Owings Mills insurer assessed $9.9 million in suit Breach of contract against Alexander

January 14, 1994|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

A U.S. District Court jury in Baltimore ordered national insurance broker Alexander & Alexander Services Inc. yesterday to pay $9.9 million for breach of contract in a plan to sell a workers' compensation package to fast-food restaurants.

In its civil suit against the Owings Mills insurer, Preferred Employers Group Inc. of Florida claimed that Alexander stole its plan to market a workers' compensation program tailored for Burger King and other fast-food chains.

"A large company often gets this feeling it can do anything it wants to do because it's bigger," said Gerson Mehlman, attorney for PEGI. "I think the jury was outraged."

The multimillion-dollar verdict showed that "people in the commu

nity are going to tell them, 'This is not the way we want business being done,' " he said.

PEGI created a plan under which fast-food restaurants could lower their insurance risks by creating safer environments for workers, Mr. Mehlman said.

Alexander, which had agreed to act as a national broker, was to provide liability and property insurance.

Instead, Mr. Mehlman said, Alexander gave those insurance packages to one of its subsidiaries and began planning to sell the PEGI program itself. Alexander told PEGI it had no policy against competing with its clients, Mr. Mehlman said.

Alexander claimed in court documents that it merely had an oral agreement with PEGI and that PEGI had put forth an idea rather than a specific program.

Attorneys for Alexander, which employs 14,300 workers worldwide, including 750 in Maryland and 250 in Owings Mills, could not be reached for comment yesterday.

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