UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
THE HONORABLE BARBARA J.
HOUSER (RET.), IN HER CAPACITY AS
TRUSTEE OF THE BSA SETTLEMENT
TRUST,
Plaintiff,
v.
ALLIANZ GLOBAL RISKS US
INSURANCE COMPANY; ALLIED
WORLD ASSURANCE COMPANY, LTD.;
ALLIED WORLD ASSURANCE
COMPANY (U.S.) INC.; ALLSTATE
INSURANCE COMPANY; AMERICAN
CASUALTY COMPANY OF READING,
PENNSYLVANIA; AMERICAN
ECONOMY INSURANCE COMPANY;
AMERICAN EXCESS INSURANCE
ASSOCIATION; AMERICAN HOME
ASSURANCE COMPANY; AMERICAN
STATES INSURANCE COMPANY;
AMERISURE INSURANCE COMPANY;
ARCH INSURANCE COMPANY;
ARGONAUT INSURANCE COMPANY;
ARROWOOD INDEMNITY COMPANY;
ASPEN SPECIALTY INSURANCE
COMPANY; ATEGRITY SPECIALTY
INSURANCE COMPANY; AVIVA PLC;
AXIS SPECIALTY INSURANCE
COMPANY; AXIS SURPLUS
INSURANCE COMPANY;
BRIGHTHOUSE LIFE INSURANCE
COMPANY; CATLIN SPECIALTY
INSURANCE COMPANY; CHARTER
OAK FIRE INSURANCE COMPANY;
THE CINCINNATI INSURANCE
COMPANY; CNA FINANCIAL
CORPORATION; COLONY INSURANCE
COMPANY; COLUMBIA CASUALTY
COMPANY; COLUMBIA INSURANCE
Case No. ___________________
Case 3:23-cv-01592-S Document 1 Filed 07/17/23 Page 1 of 31 PageID 1
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COMPANY; CONSOLIDATED
NATIONAL INSURANCE COMPANY;
CONTINENTAL CASUALTY COMPANY;
THE CONTINENTAL INSURANCE
COMPANY; CRUM & FORSTER
INDEMNITY COMPANY; ENDURANCE
AMERICAN INSURANCE COMPANY;
ENDURANCE AMERICAN SPECIALTY
INSURANCE COMPANY; ERIE AND
NIAGARA INSURANCE ASSOCIATION;
ERIE FAMILY LIFE INSURANCE
COMPANY; ERIE INSURANCE
EXCHANGE; EVANSTON INSURANCE
COMPANY; EVEREST NATIONAL
INSURANCE COMPANY; FIREMAN’S
FUND INSURANCE COMPANY; FIRST
INSURANCE COMPANY OF HAWAII,
LTD.; GEMINI INSURANCE COMPANY;
GENERAL INSURANCE COMPANY OF
AMERICA; GENERAL STAR
INDEMNITY COMPANY; GREAT
AMERICAN ASSURANCE COMPANY;
GREAT AMERICAN E & S INSURANCE
COMPANY; GREAT AMERICAN
INSURANCE COMPANY; INDIAN
HARBOR INSURANCE COMPANY; THE
INSURANCE COMPANY OF THE STATE
OF PENNSYLVANIA; INTERSTATE
FIRE & CASUALTY COMPANY;
JEFFERSON INSURANCE COMPANY;
LEXINGTON INSURANCE COMPANY;
LIBERTY INSURANCE
UNDERWRITERS, INC.; LIBERTY
MUTUAL INSURANCE COMPANY;
LIBERTY SURPLUS INSURANCE
CORPORATION; LONDON AND
EDINBURGH INSURANCE COMPANY
LIMITED; MUNICH REINSURANCE
AMERICA, INC.; NATIONAL
CASUALTY COMPANY; NATIONAL
FIRE INSURANCE COMPANY OF
HARTFORD; NATIONAL SURETY
CORPORATION; NATIONAL UNION
FIRE INSURANCE COMPANY OF
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PITTSBURGH, PA; NATIONWIDE
AFFINITY INSURANCE COMPANY OF
AMERICA; NATIONWIDE MUTUAL
INSURANCE COMPANY; NEW
HAMPSHIRE INSURANCE COMPANY;
NORMANDY REINSURANCE
COMPANY LIMITED; THE NORTH
RIVER INSURANCE COMPANY; THE
OHIO CASUALTY INSURANCE
COMPANY; OLD REPUBLIC
INSURANCE COMPANY; PEERLESS
INDEMNITY INSURANCE COMPANY;
PHOENIX INSURANCE COMPANY; QBE
INSURANCE CORPORATION; SAFECO
INSURANCE COMPANY OF AMERICA;
SCOTTSDALE INSURANCE COMPANY;
SECURITY MUTUAL INSURANCE
COMPANY; SPARTA INSURANCE
COMPANY; ST. PAUL FIRE AND
MARINE INSURANCE COMPANY; ST.
