LDS Church sues insurance providers

[JAHS]

"The Church of Jesus Christ of Latter-day Saints has filed a lawsuit against its insurance providers, demanding they cover the costs of a child sexual abuse lawsuit settlement.
The lawsuit, filed in U.S. District Court in Salt Lake City, seeks to compel National Union Insurance and ACE Property & Casualty Co. to cover the financial settlement terms of a 2013 child sexual abuse case in West Virginia. In that litigation, the Church was sued by unnamed plaintiffs over allegations that the faith "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm.
According to this new lawsuit, the Church alleges it went to its insurers to have the settlement costs covered under its umbrella liability policies. But the insurers have rebuffed it, basically arguing the Church has not met the threshold to qualify for coverage and should dip into its own pockets to cover the costs.

"The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage," attorneys for that company wrote in a motion for summary judgment. "In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity."

LDS Church sues insurance providers over sex abuse settlement costs

I thought the Church was self-insured. 

[Calm]

5 minutes ago, JAHS said:

thought the Church was self-insured. 

Same here.

Can someone who speaks insurancese translate:

Quote

The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage…In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity.

 

[Dario_M]

Well however. I always get sick to my stomach when i hear something about child abusse anyway. 🤢🤮 Why is this happening so much these days? And no one seems to take action. Also in this storie. And afterwards everyone is suing each other. And has our church not a self insurance btw? 

 

Edited July 28, 2023 by Dario_M

[Pyreaux]

34 minutes ago, Dario_M said:

Well however. I always get sick to my stomach when i hear something about child abusse anyway. 🤢🤮 Why is this happening so much these days? And no one seems to take action. Also in this storie. And afterwards everyone is suing each other. And has our church not a self insurance btw? 

I'm not sure if its increasing, it could be decreasing, as in the past it was perhaps under reported, there are many resources devoted to this now. The arrests are increasing and it always makes it on the news. Sometimes I think it's even over corrected; just because a member of the church commits a crime doesn't mean the church could have prevented it or should have to pay. The church didn't pull the trigger, but they have money and insurance, so they get sued.

Edited July 28, 2023 by Pyreaux

[Peacefully]

It makes sense for the representatives of the church to exhaust all means of getting insurance they have paid for to pay up before they start dipping into our funds. 

[Dario_M]

11 hours ago, Pyreaux said:

I'm not sure if its increasing, it could be decreasing, as in the past it was perhaps under reported, there are many resources devoted to this now. The arrests are increasing and it always makes it on the news. Sometimes I think it's even over corrected; just because a member of the church commits a crime doesn't mean the church could have prevented it or should have to pay. The church didn't pull the trigger, but they have money and insurance, so they get sued.

I don't say that our church needs to pay. But i do find that when someone within the church get notice at such sinister practices he/she should get in action..and do whatever they need to do. Instead of acting as if there is nothing going on. That caunts also for places outside of the church btw. This is just so disgusting. And these childeren are damaged for life. When they grow up they will be still traumatized. We don't need to allow that. 

Edited July 28, 2023 by Dario_M

[Tacenda]

1 hour ago, Dario_M said:

I don't say that our church needs to pay. But i do find that when someone within the church get notice at such sinister practices he/she should get in action..and do whatever they need to do. Instead of acting as if there is nothing going on. That caunts also for places outside of the church btw. This is just so disgusting. And these childeren are damaged for life. When they grown up they will be still traumagized. We don't need to allow that. 

Yes to this!

[Benjamin McGuire]

11 hours ago, JAHS said:

"The Church of Jesus Christ of Latter-day Saints has filed a lawsuit against its insurance providers, demanding they cover the costs of a child sexual abuse lawsuit settlement.
The lawsuit, filed in U.S. District Court in Salt Lake City, seeks to compel National Union Insurance and ACE Property & Casualty Co. to cover the financial settlement terms of a 2013 child sexual abuse case in West Virginia. In that litigation, the Church was sued by unnamed plaintiffs over allegations that the faith "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm.
According to this new lawsuit, the Church alleges it went to its insurers to have the settlement costs covered under its umbrella liability policies. But the insurers have rebuffed it, basically arguing the Church has not met the threshold to qualify for coverage and should dip into its own pockets to cover the costs.

