Appeal for Insurance Coverage Restoration after Settlement

The Church of Jesus Christ of Latter-day Saints is seeking to restore insurance coverage for a 2018 settlement, involving sexual abuse claims, through an appeal to the 10th Circuit. The church's argument centers on interpreting multiple incidents by a member as a single occurrence, based on their insurance policy language.

Represented by attorney Haley Krug of Kirton McConkie, the church presented its case to a three-judge panel. Krug stressed the critical issue is the interpretation of insurance policy terms, asserting that these incidents should be viewed collectively under the policy’s language, which aligns with the insurers' own terms.

The claims originate from abuses by Michael Jensen, a teenage church member, whose crimes over several years resulted in a 35-75 year prison sentence in 2013. Despite a 2018 settlement with victims, the church faced a coverage denial from National Union Fire Insurance Company and ACE Property & Casualty Company. The insurers argued these were separate occurrences due to varying times and locations, also implicating the church's possible inaction as exacerbating the abuse.

Previously, U.S. District Judge Tena Campbell sided with the insurers. However, Krug argued that Utah Supreme Court precedent supports that ambiguity in insurance policies should benefit the policyholder. She criticized the lower court for redefining the term "occurrence" beyond the original policy language.

Krug pointed out that ACE's policy didn’t mandate separate occurrences for individual victims, suggesting Jensen's actions should be considered a single occurrence. The church’s legal brief emphasized that ACE previously interpreted similar policy language differently.

Opposing the church’s position, Mark Sobczak, representing National Union Fire Insurance Company, maintained that the repeated incidents and lack of intervention by the church justified treating them as separate occurrences, impacting the liability framework of the insurance policy.

Judicial scrutiny ensued as the panel, which included Judge Nancy Moritz, posed critical questions. Judge Moritz queried if any policy ambiguity could necessitate overturning the earlier decision, observing both parties’ tendency to flexibly interpret policy terms for their advantage. Alongside her were Circuit Judge Gregory Phillips and District Judge Matthew Garcia, who examined the lower court's handling of whether the church's actions represented a factual dispute in policy interpretation.