Duke Sues Insurer Over Claims From Lacrosse Case By Dave Lenckus, businessinsurance.com - December 4, 2008DURHAM, N.C.—Duke University has sued executive management insurer National Union Fire Insurance Co. of Pittsburgh, Pa., for allegedly failing to cover the defense and settlement of claims Duke has faced over its response to criminal charges once leveled against players on its men’s lacrosse team.
A stripper in March 2006 accused members of the team of sexually assaulting her, and a prosecutor eventually indicted three teammates. Duke forced team coach Mike Pressler to resign in April of that year and canceled the remainder of the team's season.
But the North Carolina attorney general in 2007 dropped the charges, calling the defendants innocent victims of a "tragic rush to accuse." The prosecutor, former Durham County District Attorney Mike Nifong, was forced to resign and ultimately was disbarred because of his misconduct in pressing the case.
The three teammates later sued Duke over how it handled the case, and the school reached an undisclosed settlement with them. Ultimately, 42 unindicted players and Mr. Pressler also sued Duke. Those cases are pending.
In correspondence with Duke, National Union has stated the school appears to have a covered claim, Duke asserts in its lawsuit, filed Nov. 24 in U.S. district court in Durham, N.C.
However, National Union, a subsidiary of American International Group Inc. of New York, has not covered any of Duke's defense or settlement costs, the university alleges.
Besides defense and settlement costs, Duke seeks punitive and treble damages because of National Union's alleged unfair and deceptive practices.
National Union wrote two one-year claims-made directors and officers liability insurance policies for the school from December 2005 through December 2007, according to court papers. Defense costs were included within policy limits.
An AIG spokesman said the company does not comment on pending litigation.
by Dave Lenckus, www.businessinsurance.com
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