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Child Victims Act Leads to Coverage Dispute (NY)

July 25, 2019

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<p style="text-align: justify;">On February 14, 2019, Governor Cuomo signed the Child Victims Act into law in New York.  The Child Victims Act increased the civil statute of limitations in child sex abuse case to when the victim reaches 55 years of age.  The criminal statute of limitations was extended to 25 for misdemeanor offenses and 28 for felonies; prior to the Child Victims Act, the statute of limitations for child sex abuse expired when the victim turned 23 in civil and criminal cases.  Starting August 2019, victims of any age will have one year to bring civil claims against their abuser or an institution.</p>
<p style="text-align: justify;">In the wake of this law, New York firms have been inundated with inquiries from victims with one firm estimating receiving approximately 15 calls per hour.  Prominent survivors have also started coming forward including Charles Apotheker, acting New York State Supreme Court justice.  Apotheker shared his story of being abused 60 years ago at age 13 by Dr. Reginald Archibald, a pediatric endocrinologist at Rockefeller University Hospital.  Under the new law, Rockefeller University could be held to account for their role in covering up Dr. Archibald’s abuse as they have already conceded liability in a public apology.  Michigan State University allocated $500M for victims of Dr. Nassar’s abuse and settled with 332 victims for $425M.  MSU then sued its insurance companies for $300M in coverage.  The outcome of that coverage dispute is unknown at this time, however, approximately 172 more victims have come forward and claim the $75M remaining in the fund is woefully inadequate to cover their damages.</p>
<p style="text-align: justify;">The archdiocese are now in a similar predicament.  Victim Norman brought suit claiming sexual assault by two members of the clergy from 1972 – 1974 and alleging the church “knew and/or reasonably should have known” about the abuse.  The archdiocese submitted the pleadings to their insurance carrier, and coverage was disclaimed stating the plaintiff “alleges to have sustained injury was expected and/or intended from the standpoint of the archdiocese.  These allegations do not give rise to an ‘occurrence’ under the INA policies.”</p>
<p style="text-align: justify;">Norman’s lawsuit will not become active until the August window opens, however, <a href="https://www.wcmlaw.com/wp-content/uploads/2019/07/NY-Archdiocese-Sues-Insurers-After-Coverage-Denied-for-Child-Sex-Abuse-C....pdf">the Archdiocese of New York is making a proactive move for declaratory judgment</a> to prevent disclaimers on the inevitable multitude of claims which will flow once the August window opens.  The archdiocese set up a fund for victims of abuse in 2016 and has paid out $65M to 323 victims as of April 2019, but when a similar law passed in California in 2002, the dioceses there paid $1.2B in legal settlements.  The archdiocese filed suit June 28, 2019 under index 653772/2019.  The court’s decision would affect all suits brought within the jurisdiction of the Archdiocese of New York which covers Manhattan, Bronx, Staten Island, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester counties and will be closely monitored by other dioceses in NY.  Thanks to Mehreen Hayatt for her contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.</p>

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