"The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage," attorneys for that company wrote in a motion for summary judgment. "In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity."

LDS Church sues insurance providers over sex abuse settlement costs

I thought the Church was self-insured. 

Insurance companies work with a set of complicated relationships. Most insurance companies work with another layer of insurance that is usually referred to as reinsurance. Reinsurance can be used by insurance companies (who are then able to limit their losses in certain circumstances) or they can be used by companies directly who self-insure. Reinsurance companies use something that works like your normal insurance deductible - except that the numbers can be quite large. I have a brother who is an attorney who spent part of his career representing reinsurance companies in the health care industry. So, he would get involved in cases only when the costs to a hospital (or their insurance company - if he was representing the insurance company) reached the level where his company would start to assume liability. Suppose that the deductible for the reinsurance was 5 million dollars. Suppose someone has an issue with the hospital, and wants to sue. The hospital makes them a settlement offer for 5 million. My brother's job might be to encourage that person to accept the settlement - because if they decide to go for more than that 5 million dollars, the reinsurer could fight that claim in court - sometimes leaving the claimant with nothing (even though the hospital themselves were willing to settle).

An umbrella policy of the sort referred to here, covers damages (losses) in excess of amounts covered by both underlying regular insurance policies and/or an amount set out for self-insurance (the 'retained limit'). So the umbrella policy might have a stipulation that says that they will pay amounts only after other insurance policies have paid, or in the case of something not covered by other insurance policies, only after an amount of XXX dollars has been paid by the insured entity. Most of the time, these other first shot insurance policies have limits on the amount that they will pay out, and this umbrella policy is acquired to cover damages in excess of those payouts. The argument here is simply that the insurance companies are claiming that the Church did not meet the contractual requirements necessary before the reinsurance kicks in. Additionally, the insurance company is claiming that the voluntary settlement in this specific cause didn't meet the bar to qualify as damages or losses for the purposes of meeting the retained limit. The Church is claiming that it has met those contractual requirements and is expecting these insurance companies to meet their obligations.

This sort of case is actually pretty routine.

[jonah747]

12 hours ago, JAHS said:

I thought the Church was self-insured.

Will your insurance company reimburse you if you have home insurance and you burn your house down?  No.
Will your insurance company pay out a life insurance policy to the wife if the husband commits suicide?  No.

For crimes like molestation or abuse in religious institutions, insurance does not work that way.

[Dario_M]

1 hour ago, Tacenda said:

Yes to this!

💙⬆️

[Thinking]

32 minutes ago, jonah747 said:

Will your insurance company pay out a life insurance policy to the wife if the husband commits suicide?  No.

Mine will. When we purchased my $200,000 term life insurance policy 21 years ago, during the first year suicide wasn't covered. After the first year it was.

[Pyreaux]

2 hours ago, jonah747 said:

Will your insurance company reimburse you if you have home insurance and you burn your house down?  No.
Will your insurance company pay out a life insurance policy to the wife if the husband commits suicide?  No.

For crimes like molestation or abuse in religious institutions, insurance does not work that way.

Apparently, it does, otherwise the lawsuit the church filed on their insurance has no precedent. I don't think the church has a habit of filing innovative or frivolous lawsuits.

[The Nehor]

2 hours ago, jonah747 said:

Will your insurance company reimburse you if you have home insurance and you burn your house down?  No.
Will your insurance company pay out a life insurance policy to the wife if the husband commits suicide?  No.

For crimes like molestation or abuse in religious institutions, insurance does not work that way.

In order:

Generally true.
Wrong, life insurance often does cover suicide if the policy has been in effect long enough.
Wrong, insurance can and often does work that way.

