A federal judge in California has ruled that an insurance unit of American International Group must pay a technology company more than $32 million in dispute over directors and officers liability coverage.

U.S. District Court Judge Phillip Gutierrez, in Los Angeles, ordered New York-based AIG's National Union Fire Insurance Company of Pittsburgh to pay CombiMatrix Corporation $32.1 million to cover settlement costs, defense costs and prejudgment interest. The judgment of payment was filed yesterday.

According to court papers, CombiMatrix, a technology company, and its chief technology officer, David Montgomery, were sued by Nanogen Inc. over patent infringement in 2000. After 19 months of litigation, CombiMatrix decided it could not afford the defense costs and settled with the San Diego medical research company in 2002.

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