LAUSD sues insurers for alleged denial of sexual abuse coverage

LOS ANGELES (CNS) – The Los Angeles Unified School District is suing several insurance companies for allegedly failing to defend and indemnify the district for more than 60 sex abuse lawsuits filed under a 2019 law that allowed alleged victims to overcome the limitation period barrier.

The lawsuit in Los Angeles Superior Court names as defendants Aetna Insurance Co.; Central National Insurance Company of Omaha; Cravens, Dargan & Co., Pacific Coast; Pacific Indemnity Co.; and Providence Washington Insurance Co. Representatives for Aetna and Central National Insurance did not immediately respond to requests for comment on the breach of contract lawsuit filed Wednesday.

In October 2019, Governor Gavin Newsom signed into law AB 218, which created a three-year review period for adult victims who were abused as minors to file civil lawsuits for sexual abuse that were previously prohibited by the statute of limitations.

The bill's passage “resulted in a flood of litigation against LAUSD, as plaintiffs have asserted and continue to assert, claims against the district involving allegations of sexual assault, abuse and/or of sexual assault as a child…” the lawsuit states.

Each of the 61 underlying lawsuits were filed by victims of alleged childhood sexual assault, allegedly by an LAUSD employee or someone affiliated with the district, according to the complaint, which further states that the insurance policies at issue were underwritten by the LAUSD in the 1950s, 1960s and early to mid-1970s.

For the most part, the insurance companies “evaded their contractual responsibilities to defend and indemnify the District against allegations of negligence made in these alleged sexual abuse cases, choosing instead to abandon the LAUSD and stand by …,” the lawsuit alleges.

Instead, insurers have “constructed arbitrary and capricious obstacles to circumvent their obligations and they have delayed, delayed, obstructed and engaged in insurance coverage maneuvers in an attempt to avoid their contractual obligations to defend and indemnify the LAUSD against the underlying lawsuits,” the suit states.

In addition to compensatory damages, LAUSD is seeking recovery of attorney fees and benefits the district believes insurance companies are owed, according to the suit, which further alleges that insurers could also be liable for damages- punitive interests.