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Penn State could raise tuition to cover damages from civil lawsuits

By   /   November 17, 2011  /   No Comments

Paterno, others could be hit with civil suits in aftermath of sex abuse scanda

By Stacy Brown | PA Independent

HARRISBURG — Penn State University and former assistant football coach Jerry Sandusky are among those potentially facing millions of dollars in civil lawsuits as the allegations of child sexual abuse against Sandusky continue.

If the university is sued and found civilly liable, students and their families could face higher tuition to offset the damages or settlements. Tuition increased this year because of cuts in state funding.
"When something bad happens, sometimes civil liabilities follow, so it’s certainly not out of the question that somebody could sue not just Sandusky, but the school and others," said Jessie Allen, who teaches civil procedure, legal ethics and civil rights at University of Pittsburgh School of Law.
Sandusky is charged with sexual assault against a minor. A grand jury report detailed eight separate incidents in which the former football coach is accused of abusing boys as young as 8 years old between 1996 and 2005.
Various, but unconfirmed, media reports, suggested that at least 10 new victims, going back to the 1970s, have come forward with allegations against Sandusky.
"There is no reason not to file even before the criminal case because the standard of proof in a civil case is much lower. You could have an acquittal in the criminal case where the state has to prove its case beyond a reasonable doubt. Civil liability would need only to be a preponderance of the evidence or a 51 percent chance that the incident happened," Allen said.
Insurance may not cover this.
The university may have liability insurance coverage but, with potentially dozens of victims in the Sandusky case, civil awards could amount to tens of millions and may easily surpass insurance liability limits, experts said.
"The insurance company might also argue that it doesn't cover the conduct in question," said John Culhane, a law professor and tort expert at Widener University's School of Law in Wilmington, Del.
"Any policy is only covered to its liability limits, and that could be a problem. Even if it isn't a problem with liability limits, the policy premiums could rise, and any costs could be passed on to students in the form of higher tuition," Culhane said.
A Penn State University spokesman hung up the phone Thursday without answering PA Independent’s questions about liability insurance and the university's preparations for possible civil lawsuits.
Culhane said among those who could face civil liability are:
  • Legendary football coach Joe Paterno, who was fired amid the scandal;
  • University resident Graham Spanier, who also was fired amid the scandal,
  • Former university vice president Gary Schultz, who was charged with covering up the sex abuse allegations and later resigned;
  • Former athletic director Tim Curley, who also resigned after he was charged with covering up the sex abuse allegations; and
  • Assistant coach Mike McQueary, who was placed on administrative leave last week and allegedly did not report the abuse incident he reportedly witnessed to anyone but Paterno.

McQueary told a grand jury that he saw Sandusky assaulting a boy as young as 10 years old in the showers at the university's sports complex. He said he reported the incident to Paterno and police. The school's police this week denied receiving any such report from McQueary.  

Paterno's wife gets the house

Paterno could be preparing to face civil action. According to multiple media reports, including The New York Times, which cited county records, Paterno transferred full ownership of his house to his wife, Sue, for just $1 in July. Paterno's house's fair-market value was listed at $594,484.40.

Wick Sollers, Paterno's lawyer, did not return two telephone messages left at his office Thursday.

In an e-mail to The New York Times, Sollers said the Paternos had been engaged in a “multiyear estate-planning program,” and the transfer “was simply one element of that plan.” He said it had nothing to do with the scandal.

However, Culhane, who said he has followed the case closely, said Paterno's actions could be interpreted as a move to protect himself.

"It is fair to say that, in the event of a civil judgment against Paterno, the court in its search for assets might want to take a closer look at that transaction," Culhane said.

Culhane did, however, caution that the house had been the subject of numerous transactions.  

But, Lawrence Frolik, a law professor at the University of Pittsburgh who specializes in elder law, told The New York Times that he had “never heard” of a husband selling his share of a house for $1 to his spouse for tax or government assistance purposes.

“I can’t see any tax advantages,” Frolik said. “If someone told me that, my reaction would be, ‘Are they hoping to shield assets in case if there’s personal liability?’ It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”