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Insurance company wants Springdale School District counterclaims dismissed

by Ron Wood | May 17, 2023 at 1:00 a.m.

FAYETTEVILLE -- The insurance carrier for Springdale Public Schools is asking a judge to throw out counterclaims filed in a federal lawsuit by the district.

Berkley Assurance Co. contends counterclaims filed by the School District and Joseph Rollins fail to state a valid claim for relief and should be dismissed.

The counterclaims were filed after Berkley asked a judge last month to rule it has no legal obligation to defend or pay any resulting damages from a federal lawsuit brought by Alissa Cawood against the school district, Marke Oesterle and Rollins.

Cawood's suit claims she was groomed and assaulted by Oesterle and Rollins and the district knew about the abuse, but did nothing to stop it. Oesterle, Rollins and the district have denied wrongdoing and asked the lawsuit be dismissed.

Cawood alleges Springdale hired Oesterle as an assistant principal in 2014. He was first employed at Har-Ber High School, then at the Tyson School of Innovation. Cawood claims during her time there, Oesterle engaged in grooming behavior toward her, culminating in a pattern of sexual harassment, molestation, sexual assaults and violations of bodily integrity.

Oesterle's inappropriate interest in Cawood allegedly began in August 2015 and continued in 2016, including many instances of sexual assault on campus, according to Cawood's lawsuit. Oesterle pleaded guilty to groping Cawood. Cawood's lawsuit seeks damages for emotional suffering and mental anguish, shame, humiliation, medical expenses for physical ailments, counseling and therapy and expenses related to such treatment.

Berkley Assurance argues multiple exclusions apply barring coverage for losses involving claims such as Cawood's. The company contends the exclusions mean it doesn't have to pay for any award of attorney's fees, costs or expenses that might be made in the lawsuit.

The insurance policy provides the school liability coverage subject to a limit of $1 million per claim or an annual aggregate of $1 million.

The School District and Rollins filed counter-claims alleging breach of contract, fraud, false misrepresentations, constructive fraud and insurance bad faith. They contend Berkley has a duty to defend the case and pay damages under the policy for any wrongful acts.

The counterclaim also contends Berkley owes damages to the district for not immediately defending the case.

Berkley contends the counterclaims are nothing but allegations that unspecified conduct was fraudulent and fail to plead necessary facts such as the time, place and content of the alleged false representations, as well as the details of the alleged fraudulent acts, including when the acts occurred, who engaged in them and what was obtained as a result.

"Even if all of Springdale's and Rollins' allegations are taken as true, they have still failed to state a claim upon which relief could be granted, and the counterclaims for declaration, bad faith, fraud, constructive fraud and false misrepresentations should therefore be dismissed," lawyers for Berkley said in a pleading filed Tuesday.

Rollins left the district in 2018 for a job with the Northwest Arkansas Council.

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