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Travelers Won't Have to Pay in Kickback Case

Source: AP

Posted on 25 Jun 2012 by Neilson

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TravelersA federal appeals court says an insurance company doesn't have to pay $1.75 million in damages as part of a settlement involving privately owned juvenile detention facilities in northeastern Pennsylvania.

Travelers Property Casualty Co. claimed it was free from paying damages under a policy held by developer Robert Mericle in a juvenile justice scandal that landed two former Luzerne County judges in jail.

The Third Circuit Court of Appeals panel agreed Travelers didn't have to pay Mericle's damages because the plaintiffs said he knowingly committed the acts that led to the suit.

Mericle built a pair of juvenile detention centers associated with kickbacks paid to two former judges. He pleaded guilty to federal charges in the case.

Mericle settled with plaintiffs for $17.75 million not tied to the insurance company dispute.