Attorney Curtis Porterfield, with the Los Angeles office of Howrey Simon Arnold & White, who represented United Space Alliance LLC, the NASA prime contractor for Space Shuttle operations, said the case was unusual.

The insurer, he said, after refusing to pay the claim went to court a week later seeking a ruling affirming its action rather than waiting for its insured to file a complaint.

The case in U.S. District Court in Houston, Texas, was heard by Judge David Hittner. After one panel member was excused, a seven member jury returned a $2,029,625 award against American Home and National Union.

The legal action began when American Home, having denied coverage for a Florida claim against USA, brought suit in Houston for declaratory relief.

Mr. Porterfield said legal action developed after USA filed an insurance claim to cover legal costs that developed when a Florida concern sued the space group for terminating its contract and allegedly disparaging the firm's work product.

Responding to the AIG legal action, USA entered a cross-claim against AIG for breach of contract and sought the fees for the defense of the Florida action and for the costs to the USA to defend against AIG.

According to Mr. Porterfield, the jury took less than an hour and a half to find that American Home Assurance Company had breached its contract with the United Space Alliance and to award the Alliance all of its damages.

USA is headquartered in Houston. The space operations company is chartered to manage and conduct space operations work involving the operation and maintenance of multipurpose space systems, including systems associated with NASA's human space flight program.

It is also involved with Space Shuttle applications beyond those of NASA, and other reusable launch and orbital systems beyond the Space Shuttle and Space station.

Mr. Porterfield said, since a final judgment in the case was entered Dec. 31, 2002, he has heard nothing from AIG as to whether they plan to take the case to the Federal Fifth Circuit Court of Appeals. AIG's lead attorney was Benjamin Love of Cowels and Thompson in Dallas.