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Penn Law News

2022
AUG

Insurers Must Face $345M School Abuse Suit, Victims Say

 

Former students of a Georgia private school who were sexually abused by a teacher and two others asked a state court to deny motions filed by several insurers seeking to end a consolidated case for coverage of a $345 million consent judgment entered in favor of the students.

Twenty plaintiffs, led by Mark Eubanks, told the Floyd County Superior Court on Friday that their claims for damages against Continental Casualty Co., Zurich American Insurance Co. and five other insurers should be able to proceed. The former students argued in an opposition that they are entitled to sue the insurers to collect the full judgment entered against their insureds, The Darlington School and Roger Stifflemire, a teacher at the school who was accused of molesting students in the 1970s and 1980s.

"The insurance defendants' attempt to delay the inevitable question of their liability based on misperceived and inapplicable legal technicalities must fail," the plaintiffs said.

The former students filed a consolidated amended complaint against the insurers in March — after a consent judgment was entered with the school — for damages resulting from the insurers' alleged breach of contract and bad-faith failure to settle, and as direct beneficiaries, assignees and judgment creditors, according to court filings.

The insurers filed various motions to dismiss and for judgments in their favor in May, arguing that they were not properly joined as parties and that claims for bad faith and attorney fees should be dropped.

However, the former students argued that Georgia law clearly provides that "where an action against an insurance company is based on an unsatisfied judgment obtained against the insured, joinder of the insurance defendant is proper."

The plaintiffs filed a second amended complaint in June, following the consent judgment entered against Stifflemire. They argued that the judgments and assignment of rights fixed Darlington and Stifflemire's liability for their underlying claims in the amount of the unsatisfied judgment.

In the most recent complaint, which is the subject of the insurers' motions to dismiss, the former students argued that the consent judgments allow them to maintain an action directly against the insurers for the proceeds of their policies. The insurers, on the other hand, have asserted that the former students cannot bring a direct action against them because a consent judgment is not a final judgment.

The former students asked the court to issue an order finding that the consent judgments against Stifflemire, Darlington and David Ellis, who is not an insured, are final judgments pursuant to Georgia code in order to resolve concerns raised by the insurers and move litigation along.

They also asked the court to dismiss without prejudice Frederick Marquette, who was accused of abusing students and is now deceased.

"He is not an insured with respect to any of the insurance defendants, and dismissing Marquette would alleviate one of defendants' major concerns in their motion: that the action against the insurance defendants should not proceed while underlying defendants remain in the case," the plaintiffs said.

Additionally, the former students withdrew their claim for punitive damages against the insurers.

Representatives of the parties did not immediately respond to requests for comment Monday.

The plaintiffs are represented by Darren W. Penn, Kevin M. Ketner and Alexandra "Sachi" Cole of Penn Law LLC and by Paul Mones.

The Darlington School is represented by Robert L. Berry, C. King Askew, Samuel L. Lucas and Lee B. Carter of Brinson Askew Berry Seigler Richardson & Davis LLP.

Roger Stifflemire is represented by Clifford Cleveland of The Cleveland Law Firm LLC and by Robert H. Smalley III of McCamy Phillips Tuggle & Fordham LLP.

Frederick Marquette is represented by S. Lester Tate III of Akin & Tate PC.

David Ellis is represented by Barbara A. Marschalk of Drew Eckl & Farnham LLP.

Great American Insurance Co. is represented by Matthew Boyer and Rachael Slimmon of Freeman Mathis & Gary LLP.

Continental Casualty Co. is represented by Jeffrey A. Kershaw of Kershaw White LLC.

Philadelphia Indemnity Insurance Co. is represented by Kim M. Jackson, David Russell Smith and W. Randal Bryant of Bovis Kyle Burch & Medlin LLC.

The North River Insurance Co. is represented by Alycen A. Moss and Dakota E. Knehans of Cozen O'Connor.

Zurich American Insurance Co., American Guarantee & Liability Insurance Co. and Northern Insurance Co. of New York are represented by Elliot Kerzner and Kenan Loomis of Cozen O'Connor.

The case is Mark Eubanks et al. v. The Darlington School et al., case number 19CV00237, in the Superior Court of Floyd County, Georgia.

--Editing by Nick Petruncio.

 

 


 

 

 

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