[smac97]

15 hours ago, JAHS said:

"The Church of Jesus Christ of Latter-day Saints has filed a lawsuit against its insurance providers, demanding they cover the costs of a child sexual abuse lawsuit settlement.
The lawsuit, filed in U.S. District Court in Salt Lake City, seeks to compel National Union Insurance and ACE Property & Casualty Co. to cover the financial settlement terms of a 2013 child sexual abuse case in West Virginia. In that litigation, the Church was sued by unnamed plaintiffs over allegations that the faith "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm.
According to this new lawsuit, the Church alleges it went to its insurers to have the settlement costs covered under its umbrella liability policies. But the insurers have rebuffed it, basically arguing the Church has not met the threshold to qualify for coverage and should dip into its own pockets to cover the costs.

"The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage," attorneys for that company wrote in a motion for summary judgment. "In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity."

LDS Church sues insurance providers over sex abuse settlement costs

I thought the Church was self-insured. 

I thought the self-insured thing was for hazard insurance for most of its physical properties.  This makes sense, since nobody lives in the buildings, or cooks food, etc.  It's likely cheaper to "self-insure" than to carry policies on these thousands of buildings.  For other things, though, I suspect typical insurance coverage makes sense.

Thanks,

-Smac

[Amulek]

16 hours ago, Calm said:

Quote

I thought the Church was self-insured. 

Same here.

I believe the church self-insures up to a certain amount and then carries an umbrella policy for claims above that amount.

I'm not sure what the self-insured amount is currently pegged at, but I remember coming across a case a few years back that said it was $15M.

I wouldn't be surprised if it wasn't somewhere above that number presently; anywhere between $15M - $25M would probably be in the ballpark.

 

Quote

Can someone who speaks insurancese translate:

Quote

The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage…In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity.

I think @Benjamin McGuire did a good job of explaining this, but here's a quick rundown...

An umbrella policy is kind of like an extra layer of liability coverage that kicks in after any other insurance (including self-insurance) has paid out.

Say, for example, that you get into a car accident and cause $500K in damage, medical bills, etc. but your car insurance has a $300K limit with a $1k deductible.

After you pay your deductible, your automotive policy would then pay out $300K. At which point your umbrella policy (assuming you had one) would kick in and pay the remaining $200K. That remaining amount could even include things that weren't covered by your auto policy (e.g., attorney fees).

The "retained limit" they are referring to is usually just the total limit of any other insurance available to the involved party. You generally have to use all of that up first before you get to use the amount specified in your umbrella policy. If there isn't any underlying insurance, as is the case with a self-insured party, then the retained limit functions kind of like a deductible. You have to pay out whatever amount you agreed to first in order for your umbrella policy to kick in.

So, one of the things National Union is asserting is that the Church hasn't satisfied the retained limit. If that is the case, then they (NU) shouldn't be on the hook for payment yet.

The other thing the insurer is claiming is that the church breached the "voluntary payments provision" of the umbrella policy. Basically, what they are saying is that the Church voluntarily took this obligation upon themselves by settling the lawsuit without obtaining their (NU's) consent. If that turns out to be correct and the Church really did breach the terms of their agreement, the insurer might not be on the hook after all - even if they would have been required to pay the full amount otherwise.

That's a pretty simplified, high level view though. In practice, there are a bunch of other factors that come into play - which is why everybody gets their lawyers involved. As Sam Brunson (in the original article) and Benjamin McGuire (above) both said, these kinds of disputes are actually fairly common in the industry.

 

[Analytics]

1 hour ago, Amulek said:

I believe the church self-insures up to a certain amount and then carries an umbrella policy for claims above that amount.

According to the actual complaint, the Church has two relevant insurance policies. The first is an "Umbrella Prime Commercial Umbrella Liability Policy" [sic] issued by National Union Fire Insurance Company of Pittsburgh, PA, and the second is a "Commercial Umbrella Liability Policy" issued by Ace Property and Casualty insurance Company. The complaint doesn't give any exact numbers, but I would guess the Church self-insures up to a certain limit, and then the National Union policy pays damages from that limit up to a higher amount, and then for truly catastrophic claims the Ace policy pays damages beyond that.

