Duke, AIG in Settlement Talks Over Lacrosse Rape Case
It's the case of: "who has to foot the bill?"
Duke University filed a motion in federal court last week regarding the 2006 Duke lacrosse rape case. The motion was a joint motion asking for more time from Duke and National Union Fire Insurance Company, an affiliate of insurance giant AIG. According to the motion, Duke and National Union have engaged in mediation and hope to make a deal on November 4.
After reviewing the motion, U.S. District Court Judge James Beaty Jr. decided to extend the deadline for pre-trial discovery to January 4, 2011. Judge Beaty cited several reasons for extending the deadline, including the fact that a National Union attorney had to delay talks due to cancer treatment. Further, Beaty found that allowing time to continue to talks would contribute to judicial efficiency and help both sides avoid costly ongoing litigation.
Duke sued National Union in 2008 after the insurer declined to cover the legal expenses which arose after stripper Crystal Mangum falsely accussed three lacrosse players of rape at a team party. The school settled our of court with the three accused men, David Evans, Colin Finnerty and Reade Seligmann, who were exonerated of criminal charges, as well as former men's lacrosse coach Mike Pressler.
Duke University purchased the insurance from National Union under the belief that in a situation such as the lacrosse rape case, the policy would cover some, if not all, of its legal and settlement costs. However, National Union contends that it does not have to pay because officials at Duke violated their contractual obligations to the company. Specifically, National Union contends that Duke should not have settled with the students without first obtaining consent from National Union.
The case serves as an excellent example of the dangers of jumping to conclusions and trying cases in the media. In the early stages of the investigation, prosecutor Mike Nifong suggested that the alleged assault could be considered a hate crime. Eventually, Attorney General Roy Cooper dropped all charges and called the case a "tragic rush to accuse." Nifong became labeled as a "rogue prosecutor," eventually being disbarred for "dishonesty, fraud, deceit and misrepresentation." Nifong was also convicted of criminal contempt in the case.
In the end, the lies and mistakes cost everyone involved a massive amount of time and money. The question that remains is whether Duke and National Union can work out the money and move on.
- Insurance Law - Practice Areas (FindLaw)
- Insurance and Liability (FindLaw)
- Employer Liability for an Employee's Bad Acts (FindLaw)
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