The AD did not ask you to investigate this situation, true?
There is no letter or email or text from the AD directing you to investigate this situation, true?
Indeed, the AD did not know about this situation at the time, true?
So he could not have directed you to investigate it, true?
And there was no standing order from the AD to investigate situations of this kind, true?
On and on ... USU only settles this if it decides that litigation in full is too costly in other ways