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Empire Indemnity Ins. Co. v. Chicago Province of the Society of Jesus

2013 IL App (1st) 112346 (Ill. App., 2013)

Words & Phrases

Exclusions: Intentional Act

Trial Judge

Honorable Martin Agran and Hon. Lee Preston

Appellate Judge

Justice Delort


Where complaints alleged that Diocese was aware that former priest sexually abused minors, there was no duty to defend on indemnify based on “expected or intended” exclusion.

Fact Summary

The Chicago Province of the Society of Jesus (the “Jesuits”) sought  a defense for allegations of molestation of minors by one of its priests.  The trial court granted summary judgment in favor or its liability insurers Empire Indemnity Insur. Co., First Nonprofit Insur. Co., RLI Insur. Co., Mt. Hawley Insur. Co., and Pennsylvania General Insur. Co.  The Jesuits appealed, arguing that the “expected or intended” exclusion did not apply. 

The underlying claims alleged that defendant Donald McGuire, a former priest and member of the Jesuits, sexually abused numerous minors.  McGuire was also alleged to be a “teacher and scholastic advisor” at Loyola Academy, a high school operated by the Jesuits.  The complaints claimed that the Jesuits either knew or should have known of McGuire’s abuse, because the Jesuits were first apprised of McGuire’s abuse of minors in 1969, when another victim first apprised the Jesuits of a prior alleged abuse.  The Jesuits were subsequently apprised of numerous other complaints of sexual abuse of minors.  However, the Jesuits allegedly transferred McGuire and allowed him to “remain in ministry and travel around the world” solely to avoid scandal. The Jesuits also settled other sexual abuse claims involving McGuire to avoid scandal, according to the complaint.

The insurers issued numerous liability policies.  The relevant policies covered “Bodily Injury and Property Damage Liability” as well as “Sexual Abuse or Sexual Molestation Liability.”  The bodily injury coverage provided in pertinent part that the insurers would pay sums that the Jesuits became legally obligated to pay as damages due to “bodily injury or property damage to which this coverage applies.”  However, the policies specifically excluded damages “expected or intended from the standpoint of the insured.”

The sexual abuse or molestation coverage stated that insurers would pay damages that the Jesuits became legally obligated to pay “arising out of any actual, threatened, intentional or unintentional sexual molestation of any person to which this coverage applies.”  This coverage also stated that the coverage would be cancelled “if any executive officer, supervisory employee, director or trustee [had] actual knowledge of any act, incident or alleged act of sexual abuse or sexual molestation.”  The policy defined sexual abuse or molestation as “the infliction of harm upon a person, by any employee, agent or representative or volunteer of [the Jesuits], whether such harm is physical, emotional or psychological in nature and is primarily sexually motivated.”

The insurers filed declaratory judgment actions contending they had no duty to defend the Jesuits in the underlying lawsuits. The trial court found that insurers owed no duty to defend because prior reports of sexual abuse would suffice to render the alleged abuse expected or intended. 

The appellate court affirmed.  The court explained that “intended” and “expected” are not synonyms: an “expected“  injury is merely one that should have been “reasonably anticipated” by the insured.  Here, the factual section preceding the various counts of the underlying complaints allege that the Jesuits were first apprised of McGuire’s abuse of minors in 1969 and had subsequently received numerous other complaints alleging McGuire’s sexual abuse of minors, all of which took place prior to the underlying plaintiffs’ abuse.  These allegations set forth that the Jesuits reasonably should have anticipated (or expected) McGuire’s abuse of the underlying plaintiffs.  Therefore, the allegations of abuse were an “expected” injury from the Jesuits’ standpoint.