Jerry Sandusky Scandal

Penn State loses appeal bid in PMA case

Penn State is not getting what it wants from a Philadelphia judge.

On Thursday, Judge Gary Glazer issued an order denying the university’s request to certify an interlocutory appeal that would allow it to move forward with an appeal.

Penn State and its liability insurer, Pennsylvania Manufacturers Association, are locked in a breach of contract battle over who pays what in the Jerry Sandusky child sex abuse scandal. The university settled with 32 claimants for a total of $92.8 million between 2012 and 2015.

Glazer issued a mixed-bag ruling of grants and approvals on both sides in May. One of those was a siding with PMA regarding policies with an abuse and molestation exclusion. Glazer said the university was not entitled to coverage of related claims on seven separate policies between 1992 and 1999, but he did agree that coverage before 1998 was not barred.

Penn State requested the interlocutory appeal on the AME issues.

An interlocutory appeal is an appeal before all issues are settled. While Glazer did issue some orders and an opinion on the case, it is still very much alive in the Philadelphia Court of Common Pleas. State law says the interlocutory appeal comes in when there is “substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the matter.”

Glazer said that is not what is happening in this case, explaining that if events unfolded differently, PMA would still not necessarily be on the hook for the millions paid out.

“If, instead of settling, PSU had been found liable at trial for all of Sandusky’s abusive acts based on PSU’s negligent employment, supervision or retention of him, then under the court’s ruling, the AME would bar coverage for any damages paid by PSU on such claims,” he wrote.

But, Penn State didn’t go to trial with the claimants. And that didn’t help, according to Glazer.

What would have happened if the university was found not liable for some claims, like those where abuse happened somewhere not on campus, but paid a claim anyway? PMA wouldn’t be responsible for that either, because the policies detailed that happening only for debts Penn State was “legally obligated to pay as damages.”

But that didn’t happen either.

“PSU opted to settle the claims rather than try them,” Glazer wrote. “The court does not see how there could be substantially different opinions regarding what is, candidly, a fairly pedestrian coverage decision.”

Penn State argued that the appellate court could reverse the ruling and the university could be “positioned for a complete recovery of its claims under the exclusion policies.”

Glazer countered that was true of any appeal and didn’t require the interlocutory certification.

Glazer’s May ruling garnered huge media attention when he revealed settlements with 1970s claimaints, one of whom allegedly told longtime football coach Joe Paterno of assistant coach Sandusky’s abuse.

Since then, the ruling has since prompted additional court filings. A group of media outlets, including the Centre Daily Times, have petitioned to have documents unsealed. It has also been pulled into the ongoing lawsuit between the estate of Paterno, who died in January 2012, and the NCAA. The two 1970s John Does have filed documents in court seeking protection.

But through all of that, Glazer is focused on just one aspect of the Sandusky case and its wide legal net.

“This is an insurance coverage case and only an insurance coverage case,” he wrote. “The legal issues raised in this case ... 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.”

Lori Falce: 814-235-3910, @LoriFalce