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Coverage Issues Further Complicate Penn State Scandal

July 26, 2016

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Pennsylvania Manufacturer’s Association Insurance  Co. (“PMA”) filed a motion recently in the Philadelphia Court of Common Pleas <a href="">seeking to bar Penn State University</a> from introducing evidence on why it settled allegedly time-barred claims.  The motion stems from a declaratory action PMA filed against Penn State seeking a judgment on whether it had to provide coverage on a $90 million settlement the school paid to abuse victims in the recent Jerry Sandusky scandal.  PMA is alleging that the potential time-barred claims are blocked by the statute of limitations as it applies to abuse claims.  These claims make up $4 million of the settlement.
PMA argues that it did not consent to the settlements entered into by Penn State and that in order to carry its burden, the school must show that the un-consented to settlements were reasonable.  PMA then stated that during depositions, school officials refused to discuss or elaborate on specifics, making it impossible for its lawyers to determine whether the school sought to toss out or validate time-barred claims.  Because Penn State refused to provide discovery on these claims, PMA is requesting that the school be preclude from introducing any evidence on the subject at trial.
This case highlights the already complicated realm of coverage can become even more so when mixed with multi-million dollar high-publicity cases like the Penn State abuse scandal.  It also stresses the importance of monitoring statutes of limitation, as they can both hurt and help one’s case.  Finally, this case also brings up the important issue of providing adequate discovery and cooperating with the other side so as to avoid adverse motions in the future, as Penn State is now facing.  As if the Sandusky situation at Penn State required further complication.... Thanks to Peter Cardwell for his contribution to this post.  Please email <a href="">Brian Gibbons</a> with any questions.


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