On April 17, 2023, Oberlin College and Meredith Raimondo filed a lawsuit against four of its insurance providers in the Lorain County Common Pleas Court on the grounds that the defendant insurers have not reimbursed any portion of the $36.59 million Oberlin paid in damages and prejudgement interest awarded in the Gibson’s Bakery Lawsuit in 2022, or any of the defense costs incurred by Oberlin in appealing the judgment. 

The $36.59 million does not include a separate $1 million contribution from Oberlin’s primary commercial general liability insurer, the College Risk Retention Group. 

The suit is filed against Lexington Insurance Company, United Educators Insurance, Mt. Hawley Insurance Company, and StarStone Specialty Insurance Company.

The case will be overseen by Judge D. Chris Cook. The complaint brings claims for Declaratory Judgment, Breach of Contract, Equitable Subrogation, Bad Faith and Breach of the Duty of Good Faith and Fair Dealing, and Promissory Estoppel. 

Oberlin College claims that primary 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.

“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,” the lawsuit reads. Oberlin claims that before the trial, “it became clear that the case likely could be settled for under $10 million,” but that none of its insurers were willing to pay the settlement fees, leaving Oberlin to pay damages “many times greater than the lost settlement opportunity.”

Lexington and United Educators have both denied Oberlin’s allegations, and Lexington has filed a cross claim against United Educators. 

However, in the lawsuit filing, Oberlin cited a section of Lexington’s policy stating that the insurance company has a “duty to defend any ‘suit’ against the ‘Insured’ that seeks damages for … personal and advertising injury, to which this insurance applies, even if the ‘suit’ is groundless, false or fraudulent.” 

“As a fiscally responsible institution, Oberlin had at least $75 million in total insurance coverage — more than enough to pay the judgment and defense costs,” Oberlin wrote in a statement to the Review. “The insurers declined to settle despite indications from a mock jury that a trial might result in a substantially more costly outcome.” 

Oberlin College also claims that the insurance companies have shifted blame for who is responsible for the loss Oberlin incurred. 

“Lexington and United Educators each engaged in a systematic, multi-year effort to avoid their coverage obligations by attempting to shift responsibility for the Gibson lawsuit to each other, to [the College Risk Retention Group], or to Oberlin, instead of protecting their Insureds’ interests,” the lawsuit reads.

Second-year College student and Law and Justice Scholar Kash Radocha commented on the case. 

“Oberlin College v. Lexington Insurance Company is not another Gibson’s,” Radocha wrote in an email to the Review. “I believe it is important for students to be aware of, since this will be a living memory for us whenever the holding is delivered. The reality is, this is just a normal legal process the College is engaging in with insurance claims, not out of its own control. Gibson’s, while very important to remember and recount accurately as part of the College’s history, is a settled case. The College is moving forward and away, and this new suit is evidence of that.”