Duke University Sues Its Own Insurance Company for Refusing to Pay Claim

Anyone that follows sports, and many who don't, will probably remember the Duke University mens' Lacrosse team scandal.  According to a North Carolina newspaper, Duke has now been forced to sue it's own insurance company, National Union Fire Insurance Co., (an AIG affiliate) for refusing to provide insurance coverage and pay the damages that Duke paid to those players to settle the players' lawsuits against the University.  The lawsuit is likely a combination of breach of contract and insurance bad faith.
"Because National Union has not paid, Duke has been forced to bear the full financial impact of its own defense,' Duke attorneys wrote in the lawsuit.
According to The Herald Sun, the insurer has refused to reimburse Duke for legal bills of $11-million because it believes the university’s policy is capped at $5-million. D uke's demands are considerable: it wants National Union to "advance and/or pay all of Duke?s Defense Costs (as defined in the insurance policies) for the Underlying Claims and the full amount of Duke?s settlement with certain claimants," and "a declaratory judgment (i) that National Union is liable to advance the costs for any future defense of Duke in connection with the Underlying Claims, and (ii) that National Union is liable for any reasonable settlement entered into by Duke in the Underlying Claims and/or any judgment entered against Duke in the Underlying Claims."

hans