University of Idaho Sues Insurance Company for $10M

June 6, 2005

The University of Idaho and its foundation have sued their insurance company for $10 million, claiming it should cover losses related to alleged mismanagement of the school’s failed attempt to expand in Boise.

In the 4th District Court lawsuit against Great American Insurance Co., the university alleges that former University of Idaho officials, including then-president Robert Hoover, Jerry Wallace, the school’s former finance chief, and Roy Eiguren, the foundation’s former vice president, cost the school as much as $25 million with their alleged mishandling of the University Place project.

Idaho President Tim White said because the school paid its insurance premiums to Great American at the time of the alleged mismanagement, the school is due $10 million provided for in its insurance policy.

“The insurance company has denied coverage or payment for the losses,” White said June 3 in a statement on the University of Idaho Web site. He said the lawsuit, filed May 16, was the next logical step for the university.

Telephone attempts by the Associated Press to reach Hoover, now president of Albertson College of Idaho in Caldwell, weren’t immediately successful.

Calls to Great American in Cincinnati weren’t immediately returned.

Separately, the Moscow-based university has also asked to join a lawsuit filed May 6 in 4th District Court by its foundation against two Boise law firms and four lawyers who were involved in University Place.

In that case, the foundation sued the law firms of Elam & Burke and Givens Pursley, as well as lawyers including Eiguren and L. Edward Miller, seeking as much as $25 million for alleged malpractice.

In asking to join the litigation, the university said it’s entitled to $10 million in damages.

The planned $136 million, multi-building University Place real estate project was conceived in 1999 as a way to increase the University of Idaho’s profile in the capital city and keep pace with ascendant Boise State University.

But when Idaho’s economy faltered in 2002, the University of Idaho and the foundation made questionable loans to cover upfront costs and keep the project afloat.

The loan disclosures led to the resignation of Hoover and the project was scaled back to a single $50 million building.

Calls on June 3 to Eiguren and Miller in Boise weren’t immediately returned.

Both lawyers are the target of separate allegations, filed in April, by the Idaho State Bar Association, accusing them of conflict of interest for their roles in representing both a private development company and the foundation in the failed project.

Calls to Bradley Keller, a Seattle-based attorney representing Givens Pursley and Miller, also weren’t immediately returned.

Last month, however, lawyers for Eiguren, Miller and Givens Pursley called the foundation’s allegations “outrageous,” arguing its board included sophisticated business people and philanthropists and should have been aware of the risks.

“The foundation should be accepting responsibility for the business choices it made instead of trying to blame others,” Keller said at the time.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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