PAUL MERCURY INSURANCE
COMPANY; ST. PAUL SURPLUS LINES
INSURANCE COMPANY; SWISS RE
CORPORATE SOLUTIONS CAPACITY
INSURANCE CORPORATION;
TENECOM LIMITED; TIG INSURANCE
COMPANY; TRAVELERS (BERMUDA)
LIMITED; TRAVELERS CASUALTY
AND SURETY COMPANY; THE
TRAVELERS COMPANIES, INC.; THE
TRAVELERS INDEMNITY COMPANY;
UNITED STATES FIDELITY AND
GUARANTY COMPANY; UNITED
STATES FIRE INSURANCE COMPANY;
UNIVERSAL RE-INSURANCE
COMPANY LIMITED; UTICA MUTUAL
INSURANCE COMPANY; WAUSAU
GENERAL INSURANCE COMPANY;
WESTPORT INSURANCE
CORPORATION; XL BERMUDA
LIMITED; XL INSURANCE COMPANY
SE; and DOE DEFENDANTS 1-100,
Case 3:23-cv-01592-S Document 1 Filed 07/17/23 Page 3 of 31 PageID 3
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Defendants.
COMPLAINT
Plaintiff, the Honorable Barbara J. Houser (Ret.) (the “Trustee”), in her capacity as
trustee of the BSA Settlement Trust (the “Trust”), hereby files this complaint (the “Complaint”)
against the above-captioned defendants (the “Defendants”), and in support thereof respectfully
states and alleges as follows:
I. NATURE OF THE ACTION
1. This is a civil action for a declaratory judgment, breach of contract, and bad faith.
The action arises out of an insurance coverage dispute between the Trust, as the assignee to
certain insurance policy rights originally issued to the Boy Scouts of America (“BSA”) and its
Local Councils (defined below) and exclusive holder, pursuant to the Third Modified Fifth
Amended Chapter 11 Plan of Reorganization (With Technical Modifications) for Boy Scouts of
America and Delaware BSA, LLC (the “Plan”),
1
of all rights under such insurance policies, and
Defendants, which are liability insurers that issued or subscribed to insurance policies
(collectively, the “Insurance Policies,” and each an “Insurance Policy”) sold to BSA and Local
Councils.
2. The Defendants have disputed and/or will dispute their obligations to the Trustee
under the Insurance Policies to cover claims for personal injuries arising from sexual or other
abuse in BSA’s Scouting programs (the “Abuse Claims”).
1
Third Modified Fifth Amended Chapter 11 Plan of Reorganization (With Technical Modifications) for Boy Scouts
of America and Delaware BSA, LLC, In re Boy Scouts of America, No. 20-10343 (LSS) (Bankr. D. Del. Sept. 6,
2022), ECF No. 10296, available at https://casedocs.omniagentsolutions.com/cmsvol2/pub_47373/aeeb7dbb-0270-
4442-8db6-f657d052676f_10296.pdf. Descriptions of the Plan herein are subject in all respects to the actual terms
of the Plan. Capitalized terms not defined herein have the meaning ascribed to them in the Plan.
