The Wisconsin Court of Appeals recently ruled that “negligent misrepresentation” claims against the Archdiocese of Milwaukee arising from alleged molestation by priests are not covered under the Archdiocese’s CGL policy. See Doe 1 v. Archdiocese of Milwaukee, No. 2009AP2266 et al. (Wis. Ct. App. Nov. 23, 2010). A copy of the decision is available here.
The suits against the Archdiocese alleged that the Archdiocese knew that the priests had committed abuse, and misrepresented that the children were safe in the priests’ care. The court found that these alleged misrepresentations, even if “negligent,” were not “accidents” and therefore were not covered “occurrences.” The court noted that, under Wisconsin law, the question of whether an event is "accidental" and an "occurrence" does not depend on "whether a specific result was accidental," but "whether the cause of the damage was accidental.” Although the Archdiocese may not have intended to harm the children, said the court, the alleged misrepresentations “cannot be characterized as accidental.” “The affirmative representation of safety by the Archdiocese did not occur by chance, nor was it unforeseen or unintended,” as Wisconsin law requires, the court found.
In a statement with potentially broad implications for coverage disputes over “negligent misrepresentation” claims, the court said that the non-disclosure “may have been prompted by negligence, but it was nevertheless devoid of any suggestion of accident.”
