10th Circuit Reverses Summary Judgment for Mormon Church's Insurance Claims

• A 10th Circuit panel reversed summary judgment in favor of two insurance companies, allowing the Church of Jesus Christ of Latter-Day Saints to pursue reimbursement for civil settlements related to sexual abuse claims.
• The appellate panel found that the insurance policies were ambiguous regarding what constitutes an 'occurrence,' allowing the church to seek coverage under Utah law.
• The decision has significant implications for churches and religious organizations, highlighting the importance of carefully reviewing their insurance policies to ensure they cover potential liabilities related to sexual abuse claims.

We hold only that it is plausible [for the church's interpretation], and because it is plausible, and the district court’s interpretation is also plausible, the provisions are ambiguous under Utah law.

A 10th Circuit panel has reversed a trial judge's decision to grant summary judgment to two insurance companies, National Union Fire Insurance Co. and ACE Property and Casualty Insurance Co., in a case related to the Church of Jesus Christ of Latter-Day Saints' (LDS) efforts to seek reimbursement for civil settlements stemming from sexual abuse claims. The appellate panel found that the insurance policies were ambiguous regarding what constitutes an 'occurrence,' allowing the church to pursue coverage under Utah law. This decision has significant implications for churches and religious organizations, highlighting the importance of carefully reviewing their insurance policies to ensure they cover potential liabilities related to sexual abuse claims.

The 10th Circuit panel's ruling hinges on the interpretation of the insurance policies' language regarding 'occurrences.' The court determined that under Utah law, the church's interpretation of the policy is plausible, and since it is plausible, the provisions are ambiguous. This decision underscores the complexity of insurance policy interpretation and the need for clear and unambiguous language to avoid disputes. The appellate panel also noted that courts have taken different positions on whether negligence claims in sexual abuse cases should be considered separate occurrences or one single occurrence, further reinforcing their conclusion that the policies are ambiguous.

The reversal of summary judgment has significant implications for churches and religious organizations. The decision highlights the importance of carefully reviewing insurance policies to ensure they cover potential liabilities related to sexual abuse claims. Lawyers advising these institutions should review their policies to ensure that ambiguous language does not leave them vulnerable to costly disputes. This case serves as a reminder that clear and unambiguous policy language is essential for avoiding disputes and ensuring that insurance coverage is available when needed.

Lawyers advising churches or religious organizations on risk management should review their insurance policies to ensure they cover potential liabilities related to sexual abuse claims, as this decision highlights the importance of ambiguous policy language in favor of the insured.

Source: Original reporting via Courthouse News