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3. Accordingly, in order to effectuate the Trust’s purposes, fulfill the Trust’s
obligations under the Plan, and obtain clarity and finality regarding the Defendants’ coverage
obligations, the Trustee seeks a declaration that Defendants have breached or will breach the
Insurance Policies by refusing to provide coverage under the Insurance Policies for the Abuse
Claims. Additionally, the Trustee seeks compensatory damages, interest, attorneys’ fees, and
such other relief as this Court deems just and proper.
II. PARTIES
4. The Trustee is the sole trustee for the Trust and is a citizen of New Mexico. The
Trust is a trust organized under Delaware law that is administered in New Mexico.
5. Defendant Allianz Global Risks US Insurance Company (formerly known as, or
otherwise responsible for the liability of, Allianz Insurance Company) is an Illinois corporation
with its principal place of business in Illinois.
6. Defendant Allied World Assurance Company, Ltd. is a Bermuda corporation with
its principal place of business in Bermuda.
7. Defendant Allied World Assurance Company (U.S.) Inc. is a Delaware
corporation with its principal place of business in New York.
8. Defendant Allstate Insurance Company is an Illinois corporation with its principal
place of business in Illinois.
9. Defendant American Casualty Company of Reading, Pennsylvania is a
Pennsylvania corporation with its principal place of business in Illinois.
10. Defendant American Economy Insurance Company is an Indiana corporation with
its principal place of business in Massachusetts.
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11. Defendant American Excess Insurance Association is a Connecticut corporation
with its principal place of business in Connecticut.
12. Defendant American Home Assurance Company (formerly known as, or
otherwise responsible for the liability of, American Home Fire Assurance Company) is a New
York corporation with its principal place of business in New York.
13. Defendant American States Insurance Company is an Indiana Corporation with its
principal place of business in Massachusetts.
14. Defendant Amerisure Insurance Company is a Michigan corporation with its
principal place of business in Michigan.
15. Defendant Arch Insurance Company is a Missouri corporation with its principal
place of business in New Jersey.
16. Defendant Argonaut Insurance Company is an Illinois corporation with its
principal place of business in Illinois.
17. Defendant Arrowood Indemnity Company (formerly known as, or otherwise
responsible for the liability of, Royal Indemnity Company, Globe Indemnity Company, Royal
Globe Insurance Company, and Royal Insurance Co. of America) is a Delaware corporation with
its principal place of business in North Carolina.
18. Defendant Aspen Specialty Insurance Company is a North Dakota Corporation
with its principal place of business in Connecticut.
19. Defendant Ategrity Specialty Insurance Company is a Delaware corporation with
its principal place of business in Arizona.
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20. Defendant Aviva plc (formerly known as, or otherwise responsible for the liability
of, Commercial Union Assurance Company) is a U.K. corporation with its principal place of
business in the U.K.
21. Defendant Axis Specialty Insurance Company is a Connecticut corporation with
its principal place of business in Georgia.
22. Defendant Axis Surplus Insurance Company is an Illinois corporation with its
principal place of business in Georgia.
23. Defendant Brighthouse Life Insurance Company (formerly known as, or
otherwise responsible for the liability of, Travelers Insurance Company) is a Delaware
corporation with its principal place of business in North Carolina.
24. Defendant Catlin Specialty Insurance Company is a Delaware corporation with its
principal place of business in Georgia.
25. Defendant Charter Oak Fire Insurance Company is a Connecticut corporation
with its principal place of business in Connecticut.
26. Defendant The Cincinnati Insurance Company is an Ohio corporation with its
principal place of business in Ohio.
27. Defendant CNA Financial Corporation (formerly known as, or otherwise
responsible for the liability of, CNA) is a Delaware corporation with its principal place of
business in Illinois.