The Church's Complaint

What's interesting about this is that the Church is now arguing that these damages really occurred. The insurance policies don't cover losses due to a Church wanting to settle frivolous lawsuits in order to avoid bad publicity and avoid annoying legal costs. It covers losses that compensate for actual "bodily injury," which is defined as "bodily injury, sickness, or disease sustained by any person, including death, mental anguish, mental injury, shock or humiliation resulting from any of these at any time." By seeking reimbursement from the insurers, the Church is arguing that the bodily injury actually took place. The bodily injury is question is a teenager sexually abusing some kids at Church over the course of six years, and the Church being liable because it "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm."

The Church settled the underlying claim, apparently for a huge sum. And now, the Church is arguing that the bodily injury really took place.

I'm looking forward to seeing how the defendants respond to this.

 

 

Edited July 28, 2023 by Analytics

[smac97]

47 minutes ago, Analytics said:

The Church's Complaint

What's interesting about this is that the Church is now arguing that these damages really occurred.

I'm not sure about that.  From paragraph 10 of the Complaint:

Quote

The parties to the Underlying Lawsuit settled in July 2018.  

I rather suspect that the settlement included a "No Admission of Liability" provision.

See also paragraph 18:

Quote

The National Union Policy defines “Loss” as “those sums actually paid as judgments or settlements . . . .” 

 And paragraph 20:

Quote

The National Union Policy provides that National Union has:  

the right and duty to defend any Suit against the Insured that seeks damages for Bodily Injury . . . covered by this policy, even if the Suit is groundless, false, or fraudulent...

And paragraph 22:

Quote

The National Union Policy defines “Defense Expenses” as “payment(s) allocated to the investigation, settlement or defense of a specific loss, claim or Suit, including but not limited to . . . Attorneys’ fees and all other investigation, loss adjustment, and litigation expenses . . . .” 

And paragraph 28:

Quote

The ACE Policies define the insured’s “retained limit” as “the amount stated above which is the amount you will pay in the settlement of any claim or ‘suit’ to which this policy applies and no ‘underlying insurance’ or ‘other insurance’ applies.” 

And paragraph 29:

Quote

The ACE Policies obligate ACE to “assume charge of the settlement or defense of any ‘suit’ brought against the ‘insured’ to which this policy applies and to which no ‘insured’s’ ‘retained limit’ stated above applies because of the exhaustion of the applicable limits.” 

And paragraph 31:

Quote

The ACE Policies define “loss” as “those sums paid in the settlement of a claim or ‘suit’ or satisfaction of a judgment which the ‘insured’ is legally obligated to pay as damages because of ‘bodily injury’ . . . .” 

And so on.

47 minutes ago, Analytics said:

The insurance policies don't cover losses due to a Church wanting to settle frivolous lawsuits in order to avoid bad publicity and avoid annoying legal costs.

I'm happy to admit that I am out of my wheelhouse here, but the foregoing quotes seem to indicate that the insurance policies do cover settlements, including situations where "the Suit is groundless, false, or fraudulent."

What am I missing here?

47 minutes ago, Analytics said:

It covers losses that compensate for actual "bodily injury," which is defined as "bodily injury, sickness, or disease sustained by any person, including death, mental anguish, mental injury, shock or humiliation resulting from any of these at any time."

I don't think that is correct.  The policies appear to cover "those sums in excess of the Retained Limit that {the Church} becomes legally obligated to pay as damages by reason of liability imposed by law because of Bodily Injury . . . to which this insurance applies" (quoted in paragraph 12).

Payment by the insurer is for "loss," which is defined as "those sums actually paid as judgments or settlements . . . .” (paragraph 18).

As I read it, then,

A) since the insurer is obligated to for "losses" (again, defined as "sums paid in the settlement of a claim or ‘suit’ or satisfaction of a judgment"), and

B) since that requirement arises regardless of how the "loss" arises (whether "as judgments" or as "settlements"), and

C) given that settlements pretty much always include a "No Admission" proviso,

the Church doesn't need to - as you put it - "argu[e] that these damages really occurred."

47 minutes ago, Analytics said:

By seeking reimbursement from the insurers, the Church is arguing that the bodily injury actually took place.

No, I don't think it is.  The Church is arguing that it settled the case, and that the insurer has to pay out on settlement amounts over a specific "Retained Limits" amount (see paragraph 17).

