Duke sues insurer over refusal to pay legal costs

Duke University is suing its insurance company for refusing to pay any of the settlement costs for the Duke lacrosse case.

In federal court papers filed Monday, Duke is seeking financial relief from National Union Fire Insurance Co. of Pittsburgh, Pa., an affiliate of insurance giant AIG.

The case stems from gang-rape allegations that an escort service dancer lodged against three players after a lacrosse team party in June 2006.

Before all the facts were gathered and any criminal charges were filed, Duke suspended the team's season.

The criminal case crumbled quickly over the next year.

In April 2007, state Attorney General Roy Cooper dismissed all charges against the three and declared that there was no evidence of an assault at the party.

In June 2007, Duke entered a settlement agreement with three Duke lacrosse players who were accused and then exonerated. Neither side has disclosed the terms of the settlement agreement.

The families of the Duke players racked up millions of dollars in legal fees.

In its lawsuit filed this week, Duke says National Union breached its contractual duty to pay legal defense costs and to indemnify Duke in claims and lawsuits brought against the school.

"Duke believes that our insurance companies should meet their obligations, and we will pursue all options available to us," Michael Schoenfeld, vice president for public affairs and government relations at Duke, said in a statement. "While Duke sought to address this without resorting to a lawsuit, we were not able to reach a satisfactory outcome and thus turn to the courts."

Besides the settlement with the three players, Duke also faces suits from most of the other players on the 2006 team and former lacrosse coach Mike Pressler.

National Union could not be reached for comment.