28. Defendant Colony Insurance Company is a Virginia corporation with its principal
place of business in Illinois.
29. Defendant Columbia Casualty Company is an Illinois corporation with its
principal place of business in Illinois.
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30. Defendant Columbia Insurance Company is a Nebraska corporation with its
principal place of business in Nebraska.
31. Defendant Consolidated National Insurance Company (formerly known as, or
otherwise responsible for the liability of, American Fidelity Company) is a Colorado corporation
with its principal place of business in New York.
32. Defendant Continental Casualty Company is an Illinois corporation with its
principal place of business in Illinois.
33. Defendant The Continental Insurance Company (formerly known as, or otherwise
responsible for the liability of, Buckeye Union Insurance Company; Fidelity and Casualty Co. of
NY; Fireman’s Insurance Company of Newark, NJ; Pacific Insurance Company; Niagara Fire
Insurance Company; and Harbor Insurance Company) is a Pennsylvania corporation with its
principal place of business in Illinois.
34. Defendant Crum & Forster Indemnity Company (formerly known as, or otherwise
responsible for the liability of, Crum & Forster) is a Delaware corporation with its principal
place of business in New Jersey.
35. Defendant Endurance American Insurance Company is a Delaware corporation
with its principal place of business in New York.
36. Defendant Endurance American Specialty Insurance Company (formerly known
as, or otherwise responsible for the liability of, Traders and Pacific Insurance Company) is a
Delaware corporation with its principal place of business in New York.
37. Defendant Erie and Niagara Insurance Association is a New York corporation
with its principal place of business in New York.
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38. Defendant Erie Family Life Insurance Company is a Pennsylvania corporation
with its principal place of business in Pennsylvania.
39. Defendant Erie Insurance Exchange is a Pennsylvania corporation with its
principal place of business in Pennsylvania.
40. Defendant Evanston Insurance Company (formerly known as, or otherwise
responsible for the liability of, Alterra Excess & Surplus Insurance Company) is an Illinois
corporation with its principal place of business in Illinois.
41. Defendant Everest National Insurance Company is a Delaware corporation with
its principal place of business in New Jersey.
42. Defendant Fireman’s Fund Insurance Company is an Illinois corporation with its
principal place of business in Illinois.
43. Defendant First Insurance Company of Hawaii, Ltd. is a Hawaii corporation with
its principal place of business in Hawaii.
44. Defendant Gemini Insurance Company is a Delaware corporation with its
principal place of business in Arizona.
45. Defendant General Insurance Company of America (formerly known as, or
otherwise responsible for the liability of, General Casualty Company of America) is a New
Hampshire corporation with its principal place of business in Massachusetts.
46. Defendant General Star Indemnity Company is a Delaware corporation with its
principal place of business in Connecticut.
47. Defendant Great American Assurance Company (formerly known as, or otherwise
responsible for the liability of, Agricultural Insurance Company and Anchor Casualty Company)
is an Ohio corporation with its principal place of business in Ohio.
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48. Defendant Great American E & S Insurance Company (formerly known as, or
otherwise responsible for the liability of, Agricultural Excess & Surplus Insurance Company) is
an Ohio corporation with its principal place of business in Ohio.
49. Defendant Great American Insurance Company is an Ohio corporation with its
principal place of business in Ohio.
50. Defendant Indian Harbor Insurance Company is a Delaware corporation with its
principal place of business in Connecticut.
51. Defendant The Insurance Company of the State of Pennsylvania is an Illinois
corporation with its principal place of business in New York.
52. Defendant Interstate Fire & Casualty Company is an Illinois corporation with its
principal place of business in Illinois.
53. Defendant Jefferson Insurance Company (formerly known as, or otherwise
responsible for the liability of, Jefferson Insurance Company of New York) is a New York
corporation with its principal place of business in Virginia.
54. Defendant Lexington Insurance Company is a Delaware corporation with its
principal place of business in Massachusetts.
