Court: Travelers Won’t Have to Pay Damages to Insured in Kickback Case

A federal appeals court said 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 last Thursday Travelers didn’t have to pay Mericle’s damages because 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 must pay plaintiffs $17.75 million not tied to the insurance company dispute.