Coverage and Liability Issues in Sexual Misconduct Claims

NEW MEXICOCoverage Trigger & Number ofOccurrencesIntentional Acts ExclusionsPerpetrator:Non-perpetrator:Sexual Misconduct ExclusionsStatute of LimitationsIn a case involving the archdiocese’s alleged negligent retention andsupervision of priests who sexually molested minors, court foundcoverage must be calculated on a per-priest, per-year basis despitenumber of persons harmed by a particular priest in any one year.Roman Catholic Church of the Archdiocese of Santa Fe v. CentennialIns. Co., NO.SF.-93-1519 (c) (N.Mex. Dist. Ct. March 15, 1995). Inanother case involving minors sexually abused from 1968 to 1970who did not realize the nature of their resulting injuries until 1992, thecourt held that the insurers on risk when the abuse took place andwhen claimants became aware of their injuries had a duty to defend.Servants of the Paraclete, Inc. v. Great Amer. Ins. Co., 857 F. Supp.822 (D. N.M. 1994), amended in part, clarified in part, 866 F. Supp.1560 (N.M. 1994).An intentional acts exclusion precludes coverage for an insured’sintentional acts of sexual abuse based on the inferred intent doctrine.See Sena v. Travelers Ins. Co., 801 F. Supp. 471 (D. N.M. 1992); NewMexico Physicians Mut. Liab. Co. v. LaMure, et al., 860 P.2d 734 (N.M.1993) (Criminal acts exclusion barred coverage under professionalliability policy for doctor’s sexual abuse of patient).An exclusion for intentional acts of “the insured” would not barcoverage for alleged negligence of a non-perpetrator connected withthe abuse, but an exclusion for intentional acts of “an insured” wouldbar coverage for a non-perpetrator’s negligence because the bar isfor claims against any insured arising out of underlying sexual abuse.Sena v. Travelers Ins. Co., 801 F. Supp. 471 (D. N.M. 1992).The Supreme Court of New Mexico held that a sexual misconductexclusion bars coverage for all claims arising from alleged sexualmisconduct; however, the insurer has a duty to defend all claimsuntil it can establish that all claims fall within the sexual misconductexclusion. Lopez v. New Mexico Pub. Sch. Ins. Auth., 870 P.2d 745(N.M. 1994).Actions for injuries to the person must be brought within three years.N.M. Stat. Ann. §37-1-8.An action based on childhood sexual abuse may be filed the laterof: (1) the victim’s 24th birthday; or (2) three years from when thevictim knew or had reason to know of the abuse and that the abusecaused injury to the victim, as established by competent medical orpsychological testimony. Id at §37-1-30. In a case based on §37-1-8 and not the childhood sexual abuse statute, the court held thatthe discovery rule did not toll the limitations period beyond the dateclaimant first became aware of significant injuries from minor sexualabuse, such as acquisition of venereal disease and an unwantedpregnancy. Martinez-Sandoval v. Kirsch, et al., 884 P.2d 507 (N.M.Ct. App. 1994).– 44 –