Sttate judge Gary Glazer denied Pennsylvania State University’s appeal of a ruling Thursday that its insurance policies in the 1990s excluded the school from coverage for settlements paid to sex abuse victims of former assistant football coach Jerry Sandusky.
“The court does not see how there could be substantially different opinions regarding what is, candidly, a fairly pedestrian coverage decision,” Judge Glazer ruled in Philadelphia County Court of Common Pleas.
In October 2013, Penn State announced that it had agreed to pay $60 million to 26 purported victims. The school, however, did not reveal details of another set of settlements approved April 2015.
In January 2012, Penn State insurer Pennsylvania Manufacturers’ Association Insurance Co. (PMA) launched a declaratory judgement action in an attempt to limit its exposure to claims related to Sandusky. In response, Penn State filed two declaratory judgment actions in November 2013.
Last May, Judge Glazer ruled that the university had no right to coverage under the exclusion since the injuries were the result of Penn State’s negligent employment, investigation, and retention of Sandusky.
Although Glazer’s decision dealt with a number of the claims made in relation to the case, litigation remains.
Penn State asserted an immediate appeal of the ruling in June, pointing to language in the policies defining insureds as employees “working within the scope of their job duties.”
“Penn State contends that this reasoning presents several controlling questions of law as to which there are substantial grounds for difference of opinion regarding whether Sandusky was an insured,” a statement from the school read. “First, Pennsylvania courts have held that acts of sexual abuse, like other acts that are outrageous, self-interested, and harmful, are not within an employee’s scope of employment as a matter of law.”
PMA clarified that although one could commit acts of molestation “while cloaked with responsibilities and titles that permit him to access children” the individual in question can still be considered an insured that is ineligible for coverage under the exclusion.
With only the settlements before him, Judge Glazer was forced to make a coverage decision without knowledge whether the university would have been found liable for negligent supervision in trials lodged against it by Sandusky’s victims.
“This is an insurance coverage case and only an insurance coverage case,” Glazer underscored. “The legal issues raised in this case, as opposed to those raised in the underlying matter, are far less than meet the eye. This court was not asked to, and did not, decide whether PSU should be held tortiously liable for Sandusky’s crimes or not. Instead, this court had to make its coverage decision in the liability vacuum created by PSU’s settlement with Sandusky’s victims.”
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