PA Public Policy Not Enough to Allow Insurer to Win Out-of-the-Box Judgment against Sandusky.

Opening statements began yesterday in the Jerry Sandusky criminal trial — a case with a truly horrific (alleged) fact pattern (and that’s probably an understatement).  But, as you would expect, more than the criminal trial is afoot and, in fact, parallel civil cases are proceeding.  Many of those civil cases have been filed against The Second Mile, Jerry Sandusky’s former charitable organization and Jerry Sandusky himself.  And, of course, at the time of many of the alleged incidents, The Second Mile had insurance – with Federal Insurance Company (“Federal”).

When confronted with the claims, Federal filed a declaratory judgment lawsuit in federal court (i.e. the Middle District of Pennsylvania).  After issue was joined, but before any discovery had occurred, Federal moved for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).  Federal argued that, in light of the allegations against Sandusky and purely as a matter of public policy, the court should rule that Sandusky was not entitled to either defense or indemnity.  After hearing arguments and reading the papers, the Court denied the motion.  The Court noted that while Pennsylvania law “prohibits the reimbursement of Sandusky for any damage award that he may ultimately be found to owe arising from the allegations that he molested and sexually abused children”, in the absence of any discovery (and notwithstanding the well publicized allegations), a 12(c) judgment for Federal would be premature.  It just goes to show that the duty to defend is generously interpreted, indeed.

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.