47 minutes ago, Analytics said:

The bodily injury is question is a teenager sexually abusing some kids at Church over the course of six years, and the Church being liable because it "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm."

But since the Church did not admit to liability during the litigation, and because the Church settled the matter (which, I suspect, includes a "No Admission of Liability" provision), and because the policy includes amounts paid out as settlements (as opposed to "judgments" entered after a finding of liability), the Church doesn't need to argue what you are suggesting.

If the Church really is "arguing that the bodily injury actually took place," please provide a verbatim, chapter-and-verse quote in the Complaint.

47 minutes ago, Analytics said:

The Church settled the underlying claim, apparently for a huge sum. And now, the Church is arguing that the bodily injury really took place.

I'm sure that you really really want to be able to make that claim, but I don't think it works.  

The nice thing about lawsuits is that they are heavily based on written statements.  You have provided a link to the Complaint, but nowhere in it does the Church argue "that the bodily injury really took place."  If I have missed that admission, please point it out.  Otherwise, you can't stuff those words into the Church's mouth.

Thanks,

-Smac

[Amulek]

1 hour ago, Analytics said:

According to the actual complaint, the Church has two relevant insurance policies. The first is an "Umbrella Prime Commercial Umbrella Liability Policy" [sic] issued by National Union Fire Insurance Company of Pittsburgh, PA, and the second is a "Commercial Umbrella Liability Policy" issued by Ace Property and Casualty insurance Company. The policy doesn't give any exact numbers, but I would guess the Church self-insures up to a certain limit, and then the National Union policy pays damages from that limit up to a higher amount, and then for truly catastrophic claims the Ace policy pays damages beyond that.

It isn't that they have two umbrella policies - one for normal overruns and another for extreme amounts - it's just that more than one policy comes into play based on the timing of the abuse.

The injuries incurred in the underlying lawsuit took place between 2007 and 2012.

During that time frame, the church had an umbrella policy with National Union (from 2006-2007) and then switched providers to ACE for the next five years (from 2007-2012). Since the policies cover injuries and losses taking place within the defined policy periods, the Church is arguing that their insurers are obligated to pay the amounts over their retained limit.

 

Quote

What's interesting about this is that the Church is now arguing that these damages really occurred. The insurance policies don't cover losses due to a Church wanting to settle frivolous lawsuits in order to avoid bad publicity and avoid annoying legal costs. It covers losses that compensate for actual "bodily injury," which is defined as "bodily injury, sickness, or disease sustained by any person, including death, mental anguish, mental injury, shock or humiliation resulting from any of these at any time." By seeking reimbursement from the insurers, the Church is arguing that the bodily injury actually took place.

I'm not sure that's quite right.

I read the argument as saying that the underlying suit (which was ultimately settled) alleged bodily injury. And since the policy in force covered any suit against the insured which seeks damages for bodily injury - even if groundless, false, or fraudulent - then any defense expenses incurred (including settlement costs) are covered by the policy.

 

Quote

I'm looking forward to seeing how the defendants respond to this.

If the article is correct in it's summary of NU's general response, it looks like they will be arguing that (1) the Church failed to demonstrate they had exhausted the retained limit; and (2) the Church violated the no voluntary payments clause.

I don't have enough information to know if the Church was actually in breach of contract - thus negating their insurers' obligations - but I suspect the Church was operating within the realm of acceptability. But there honestly isn't any way to know for certain without going trough the courts. The Church's attorneys presumably believe they have a strong enough case to litigate, or at least strong enough that they believe they can receive a settlement from their insurers.

This isn't one that I'm super interested in following personally, but I would be interested in seeing out it ultimately turns out.

 

Edited July 28, 2023 by Amulek

[Analytics]

13 minutes ago, smac97 said:

The nice thing about lawsuits is that they are heavily based on written statements.  You have provided a link to the Complaint, but nowhere in it does the Church argue "that the bodily injury really took place."  If I have missed that admission, please point it out.  Otherwise, you can't stuff those words into the Church's mouth.

