Nike, Inc. v. Atlantic Mutual Insurance

ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT

Plaintiff brought this motion for partial summary judgment on the issue of the liability of Atlantic Mutual Insurance Company (Atlantic), Nike’s insurance carrier, to reimburse Nike for attorney’s fees incurred in defending a libel suit. Under the insurance policy issued by Atlantic, it had a duty to defend Nike against the libel claim. Nike tendered the defense of the suit to Atlantic, which accepted, subject to the reservation of its right not to pay any possible adverse judgment if it were determined that the allegedly libelous statements by Nike were made with malice. In the same letter in which it reserved its right not to pay, Atlantic suggested that Nike retain its own counsel at Nike’s own expense to associate with the attorney that Atlantic had designated to defend the ease. Nike retained its own counsel, and the case was eventually settled, with neither Nike nor Atlantic having to pay any money. Nike then brought this suit against Atlantic to recover its costs and attorney’s fees incurred for the services of independent counsel.

The court finds that the reservation of rights by Atlantic in the libel action…