Lexington Insurance Company and United Educators Insurance have responded to a lawsuit filed by Oberlin College April 17, 2023. The suit claims that Lexington and United Educators have not reimbursed any portion of the $36.59 million Oberlin paid towards damages and prejudgment interest in the Gibson’s Bakery lawsuit or any of the defense costs incurred by Oberlin in appealing the judgment.

On Aug. 31, Lexington and United Educators filed two separate responses. 

Lexington has admitted that they have not reimbursed Oberlin for any of the amounts paid to the Gibson plaintiffs, including any damages and post-judgment interest incurred. However, the company denies that it wrongfully refused to provide coverage under its own policy and denies that it broke any obligation to defend Oberlin College. 

Oberlin’s initial lawsuit reads, “Lexington and United Educators observed mock jury exercises before the Gibson trial, and were therefore fully aware of the possibility for a substantial plaintiffs’ verdict,” and “on the eve of the trial, it became clear that the case likely could be settled for under $10 million.” 

Lexington admits that it observed mock jury exercises but denies that prior to the trial, one of Oberlin’s excess insurers, Mt. Hawley Insurance Company, “sent Lexington and United Educators a letter demanding that they ‘negotiate in good faith and settle this matter on [Oberlin’s] behalf [.]’”

Lexington has acknowledged that Oberlin purchased a commercial umbrella liability policy with a $25 million limit but has continued to deny that it was contractually obligated to provide a defense.

In a separate filing, United Educators Insurance denies that they were presented the opportunity to resolve the Gibson case before trial. Additionally, United Educators refutes the claim concerning that there would be a substantial verdict and that there were numerous opportunities to resolve the Gibson lawsuit. United Educators denies that the Gibson lawsuit could have been settled for the amount that United Educators contends is covered by its policy.

The Alumni for Oberlin Values group issued a statement expressing concern over recent actions of College administration, stating, among other things, that Oberlin has “Handled the Gibson’s bakery matter in such a way that [resulted in] serious financial losses and damage to Oberlin’s reputation.” 

Oberlin College has previously claimed that insurers Lexington and United Educators could have funded a settlement within the combined $50 million limits of their policies to avoid a costly jury verdict.

Joshua Spielberg, OC ’77, a lawyer and member of the Alumni for Oberlin Values group, explained his concern with Oberlin’s recent financial track record.

“As an alum, I am very concerned that Oberlin has paid out $36.6 million for this judgment because it could have been spent on other things that are a priority for Oberlin,” Spielberg said. “Oberlin has not been spending money in areas that I would consider a priority. Oberlin has outsourced union jobs that affected over a hundred union workers. The explanation given for that is they needed to save money. Oberlin has not kept its faculty salaries competitive with peer colleges. The explanation is Oberlin needed to save money or create additional revenue. So especially in that context that Oberlin would be paying out this much money, it’s very much a concern.”