Thanks,

-Smac

Here are paragraphs 12 and 13 of the complaint:

12. Under the National Union Policy’s Commercial Umbrella Liability Insuring Agreement, National Union is obligated to pay on behalf of the Church “those sums in excess of the Retained Limit that [the Church] becomes legally obligated to pay as damages by reason of liability imposed by law because of Bodily Injury . . . to which this insurance applies.” 

13. The insurance afforded by the National Union Policy applies if “the Bodily Injury . . . is caused by an Occurrence that takes place anywhere, and the Bodily Injury . . . occurs during the Policy Period.”

Yes, the complaint says a partial definition of Loss is “those sums actually paid as judgments or settlements . . . .” but I'm positive that when looked at in its entirety, the insurance contract clarifies that not any arbitrary settlement is a covered Loss, but rather only losses associated with Bodily Injuries which are "caused by an Occurrence that takes place."

I'd be interested in how the actual insurance policy defines the capitalized word "Occurrence." 

The Church is free to argue that there wasn't an Occurrence, or that there was no Bodily Injury, or that it wan't legally liable , or whatever else it wants, but if that's the case I don't know how it could win this lawsuit.

[Analytics]

17 minutes ago, Amulek said:

It isn't that they have two umbrella policies - one for normal overruns and another for extreme amounts - it's just that more than one policy comes into play based on the timing of the abuse.

The injuries incurred in the underlying lawsuit took place between 2007 and 2012.

During that time frame, the church had an umbrella policy with National Union (from 2006-2007) and then switched providers to ACE for the next five years (from 2007-2012). Since the policies cover injuries and losses taking place within the defined policy periods, the Church is arguing that their insurers are obligated to pay the amounts over their retained limit.

Thanks for the clarification.

17 minutes ago, Amulek said:

 

I'm not sure that's quite right.

I read the argument as saying that the underlying suit (which was ultimately settled) alleged bodily injury. And since the policy in force covered any suit against the insured which seeks damages for bodily injury - even if groundless, false, or fraudulent - then any defense expenses incurred (including settlement costs) are covered by the policy.

 

If the article is correct in it's summary of NU's general response, it looks like they will be arguing that (1) the Church failed to demonstrate they had exhausted the retained limit; and (2) the Church violated the no voluntary payments clause.

I don't have enough information to know if the Church was actually in breach of contract - thus negating their insurers' obligations - but I suspect the Church was operating within the realm of acceptability. But there honestly isn't any way to know for certain without going trough the courts. The Church's attorneys presumably believe they have a strong enough case to litigate, or at least strong enough that they believe they can receive a settlement from their insurers.

This isn't one that I'm super interested in following personally, but I would be interested in seeing out it ultimately turns out.

 

The retention limit issue here might be similar to a one that reinsurers dealt with 20 years ago--were the terrorist attacks on the Twin Towers one even or two events? The payouts from reinsurers to life insurance companies were extremely different depending upon whether or not the two planes hitting the two towers were two distinct events. Likewise, these unfortunate alleged events in West Virginia took place over 6 years. In terms of the insurance contracts, were these one event or many events?

The No Voluntary Payments clause is also relevant, probably.

[smac97]

13 minutes ago, Analytics said:

Here are paragraphs 12 and 13 of the complaint:

12. Under the National Union Policy’s Commercial Umbrella Liability Insuring Agreement, National Union is obligated to pay on behalf of the Church “those sums in excess of the Retained Limit that [the Church] becomes legally obligated to pay as damages by reason of liability imposed by law because of Bodily Injury . . . to which this insurance applies.” 

13. The insurance afforded by the National Union Policy applies if “the Bodily Injury . . . is caused by an Occurrence that takes place anywhere, and the Bodily Injury . . . occurs during the Policy Period.”

Yes, I reviewed those.  But they do not include any admission by the Church.  They also cannot be read in isolation.  The policies appear to be fore "losses" accrued by judgment or settlement.  

And again, settlements pretty much always include "No Admission" provisions.

