LAUSD insurer sues to avoid paying $30 million Miramonte settlement

LAUSD insurer sues to avoid paying $30 million Miramonte settlement
Former teacher Mark Berndt at his 2012 arraignment on charges that he abused students at Miramonte Elementary School.
Los Angeles Times
By Howard Blume
May 31, 2013

An insurance company has sued the Los Angeles Unified School District seeking to avoid paying settlement costs related to alleged child abuse at Miramonte Elementary School.

The action, if successful, could leave the nation's second-largest school system on the hook for an estimated $30 million that it agreed to pay to 58 alleged victims of former teacher Mark Berndt. At least as many claims remained unresolved, with attorneys seeking higher compensation than the settlement provides.

The suit was filed Wednesday in Los Angeles Superior Court by New Jersey-based Everest National Insurance Co.

L.A. Unified also has sought compensation for more than $5 million spent to replace the entire Miramonte staff for half a year after Berndt's arrest in January 2012.

Everest "disputes that there is any coverage under the Everest policies" for the claims by L.A. Unified. "A judicial declaration is necessary and appropriate," according to the suit.

Six other insurers also are named as defendants. All have provided policies to L.A. Unified, the suit claims.

The type of coverage was general liability, and the companies should be responsible for Miramonte costs beyond a "self-insurance" amount, in the district's view. The district's share of the liability should be $3 million or $5 million, said Sean Andrade, an outside counsel representing L.A. Unified.

The likely outcome of the litigation would be a determination of who owes what, said Andrade, adding that all insurers have so far refused to pay Miramonte-related claims.

Everest sued "before the district could sue them for breach of contract or bad faith," Andrade said.

"It's troubling that these insurance companies which were compensated to provide this coverage are now trying to escape responsibility," said district spokesman Sean Rossall. "We’re going to do everything possible to ensure that the carriers honor our policies. We’ve been working diligently to resolve these cases in the best interests of the students while also honoring the district's obligation to preserve resources for all students.”

Berndt, 62, awaits trial on allegations that he spoon-fed his semen to blindfolded students in his classroom as part of a tasting game. He has pleaded not guilty. He remains in custody in lieu of $23 million bail.


Southern California School District Settles Lewd ‘Tasting Games’ Claims
By Christina Hoag and Gillian Flaccus
March 14, 2013
Insurance Journal

The Los Angeles school district will pay millions of dollars to settle claims and lawsuits filed by students and families from an elementary school where a third-grade teacher was accused of spoon-feeding children semen in what he called “tasting games,” lawyers in the cases said Tuesday.

District officials did not reveal the total amount of the settlement, but attorney Raymond Boucher, who represents several Miramonte Elementary School students, said each claimant will receive $470,000.

District General Counsel David Holmquist said the settlement covers 58 of the 191 claims and lawsuits filed by students and parents against the district after the January 2012 arrest of former third-grade teacher Mark Berndt on 23 charges of lewd behavior spanning five years at Miramonte.

A few of the cases involved another Miramonte teacher, Martin Springer, who was charged with lewd acts on a child in a case involving a second-grader that authorities said was fondled in class in 2009.

The accusation surfaced after Berndt’s arrest, Holmquist said.

The 58 people involved in the settlement are all students, he said.

Prosecutors said in Berndt’s “tasting games” he fed students his semen on cookies and by spoon, sometimes blindfolding and photographing them. Berndt, who taught for 32 years at the South Los Angeles school, has pleaded not guilty in the criminal case.

Springer has also pleaded not guilty.

The allegations against Berndt came to light when a drugstore photo technician noticed dozens of odd photos of blindfolded children and reported them to authorities. Investigators said they discovered a plastic spoon in Berndt’s classroom trash bin that was found to contain traces of semen.

Boucher, who represents 13 of the 58 students in the settlement, said proving some of the claims would have been a problem at trial.

Some children did not have photographs of themselves eating the cookies laced with a milky white substance, or of being fed spoonfuls of it, he said.

In addition, there was no way to prove the substance in photos was semen, he added.

Parents also understood that with so many claims, a jury verdict could bankrupt the district, he added.

“We had to do a balancing act and we understood, if you go that second route and you wind up (with the district) in bankruptcy, these clients will never receive compensation for what they’ve been through,” Boucher said.

Frank Perez, an attorney representing eight students, said parents chose to settle rather than put their children through the emotional upheaval of litigation and to put the case behind them.

Other attorneys blasted the settlement amount as paltry and said they would proceed with their cases.

“This is lifelong trauma,” lawyer Brian Claypool said.

Attorney John Manly said the district has not yet explained how the alleged incidents went undetected for so long.

“The district got a great deal today,” he said. “There’s not been a single explanation of who knew what when.”

The case led to a wide-ranging overhaul of how the nation’s second-largest school district handles allegations of sexual abuse after it was revealed that previous complaints about Berndt’s behavior were ignored.

It also shined a light on how slowly state officials act to censure teachers and led to a flurry of allegations of teacher-student sex abuse in the district and in other school systems...