AIG Resolves Duke University's 2008 Lacrosse-Stripper Suit Over Expenses

American International Group Inc. has resolved a lawsuit filed by Duke University over expenses tied to the school’s dispute with lacrosse team members falsely accused of sexually assaulting a stripper.

The university and the unit of New York-based AIG that sold insurance coverage to Duke “agree to the dismissal” of the claims, according to a joint filing yesterday in U.S. District Court in Durham, North Carolina. The court document didn’t disclose terms of the settlement.

The school was seeking reimbursement of costs from confidential settlements with three members of the team who were exonerated after they were accused of rape by a woman invited to a 2006 party. AIG, the bailed-out life and property-casualty insurer, had offered $5 million to Duke, Joseph O’Neil, a lawyer for the insurer, said in December 2008.

Duke had demanded reimbursement for costs tied to lawsuits by players and another by the team’s former coach over the school’s role in investigating the accusation, according to the November 2008 complaint. The athletes said Duke remained silent during the probe even though the university had evidence they were innocent.

Mark Herr, a spokesman for AIG, and Gregg McDougal, a lawyer for Duke at Kilpatrick Townsend & Stockton LLP, declined to comment.

The case is Duke University and Duke University Health System Inc. v. National Union Fire Insurance Co. of Pittsburgh Pa., 08-cv-0854, U.S. District Court, Middle District of North Carolina (Durham).

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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