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LDS Church sues insurance providers over sex abuse settlement costs

Posted at 4:19 PM, Jul 27, 2023
and last updated 2023-07-28 12:50:58-04

SALT LAKE CITY — The Church of Jesus Christ of Latter-day Saints has filed a lawsuit against its insurance providers, demanding they cover the costs of a child sexual abuse lawsuit settlement.

The lawsuit, filed in U.S. District Court in Salt Lake City, seeks to compel National Union Insurance and ACE Property & Casualty Co. to cover the financial settlement terms of a 2013 child sexual abuse case in West Virginia. In that litigation, the Church was sued by unnamed plaintiffs over allegations that the faith "negligently caused their abuse and resulting physical and emotional harm by failing to report a reasonable suspicion of child sexual abuse as required by West Virginia law, failing to properly supervise and train clergy, allowing the minor plaintiffs to come into contact with their abuser, failing to warn the minor plaintiffs and their parents, and otherwise failing to protect the plaintiffs from foreseeable harm."

The Church settled that litigation in 2018.

According to this new lawsuit, the Church alleges it went to its insurers to have the settlement costs covered under its umbrella liability policies. But the insurers have rebuffed it, basically arguing the Church has not met the threshold to qualify for coverage and should dip into its own pockets to cover the costs.

"The Church has not established exhaustion of the National Union Umbrella Policy’s Retained Limit, which is a condition precedent to coverage," attorneys for that company wrote in a motion for summary judgment. "In the alternative, National Union moves this Court to enter summary judgment in its favor on the grounds that the Church is estopped from seeking defense and indemnity for the lawsuit, and that its settlement of the lawsuit breached the National Union Umbrella Policy’s voluntary payments provision, which is an additional bar to indemnity."

Sam Brunson, a law professor at Loyola University Chicago who specializes in nonprofits and tax law, said the dispute at the heart of the lawsuit is pretty common — even if the parties involved and the circumstances are not.

"For those of us who are used to car insurance or health insurance? It’s kind of like our deductible," he told FOX 13 News. "They said, 'We will pay your costs in excess of this deductible amount, but you haven’t met it with this settlement.' Then the church sued saying, 'You need to pay us under this policy.'"

The exact financial amount in dispute is unknown. Court filings have redacted it. The Church of Jesus Christ of Latter-day Saints declined to comment on the litigation. Attorneys representing the insurance providers did not reply to emails seeking comment from FOX 13 News.

A federal judge has scheduled a hearing next month to consider whether to grant the insurance companies' requests to dismiss the Church's lawsuit.

Read the lawsuit here: