Cincinnati Insurance Co. v. Oblates of St. Francis De Sales, Inc.

James Rapp was a priest ordained by the Oblates of St. Francis de Sales, Inc. (Oblates) (defendant) and employed by the Archdiocese of Oklahoma City (archdiocese) (defendant). Rapp was assigned to the Assumption Parish (Assumption). At the time Rapp was assigned to Assumption, he had a 20-year-long history of sexually abusing minor boys. Rapp went through several in-patients rounds of treatment for his pedophilia but always reoffended upon release. After Rapp’s most recent round of in-patient treatment, the facility director stated that Rapp would need lifelong therapy to control his pedophilia and that he should not be assigned to work with children. Regardless, in 1990, the Oblates subsequently reassigned Rapp to Assumption without warning either Assumption or the archdiocese about Rapp’s history of sexual misconduct or his pedophilia diagnosis. Rapp was not subject to any counseling requirements, and his work with children was unrestricted until Rapp was ultimately arrested in 1999. Rapp sexually abused a minor child from 1993 to 1997 while assigned to Assumption. The child’s parents sued the Oblates, arguing that the Oblates’ failure to warn Assumption about Rapp’s history of child sexual abuse caused their child’s injuries. Because the Oblates’ insurer, Cincinnati Insurance Company (CIC) (plaintiff), denied liability coverage, the archdiocese lent the Oblates $5 million to settle the lawsuit. The Oblates then assigned their CIC policy to the archdiocese. The archdiocese sued CIC for reimbursement. CIC moved for summary judgment, arguing that it did not need to indemnify the archdiocese for its loan to the Oblates because the Oblates’ failure to disclose Rapp’s pedophilia was substantially certain to result in injury. The trial court granted CIC summary judgment. The archdiocese appealed.