Five insurance carriers cannot be expected to defend or indemnify a Georgia boarding school
where child sexual abuse took place decades before the liability policies were written, the Georgia Court of Appeals has found in a ruling that reversed a $345 million judgment against the insurers.
“…The fact that the mental anguish continued in subsequent years does not mean the injury ‘comes into existence’ in each subsequent policy period, the
three-judge panel said in the March 6 opinion, addressing the heart of Darlington School victims’ argument.
The litigation has been brewing for almost a decade. The appeals court’s review was deemed so important that the American Property Casualty Insurance
Association, the Complex Insurance Claims Litigation Association
and the Federation of Defense and Corporate Counsel all filed friend-of-the-court arguments. The appellate judges thanked all three groups for their input.
The sad episode began in 1974 and continued through 1994, when at least 20 boys at th
e school in Rome, Georgia, were sexually abused by a teacher named Roger Stifflemire. Several of
the students informed school leadership but the school failed to investigate or terminate Stifflemire, the court explained.
In 2017, Darlington School finally sent a letter to alumni, informing them that the school had been made aware of one instance of abuse. Some 20 student
s then filed suit. The school in 2024 reached a $351 million settlement, agreeing to pay $6 m
See more beautiful photo albums Here >>>
illion of that while its insurance carriers paid the rest. The school also assigned rights to the plain
tiffs-victims, allowing them to seek recovery directly from the insurance companies, which i
ncluded Philadelphia Indemnity Insurance, Continental Casualty Co., The North River Insurance Co., Great American Insurance and Zurich American
All insurers denied the claims, noting that most of the insurance policies specified that bodi
ly injury must occur during the policy periods, which did not start until 2010. Others excluded unlawful conduct by the insureds.
The only insurance company that had written policies for the school at the time of the abuse w
as Lamorak Insurance, which was later deemed insolvent and was liquidated in 2011. So, Darlington’s attorneys tried a different approach, arguing that mental anguish,
which manifested many years after the abuse and was triggered in part by the 2017 letter to school alumni, was the true injury—and the school should be covered.
The trial court in Floyd County, Georgia, agreed with that argument and in 2024 ordered Philadelph
ia Indemnity to pay $232 million; Zurich was ordered to pay $92 million; North River and Great American were both liable for $10 million each.
But on appeal, the Georgia Appeals Court judges last week reached a very different conclusion.