Mark Lennihan/ASSOCIATED PRESS
Horace Mann and its insurance companies were ordered to begin mediation on Thursday on the school’s suit to force the carriers to cover the costs of its sex abuse settlements.
Horace Mann, the tony Bronx prep school rocked by a sex abuse scandal, was ordered to take its lawsuit against its insurance carriers to mediation Thursday after a judge told the lawyers privately that the school might have a weak case.
Manhattan Supreme Court Justice Charles Ramos repeatedly asked why Horace Mann officials waited 25 years to notify its carriers, who are subsidiaries of AIG, about a student allegation in 1993 that a music teacher had sexually abused him.
When Ramos, a 1959 graduate of Horace Mann, asked the school’s lawyer, Howard Epstein, if trustees had been notified of the student’s letter, Epstein initially said “there was no evidence of that.”
RELATED: JUDGE ASKED TO STEP DOWN FROM HORACE MANN SUIT
Later, when Ramos noticed in court papers that trustees had been aware, Epstein replied: “Well, some trustees.”
“One will do,” Ramos replied.
Epstein insisted it didn’t have to be reported in 1993 because it was just an allegation, not a formal complaint.
RELATED: SCHOOL KEPT INSURANCE COMPANY IN DARK IN SEX ABUSE SUITS: COURT PAPERS
But Ramos suggested that the insurance companies might be off the hook for about $ 1.2 million for two settlements the school made with former students and legal fees if trustees knew about the allegations but didn’t report it.
“They’ve got some good defenses here. This (public legal fight) doesn’t do anybody any good,” Ramos told the lawyers at the bench.
Horace Mann filed the suit against its carriers after they failed to pay the costs of its settlements.
AIG’s attorney Mark Sheridan said his client would have participated in settlement discussions two years ago when news of the allegations first hit the media if Horace Mann had not insisted on a confidentiality clause that forbid the carriers from using anything they learned to ultimately deny the school’s claim for coverage.
In another development, the insurance carriers withdrew their application to have Ramos withdraw from the case because of his ties to the school.
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