Insurance Coverage and The Child Victims Act: The Gauntlet Has Been Dropped

By Dan D. Kohane, Esq.

The Archdiocese of New York v. Insurance Company of North America, et al. New York State Supreme Court, New York County, Index No. 653772/2019

When Governor Cuomo signed the Child Victims’ Act into law on February 14, 2019, we predicted a rash of insurance coverage lawsuits as religious institutions, schools, hospitals, scout troops, and others faced lawsuits.  With the one-year window about to open in August—reviving claims barred by the statute of limitations— sexual assault and abuse claims are already being proffered under the CVA and the coverage lawsuits are being filed.

The Archdiocese has filed a lawsuit in the State of New York, Supreme Court, New York County against over 30 insurers who issued insurance policies to the Archdiocese from the early 1950s to 2000. However, the underlying lawsuit which has given rise to this declaratory judgment action impacts only two carriers, INA and Chubb. The underlying claim involves a plaintiff named John Michael Norman. Mr. Norman claims to have been abused by two priests, one approximately 1972 through 1973 and the other for six months during 1974. Mr. Norman has sued the Archdiocese including claims alleging negligent hiring and retention, gross negligence, and negligent infliction of emotional distress.

According to the Declaratory Judgment complaint, both insurers deny coverage alleging that the claims do not constitute an “occurrence” under the terms of the policies. The Archdiocese claims that the allegations in the pleading are broad enough to require a defense under the policies. Those are typical allegations one would expect to find in a declaratory judgment action.

However, the Archdiocese seeks to broaden the relief sought. It seeks a “judicial determination of the rights and duties of the Archdiocese and other insurers. The Archdiocese alleges that as claims and lawsuits alleging sexual abuse and physical abuse are commenced against the Archdiocese, these other insurers intend to “dispute, limit or deny coverage for sexual abuse claims lawsuits alleged against the Archdiocese as a result of the CVA.” Thus, the Archdiocese joined 30 other insurers who issued policies decades before and decades after Mr. Norman’s claim, claiming the Archdiocese anticipates these other unrelated insurers to limit or deny coverage.

We cannot imagine how the Archdiocese can successfully maintain claims against insurance companies to which lawsuits or claims have not been submitted for consideration. Particularly, in situations where the insurers have not denied coverage or otherwise sent out coverage position letters. We would expect those carriers to retain counsel moved to dismiss those lawsuits because no case or controversy exists between the Archdiocese and those uninvolved insurers at this time.

We will keep you posted.

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