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CEDILLOS TESTING CO. SEEKS $30 MILLION IN BAD FAITH LAWSUIT; FILES UNFAIR PRACTICES COMPLAINT WITH STATE DEPARTMENT OF INSURANCE

 CEDILLOS TESTING CO. SEEKS $30 MILLION IN BAD FAITH LAWSUIT; FILES UNFAIR PRACTICES COMPLAINT WITH STATE DEPARTMENT OF INSURANCE
 LONG BEACH, Calif., July 23 /PRNewswire/ -- The following was issued today on behalf of Cedillos Testing Co.:
 Long Beach aerospace testing contractor Cedillos Testing Co. today announced it has filed a $30 million bad faith lawsuit against San Diego-based Golden Eagle Insurance Co.
 Company owner and business advocate Ron Cedillos also called for insurance reforms to protect business owners throughout the state.
 Cedillos' suit, being handled by William Shernoff, nationally recognized trial expert in insurance bad faith litigation, is in response to Golden Eagle's refusal to pay his claims stemming from the March 4 fire that gutted his testing facility.
 Cedillos has also filed an unfair claims practices complaint with the California Department of Insurance (CDI) against Golden Eagle. Department spokesman William Schulz said that the CDI would immediately look into the allegations and will shortly finalize regulations aimed at stopping abusive insurance company practices.
 Speaking this morning amidst the charred remains of his company, Cedillos explained that Golden Eagle has refused to pay his original multimillion-dollar claim, based on a technical error made on the application by Golden Eagle's authorized representative, which was never seen nor reviewed by Cedillos. He said that he believes Golden Eagle never intended to pay on the claim from his policy, but kept accepting premiums as if the technicality did not exist and never alerted him to the potential problem.
 "My case is just one small example of the larger insurance picture," said Cedillos. "Golden Eagle's refusal to make payment has destroyed a 20-year-old, multimillion dollar company, employing almost 100 local residents."
 Shernoff also commented, "This is another example of the delaying tactics used by so many insurance companies to force an innocent, unsuspecting client into a settlement." Shernoff represented the MGM Grand Hotel of Las Vegas in its $76 million bad faith lawsuit against a group of insurance companies on similar grounds as the Cedillos case.
 The ripple effect from the claim denial has also resulted in Cedillos' aerospace workers now being unemployed. Cedillos intended to use the claim money to rebuild his facility and reopen for business but now that is no longer possible.
 Cedillos is no stranger to business advocacy and, in fact, is quite familiar with mobilizing coalition efforts on behalf of business. He serves as a member of the prestigious California Council on Competitiveness, known as the Ueberroth Commission, and is active in leadership efforts to promote higher education.
 Cedillos is best known for his 1991 founding of Californians for Aerospace Leadership, a group designed to support the aerospace and defense industry in the state. After being the subject of nationwide news coverage, including "Nightline" and The New York Times, Cedillos became part of the Washington rumor mill as a rumored candidate for Secretary of Commerce.
 -0- 7/23/92
 /CONTACT: Paula Brici or Hilary Kaye of Hilary Kaye & Associates, 714-851-5150, for Cedillos Testing/ CO: Cedillos Testing Co.; Golden Eagle Insurance Co. ST: California IN: INS SU:


KJ-CH -- LA018 -- 2608 07/23/92 14:10 EDT
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Date:Jul 23, 1992
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