Jerry Sandusky Scandal

Some of Penn State’s Sandusky settlements called ‘extremely high’

Jerry Sandusky enters the Centre County Courthouse in Bellefonte in May.
Jerry Sandusky enters the Centre County Courthouse in Bellefonte in May. Centre Daily Times, file

While much of the focus of the documents released in Philadelphia Court of Common Pleas on Tuesday was on who knew what and when they knew it regarding Jerry Sandusky and the child sex scandal that has surrounded Penn State since 2011, that wasn’t the only point of interest Judge Gary Glazer uncovered.

Some of it was about money. It is a lawsuit about insurance, after all, with the university and its liability insurer, Pennsylvania Manufacturers Association, locked in a battle over who owes what amid the millions the case has cost.

One document points to Penn State overpaying some cases and paying some that would not have met the test for a lawsuit.

Pittsburgh attorney Eric Anderson has represented “religious institutions and private companies” that have been involved in similar suits. In a letter to PMA attorney Steven J. Engelmyer, Anderson outlined some of the issues.

“Generally speaking, it appears the amounts of the settlements were high and in some cases extremely high,” he wrote, saying it appeared that punitive damages had been factored in.

At least one settlement document was included in the released documents. It showed the university specifically spelling out that the settlement did not include punitive damages in the $1.25 million payout.

There were also reports on two of the cases. Anderson was asked to review the settlements.

One was the case of a landscaper who was 34 when interviewed in 2015. He claimed Sandusky molested him in a hot tub when he was in high school in 1995 or 1996.

The problem is that put the man outside the statute of limitations when he originally came forward in August 2012, two months after Sandusky’s conviction.

“The statute of limitations is a complete defense,” Anderson wrote.

The university settled with the man for $250,000.

Another man received a settlement of $5.5 million. He was one of the victims in Sandusky’s criminal case.

Anderson said the man’s case was not a statute of limitations issue, dating to 1998, but he still felt the case was overvalued.

“... Based on the abuse sustained and the limited information concerning the damage aspect of his claims, I believe that the settlement value of his case is approximately $2 million,” Anderson wrote.

Penn State submitted a claim to PMA in October 2013, requesting $1.5 million in defense and indemnity expenses for one of the cases, saying it “reflect(ed) the most favorable settlement Penn State could have achieved outside of litigation.”

That number included a $1.25 million settlement and another $290,414 for “investigating, responding to and seeking to reduce its and PMA’s ultimate exposure,” including $260,000 as its piece of the university-commissioned investigation by former FBI director Louis Freeh.

PMA responded on a different claim for $5.7 million in March 2014, denying coverage based on one of the central pins of the case, the issue of the abuse and molestation exclusion.

It also details that punitive damages are not insurable under Pennsylvania law.

Glazer ruled on some of the issues in the insurance dispute in May, when the case first garnered attention with the judge’s allusion to claims longtime coach Joe Paterno was informed of molestation claims in the 1970s.

The case is not yet resolved.

Jerry Sandusky enters the Centre County Courthouse in Bellefonte, Pa. for a hearing May 2, 2016. Sandusky has filed a petition under Pennsylvania’s Post Conviction Relief Act, seeking a new trial.

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