IL App 5th / Sex Abuse
Similar Complaints Against a Single Individual is a “Single Claim”
The Illinois Appellate Court for the Fifth District, in an opinion written by Justice Barberis with Justices Moore and Vaughan concurring, applying Illinois law, reversed the judgment of the circuit court denying the insurer’s motion to dismiss, holding instead that an insurer has no duty to defend and indemnify the insured for a sexual abuse claim made under a claims-based policy because that claim arose out of the same or related series of events of other claims made before the inception of the policy, triggering the single claims provision.
This dispute stems from a federal sexual abuse lawsuit (the “John Doe 4 action”) brought by a former Freeburg school district student who alleged that he had been sexually abused on multiple occasions by Rob Hawkins, a male Freeburg Community Consolidated School District No. 70 (“Freeburg”) school district official (now deceased) from 2006 to 2009. Prior to this action, at least three other federal lawsuits were filed against Hawkins between 2010 and 2012, alleging that Hawkins had sexually abused other male students from in the 1990s and 2000s. The initial John Doe 4 action was filed against Freeburg school district and three former Freeburg school district officials, alleging Title IX discrimination, substantive due process, denial of constitutional liberty interests, and negligent failure to control Hawkins’ conduct. The complaint was the fourth known lawsuit against the school district and the first to be filed within the coverage period of the insurance policy. The first lawsuit (the “John Doe 1 action”) was filed in July 2010.
RSUI Indemnity Company (“RSUI”) insured Freeburg under a claims-made policy for the policy period July 1, 2013, to July 1, 2014. Included in the policy was a single claims provision, stipulating that “all claims based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transaction or events shall be deemed to be a single Claim for all purposes under this policy… and shall be deemed first made when the earliest of such Claims is first made, regardless of whether such date is before or during the Policy Period.”
Following the filing of the John Doe 4 action on June 11, 2014, Freeburg submitted a demand for coverage from RSUI, which RSUI denied. RSUI maintained, throughout the coverage denial and the subsequent litigation, that Freeburg was aware of multiple reports and allegations of sexual abuse over several prior decades, and that the John Doe 4 action arose out of the same facts and circumstances as the John Doe 1 action, and thus was excluded for coverage, because the John Doe 1 action was initiated in July 2010, prior to the inception date of the policy.
After a lengthy procedural history, in which the circuit court had concluded that the single claims provision was “overly broad” and resulted in ambiguity in determining the degree of connection between particular claims, the Appellate Court considered both whether the policy provision was ambiguous and whether it applied to the present facts.
Freeburg argued that the provision was ambiguous because the policy did not define the term “related” and that the actions prior to John Doe 4 action were based on different events requiring different defenses. The Appellate Court rejected these arguments, however, stressing the factual similarities between all Doe actions and stating that “[c]laims that involve the same, continuing source of misconduct by the same school officials that culminates in the same type of harm from a common, identified sexual predator, while that predator was an employee of the Freeburg school district is a ‘related series of facts, circumstances, situations, transactions or events’ under any ordinary meaning of the phrase.” As a result, the John Doe 1 action of July 2010 and the John Doe 4 action of 2014 were considered a single claim.
As such, even in the absence of a definition for the term “related,” the Appellate Court held that the single claims provision was not ambiguous, that the John Doe 4 action was not within the coverage of the policy, and, thus, RSUI had no duty to defend or indemnify Freeburg in the underlying litigation. Freeburg Community Consolidated School District No. 70 v. Country Mutual Insurance Co., 2021 IL App (5th) 190098 (Apr. 8, 2021).