A federal appeals court has upheld dismissal of breach of contract and bad faith claims against an American International Group Inc. unit in a case involving a Marsh USA Inc. employee who was involved in an accident.

The long-running case involves a former salesperson in Marsh USA’s Los Angeles office, Judy Bamberger, who along with other salespeople was required to use her personal vehicle for business travel and was reimbursed by Marsh USA for her mileage.

On April 15, 2010, Ms. Bamberger, who planned to stop on her way home for some frozen yogurt and then attend a yoga class, hit Majid Moradi, who was traveling on a motorcycle, according to a ruling in the case. Mr. Moradi subsequently sued Ms. Bamberger and Marsh USA.

In addition to two insurance policies Ms. Bamberger had personally purchased, she had coverage as an additional insured under a business auto policy issued by AIG unit National Union Fire Insurance Co. to Marsh USA, according to court papers in Judy Bamberger v. Marsh USA Inc., et al. and National Union Fire Insurance Co.

In September 2012, she reached a settlement to resolve all claims against her for $1.25 million, which was primarily covered by her personal insurance, except for a $150,000 gap that existed between her personal and excess policies that she agreed to personally pay, according to court papers.

Ms. Bamberger filed suit against Marsh USA and National Union in May 2014 charging the insurer with breach of contract and breach of duty of good faith and fair dealing.

Shortly after the complaint was served, Marsh USA reimbursed Ms. Bamberger for her out-of-pocket expenses in the litigation, and the two parties resolved their dispute, according to the ruling by the U.S. District Court in Los Angeles.

In August 2014, AIG reimbursed Ms. Bamberger $156,000, reflecting the $150,000 plus interest.

The District Court dismissed her claims against the insurer, which a three-judge appeals court panel unanimously upheld in Wednesday’s ruling.

“Bamberger has no extant contract damages because National Union reimbursed Bamberger for her out-of-pocket contribution to the Moradi settlement, plus interest,” said the ruling, which also affirmed the lower court’s bad faith ruling.