Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01405/USCOURTS-azd-2_09-cv-01405-2/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Declaratory Judgment

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Interstate Fire & Casualty Company, Inc., 

an Illinois corporation, 

Plaintiff and Counterdefendant, 

vs. 

The Roman Catholic Church of the Diocese 

of Phoenix, a corporation sole, by and 

through Bishop Thomas J. Olmsted, his 

predecessors and successors, 

Defendants and Counterclaimants.

No. CV 09-01405-PHX-NVW

ORDER 

Before the Court is the Diocese of Phoenix’s Motion for Partial Summary 

Judgment That There Will Be No Apportionment of the Settlements Between Covered 

and Uncovered Amounts (Doc. 118) and Interstate Fire’s Request for Oral Argument on 

Defendant’s Motion for Partial Summary Judgment That There Will Be No 

Apportionment of the Settlements Between Covered and Uncovered Amounts (Doc. 

130). The Diocese argues that the four underlying settlements for which it is claiming 

indemnification under Interstate Fire’s insurance policy should not be apportioned 

because there is no reasonable basis to do so. The Court agrees, and will accordingly 

grant the Diocese’s motion. 

The pleadings in the underlying settled matters alleged multiple theories of 

liability for the Diocese, including both negligence and intentional tort theories. 

However, the settled claims were against the Diocese only, and the alleged injury 

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underlying each settled claim resulted from sexual abuse by Diocese priests and a 

layworker. Apportionment of a settlement may be appropriate where the Court has a 

reasonable basis for apportioning between covered and uncovered claims, such as where 

a settlement includes payment for actions taken by both insured and non-insured actors. 

See, e.g., Caterpillar, Inc. v. Great Am. Ins. Co., 62 F.3d 955 (7th Cir. 1995) 

(apportioning settlement that included payment for actions taken by insured directors and 

uninsured company). However, apportionment is not appropriate where the complaints 

underlying the settled matters simply alleged multiple theories of liability, not multiple 

injuries or injuries inflicted by both insured and uninsured actors. 

At this stage in the pleadings, the Court has not yet determined whether the 

Diocese’s actions were merely negligent, or if they amounted to intentional conduct 

because the Diocese was substantially certain that its actions would result in the injuries 

claimed in the settled matters. If the Diocese was merely negligent, the injury stemming 

from the Diocese’s conduct will constitute a covered occurrence under the insurance 

policy, and Interstate Fire will be liable for the settlement payouts. If the Diocese is 

found to have acted in such a way that the harm resulting here was substantially certain, 

thus imputing intentionality to its actions, there will be no covered occurrence; 

accordingly, Interstate Fire will not be liable for the settlement payouts. Whether the 

Diocese’s conduct is determined to have been negligent or intentional is an issue to be 

decided by later motion for summary judgment or at trial. The unresolved issue at this 

stage thus has no relevance to the apportionment of the settlement claims; there is no 

allegation that there are some injuries that are covered and others which are not, nor is 

there any allegation that some actors were insured and others were not. Rather, the facts 

are clear that there is one injury underlying each settlement (the abuse), and one insured 

defendant to the settlement (the Diocese). 

Interstate Fire has presented no authority contradicting the Diocese’s position that 

apportionment is not appropriate in this context. Rather, Interstate Fire focuses its 

response on arguing that there was no covered occurrence at all because the Diocese had 

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sufficient information to be substantially certain that its actions would lead to the harm 

which formed the basis for the underlying settlements. While this may prove to be the 

case, it is irrelevant to the question of apportionment and the subject of this motion; either 

there will be a covered occurrence and Interstate Fire will be liable for the settlements 

paid, or there will be no covered occurrence and no liability for Interstate Fire. 

For these reasons, the Court will grant the Diocese’s motion for partial summary 

judgment on the issue of apportionment. Because both parties have submitted legal 

memoranda and oral argument would not aid the Court’s decisional process, Interstate 

Fire’s request for oral argument on the motion (Doc. 130) will be denied. 

IT IS THEREFORE ORDERED that the Diocese of Phoenix’s Motion for Partial 

Summary Judgment That There Will Be No Apportionment of the Settlements Between 

Covered and Uncovered Amounts (Doc. 118) is granted. 

IT IS FURTHER ORDERED that Interstate Fire’s Request for Oral Argument on 

Defendant’s Motion for Partial Summary Judgment That There Will Be No 

Apportionment of the Settlements Between Covered and Uncovered Amounts (Doc. 130) 

is denied. 

Dated this 20th day of January, 2012. 

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