NEWARK, N.J. -- A U.S. judge dismissed a lawsuit by Verizon Communciations Inc., the largest U.S. local-telephone carrier, that sought up to $400 million from five insurers to cover Year 2000 computer remediation costs.

U.S. District Judge Alfred Wolin ruled that Verizon can't collect from Allendale Mutual Insurance Co.; Affiliated FM Insurance Co.; Allianz Insurance Co.; Federal Insurance Co.; and Industrial Risk Insurers. GTE Corp. filed the lawsuit before it merged with Bell Atlantic Corp. to form Verizon in July 2000.

GTE sued to recoup money it spent between 1996 and 1999 to prepare its computers for potential problems when the year 2000 arrived. GTE and other companies feared that their computers would fail to recognize coding that designated the new year, a problem that was averted.

"With the benefit of hindsight, it is safe to say that the arrival of the year 2000 did not lead to widespread damage or destruction, as many had predicted," Wolin said in his opinion. "It is difficult to recall ever anticipating that worldwide massive computer failures would accompany the new year."

Shares of New York-based Verizon fell 20 cents to $36.07 in New York Stock Exchange composite trading. They have fallen 26 percent in the past year.

"We've just received the opinion and we're considering our options," Verizon spokesman Peter Thonis said.

The insurers argued that they weren't obligated to cover design defects in the computers. GTE said the year 2000 work should not be considered design defects. Wolin agreed with the insurers in his 37-page opinion.

The judge also agreed with the insurers' argument that the computers contained their own "seeds of destruction" and were not threatened by external forces, as GTE had argued.

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