Broker dismissed from foundation’s D&O suit with Navigators

A Kentucky federal district court has agreed to dismiss an insurance broker from directors and officers liability insurance litigation between a Hartford Financial Services Inc. unit and the University of Louisville Foundation.

An agent working for Louisville, Kentucky-based R.H. Clarkson Insurance Group had worked on an insurance policy, which included D&O coverage, that Hartford unit Navigators Insurance Co. issued to the University of Louisville Foundation, according to last week’s ruling by the U.S. District Court in Louisville, Kentucky, in Navigators Insurance Co. v. University of Louisville Foundation, Inc.

Several of the foundation’s officers allegedly mismanaged the university endowment that the foundation holds, and a state auditor’s report released to the public in December 2016 detailed alleged wrongdoing by many of the foundation’s officers, according to the ruling.

In April 2018, the foundation and the University of Louisville sued several of the foundation’s officers in state court for their alleged mismanagement of the university’s endowment, according to the ruling.

Navigators filed suit against the foundation seeking rescission of its policy, or a judicial declaration it has no liability to the foundation related to the state court lawsuit.

The foundation then filed third-party fraud and negligence charges against Clarkson. The court has previously dismissed the foundation’s fraud claim.

In dismissing the negligence claim, the ruling states, “Even assuming that Clarkson did breach a duty it owed to the Foundation, the facts as stated in the complaint do not inadequately allege that the breach resulted in Navigators’ lawsuit…Any such breach therefore did not cause the Foundation’s claimed damages,” said the ruling, in terminating the brokerage as a third-party defendant.

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