Sandusky, State Farm agree to stipulation that insurer need not indemnify Sandusky for civil defense costs; judge approves

By Jon Campisi | Jan 21, 2013

The chief judge of the U.S. District Court for the Middle District of Pennsylvania has

dismissed a case involving an indemnification dispute between convicted child molester Jerry Sandusky and his insurance carrier.

U.S. District Chief Judge Yvette Kane on Jan. 15 dismissed the case of State Farm Fire and Casualty v. Sandusky, stating in her four-page order that the insurance company does not have to indemnify Sandusky for defense costs arising out of the former Penn State University assistant football coach’s outstanding civil claims relating to his sexual abuse of minors.

“State Farm does not have any obligation to provide a defense to or to indemnify Gerald Sandusky for the Underlying Claims or any and all other claims and/or demands at law or in equity arising from and/or in any way related to any sexual conduct, or any inappropriate physical contact or mental coercion of any person, alleged or actual, by Gerald Sandusky,” Kane wrote in her order. “All rights and obligations under the homeowners insurance policies State Farm issued to Gerald Sandusky and Dorothy Sandusky unrelated to the aforementioned claims against Gerald Sandusky remain in full force and effect.”

Kane further wrote that Dorothy Sandusky, Jerry Sandusky’s wife, reserves all rights against State Farm concerning all civil claims, including the right to tender to State Farm and seek a defense and indemnity from the insurance company for any pending or future claims that may be asserted against her.

Jerry Sandusky was a popular defense coordinator for the Penn State Nittany Lions who helped lead the college team to great success on the field.

But he was disgraced in late 2011 when a grand jury lodged 48 counts of child sex abuse against him, 45 of which Sandusky was eventually convicted on following a jury trial in Centre County, Pa. this past June.

In October, Sandusky was sentenced to between 30 and 60 years in state prison for his crimes.

His attorneys have since appealed both his conviction and sentence, alleging they were not given adequate time by which to prepare a proper defense.

In the present case, State Farm had filed a declaratory action against Sandusky at the federal court in Harrisburg last July seeking to have a judge declare that the insurer was not responsible for indemnifying Sandusky for defense costs arising out of the civil claims initiated by some of his molestation victims.

The judge’s ruling came after State Farm and Sandusky filed a joint motion for dismissal in which both parties agreed to a consent order that says the insurance company is not on the hook for the defense costs.

State Farm had said in its initial complaint that the policy issued to Sandusky and his wife that involved coverage for bodily injury is negated when due to the willful and malicious acts of the insured.

The ruling means State Farm will also not have to indemnify Sandusky for any costs relating to the appeal of his criminal conviction, which is currently playing out in Centre County.

Want to get notified whenever we write about Penn State University ?

Sign-up Next time we write about Penn State University, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Penn State University

More News

The Record Network