The New York Archdiocese, one of the largest in the country, has sued more than 30 of its general liability and excess insurers, insurance companies that have insured the archdiocese since 1954. The lawsuit seeks coverage for existing and future lawsuits against the Archdiocese arising from past sexual abuse claims newly revived by the New York State Legislature.
This year, New York enacted a new law called the Child Victims Act (“CVA“), which revives claims for sexual abuse that were previously barred by the statute of limitations. The CVA takes effect in August and gives victims of sex abuse one year from August to make claims against the perpetrators of the abuse. Other states have passed similar laws and New York joined the trend.
Although the time window within which to bring these lawsuits has not yet officially opened, claimants have already started to file legal actions, and one such action was commenced against the New York Archdiocese. The Archdiocese tendered the lawsuit to its insurance companies for coverage, and coverage has already been denied by at least one insurance company.
The lawsuit against the Archdiocese alleges that the Archdiocese was negligent in its hiring, retention, and supervision of certain members of the clergy that allegedly sexually abused a child who attended a church under the jurisdiction of the Archdiocese. The insurance company’s refusal to cover the Archdiocese under has stated that there is no coverage because of the alleged incidents do not constitute an “occurrence.” For an incident to be an occurrence, it must be unexpected and unintended from the standpoint of the insured. The insurance company, in this case, is basically saying that the archdiocese knew about the conduct of its clergy, and therefore cannot claim that any of the sexual abuse was an accident.
From what we can see, this coverage dispute is going to be a major war. The allegations in these complaints are all going to be based in negligence, claims that are potentially covered under all of these policies. Because all of these complaints are going to plead potentially covered claims, we predict that all of these insurance companies will have a duty to defend these claims, at a minimum, unless the insurance companies can prove definitively, at the outset, that the Archdiocese knew about these alleged incidents of sexual abuse.
Whether the Archdiocese knew about these multiple instances of sexual abuse is going to be an intensely factual inquiry. That means the insurance companies are going to engage in extraordinary detailed documentary discovery and depositions to determine who knew what and when they knew.
Unless the insurance companies have a smoking gun, we predict they will all be obligated to defend these lawsuits, while this massive insurance coverage litigation goes through intense discovery, and heads to a showdown in front of a jury.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack