Kennewick School District not covered for $30 million worth of claims in sex abuse lawsuit

The Kennewick School District could be on the hook for $30 million in damages, or a little less than one fifth of its annual general fund, if it’s found at fault in a $70 million lawsuit concerning the sex crimes of former teacher and coach William Pickerel.

An insurance policy meant to protect the district in such cases ended a year ago because the insurer was dissolved, according to court documents.

The first of Pickerel’s alleged victims — all former students — didn’t file claims with the district until months after the insurance coverage was cut off.

“To date, all efforts to determine if coverage can be obtained have been unsuccessful resulting in approximately $30 million in claims that are not subject to indemnity under an insurance policy,” Michael McFarland, the district’s attorney, said in court documents. He was not available for further comment.

The identities of the former students participating in the case also could become known — Benton County Superior Court judge Vic VanderSchoor refused to grant a protective order that would prevent the alleged victims’ names from being released and recently rejected a request to reconsider the decision.

The former students’ attorney, Jeff Kreutz of Kennewick-based Tamaki Law, said he plans to appeal the decision to the Washington Court of Appeals.

“Not allowing (the plaintiffs) to proceed under John Doe status victimizes them again,” Kreutz told the Herald.

Pickerel, 78, who taught in Kennewick for 37 years, was convicted in King County in 2008 of sex crimes against young boys, with prosecutors citing “numerous incidents of fondling, inappropriate touching and sodomy.”

He was released from prison in early 2014 for good behavior after serving 51/2 years of a 10-year sentence and is living in Seattle as a registered Level 3 sex offender.

Fourteen former Kennewick High School students filed the lawsuit in October, saying the district knew or should have known about Pickerel’s actions and acted to stop him. They attended the school as far back as the 1980s and as recently as the 2000s.

Half of the victims said Pickerel sexually assaulted them during or after wrestling practice on school property. Many said he abused them on out-of-town trips, most to Seattle, at the hotel rooms they shared.

The district has denied any wrongdoing, saying the alleged abuse happened off-campus and during non-school sponsored events, and has referred further comment to its attorneys.

Todd Startzel, an investigator hired by the district to research its insurance coverage in light of the lawsuit, said in court documents that a policy provided by Atlantic Mutual Insurance Co. would have covered claims from six of the alleged victims in the lawsuit.

But the insurer, which was founded in the mid-1800s and paid out claims related to the sinking of the Titanic in 1912, was liquidated by a New York court in 2011 after a flood of workers’ compensation claims overwhelmed the company.

The district was required to make any claims on that policy before Dec. 15, 2013, in order to receive financial protection in a lawsuit.

“I have been unable to find any legal authority providing an exception to the (cutoff) date,” Startzel said in court documents.

Kreutz has not received any additional information about the district’s lack of liability coverage for some of his clients’ claims, he said. His clients will continue to pursue their case, as it’s about holding the district accountable, not an insurance company.

Judge VanderSchoor did not issue a written ruling explaining his denial of a protection order for the plaintiffs in the case, but noted in a November hearing that the law allows for abuse victims to be named in civil claims, Kreutz said.

District officials and Kreutz were in negotiations about a potential protection order during the summer of 2014 after the first claims were filed. But the district pulled out of those talks, court documents said.

The plaintiffs have always been willing to disclose their identities to district officials, as well as provide counseling records and other information, Kreutz has said. But the nature of what happened to them makes them the target of “undoubted embarrassment that would come with the revealing of their identities” publicly and victims of sexual abuse are frequently granted the right to protect their identities.

“It’s very surprising to us,” Kreutz said of the district’s opposition to the protection order.

McFarland argued in court documents that allowing the students to remain anonymous is unfair to the district, which is faced with harsh publicity while its accusers remain shielded.

While pseudonyms have a place in criminal cases, there is far less of a compelling interest for them in voluntary civil suits, McFarland said. That’s especially true after Tamaki Law placed an ad in the Herald seeking potential clients in the case and agreed to interviews about the lawsuit.

“Plaintiffs, through their counsel, have stated their wish to have ‘recognition’ and ‘acknowledgment’ to vindicate their personal interests,” McFarland said in court documents. “Thus, they voluntarily chose to invoke the power of this court and must be required to proceed in their true identities.”

This story was originally published January 2, 2015 at 1:59 PM with the headline "Kennewick School District not covered for $30 million worth of claims in sex abuse lawsuit."