An insurance company for Penn State is trying to bring a lawsuit filed by the university in Centre County last week about 200 miles east to the First Judicial District, according to a motion it filed Tuesday in Philadelphia Common Pleas Court.
The Pennsylvania Manufacturers’ Association Insurance Co. initially sued the university in Philadelphia last month, seeking a declaratory judgment limiting defense costs and indemnity for which the university could claim coverage in a case stemming from the Jerry Sandusky sex-abuse scandal.
Penn State followed with its own legal action, alleging the PMA breached its contract with the school and acted in bad faith by both initially denying coverage and then following with a lawsuit. It asked for a Centre County jury to decide all matters triable by jury.
But the PMA is looking to stymie that attempt. In a 14-page motion to coordinate transfer of the lawsuit to Philadelphia, the PMA aimed to eschew the “unavoidable risk” of the courts issuing contradictory decisions. If the court denied that request, the PMA asked it to stay the Centre County case until the Philadelphia one was decided.
The insurance company said Pennsylvania Rule of Civil Procedure 213.1 allows for the Philadelphia court to move Penn State’s action and coordinate it with the insurer’s case because the PMA filed first and because the two cases are “mirror images” of each other.
“Indeed, the two actions represent a single dispute over PMA’s obligations to PSU,” the company said. “Requiring the parties to litigate the same issues in two forums would be a waste of judicial and the parties’ resources and would give rise to an unavoidable risk of inconsistent rulings.”
Rule 213.1 gives discretion to the court where the first lawsuit was filed as to whether the matters in which there is a “common question of law or fact” should be coordinated.
The PMA argued the facts and legal questions were identical.
“Putting wholly aside whether PSU’s claims have any merit, which PMA vigorously denies, the claims asserted by PSU in the Centre County action are wholly dependent upon the issues raised by PMA in the Philadelphia action, as even a casual reading of PSU’s complaint amply illustrates,” the PMA said in the motion.
It also argued that for convenience of the parties, witnesses and counsel, the court should transfer and coordinate the cases. It said such a decision would not result in unreasonable delay or costs to either party or result in prejudice to either side. If anything, an order granting transfer would cut costs, the insurer said.
Steven J. Engelmyer, of Philadelphia firm Kleinbard Bell & Brecker, represents the insurance company and declined to comment on the motion filed this week.
Jerold Oshinsky, a California attorney with Jenner & Block, represents Penn State in the Centre County matter — Pennsylvania State University v. Pennsylvania Manufacturers’ Insurance Co. — along with Joseph P. Green, of Lee Green & Reiter in State College.
Both Oshinsky and Green were copied on the PMA’s motion, but neither has made an entry of appearance in the Philadelphia case — Pennsylvania Manufacturers’ Insurance Co. v. Pennsylvania State University.
Oshinsky was not immediately available for comment Wednesday.
The underlying civil case — Doe A v. Second Mile — was the first lawsuit filed in response to the allegations that Sandusky, the school’s former assistant football coach, used his position within the university and his Second Mile charity to sexually assault young boys. The state has charged him with 52 counts of sex-related offenses.
In the PMA’s initial complaint, filed in late January in Philadelphia, the PMA pointed to an abuse or molestation exclusion in the second of three consecutive general liability policies, arguing that such would excuse it from paying for the school’s legal costs. There appeared to be a narrow, two-month window in which the PMA acknowledged Penn State could be afforded coverage based on its policy.
However, that would come down to facts that have yet to be established in Doe A , namely whether the alleged abuse started before March 1, 1992, when the university’s policy changed to incorporate the abuse and molestation exclusion.
The Doe A complaint alleged Sandusky abused the accuser “more than 100 times” between 1992 and 1996.
The school, in its separate action, argued the PMA breached its contract with the university by refusing to cover Penn State’s defense costs and for refusing liability coverage for any damages stemming from Doe A . The university also pled an “anticipatory breach of contract” count to spell out that a breach had already taken place before Doe A has proceeded to litigation, and that the breach applies to any such claims against Penn State.