Tuesday, December 02, 2008

Duke filing against insurer in connection with lax suits

Readers Note: As first published, this post contained two citation errors as you'll see if you read the comment thread. The errors have now been corrected.

My thanks to the Anon who called them to my attention.


A Dec. 1 Chronicle story begins - - -

Duke has filed suit seeking compensatory and punitive damages from National Union Fire Insurance Company for refusing to pay the expenses of the University's settlements with members of the 2005-2006 men's lacrosse team.

The suit stems from a dispute between Pittsburgh-based National Union-an affiliate of American Insurance Group, Inc.-and United Educators Insurance, another company with which Duke has a policy, The (Durham) Herald-Sun reported Nov. 26. The two insurance companies are wrangling over who is obligated to cover the University's legal expenses for a settlement with the three wrongly indicted former lacrosse players, sources told The Herald-Sun. …

The entire Chronicle story’s here.

I’ve read the Duke and Duke Health Systems complaint filing. (pdf)

The complaint says National Union has failed to pay any compensation not only in connection with actions brought by members of the 2005-2006 men’s lacrosse team, but by Coach Mike Pressler as well.

In addition to the settlement with the three wrongly indicted students later declared innocent by the NC attorney general, separate suits have been brought by three team members (called McFadyen suit in Duke’s filing; more often called the Ekstrand suit), thirty-eight team members and some parents (called Carrington suit ) and Kyle Dowd’s now settled suit in response to grade retaliation.

All those actions are specifically mentioned in the Duke filing as resulting in expenses for which Duke maintains National Union must indemnify it.

There is nothing in Duke’s filing that speaks to a dispute between insurance companies as to which of them must indemnify Duke.

That may simply be because that material doesn’t belong in the filing.

Still, I’m very eager to read the reason(s) National Union gives in its response for its refusal to date to pay one dime in connection with any of the legal actions brought against Duke in connection with its disgraceful and mismanaged Duke lacrosse case actions and inactions.

The Raleigh News & Observer’s account of Duke’s filing is here; the Durham Herald Sun’s account’s here.

None of the three newspapers mentions a date by which National Union must respond.

I have a call in now to its legal office in New York City and will let you know what I learn.


Ex-prosecutor said...

There is one aspect of this latest lawsuit which should be very interesting to those of us following this unfolding situation.

In the civil rights suit brought by the players against various defendants, the defense lawyers, as I recall, were successful in getting a ruling that discovery (depositions, production of most documents, etc.) will be postponed until the judge rules on the defendants' summary judgment motions.

The judge will decide which, if any of the plaintiffs' claims do not make out a legal basis upon which recovery can be based. If some of the claims are dismissed as a matter of law, depositions and discovery of documents will be limited to the surviving claims and defendants.

The civil rights suits are breathtaking in their complexity and length, so it may take and judge and his law clerks awhile to make a ruling.

However, as to Duke's claims against its insurance carrier, one of the company's main defenses, I expect, will be that the misdeeds of Duke officials triggered an exclusion to the policy, so it does not cover Duke.

What makes this defense interesting is that to determine exactly what the Duke officials did, the insurance company should be able to depose the Duke officials and employees and obtain copies of relevant documents. Ultimately, copies of some depositions may be filed with the court clerk, meaning that they will be available for public review.

It's likely that a copy of the policy is attached as an exhibit to Duke's lawsuit. An examination of it would show what acts are excluded from coverage.

Jim in San Diego said...

This is an intriguing development in the Lacrosse case.

Jurisdictions of which I have knowledge prohibit insurers from covering or defending against claims for intentional wrongs.

This prohibition if for obvious policy reasons. If you could insure in advance for committing an intentional wrong, you could "buy" the right to do a wrong. (This was done in Medieval times through purchase from the Church of advance dispensations for sins the purchaser intended to commit. It is frowned upon here.)

The insurer would not have lightly refused to pay defense costs in a case like this. Thus, they must have a reason, and a good reason.

Discovery in the insurance case, which will begin very soon, will be fascinating.

Jim Peterson

Anonymous said...

You two guys offer articulate, literate, informative and yes Jim, facinating comments. Thank you from a regular reader for the time and effort you take to make them. Steve in New Mexico

Anonymous said...

John - I love your work, but you have some factual errors in your writeup.

The "McFadyen et al lawsuit" (3 plaintiffs) is being managed by the attorney R. Ekstrand.

The "Carrington et al lawsuit" (38 plaintiffs) is being managed by the attorney C. Cooper.

Keep up the good work.

JWM said...

To Anon @ 9:51,

Thanks for combining a very helpful piece of editing with some nice words for me.

I appreciate your help to me and others who'll read the post.