The Backstory: abuse Claims and Insurance Coverage

The legal saga began in 2013 when 12 children and their parents filed suit against the church, several of its leaders, and Michael Jensen, along with Jensen’s parents. The suit alleged that Jensen had sexually abused the children during his teens and twenties. Jensen was later convicted and sentenced to a lengthy prison term.

The plaintiffs’ claims against the church and its leaders centered on allegations of negligence, including:

• Failure to warn families about jensen’s sexual abuse.
• Coordinating Jensen’s living arrangements with families within the church community.
• failure to report a reasonable suspicion of child sexual abuse to the authorities.
• Inadequate training of church agents.

The lawsuit further alleged that the church had received multiple warnings regarding Jensen’s behavior.

In 2018, the church reached a settlement with the victims for an undisclosed amount. Subsequently, the church sought reimbursement from its insurers, National Union Fire Insurance Company of Pittsburgh, Pennsylvania, and ACE Property and Casualty Insurance Company, for a portion of the settlement costs and legal fees.

The Core Issue: Defining “Occurrence”

The legal dispute centered on the interpretation of the word occurrence within the church’s insurance policies. The policies obligated the insurers to cover amounts exceeding a retained limit for bodily injury caused by an occurrence. Sexual abuse was not disputed as constituting bodily injury.

The retained limit functions similarly to a deductible.The settlement amount exceeded the church’s total retained limit, but each individual settlement with a victim was less than that limit.

Thus, the central question became: Did Jensen’s abuse constitute a single occurrence, or multiple occurrences, one for each victim? If it was a single occurrence, the insurers would be obligated to contribute to the settlement. If each instance of abuse was a separate occurrence, the church would not meet its deductible-like threshold, and the insurers would have no obligation to pay.

The Court’s Decision: A Matter of Negligence

Both the church and the insurance companies filed motions for summary judgment.The court denied the church’s motion and granted the insurance companies’ motion, effectively ruling in favor of the insurers.

The court referenced precedent from other jurisdictions,particularly cases involving sexual abuse claims against Catholic dioceses. It adopted a test similar to that used by the Seventh Circuit, which presumes that each abused child represents a separate occurrence. However, this presumption can be overcome if the institution had no prior warning of the abuse.

The court determined that the church was, or should have been, aware of Jensen’s actions and failed to take adequate steps to stop him or warn other members. Therefore, the abuse of each child was deemed a separate occurrence.

According to a report by Fox13, the church’s position was that the liability arose from the church’s negligence, which they argued was a single inaction. The church compared its negligence to a previous case dealing with an electric utility company. However, the court rejected this argument.

As Ben Winslow of Fox13 reported, the church told Fox13 that it’s reviewing its options.

Ambiguity and Interpretation

The church argued that the definition of occurrence was ambiguous and should be interpreted in favor of the insured, as per Utah law. The court disagreed, stating that the meaning of occurrence was unambiguous, thus negating any presumption favoring the church.

What’s Next? Possible Appeals

The church faces two primary options:

• Accept the district court’s ruling and bear the costs of the settlement.
• Appeal the decision to the Tenth Circuit, arguing that the district court erred in denying its motion for summary judgment or in granting the insurance companies’ motion.

While an appeal is possible, the court’s opinion appears well-reasoned and grounded in established legal principles. However, the adoption of a test from another jurisdiction leaves room for an appellate court to potentially reach a different conclusion.

Ben is consistent in embedding judicial rulings in his stories… And I truly appreciate being able to both read his story and read the opinion itself. If you wont to take a look yourself, you can scroll down to the bottom of his story and it’s there.