Penn State's insurance co. files for declaratory relief; says university not entitled to coverage in abuse claim

A Blue Bell, Pa.-based insurance company has filed for declaratory relief against Pennsylvania State University relating to a case in which a purported victim of accused child molester Jerry Sandusky filed a civil suit against the former assistant football coach in state court.

Attorneys from Philadelphia-based Kleinbard Bell & Brecker filed the civil action Jan. 31 at the Philadelphia Court of Common Pleas on behalf of Pennsylvania Manufacturers’ Association Insurance Company.

The defendants named in the lawsuit are Penn State University and John Doe A, who filed his own lawsuit against the school and others in late November.

In the suit, the insurance company seeks a declaration that Penn State is not entitled to coverage in connection with the litigation initiated by “John Doe A” late last year.

The Doe complaint alleges that the plaintiff, who was not named because he was the alleged victim of sex crimes while he was a minor, was molested by Sandusky between 1992 and 1996. It claims, in part, that Penn State acted negligently with regard to the then-minor and Sandusky.

In its suit, the insurance company states that Penn State officials approached the plaintiff in early January of this year and made a claim for coverage and defense under a 2004 policy for the Doe lawsuit.

The company claims that Penn State sought coverage under what is known as a “continuous trigger” theory, which says that allegations in the Doe complaint triggered coverage under any policy in place from the time that Doe was first allegedly molested by Sandusky through the entire period that he allegedly suffered bodily injury and mental anguish.

The insurance company, upon reviewing the university’s claim, informed Penn State officials that the school was not entitled to coverage for the Doe complaint for various reasons, including the fact that the 2004 policy was not triggered by an occurrence during the policy period.

“PSU contends that the allegations of the Doe complaint trigger multiple policies, inclusive of all policies from at least the time that the molestation of Doe commenced to an indeterminate end date, including but not limited to the 2004 policy,” the lawsuit states. “To the contrary, PMA contends that the allegations of the Doe complaint trigger only one policy, the policy in place when the abuse of Doe A by Sandusky commenced and injury to Doe A was manifested.”

Based on the allegations of the Doe complaint, the suit states, harm was first manifested when the abuse began back in the early 1990s.

The insurance company’s complaint also notes that the plaintiff in the Doe complaint seeks punitive damages as a result of Penn State’s alleged conduct.

But punitive damages are not insurable under Pennsylvania law, the suit states, and therefore none of the policies issued by PMA to PSU provides coverage for such damages.

The plaintiff seeks declaratory relief that the 2004 insurance policy issued by PMA to the university is not triggered by allegations in the Doe complaint.

The case ID number is 120104126.