A federal court judge has dismissed a $381 million lawsuit that GTE filed in 1999 to recoup its year 2000 remediation expenses.

In his ruling last week, Judge Alfred Wolin of the U.S. District Court in New Jersey, said the insurers weren't required to reimburse GTE for the money the company spent to repair and test its computers to ward off Y2k problems.

In the lawsuit, GTE, which merged with Bell Atlantic Corp. in 2000 to become New York-based Verizon Communications, claimed that its remediation efforts were covered under the "sue and labor" clause in its insurance policies.

GTE said that under that section of the policy, customers can file claims to retrieve costs used to protect property in the face of imminent damage.

As late as the 1990s, GTE's computer systems relied on a two-digit year field to process dates.

According to GTE, such systems were incapable of correctly processing certain dates, such as the year 2000. GTE claimed that its Y2k remediation program benefited the insurers by averting a recoverable loss, the failure of GTE's data processing systems.

The defendants countered that their policies didn't cover certain problems, including the cost of fixing any flaws in the computer systems of an insured.

Wolin agreed and dismissed the lawsuit without a trial, as requested by the five insurance companies, which included Allianz Insurance Co. in Burbank, Calif., and Allendale Mutual Insurance Co. (which merged with two other companies in 1999 to form Johnston, R.I.-based FM Global).

The judge ruled that GTE's Y2k problems were caused by a date field problem in GTE's own computer systems and therefore weren't covered under its insurance policies.

"This was one of the longest and hardest-fought Y2k claims, and it finally puts these issues to rest," said William Erickson, an attorney with the Boston-based law firm of Robins, Kaplan, Miller & Ciresi LLP, which represented Allianz.

Verizon spokesman Peter Thonis said the company is reviewing its options.

COMPUTERWORLD

-- Anonymous, April 02, 2003