13 minutes ago, Analytics said:

Yes, the complaint says a partial definition of Loss is “those sums actually paid as judgments or settlements . . . .” but I'm positive that when looked at in its entirety, the insurance contract clarifies that not any arbitrary settlement is a covered Loss, but rather only losses associated with Bodily Injuries which are "caused by an Occurrence that takes place."

We'll see, I suppose.

13 minutes ago, Analytics said:

I'd be interested in how the actual insurance policy defines the capitalized word "Occurrence." 

The Church is free to argue that there wasn't an Occurrence, or that there was no Bodily Injury,

My point is that the Church doesn't seem to need to "argue" these things, and that it has not done so.

But I suppose I could be wrong.

13 minutes ago, Analytics said:

or that it wan't legally liable,

It's liable to pay a settlement, yes.  But that settlement likely includes a "No Admission of Liability" provision.

13 minutes ago, Analytics said:

or whatever else it wants, but if that's the case I don't know how it could win this lawsuit.

The Church's lawyers tend to be pretty good.

And the Church is fairly averse to litigation, but it filed this suit anyway.

This suit is likely to be resolved on principles of law (not fact).  And the Church's lawyers - being pretty good - have likely extensively reviewed this principles of law prior to filing suit.

Insurance companies are notorious for refusing to pay out when they are obligated to do so.

Taken together, these observations militate in favor of a surmise - mine - that the Church has its legal ducks in a row on this one.  

In the main, though, I'm not that interested in the outcome.  I think your assessment (that the Church has admitted liability for sexual abuse) is wrong, and my participation here focuses on that.

Thanks,

-Smac

[smac97]

49 minutes ago, Amulek said:

I'm not sure that's quite right.

I read the argument as saying that the underlying suit (which was ultimately settled) alleged bodily injury. And since the policy in force covered any suit against the insured which seeks damages for bodily injury - even if groundless, false, or fraudulent - then any defense expenses incurred (including settlement costs) are covered by the policy.

Yes, this is my interpretation as well.

49 minutes ago, Amulek said:

If the article is correct in it's summary of NU's general response, it looks like they will be arguing that (1) the Church failed to demonstrate they had exhausted the retained limit; and (2) the Church violated the no voluntary payments clause.

I don't have enough information to know if the Church was actually in breach of contract - thus negating their insurers' obligations - but I suspect the Church was operating within the realm of acceptability. But there honestly isn't any way to know for certain without going trough the courts. The Church's attorneys presumably believe they have a strong enough case to litigate, or at least strong enough that they believe they can receive a settlement from their insurers.

This isn't one that I'm super interested in following personally, but I would be interested in seeing out it ultimately turns out.

Same here.  Apart from Analytics' "Gee, this is a chance to claim the Church has admitted to being liable for sexual abuse" angle (which is, from the outset, a tough one to establish), this case is likely to be kinda boring.

Thanks,

-Smac

[Amulek]

56 minutes ago, Analytics said:

The retention limit issue here might be similar to a one that reinsurers dealt with 20 years ago--were the terrorist attacks on the Twin Towers one even or two events? The payouts from reinsurers to life insurance companies were extremely different depending upon whether or not the two planes hitting the two towers were two distinct events. Likewise, these unfortunate alleged events in West Virginia took place over 6 years. In terms of the insurance contracts, were these one event or many events?

I agree that will likely play a roll in the litigation. I suspect the insurers will argue that the Church is obligated to satisfy its retention limit for each incident of bodily injury, while the Church will argue that the several incidents gave rise to a single loss. If the Church's complaint is right about the insurers not investigating the facts pertaining to the retention limits fulfillment, then my tentative thought is that that will end up weighing in the Church's favor.

 

Quote

The No Voluntary Payments clause is also relevant, probably.

Yeah. It doesn't seem like the Church to not cross the t's / dot the i's on something like this, but just because I think they would normally act a certain way doesn't mean they actually did.

If they failed to satisfy the notification requirements outlined in their policy and/or entered into a settlement agreement without their insurer's knowledge / consent (again, assuming that such was prohibited in their policy) then it certainly may be the case that they were in breach. And if that's the case, then...too bad so sad.

Without having more information or access to the actual contract there's just no way to be sure, one way or the other. If they don't end up settling though, maybe we'll see a redacted version at some point.

