A Washington state appeals court has ruled the insurer of the Bremerton School District is not on the hook for a $1.77 million settlement reached in March of last year between the district and former assistant football coach Joseph Kennedy.

The panel of three judges affirmed Aug. 26 that the settlement covering Kennedy’s legal counsel fees was excluded under the district’s insurance policy.

The Schools Insurance Association of Washington sent a letter to the district in August of 2022 stating Kennedy’s award for legal fees and costs was “unlikely to be covered under the MOC,” and the insurer denied coverage a month later for the U.S. Supreme Court’s award of printing and clerk costs.

The insurer’s legal counsel sent another letter Jan. 17, 2023, again stating attorney fees awarded to Kennedy would not be covered while still offering to contribute $300,000 to the settlement, court records say.

The district sued SIAW in March of 2023 alleging a breach of contractual duties, and a trial court ruled against the district’s arguments.

Kennedy’s contract at Bremerton High School was not extended following the 2015 season after the district expressed concerns over the coach’s prayers at the football games. He would sue the district, primarily alleging First Amendment violations of free speech and free exercise of religion.

The case would reach the Supreme Court after defeats at the federal trial and appellate levels, and a 6-3 decision in June of 2022 awarded Kennedy the ultimate victory.

Kennedy made his return to Bremerton’s Memorial Stadium as a coach for the first game of the 2023 season before resigning just days later.