Insurance companies for Horace Mann are refusing to pay to protect the tony New York private school’s good name from allegations of sex abuse by teachers when the institution could have defeated the victims in court.
The school’s “chosen strategy was to preserve its reputation by quickly settling all purported claims regardless of viability and then foisting responsibility for payment onto its insurers,” the companies say in a lawsuit over $1 million in payouts to two students who claim to have been molested in the 1990s.
“Neither of the asserted claims was legally viable and should have been vigorously defended rather than settled,” the insurers– including Granite State Insurance Company, New Hampshire Insurance Company and Chartis Claims Inc.– say.
They add that a lawsuit would have been easily defeated given the state’s three-year statue of limitations on sexual abuse allegations.
In a stunning expose published in 2012, former student Amos Kamil revealed that his alma mater harbored employees who were sexual predators for decades from the 1970s through the 1990s. Kamil and other victims’ advocates believe up to 50 students were molested by at least 20 teachers.
Following the revelations, the school chose to avoid any “adverse publicity” at all costs, according to a motion filed in Manhattan Supreme Court on Wednesday by the insurers asking a judge to dismiss the case.
The AIG divisions, who are refusing to compensate the Bronx school for the payments, say they “are not guarantors of Horace Mann’s reputation.”
They further allege in court papers that even after the victims’ attorneys allowed them to use documents from the March 2013 mediation for insurance-coverage purposes, Horace Mann insisted on “cloaking the basic facts” of the victims’ stories “in perpetual secrecy.”
One victim, Ben Balter, did not live long enough to benefit from the settlements. He committed suicide in 2009 at age 32 after suffering years of abuse by the late music teacher Johannes Somary.
His mother, retired Horace Mann science teacher Dr. Kathleen Howard, was a recipient of the one of the two payouts at issue in the suit with insurers.
“I realize that it could be millions and millions of dollars, and it would never have made any difference,’’ she told The Post in an interview last summer.
The suit says the insurers requested information “about the extent of Horace Mann’s knowledge of such claims in order to evaluate coverage.”
Administrators even allegedly barred the insurers from attending mediation talks with the victims and tried to force them to sign “sweeping” and “overbroad” secrecy agreements that required destroying documents immediately after the negotiation.
Horace Mann ultimately paid out between $4 and $5 million to 27 former students, sources have told The Post.
The insurers accuse the tony private school of using “willful and avowed obstruction” to prevent them from learning the truth about its dark past.
Jason King, an attorney for the companies, declined to comment.
“Horace Mann brought this lawsuit because, unlike the school’s other insurers, AIG chose to breach its contractual obligations,” a Horace Mann spokesman said in a statement. “Not only did AIG deny coverage, but it refused to even participate in the mediation that resulted in the settlement of the vast majority of claims against the school. AIG now stands alone as the only insurer that has not lived up to its responsibilities under its policy. AIG’s allegation of obstruction is unsupported by the facts and is consistent with its poor behavior throughout this process.”