Judge Blocks Chubb Exit From New York Diocese’s Thousands of Child Sex Abuse Suits

A New York judge has ruled that the “plain language” of Chubb Insurance policies dictates that the insurer must cover the Archdiocese of New York parishes and schools as they contend with thousands of sex abuse lawsuits.

Chubb has balked at providing coverage for the Archdiocese of New York (ADNY) and sought declaratory judgments relieving it of responsibility. The insurer argued that the alleged incidents of sex abuse did 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 the policies.

The archdiocese insisted Chubb was obligated to provide coverage, arguing that the insurer’s wholesale denial of coverage is based on prematurely concluding without evidence what the results will be in the underlying claims when 99% are still in discovery.

The lawsuits at issue were filed under the state’s Child Victims Act (CVA). Enacted in 2019, this law gave individuals with time-barred claims alleging sexual abuse when they were minors a temporary, two-year window within which to bring claims.

On December 15, Judge Suzanne J. Adams of the state Supreme Court for New York County dismissed Chubb’s requests for declaratory judgments, finding the insurer had no cause of action.

“The plain language of the insurance policies at issue covers bodily injury and negligence as alleged in the underlying CVA actions,” she wrote, adding that the Chubb insurers set forth no facts, policy language or specifics of cases that would support declaratory judgments.

ADNY and its 300 parishes and 200 schools, which serve 10 counties, are facing more than 3,000 CVA 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.

Chubb’s View

Chubb sought declaratory judgments that it was not obligated to defend or indemnify the ADNY for the CVA claims because it maintained they do not concern accidents but rather “allege different legal theories, including intentional torts, strict liability, and negligence.”

The Chubb policies issued from 1956 to 1965 state that they will pay for bodily injury “sustained by any person and caused by accident.” The policies issued from 1966 to 1972 define an “occurrence” as “an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” The policies issued from 1973 to 1986 all define an “occurrence” as “an accident, including continuous or repeated exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”

The insurer 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.”

Chubb noted that in 2016, the ADNY compensated 338 victims of clergy abuse more than $67 million in a settlement. Chubb said the ADNY paid millions of dollars to alleged victims of child sexual abuse, without the insurers’ knowledge or consent.

Chubb also alleged a lack information and cooperation needed to evaluate the claims. 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. “All of the policies require the insured to cooperate with the insurer,” Chubb added.

Archdioceses Response

The church maintains that the sex abuse that happened decades ago was neither intentional nor known and was not expected. At best, it is too early to rule upon Chubb’s purported “expected or intended” or other coverage defenses because such determinations require legal and factual findings in the sex abuse legal actions, according to the church.

ADNY asserted that “Chubb’s complaint fails to identify even one specific lawsuit or any of the facts it intends to prove in support of its defenses. Chubb does not identify a single instance of allegedly expected or intended abuse. It does not allege a single claim for which notice was late. It does not identify a single case in which the insureds failed to cooperate.”

In its reply, ADNY cited a similar declaratory judgment action Chubb has filed against the Archdiocese of San Francisco. ADNY called Chubb’s move a “tactical maneuver” in a corporate decision to “walk away from sexual abuse claims and to ignore the intent of state law reviving child sexual abuse claims, and to refuse to adjust such claims on a case-by-case basis.”

ADNY accuses Chubb of elevating its own interests above its policyholders and the survivors that the policies were purchased to protect. “In adopting wholesale the underlying allegations of propensity knowledge, Chubb has sought to admit such allegations to avoid financial responsibility based on an “Alice in Wonderland” claim that proof of negligence is actually proof of intentionality,” the church asserted.

Judgments Denied

In her December 15 opinion, Judge Adams found the insurer had no cause of action.

“The plain language of the insurance policies at issue covers bodily injury and negligence as alleged in the underlying CVA actions,” she wrote, agreeing with ADNY that the Chubb insurers set forth no facts, policy language or specifics of cases that would support declaratory judgments.

The judge said Chubb did not cite any underlying CVA claims that are not premised on negligence. Instead the insurer only made general allegations that they allege “different legal theories, including intentional torts, strict liability and negligence.”

She said Chubb’s allegations from news articles, internal communications, state attorneys general and others were also non-specific. She called the documents “conclusory allegations— bare legal conclusions with no factual specificity— that are insufficient to survive a motion to dismiss.”

The judge insisted that in view of the plain language of the insurance policies, it is “obvious” that these policies cover the underlying CVA claims since such claims allege negligence against ADNY.