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WILKES-BARRE &mdash; An insurance company has sued Frank J. and Dorothea Ciavarella in connection with an a overpayment they received from Hanover Area School District as a transportation contractor.
				The company, American Alternative Insurance Corporation, is seeking $244,121 plus interest and costs from the Hanover Township couple.
				The origin of the suit dates back to a discovery that the district had overpaid the Ciavarellas for one year of special education student transportation. Months of negotiations by the district to recoup the money failed, and the insurance company paid the district for the loss in 2019.
				In September of that year, the insurance company filed a praecipe of summons, a precursor to a lawsuit, but none was filed until this week. Wilkes-Barre Attorney Richard Polachek filed the suit in Luzerne County Court of Common pleas on behalf of the insurance company as a &ldquo;subrogee&rdquo; of the school district. A subrogee is the person or entity assuming legal rights to attempt to collect a claim of another party, the subrogor, after paying that party&rsquo;s expenses arising from claims against a third party.
				The suit, filed against the Ciavarellas separately and doing business as Star Transportation, notes that during the 2017-18 school year a district employee &ldquo;mis-entered mileages provided&rdquo; by the defendants, resulting in the over-payment. It also notes the district&rsquo;s failed attempts to get the money back, and the insurance company&rsquo;s payment to the district.
				The suit levels four counts against the Ciavarellas: Breach of contract for failing to return the money after being notified of the error; Unjust enrichment by keeping the money despite knowing of the error and over-payment; Conversion of &ldquo;the overpayment monies for their exclusive use; and negligence &ldquo;for failing to realized the over-payments that were being made to them&rdquo; and &ldquo;failing to reimburse the overpayments.&rdquo;
				State Auditor General Eugene DePasquale had his office investigate the overpayment, resulting in a stinging report that rebuked the district on several issues, including the fact that a School Board member failed to abstain from voting to approve the payments to a &ldquo;closely related vendor.
				&ldquo;Board members must be required to disclose potential conflicts of interest and abstain from voting on decisions when conflicts arise,&rdquo; DePasquale said. &ldquo;The district should also develop a strong anti-nepotism policy that would apply to board members and administrators.&rdquo;
				No names were given, but Frank and Dorothea Ciavarella are the parents of Board Member Frank Ciavarella, who was board president at the time the overpayments hit the headlines. He resigned as board president but remains on the board.
				DePasquale&rsquo;s office referred the matter to the state Ethics Commission, which does not confirm or deny any investigations. No ruling has been issued by the Ethics Commission regarding the matter.

Insurance company sues Hanover Area School District bus contractor