No Coverage for Either Negligence or Intentional Claims against Archdiocese, Court Rules

Are excess insurers obligated to indemnify a religious institution for a negligence-based claim? A federal district court in Missouri has determined that there was no coverage in these circumstances.  

The Case 

The plaintiff in a lawsuit against the Archdiocese of St. Louis and Archbishop Robert J. Carlson alleged that a former priest and employee of the Archdiocese had sexually molested his son. The trial court dismissed all claims except those asserting that the Archdiocese had (i) “inappropriately, recklessly, and/or intentionally placed [the plaintiff’s son] in a knowingly dangerous environment[,]” causing him to suffer “emotional and psychological” illness “from which he never recovered”; (ii) intentionally failed to supervise its clergy; and (iii) intentionally failed to protect and supervise children under its care. The litigation was settled and the Archdiocese paid the plaintiff. It then sought indemnification from the insurers that had issued it excess indemnity coverage. Litigation ensued, and the insurers moved for summary judgment. 

The Court’s Decision 

The court granted summary judgment in favor of the insurers. It found that the first remaining count did not allege intentional acts that precluded coverage but rather was a negligence claim (because recklessness was a form of negligence under applicable Missouri law). The court then ruled that because negligence-based claims against a religious institution, such as the Archdiocese, could not stand under Missouri law, the Archdiocese could not be held liable for the negligent conduct alleged in the first count. Given that the excess policies limited coverage for a “loss,” defined as “the sums paid as damages in settlement of a claim or in satisfaction of a judgment for which the insured is legally liable,” it concluded that the excess insurers had no duty to indemnify the Archdiocese for any claims based on negligence. 

The court also ruled that because the remaining claims alleged intentional wrongful conduct, which did not amount to “occurrences” under the policies, the insurers also had no duty to indemnify the Archdiocese for them. 

The case is Chicago Ins. Co. v. The Archdiocese of St. Louis, No. 4:09-CV-977 (CEJ) (E.D. Mo. Nov. 27, 2012).