Appeal from the Circuit Court of Cook County No. 07 CH 35007 Honorable Martin Agran Judges Presiding.
The opinion of the court was delivered by: Justice Delort
JUSTICE DELORT delivered the judgment of the court, with opinion.
Presiding Justice Hoffman and Justice Rochford concurred in the judgment and opinion.
¶ 1 The dispute we must resolve here is whether a Catholic religious order is insured for potential losses resulting from alleged molestation of minors by one of its priests. The defendant-appellant, the Chicago Province of the Society of Jesus (the Jesuits), appeals from orders granting summary judgment in favor of Empire Indemnity Insurance Company (Empire), First Nonprofit Insurance Company (FNIC), RLI Insurance Company (RLI), Mt. Hawley Insurance Company (Mt. Hawley), and Pennsylvania General Insurance Company (Pennsylvania General) (collectively, the Insurers), in an insurance coverage dispute regarding the five insurers' duty to defend lawsuits brought against the Jesuits. The Jesuits contend that the trial court erred in finding that: (i) the "expected or intended injury" exclusion in the Insurers' policies applied; (ii) the claims of John Doe 117 and his parents occurred before the FNIC policies incepted; (iii) the FNIC policies' "Condition 1.A" exclusion, regarding actual knowledge, applied; (iv) Pennsylvania General owed no coverage, where Pennsylvania General failed to produce copies of its policies; and (v) the allegations in the underlying claims did not potentially assert damages resulting from pastoral counseling activities. For the following reasons, we affirm in part, reverse in part, and remand.
¶ 3 This case began when Empire filed a declaratory judgment action (which FNIC, RLI, Mt. Hawley, and Pennsylvania General eventually joined) seeking a finding that there was no duty to defend the Jesuits against complaints filed by various alleged sexual abuse victims of defendant Donald J. McGuire, a former priest and member of the Jesuits.*fn1 FNIC issued one-year multiple-peril insurance policies, and Pennsylvania General issued one-year general liability policies. Empire, RLI, and Mt. Hawley each issued one-year umbrella liability policies.
¶ 4 The FNIC Insurance Policy
¶ 5 FNIC issued a nonprofit multiple-peril insurance policy effective
from November 30, 1998, to November 30, 1999, and subsequently renewed
the policy on an annual basis to November 30, 2004. The policy contained provisions
covering "Bodily Injury and Property Damage Liability" as well as
"Sexual Abuse or Sexual Molestation Liability." The bodily injury
coverage provided in pertinent part that FNIC 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." This
coverage was further limited to bodily injury and property damage
occurring "during the Term of Coverage" and specifically excluded
damages "expected or intended from the standpoint of the insured." The
sexual abuse or molestation coverage stated that FNIC would pay
damages that the Jesuits become legally obligated to pay "arising out
of any actual, threatened, intentional or unintentional sexual
molestation of any person to which this coverage applies."*fn2
The sexual abuse/molestation coverage was also limited to
sexual abuse or molestation occurring "during the Term of Coverage"
and, under "Condition 1.a," 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 sexual
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."
¶ 6 The Pennsylvania General Policy
¶ 7 Pennsylvania General issued a one-year general liability policy beginning on November 30, 1990, and renewed the policy annually until November 30, 1998. The policy covered bodily injury liability and "Pastoral Counseling Professional Liability." The coverage for bodily injury liability excluded such injury "expected or intended from the standpoint of the insured," except for bodily injury "resulting from the use of reasonable force to protect persons or property." With respect to the pastoral counseling professional liability, coverage was excluded, inter alia, for damages arising out of: (i) "the willful violation of a penal statute *** committed by or with the consent of the insured"; (ii) "the actual or alleged conduct of a sexual nature" (although Pennsylvania General agreed to defend the Jesuits in any suit seeking damages from such conduct until judgment was rendered); and (iii) dishonest, fraudulent, or criminal acts or omissions of the insured.
¶ 9 Empire issued a one-year umbrella liability insurance policy beginning on November 30, 2002, and renewed the policy annually to November 30, 2005. The policy indemnified the Jesuits for bodily injury liability caused by an "occurrence" in excess of a retained limit. An occurrence was defined as an "accident, including continuous or repeated exposure to substantially the same harmful conditions." The Empire policy also excluded coverage for bodily injury "either expected or intended from the standpoint of the insured."
