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Penn State insurer seeks to deny coverage

By Dominique Debucquoy-Dodley, CNN
updated 10:44 AM EDT, Thu July 26, 2012
A Joe Paterno statue has been removed. A lawsuit by the school's insurer is the latest fallout from the Sandusky case.
A Joe Paterno statue has been removed. A lawsuit by the school's insurer is the latest fallout from the Sandusky case.
STORY HIGHLIGHTS
  • Penn State insurer says former officials withheld information on Jerry Sandusky's behavior
  • One of those administrators denied this week any role in a cover-up
  • Also Wednesday, Penn State board meets, discusses recent NCAA sanctions
  • Statement from board says penalties, though harsh, could have been worse

(CNN) -- Penn State's legal battles continued Wednesday with the university's primary general liability insurer filing a motion claiming coverage should be denied because the administration failed to disclose what it knew about former coach Jerry Sandusky's behavior, according to legal documents.

The motion, filed in common pleas court by the Pennsylvania Manufacturer's Association, says Penn State did not provide it with information relevant to the insurable risk the association assumed. The association has already sued Penn State over the coverage of one of Sandusky's victims' claims against the university, filed in November 2011.

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The association has insured Penn State under general liability policies since 1976.

"It would be unlawful and contradictory to public policy to require PMA to provide coverage to PSU under any policy issued to PSU after May 1998 with respect to PSU's concealment of Sandusky's sexually abusive conduct ... and failure to take appropriate action to prevent Sandusky from molesting minors," the motion read.

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The motion comes days after former Penn State President Graham Spanier denied a role in a university cover-up of Sandusky's actions. Spanier has not been criminally charged in the case. However, an investigation by ex-FBI chief Louis Freeh concluded that he helped university officials conceal allegations of sexual abuse against the former assistant football coach.

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No one from the Pennsylvania Manufacturer's Association was immediately available for comment.

Sandusky, 68, was convicted in late June of 45 of the 48 sexual abuse counts he faced, involving 10 victims. He was an assistant football coach at Penn State for more than 40 years until he resigned in 1999 but still had access to Penn State facilities through his charity until he was arrested in 2011.

Sandusky founded The Second Mile, a nonprofit organization for underprivileged youth and several of his victims attended the program. The foundation announced in May it will close.

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He will be sentenced in September.

The Penn State Board of Trustees met Wednesday night to discuss football sanctions handed down by the NCAA. According to a statement, the members found the sanctions difficult, but understood that they could have been much worse, reportedly a multiyear shut down of the team, a traditional major college football power.

No votes were taken, the statement said.

"The university and board resolve to move forward together to recognize the historical excellence in Penn State's academic and athletic programs," the board said. "We anticipate and look forward to demonstrating our outstanding performance in complying with the sanctions."

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Workers on Tuesday, July 24, remove the concrete landing area and wall where the Joe Paterno statue once stood in State College, Pennsylvania. Workers on Tuesday, July 24, remove the concrete landing area and wall where the Joe Paterno statue once stood in State College, Pennsylvania.
Final tributes, Paterno statue removed
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Ex-Penn State defensive coordinator Jerry Sandusky was arrested in November 2011 on charges that he preyed on boys he met through The Second Mile charity. In June 2012, he was convicted of 45 counts involving 10 young victims, and in October, he was sentenced to 30 to 60 years in prison. In July 2012, the NCAA imposed sanctions against Penn State, including a $60 million fine, scholarship reductions, the vacating of 112 wins, five years' probation and a bowl ban for four years. Click through the gallery for other notable NCAA scandals. Ex-Penn State defensive coordinator Jerry Sandusky was arrested in November 2011 on charges that he preyed on boys he met through The Second Mile charity. In June 2012, he was convicted of 45 counts involving 10 young victims, and in October, he was sentenced to 30 to 60 years in prison. In July 2012, the NCAA imposed sanctions against Penn State, including a $60 million fine, scholarship reductions, the vacating of 112 wins, five years' probation and a bowl ban for four years. Click through the gallery for other notable NCAA scandals.
Notable NCAA scandals
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On Thursday, Steve Garban became the first Penn State Board of Trustees member to resign since the Freeh report.

The NCAA handed Penn State a number of severe and unprecedented sanctions Monday for "perpetuating a 'football first' culture that ultimately enabled serial child sexual abuse to occur," according to the NCAA website.

The sanctions include a record $60 million fine, a four-year postseason ban, a four-year reduction in football scholarships and five years of probation. Penn State was also forced to vacate its football victories since 1998, including 111 by the late Joe Paterno, costing him the record as the winningest coach in the NCAA's top division.

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CNN's Susan Candiotti contributed to this report.

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