Wade Clark Mulcahy LLP

On December 14, 2023, a New York County trial judge granted the Archdiocese of New York’s (“ADNY”) pre-answer motion to dismiss a declaratory judgment action filed by certain insurers challenging coverage for New York Child Victim’s Act (“CVA”) claims against ADNY. The CVA extends the statute of limitations for survivors of child sexual abuse for criminal and civil cases.

In Century Indemnity Co. v. The Archdiocese of New York, Chubb and certain affiliates sought a declaration that they had no duty to defend or indemnify ADNY in over 1,000 CVA actions alleging sexual abuse that took place from the 1950’s to the 1980’s. The insurers issued numerous primary and excess policies from 1956 to 2003 and have been defending ADNY and other associated policyholders under a reservation of rights. The insurers claimed, among other things, that claims of sexual abuse did not trigger coverage because they were not accidents or “occurrences” caused by negligence, but instead alleged intentional torts and strict liability. The insurers also asserted notice and known loss defenses.

ADNY argued that the complaint should be dismissed because it sought a blanket determination of no coverage for over 1,000 actions, each having their own unique facts, without citing any specific policy language, case facts or instances of late notice. ADNY further asserted that the insurers refused to adjust the claims on a case-by-case basis and that the complaint was riddled with conclusory allegations which were deficient as a matter of law.

The insurers argued that the only question presented on a pre-answer motion is whether a proper case has been presented to invoke the court’s jurisdiction to issue a declaratory judgment, not whether they were entitled to a favorable declaration. The insurers further argued that they plead sufficient facts to put ADNY on notice that the policies only cover bodily injury caused by an accident and that publicly available information shows that the injuries caused by the alleged sexual abuse were intentional.

The trial court disagreed and found that the allegations in the complaint were conclusory and that the insurers failed to set forth facts that would support declaratory judgment. Specifically, the Court found that the insurers failed to cite any specific facts or policy language or point to any underlying claims that are not premised on a theory of negligence. Rather, the Court observed that the “plain language” of the policies covers bodily injury and negligence and that it was “obvious” that the policies covered the CVA actions since they alleged negligence. The Court would not issue a blanket declaration of no coverage and that, at the very least, the insurers are obligated to defend ADNY in the lawsuits. The insurers have filed a Notice of Appeal.

It remains to be seen how the Appellate Division will rule on the appeal given the liberal pleading rules in New York and the sweeping, conclusory nature of the complaint in the case. Coverage for New York CVA and related Adult Survivors Act (“ASA”) claims is a developing topic which raises a number of important issues which impact the insurance industry. WCM is actively monitoring the CVA and ASA litigation and will report on any significant future developments.

Thank you to Brendan Gilmartin for his contribution to this post. Please contact Andrew Gibbs with any questions.