Insurer Is Ordered to Pay School's Investigation Costs

, New York Law Journal

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An appeals court has found that Syracuse University's insurer must cover the school's costs of answering subpoenas during the criminal investigation of sexual molestation charges against former basketball coach Bernie Fine. Without elaboration, the Appellate Division, Fourth Department, affirmed Onondaga County Supreme Court Justice Donald Greenwood's (See Profile) ruling that the National Union Fire Insurance Co. of Pittsburgh is responsible for coverage of the college's costs of complying with the subpoenas in excess of $250,000.

The university estimated it spent "millions" of dollars in 2011 and 2012 answering the six subpoenas, three each from Onondaga County District Attorney William Fitzpatrick and Northern District U.S. Attorney Richard Hartunian. Both prosecutors concluded their probes without bringing criminal charges against Fine after two former ball boys to the Syracuse team complained that the coach molested them in the early 2000s at his home and during road trips.

Greenwood ruled that Syracuse's "potential liability" in the molestation case was at stake throughout the Fine investigation even though Fine, and not the university, was technically the subject of prosecutors' interest. "Clear and unambiguous" language in the university's policy called for indemnification by National Union under such circumstances, Greenwood concluded (NYLJ, March 11, 2013).

Justices Nancy Smith (See Profile), Eugene Fahey (See Profile), Stephen Lindley (See Profile), Rose Sconiers (See Profile) and Gerald Whalen (See Profile) joined in the Fourth Department's ruling, Syracuse University v. National Union Fire Insurance of Pittsburgh Pa., CA 13-01056, from Rochester on Dec. 27.

Robert Novack of Bressler, Amery & Ross in Manhattan represented the insurer. Kenneth Frenchman of Kasowitz, Benson, Torres & Friedman argued for the university.

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