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Española schools may be on hook for most of $3.2M settlement in teacher-abuse suit

SANTA FE — A lawsuit over a teacher’s alleged improper contact with a female student at an elementary school has ended with Española Public Schools agreeing to a $3.2 million settlement payment — and the district itself, not its insurers, may be on the hook for most of the money.

The New Mexico Public Schools Insurance Authority, to which school districts pay premiums, will cover $750,000 of the settlement reached in October. But a private insurer which covers additional losses up to $4,250,000 for NMPSIA’s clients has served notice that it is denying coverage in this case.espanolaschools

“Selective Insurance is denying coverage on the grounds that the Española Schools knew, or should have known, about potential pending claims and failed to disclose these potential claims before Selective Insurance issued its policy,” says an Aug. 10 letter to both Española and Santa Fe public schools officials from NMPSIA claims specialist Marc Bernstein.

The Santa Fe school district was originally a defendant because Gary Gregor, the teacher accused of improper behavior with girls, worked in Santa Fe before he was hired in Española. But the judge in the federal court lawsuit dismissed Santa Fe from the litigation. The case has raised questions about how Gregor moved among districts after facing repeated accusations, starting in Utah before he was hired on in New Mexico.

Gregor, fired by Española schools in 2010, was accused in the suit of twice asking a fourth-grade girl to spend the night at his home, giving the girl gifts like candy and teddy bears and touching her private parts. The suit alleged a principal failed to report complaints about Gregor.

Cammie Nichols, plaintiff’s attorney in the suit, said Monday that the girl’s family came to her law firm only after police investigated Gregor in 2009, turned information over to the district attorney’s office and “nothing was happening, so they became very, very frustrated.”

Selective Insurance and NMPSIA are now in arbitration over coverage for the portion of the settlement payment above $750,000. If the arbitration proceedings go Selective’s way, that would leave about $2.5 million unpaid. If that happens, “one option is going after the Española School District” for the money,  said Sammy Quintana, executive director of NMPSIA.

The Española district also faces a new suit filed Oct. 10 by Nichols for another former Gregor student, based on essentially the same set of facts. No comment was available from Española school officials Monday.

The letter from Bernstein notes the potential for more lawsuits involving Gregor and says that another insurance company —  Genesis Insurance, which provides coverage of between $5 million and $10 million — “may also deny coverage on its policy limit of $10 million.” Even if Genesis accepts the claim, “the damages may exceed all limits for this alleged perpetrator, Gary Gregor,” Bernstein’s letter concludes.

The suit targeted Santa Fe schools for giving Gregor a “neutral reference” despite allegations of inappropriate behavior with minors that surfaced before he resigned from SFPS in 2004.