Oberlin College settles with its insurers in Gibsons Bakery judgment lawsuit

One year after it filed a lawsuit against four of its insurance providers over their refusal to help pay a nearly $36.6 million judgment won by Gibson's Bakery and its owners, Oberlin College has settled with the last two remaining defendants in the civil case. "We are pleased that Oberlin has reached a confidential resolution with our insurers. Our settlement with our two primary insurers — Lexington and UE — is significant," Oberlin College spokeswoman Andrea Simakis said Thursday. The college voluntarily dismissed its case May 17 against Lexington Insurance Co. of New York, the last of the four insurance companies that it sued in 2023, according to Lorain County Common Pleas Court records. The Mount Hawley Insurance Co. of Peoria, Illinois, was dismissed from the lawsuit on May 1, and United Educators Insurance of Bethesda, Maryland, and StarStone Specialty Insurance Co. of Cincinnati were dismissed on April 17, according to court records. According to its lawsuit, filed in Judge Chris Cook's courtroom in April 2023, Oberlin College had at least $75 million in insurance that would have easily covered the Gibsons' judgment and its own unpaid attorney fees. The college eventually paid the Gibsons after the Ohio Supreme Court refused to hear its appeal. Its lawsuit did not give an exact dollar amount the college spent on legal fees to fight the bakery and its owners in court. As a private institution, Oberlin College is not bound by the same public records laws that a public university might be held to in a similar situation. When its insurance companies refused to pay, and mediation with at least one of them failed, Oberlin College sued. Lexington and United Educators in particular "engaged in a systematic, multiyear effort to avoid their coverage obligations by attempting to shift responsibility from the Gibson lawsuit to each other" or other insurance companies, Oberlin College said in its lawsuit. Both companies allegedly had opportunities ahead of the Gibson's Bakery trial to settle the case for a fraction of its eventual cost, and Oberlin College allegedly demanded they do so, according to Oberlin College's lawsuit. Lexington failed to pay "a single cent" and Oberlin College was met with "complete abandonment" by United Educators after the company refused to renew the insurance policy it had held for 34 years, according to the lawsuit. The original jury verdict and damages stemmed from the aftermath of student protests over the arrest of three Oberlin College students for attempting to shoplift from Gibson's Bakery in November 2016. The students later pleaded guilty to misdemeanor crimes including attempted theft, aggravated trespassing charges and underage purchase of alcohol, served no jail time, and read statements in court saying store clerk Allyn Gibson had the right to chase the main perpetrator out of the store and that his actions weren't racist. Oberlin College students protested outside the bakery for two days following the arrests, handing out flyers alleging — without providing any concrete evidence — a long history of racism at the bakery. Former college Vice President and Dean of Students Meredith Raimondo was accused of supporting student protesters during the protests, including personally handing out flyers. The Gibsons sued in 2017 after college officials refused to apologize or issue a statement saying the family wasn't racist. No evidence of racism by the Gibsons or the bakery was presented during the 2019 civil trial, and numerous members of the community testified the Gibsons and their bakery were not racist. In text messages and emails presented in court, Oberlin College officials profanely mocked the bakery and its products and threatened to "rain fire and brimstone" on the business. The trial in Judge John Miraldi's court ended with a jury awarding the Gibsons $44 million in damages. Miraldi capped the actual award at $25 million, citing Ohio law limiting civil judgments. After three years of appeals by the college, the Ohio Supreme Court declined to hear the case. The final judgment included $6.5 million in legal fees to the Gibsons' attorneys and interest earned on the judgment during the appeals process.Contact Dave O'Brien at (440) 329-7129 or dobrien@chroniclet.com.