The CVA expanded the natural statute of limitations for filing childhood sexual abuse claims going forward to age 55, or until seven years after the survivor becomes aware of trauma from past abuse — whichever is later. (Credit: ambrozinio/Shutterstock.com)
The Diocese of Trenton, New Jersey has filed suit against several insurers, citing their handling of an influx of sexual abuse claims the organization received after the implementation of the state’s Child Victims Act (CVA).
The CVA, adopted in December 2019, allowed those who experienced past acts of childhood sexual abuse the opportunity to file a civil suit against their abusers or any other responsible entities regardless of whether the prior time limit for these claims had expired. This created a “revival window” that allowed childhood sexual assault victims to file claims for two years.
In addition to this, the CVA expanded the natural statute of limitations for filing childhood sexual abuse claims going forward to age 55, or until seven years after the survivor becomes aware of trauma from past abuse — whichever is later.
In the wake of the CVA’s implementation, the Diocese reports that hundreds of lawsuits and claims were made against it by people who said they were sexually abused by priests, bishops, deacons or other church-affiliated individuals. These claims allege, among other things, that the Diocese negligently hired and supervised the perpetrators of this abuse.
Plaintiffs in the suit include Century Indemnity Co. (subsidiary of Chubb), First State Insurance Company (subsidiary of The Hartford), St. Paul Fire and Marine Insurance Company (subsidiary of Travelers) and National Union Fire Insurance Company (subsidiary of AIG). The complaint also references 50 “John Does,” which it notes are not-yet-identified insurance companies that sold liability policies to the Diocese and are “contractually obligated to provide the Diocese with coverage for the underlying claims.”
The Diocese accuses the insurers of failing to structure an appropriate allocation formula for payment of these claims, which it says violates New Jersey’s Unfair Claim Settlement Practices Act.
The complaint reads, in part: “Following many months of negotiation between the Diocese and the Defendant Insurance Companies, minimal progress has been made toward finalizing an allocation or cost-sharing agreement with respect to the defense of the underlying claims and fair compensation to victims. In addition, disagreements have arisen as to whether certain self-insured retentions have been exhausted in insurance policies sold to the Diocese, and also as to the proper interpretation of the trigger of coverage under the insurance policies, as well as the interpretation of other policy terms and conditions. Meanwhile the underling [sic] litigation remains ongoing, substantial defense costs continue to accrue, and settlement discussions with certain underlying claimants are difficult or impossible to conclude due to minimal guidance and participation from the Defendant Insurance Companies.”
The Diocese asserts that it provided notices of CVA claims and supporting documentation to the defendant insurers. However, it notes, “To the extent that the Defendant Insurance Companies contend that such notice was not timely provided, there has been no appreciable prejudice to the Defendant Insurance Companies. None of the Defendant Insurance Companies has identified anything that it would have done differently if provided with earlier notice.”
When it comes to the response of the individual insurers to these claims, the Diocese states that Century offered to provide it with defense to the extent that the alleged abuse took place during Century’s policy periods. However, it claims Century’s payment of defense costs has been “sporadic at best.”
The suit states that the organization’s policies with St. Paul do not obligate the insurer to defend the Diocese in CVA claims. However, there is a dispute over whether self-insured retentions beneath these policies have been exhausted by payment of settlements to certain underlying plaintiffs, which the Diocese argues would trigger indemnity coverage for further claims that occurred during those policy years.
At the time of filing, the Diocese stated First State had not provided it with a coverage position.
National Union offered to provide the Diocese with a defense for a small number of claims, but the suit alleges the majority of CVA claims that would trigger the National Union policies have “either been ignored or not covered.”
The Diocese claims that with the assistance of insurance consultants from Willis Towers Watson, it engaged in conversations with the defendant insurers for around two years in an attempt to construct a cost-sharing allocation model to handle the CVA claims.
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