A significant ruling on May 13, 2013 in a sexual molestation case may
benefit insurers’ “expected and intended” arguments far beyond the context of
molestation claims. An Illinois Appellate Court held that the expected and
intended exclusion can preclude a duty to defend even a negligent supervision
claim if the facts allege that the insured had reason to expect the predator’s
predilections. The court found that the terms “expected” and “intended” are not
synonyms, and that an insurer has no duty to defend “expected” injury even if
that injury was not “intended” by the insured.

The matter Empire Indemn. Ins. Co. v. The Chicago Province of the Society of
Jesus, 2013 IL App (1st 112346) arises from the Chicago Province of the
Society of Jesus’ (SOJ), which employed a priest accused of molesting
several minors. Beginning in August 2007, various complainants sued the
SOJ, alleging that they had been sexually molested by Donald McGuire, a
former teacher at Loyola Academy, a high school operated by the SOJ.
The complaints alleged counts for negligence, intentional infliction of emotional
distress, and fraud. The factual background of the complaints alleged that the
SOJ had knowledge of McGuire’s predilections before the John Doe plaintiffs
were abused and that the SOJ failed to report allegations to law enforcement
and allowed McGuire to remain in the ministry.

The trial court granted the insurers’ summary judgment, holding that the
expected and intended injury exclusion precluded a duty to defend—even
though one of the counts was for mere negligence and not intentional
acts. The SOJ appealed, arguing that the count for negligent supervision was
at least potentially covered under the insurers’ policies, thereby creating a duty
to defend the entirety of the underlying claims.

In ruling that there was no duty to defend even the negligence count, the court
explained that an excluded “expected” injury is one that should have been
“reasonably anticipated” by the insured. Because the underlying complaints
alleged that, prior to the molestation at issue, the SOJ had learned of
McGuire’s abuse of other minors, the court found that these allegations
established that the SOJ reasonably should have anticipated or expected
McGuire’s abuse of the plaintiffs. Accordingly, the court affirmed the trial
court’s ruling in favor of the insurers and held that the John Doe plaintiffs’
injuries were precluded from coverage under the expected or intended injury
exclusion because the facts alleged “expected” injuries, even though a claim
for negligence was also pled.

For more information on the issues discussed above, or any other insurance
coverage questions, please contact Adam H. Fleischer,
AFleischer@BatesCarey.com or Michael Passman, MPassman@BatesCarey.com.