 

[webbles]

10 hours ago, Dario_M said:

I don't say that our church needs to pay. But i do find that when someone within the church get notice at such sinister practices he/she should get in action..and do whatever they need to do. Instead of acting as if there is nothing going on. That caunts also for places outside of the church btw. This is just so disgusting. And these childeren are damaged for life. When they grow up they will be still traumatized. We don't need to allow that. 

This case is an interesting one because it was a bishop's counselor that recommended the mother to go to the police and report the perpetrator.  But, there is also a possibility that another mother went to a different bishop and was told to that the bishop would take care of it (in the civil trial, there was testimony for and against this).  There was also the fact that the perpetrator's mother was the Relief Society president and volunteered him as a babysitter to young children.  She may or may not have known (I lean towards she knew).

I'm glad that the bishop's counselor did do the right thing.  It triggered the perpetrator to be brought home from his mission and for evidence to be found that convicted him to decades in jail.  I'm saddened, though, that there was a chance that he could have been caught earlier and people either turned a blind eye to it or didn't believe it.  I hope we are getting to the point that if there is any inclination of child abuse, we go to the police first and let them investigate.  I'm ok with the clergy-penitent privilege, but anything outside of that should be reported.

[Analytics]

1 hour ago, smac97 said:

Yes, I reviewed those.  But they do not include any admission by the Church.  They also cannot be read in isolation.  The policies appear to be fore "losses" accrued by judgment or settlement.  

I was actually involved in a somewhat similar situation nearly 20 years ago now. I was in an auto accident where it was somewhat ambiguous who was at fault. It was dusk and raining, and the other car was speeding and didn't have its headlights on. I didn't see it, and pulled in front of it and got t-boned (thank goodness for side airbags). Quite frankly, I thought it was my fault, but I followed the insurance company's instructions and didn't admit to fault. The investigating officer didn't give me a ticket for it. Furthermore, my insurance company didn't think it was my fault either and didn't pay for the damages to the other car, and it ended up going to court. 

Now, if I personally would have gone to the other party and unilaterally made a settlement with the other driver where I paid a whole bunch of money but didn't admit to fault, should I expect my insurance company to reimburse me? Ignoring the no voluntary payment provision of the policy, I wouldn't expect to win a judgment against the insurance company to reimburse me unless I proved in court that I really was at fault. The insurance company only pays for settlements that it agrees to; if the insurance company doesn't want to settle, it is free to go to court and take its chances. 

Granted, there are other issues here, too. I'm just pointing out the irony that the Church's case is predicated on the assumption that it really was liable, regardless of what it did and didn't officially admit to elsewhere.

1 hour ago, smac97 said:

And again, settlements pretty much always include "No Admission" provisions.

I know that. But it doesn't change the fact that the insurance policy only covers things for which the insured really is liable.

1 hour ago, smac97 said:

My point is that the Church doesn't seem to need to "argue" these things, and that it has not done so.

My point is that it is implicitly doing so in the context of this litigation.

1 hour ago, smac97 said:

This suit is likely to be resolved on principles of law (not fact).  And the Church's lawyers - being pretty good - have likely extensively reviewed this principles of law prior to filing suit.

I suspect the insurance companies have lawyers that are at least passingly familiar with insurance law, too.

1 hour ago, smac97 said:

Insurance companies are notorious for refusing to pay out when they are obligated to do so.

I think you are exaggerating here. In the vast majority of cases, insurance companies make good-faith efforts to adjudicate fairly. But you might find poetic justice in the fact that reinsurance companies "refuse to pay out" extraordinarily frequently too. Those disputes are almost always handled behind closed doors in arbitration, and you might be surprised how big of an industry reinsurance arbitration actually is.

1 hour ago, smac97 said:

Taken together, these observations militate in favor of a surmise - mine - that the Church has its legal ducks in a row on this one.  

I think the insurance companies have their ducks in a row, too.

1 hour ago, smac97 said:

In the main, though, I'm not that interested in the outcome. 

I don't care about the outcome, but the case itself is interesting. I'd like to hear the other side.