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PSU’s Insurance Appeal in Sex Abuse Case Could Lead to Big Changes

appeal filedPenn State University (PSU) recently filed a motion requesting an interim appeal in the Pennsylvania Manufacturers’ Association Insurance v. Pennsylvania State University ruling. The ruling, by Judge Gary Glazer, stems from the abuse and molestation case of Jerry Sandusky and the University using its insurance coverage for payouts of the claims.

Glazer ruled that the school’s insurance policy, in position between 1992 and 1999, blocks coverage for the sexual abuse that occurred at the hands of Sandusky at the time. The decision by Glazer shattered the school’s chances at receiving coverage for the abuse that ultimately led to $93 million in various settlements with victims.

Interim appeals usually do not end well and approval must first be obtained by the trial judge and then the Superior Court before the appeal can proceed.

Schmidt Kramer partner Scott Cooper was featured in a recent article by Legal Intelligencer, which went over the Judge’s decision and PSU’s chances. Cooper notes that PSU faces an uphill battle as a carrier can exclude almost anything unless there is a law blocking a specific exclusion.

Cooper goes on to explain that the argument PSU is making is that you cannot exclude sexual molestation because then no one would have a case, but there is also no statute barring the exclusion of sexual abuse.

If the appeal is granted, the appellate court would tackle the interpretation of the policy language to determine if the university would be able to use the insurance coverage to continue paying out claims.

According to Cooper, the appeal could increase the chances of a settlement. But if the appeal is not granted, then the insurance company has nothing to lose.

Visit The Legal Intelligencer to read the full article.