¶ 10 The RLI and Mt. Hawley Policies
¶ 11 RLI and Mt. Hawley both issued an umbrella liability policy to
the Jesuits. RLI's one-year policy began November 30, 1990, and was
renewed annually to November 30, 2001. Mt. Hawley's policy was
effective from November 30, 2001, to November 30, 2002. Both policies
injury liability coverage, and as with
the Pennsylvania General and Empire policies, they also excluded
coverage for bodily injury "expected or intended from the standpoint
of the insured."*fn3
¶ 12 The Underlying Litigation
¶ 13 Beginning in August 2007, various "John Doe" complainants (hereinafter, the John Doe complaints) sued the Jesuits, alleging that they had been either sexually abused or sexually molested by McGuire, then a priest and member of the Jesuits who had also been a "teacher and scholastic advisor" at Loyola Academy, a high school operated by the Jesuits. The complaints all alleged negligence, intentional infliction of emotional distress, and fraud against the Jesuits. Significantly, 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 abuse victim, John Doe 84, reported to a Fr. Schlax, a Chicago Archdiocesan priest, that McGuire had sexually abused him. Fr. Schlax then allegedly reported that abuse to the Jesuits and officials at Loyola Academy, including its president, principal, and headmaster. The John Doe lawsuits further claimed that the Jesuits had subsequently received numerous other complaints of sexual abuse of minors by McGuire, all of which took place prior to the time of the abuse in the John Doe complaints. The complaints also all alleged that, despite this knowledge of McGuire's activities and propensity to abuse minors, the Jesuits did not report these allegations to law enforcement. Instead, the Jesuits transferred McGuire and allowed him to "remain in ministry and travel around the world" solely to avoid scandal.
¶ 14 In August 2007, John Doe 116 filed a complaint against the Jesuits and McGuire, alleging that McGuire abused him from 1999 to 2003 while he was a minor. John Doe 116 amended his complaint in November 2007 and again in September 2008. In addition to the common allegations above, the second amended complaint also alleged that, after reporting his abuse by McGuire to Fr. Schlax, John Doe 84, his parents, and Fr. Schlax met with representatives of the Jesuits and Loyola Academy regarding these allegations. Following this meeting, John Doe 84 transferred to another Jesuit school and McGuire was removed from Loyola Academy in the middle of the year. John Doe 116 also claimed that, in addition to transferring McGuire, the Jesuits confidentially settled other victims' sexual abuse allegations against McGuire to avoid scandal.
¶ 15 In October 2007, John Does 117 and 118, who are brothers, filed a joint complaint also alleging sexual abuse by McGuire while they were minors. This complaint was amended in October 2008. In the amended complaint, John Doe 117 alleged that McGuire sexually abused him between 1988 and 1989 and then sexually molested him in 1992 and 1994. His brother, John Doe 118, claimed that McGuire sexually molested him in 2001 and had other "inappropriate sexual contact" with him in 2002. John Does 117 and 118 also alleged that John Doe 84 met with Jesuit and Loyola Academy representatives, after which John Doe 84 transferred schools and McGuire was removed from his position. Similar to John Doe 116, John Does 117 and 118 also claimed that the Jesuits secretly settled other allegations of sexual abuse by McGuire to avoid further scandal.
¶ 16 In April 2008, John Doe 119 filed a complaint against McGuire and the Jesuits also alleging that he had been sexually abused by McGuire as a minor beginning in June 1998. As with John Doe 116 and John Does 117 and 118, John Doe 119 also alleged that John Doe 84 met with the Jesuits and Loyola Academy officials prior to John Doe 84 transferring to another school and McGuire's removal from Loyola Academy.
¶ 17 In February 2009, John Doe 129 and John Doe 130 each filed individual complaints also alleging that they had been sexually abused by McGuire as minors. John Doe 129 alleged that he had been molested by McGuire from 1988 to 1998, and John Doe 130 alleged McGuire sexually abused him between 1990 and 1995. These complaints, however, did not allege a meeting between John Doe 84 and representatives of the Jesuits or Loyola Academy.
¶ 18 In addition to the John Doe complaints, John and Jane Doe, the parents of John Does 117 and 118, filed a complaint against the Jesuits and McGuire in September 2009 in the federal district court in Arizona (the John Doe parents' complaint). The John Doe parents' complaint alleged negligence, loss of filial consortium, and intentional infliction of emotional distress, and sought damages against the Jesuits and McGuire (whom they alleged the Jesuits supervised or employed) resulting from McGuire's alleged sexual abuse of their sons. This complaint also alleged that the Jesuits knew of McGuire's abuse of minors no later than 1969 and had been ...