The First American Financial Corporation announces that subsidiary is held ...


The First American Financial Corporation announced today that a Harris County, Texas state court jury has held its subsidiary, First American Title Insurance Company ("First American"), and an individual defendant, liable in the amount of $7.7 million (including approximately $2.1 million in interest) in a lawsuit involving alleged misuse of computer programs which the plaintiff claimed were proprietary. The lawsuit, which was filed in 1980 and had been dormant for a number of years, had only recently been pursued by the plaintiff. Officials at First American were shocked at the verdict and the excessive amount of damages awarded, which they believe were unwarranted.

First American will move to request the trial court judge to reduce the damage award and is considering appealing the verdict on a number of grounds which its counsel believe provide the basis for its reduction or reversal. In addition, it has made a claim for reimbursement against its liability insurance carrier. In the event the award is upheld and First American is unable to recover under its liability insurance policy, the award will not have a material effect on the corporation's financial condition, but will result in a charge against the corporation's 1986 after-tax earnings of approximately $1.60 per share, based on the number of its shares currently outstanding.


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