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A New York state appeals court has reinstated Chubb insurance companies’ bid for judgments declaring that they are not obligated to cover thousands of sex abuse lawsuits brought against the Archdiocese of New York (ADNY).

Chubb insurers have maintained that the alleged incidents of sex abuse do not trigger coverage because they were not accidents or occurrences caused by negligence but were instead the result of intentional, known or expected occurrences and thus fall outside of their policies. The Chubb insurers also allege that coverage is not available because the church has not cooperated with them in their efforts to assess the claims.

ADNY has insisted the Chubb insurers are obligated to provide coverage and the church won that argument in a court ruling last December. But a state appeals court has now unanimously rejected most of that lower court ruling and reinstated Chubb’s action seeking declaratory judgments.

Last December, Judge Suzanne J. Adams of the state Supreme Court for New York County ruled that the Chubb insurers had no cause of action, finding that “the plain language” of their insurance policies covers bodily injury and negligence as alleged in the sex abuse lawsuits. Adams wrote that it is “obvious” that the insurers’ policies cover the underlying claims. She dismissed the insurers’ evidence documents regarding the church’s knowledge of abuse as “conclusory allegations— bare legal conclusions with no factual specificity— that are insufficient to survive a motion to dismiss.”

Wrong Focus

That denial of Chubb’s declaratory judgments was overturned on April 23. The Appellate Division, First Judicial Department of the New York Supreme Court, said the lower court wrongly focused on the allegations in the lawsuits, most of which allege negligence, rather than on Chubb’s allegations in its complaint about ADNY’s prior knowledge and non-cooperation.

“Supreme Court should not have dismissed the complaint on the finding that it only raised bare legal conclusions. The complaint adequately sets forth factual bases for the declaratory judgments it seeks,” the appeals court asserted.

“The relevant inquiry is whether the Archdiocese’s actions fall within or without the operative policies,” the higher court stated. “The complaint sufficiently alleges that recovery would fall outside the scope of plaintiffs’ duties to defend and indemnify if the Archdiocese had knowledge of its employees’ conduct or propensities.”

The appeals court faulted the lower court for discounting Chubb’s allegations concerning the Archdiocese’s longstanding awareness of sexual abuse as “non-specific, common knowledge type allegations.” against the Catholic Church. The court said the allegations are drafted with “sufficient precision to enable the court to control the case and the opponent to prepare.”

The insurers had cited media reports, admissions by church leaders including New York’s Cardinal Timothy Dolan, investigations by 20 state attorneys general, and the underlying lawsuits themselves as evidence that the church “knew about the sexual abuse of minors, failed to stop it, covered it up, and then lied about it.”

The appeals court found that Chubb’s complaint also sufficiently pled a noncooperation defense. The insurer said it requested but did not receive information from the ADNY about its policies and practices concerning the handling of allegations of sexual abuse by clergy, its knowledge of the scope and pervasiveness of sexual abuse by clergy, and other issues relevant to the ADNY’s requests for coverage.

However, the appeals court said a third Chubb claim based on the known loss doctrine was not viable.

“In blunt terms, the appellate court today rejected the ADNY’s arguments and the trial court’s decision,” Chubb commented in a statement released yesterday.

“As the court decided, ‘The complaint sufficiently alleges that recovery would fall outside the scope of plaintiffs’ duties to defend and indemnify if the Archdiocese had knowledge of its employees’ conduct or propensities.'”

ADNY Criticism

ADNY has accused Chubb of elevating its own interests above its policyholders and the survivors and accusing it of seeking to “avoid financial responsibility based on an “Alice in Wonderland” claim that proof of negligence is actually proof of intentionality,” the church has asserted.

New York enacted the Child Victims Act in 2019 and the Adult Survivors Act in 2022, giving individuals with time-barred claims alleging sexual abuse more time to bring claims. ADNY and its 300 parishes and 200 schools, which serve 10 counties, are facing more than 3,000 lawsuits alleging negligence concerning sexual abuse by clergy, lay people, teachers and others from the 1950s through the 1980s.

Chubb and its affiliates issued more than 30 primary and excess general liability policies to the archdiocese from 1956 to 2003. Chubb has been defending 2,770 of the VCA lawsuits under a full reservation of rights.

Topics New York Claims Chubb Church