In a follow-up to a ruling earlier this year, a federal appeals court said Tuesday that a unit of Liberty Mutual Insurance Group must reimburse USA Gymnastics an additional $458,472 in legal costs associated with the activities of Larry Nasar, the doctor convicted of sexually assaulting several women gymnasts, under its director and officer indemnity policy.
In February, the 7th U.S. Circuit Court of Appeals in Chicago ruled, in a split opinion, that Liberty Mutual unit Liberty Insurance Underwriters Inc. must indemnify the now-bankrupt gymnastics organization in its first ruling in USA Gymnastics v. Liberty Insurance Underwriters Inc.
However, there were also ancillary disputes regarding the amount of attorney fees Liberty Insurance owed USAG, according to the latest ruling in the case.
The bankruptcy court and the U.S. District Court in Indianapolis “properly concluded that USAG was entitled to a presumption that the fees it incurred were reasonable and necessary,”; Tuesday’s ruling said.
“Liberty must therefore rebut the presumption by showing that various parts of the charges did not meet that standard. Since Liberty does not, we affirm.”
USAG had requested about $3.18 million in past defense costs, the ruling said.
Days before oral argument, the appeals court was informed that Liberty had paid USAG $1,655,680 for the judgment, leaving a “live controversy” over the remaining $458,472, the three-judge panel’s ruling said.
Attorneys in the case did not respond to requests for comment.