Michigan State, Insurance Companies In Talks Over Nassar Abuse Settlement
Dec. 4--Nearly 18 months after Michigan State University sued about a dozen insurance companies in an effort to get them to pay a record-setting settlement with survivors of Larry Nassar's sexual assault, the case remains on hold. The university and the companies are engaged in mediation talks, but legal action could restart soon if there's no further movement.
It's high stakes for the university. If it can't get the companies to pay, then the school will have to pay back the hundreds of millions of dollars it borrowed to make a $500 million settlement to the first round of Nassar survivors. The money needed could continue to climb -- more lawsuits are pending against MSU.
The suit was filed in July 2018. Michigan State is alleging the companies broke contracts when each one refused to pay, despite MSU paying premiums over the years for coverage.
If mediation between the university and the companies doesn't lead to an agreement, then the case will kick into high gear in 2020, said Emily Guerrant, MSU's spokeswoman.
"MSU strongly believes it is entitled to be reimbursed by the insurance companies to whom it paid millions in premiums for many years," she told the Free Press.
The court docket for the case in Ingham County Circuit Court is lengthy -- but largely is just a series of lawyers from around the country registering with the court and with deadlines for responses from the insurance companies being pushed back. The latest deadline is Dec. 15. It's unclear if that will be met.
A couple of secondary insurers have been dropped from the case, although with legal designations allowing MSU to refile at some point if they need to.
The original suit was filed in an effort to force the companies to pay, MSU said in its filing.
That filing from June 2018 says that it's not just that the insurance companies won't pay -- it's that they say don't believe MSU has any legitimate claim.
The companies "have not acknowledged their contractual coverage obligations, they have refused to acknowledge even the potential for coverage under their respective policies," the suit says. "No Defendant Insurer has paid any amounts whatsoever to reimburse MSU for costs it incurred in connection with the defense and settlement of MSU's liability arising out of Nassar's conduct. As a result of Defendant Insurers' breach of their contractual duties under their respective policies, MSU has borne and continues to pay for the entire cost of its investigation and defense with respect to the underlying claims, and will likewise bear the full costs of the settlement."
It's not unexpected for MSU to have to sue to try to force its insurance companies to pay. After the Jerry Sandusky scandal, Penn State engaged in a legal tussle with its insurers before reaching agreement on how much of a payout would be given. Penn State's latest financial statement said insurers have covered $30 million in costs, while other insurance claims remain pending.
Nassar molested hundreds of female student athletes while he was a doctor at MSU. He was sentenced Dec. 7, 2017, to 60 years in federal prison on child pornography charges and is currently in a federal prison. He also faces a 40- to 175-year sentence issued in Ingham County and a 40- to 125-year sentence from Eaton County. Those sentences will not begin until he finishes the federal sentence.
Contact David Jesse: 313-222-8851 or [email protected]. Follow him on Twitter: @reporterdavidj
Contact David Jesse: 313-222-8851 or [email protected]. Follow him on Twitter: @reporterdavidj
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