Insurer to pay ‘Three Cups’ charity $1.2M
HELENA, Mont. (AP) — An insurance company will pay $1.2 million to a charity co-founded by “Three Cups of Tea” author Greg Mortenson in a settlement over the legal costs of a lawsuit and an investigation into Mortenson and the Central Asia Institute, attorneys involved in the settlement said.
The settlement, if approved, will mark an end to more than two years of legal troubles for Mortenson after “60 Minutes” and author Jon Krakauer published reports that alleged Mortenson fabricated parts of his best-selling books and mismanaged the Central Asia Institute.
After those reports, then-Montana Attorney General Steve Bullock launched an investigation into the charity. A settlement required Mortenson to repay $1 million and made fundamental changes to the institute’s structure.
Four readers then filed a lawsuit that claimed Mortenson, co-author David Oliver Relin, publisher Penguin and the Central Asia Institute were involved in a fraud conspiracy by Mortenson lying in his best-selling “Three Cups of Tea” to boost sales and donations to the charity.
“Three Cups of Tea” and the sequel, “Stones Into Schools,” recount how Mortenson started building schools in Pakistan and Afghanistan. “Three Cups of Tea” has sold about 4 million copies since being published in 2006.
A district judge threw out the lawsuit, and the 9th U.S. Circuit Court of Appeals upheld the ruling.
Along the way, Mortenson and the Central Asia Institute racked up approximately $1.8 million in legal fees defending themselves in the investigation and the lawsuit.
The charity sued Philadelphia Indemnity Insurance Co., saying the insurer was obligated to pay for all of its defense costs, but offered to reimburse the institute 35 percent and Mortenson 25 percent of their defense fees in the lawsuit.
The insurer offered to reimburse 20 percent of Mortenson’s costs and all of the Central Asia Institute’s costs for the state investigation, according to the complaint.
The insurance company said in court filings that certain allegations against Mortenson don’t fall within the policy, including the publication of material that the insured person or company knows is false.
The $1.2 million settlement was hammered out in a private mediation conference held Wednesday before U.S. Magistrate Judge Jeremiah Lynch in Missoula, said attorney John Morrison of Helena and Billings attorney Carey Matovich.
Matovich represented the Central Asia Institute, and Morrison represented a law firm that defended Mortenson in the investigation and in the lawsuit.
The settlement still must be approved by U.S. District Judge Dana Christensen. The judge has given the sides until Dec. 6 to file dismissal papers.
Philadelphia attorney Erin Yoshino referred questions to another attorney, Brian Harrison, who did not return a call for comment.
Mortenson declined to comment.
Rules for posting comments
Comments posted below are from readers. In no way do they represent the view of Oahu Publishing Inc. or this newspaper. This is a public forum.
Comments may be monitored for inappropriate content but the newspaper is under no obligation to do so. Comment posters are solely responsible under the Communications Decency Act for comments posted on this Web site. Oahu Publishing Inc. is not liable for messages from third parties.
IP and email addresses of persons who post are not treated as confidential records and will be disclosed in response to valid legal process.
Do not post:
- Potentially libelous statements or damaging innuendo.
- Obscene, explicit, or racist language.
- Copyrighted materials of any sort without the express permission of the copyright holder.
- Personal attacks, insults or threats.
- The use of another person's real name to disguise your identity.
- Comments unrelated to the story.
If you believe that a commenter has not followed these guidelines, please click the FLAG icon below the comment.