A federal appeals court Thursday affirmed a lower court ruling against a Swiss Re unit in a dispute involving a home improvement retailer’s rejection of a settlement offer that led to a $6 million jury verdict.

A customer of Eau Claire, Wisconsin-based Menard Inc., a home improvement chain, filed a negligence suit against the retailer in state court after he was hit with a forklift operated by an employee in 2016, according to Thursday’s ruling by the 7th U.S. Circuit Court of Appeals in Chicago in North American Elite Insurance Co. v. Menard Inc.

Under its insurance program, Menard was responsible for a $2 million self-insured retention, after which Axa XL unit Greenwich Insurance Co. provided $1 million in coverage, and Swiss Re unit North American Elite Insurance Co. provided coverage of up to $25 million per occurrence, according to the ruling.

On the first day of trial, the plaintiff offered to settle for $1,985,000, or just below Menard’s self-insured retention. Menard’s lawyer did not respond to the settlement offer, even after North American urged the company to accept it.

Just before the verdict, Menard entered into a “high-low” settlement agreement with the plaintiff promising to pay at least $500,000 regardless of the verdict in exchange for capping its payout at $6 million.

The jury returned a $13 million verdict, which was reduced to a $6 million settlement under the agreement. North American indemnified Menard for liability in excess of $3 million, while reserving its right to seek reimbursement, the ruling said.

North American filed suit in U.S. District Court in Chicago, contending that Menard had violated its duties under Illinois law by rejecting the settlement offer and proceeding to trial. 

The district court dismissed the case, and was affirmed by a three-judge appeals court panel. “North American did not exercise its right to participate in the defense, which exposed it to the risk that Menard would make litigating choices that it did not like,” the ruling said.

“Menard’s negotiation of a high-low settlement agreement with the plaintiff in the underlying trial shows that it took some steps to limit its insurers’ eventual liability, rather than gambling with their money.

“Nor do we doubt that Menard’s payment obligations were ample motivation to minimize any prospective damage award. But it suffices that North American is not entitled to the benefit of someone else’s bargain,” the panel said, in affirming the lower court.

Attorneys in the case had no comment or did not respond to a request for comment.