55. Defendant Liberty Insurance Underwriters Inc. is an Illinois corporation with its
principal place of business in Massachusetts.
56. Defendant Liberty Mutual Insurance Company is a Massachusetts corporation
with its principal place of business in Massachusetts.
57. Defendant Liberty Surplus Insurance Corporation is a New Hampshire
corporation with its principal place of business in Massachusetts.
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58. Defendant London and Edinburgh Insurance Company Limited (formerly known
as, or otherwise responsible for the liability of, London and Edinburgh General Insurance
Company Limited) is a United Kingdom corporation with its principal place of business in the
United Kingdom.
59. Defendant Munich Reinsurance America, Inc. (formerly known as, or otherwise
responsible for the liability of, American Re-Insurance Company) is a Delaware corporation with
its principal place of business in New Jersey.
60. Defendant National Casualty Company is an Ohio corporation with its principal
place of business in Ohio.
61. Defendant National Fire Insurance Company of Hartford (formerly known as, or
otherwise responsible for the liability of, National Fire Insurance of Hartford) is an Illinois
corporation with its principal place of business in Illinois.
62. Defendant National Surety Corporation is an Illinois corporation with its principal
place of business in Illinois.
63. Defendant National Union Fire Insurance Company of Pittsburgh, PA (formerly
known as, or otherwise responsible for the liability of, Landmark Insurance Company) is a
Pennsylvania corporation with its principal place of business in New York.
64. Defendant Nationwide Affinity Insurance Company of America (formerly known
as, or otherwise responsible for the liability of, Western Casualty & Surety Company) is an Ohio
corporation with its principal place of business in Ohio.
65. Defendant Nationwide Mutual Insurance Company is an Ohio corporation with its
principal place of business in Ohio.
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66. Defendant New Hampshire Insurance Company (formerly known as, or otherwise
responsible for the liability of, New Hampshire Life) is an Illinois corporation with its principal
place of business in New York.
67. Defendant Normandy Reinsurance Company Limited is a Bermuda corporation
with its principal place of business in Bermuda.
68. Defendant The North River Insurance Company (formerly known as, or otherwise
responsible for the liability of, North River Insurance Company) is a New Jersey corporation
with its principal place of business in New Jersey.
69. Defendant The Ohio Casualty Insurance Company is a New Hampshire
corporation with its principal place of business in Massachusetts.
70. Defendant Old Republic Insurance Company is a Pennsylvania corporation with
its principal place of business in Pennsylvania.
71. Defendant Peerless Indemnity Insurance Company (formerly known as, or
otherwise responsible for the liability of, Ambassador Insurance Company) is an Illinois
corporation with its principal place of business in Massachusetts.
72. Defendant Phoenix Insurance Company is a Connecticut corporation with its
principal place of business in Connecticut.
73. Defendant QBE Insurance Corporation (formerly known as, or otherwise
responsible for the liability of, Jamestown Mutual Insurance Company) is a Pennsylvania
corporation with its principal place of business in Wisconsin.
74. Defendant SAFECO Insurance Company of America (formerly known as, or
otherwise responsible for the liability of, SAFECO Ins. Co. of America) is a New Hampshire
corporation with its principal place of business in Massachusetts.
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75. Defendant Scottsdale Insurance Company is an Ohio corporation with its
principal place of business in Ohio.
76. Defendant Security Mutual Insurance Company is a New York corporation with
its principal place of business in New York.
77. Defendant SPARTA Insurance Company (formerly known as, or otherwise
responsible for the liability of, American Employers’ Insurance Company and American
Employers’ Insurance Company of Boston, Massachusetts) is a Connecticut corporation with its
principal place of business in Connecticut.
78. Defendant St. Paul Fire and Marine Insurance Company (formerly known as, or
otherwise responsible for the liability of, St. Paul Insurance Company of Illinois) is a
Connecticut corporation with its principal place of business in Connecticut.
79. Defendant St. Paul Mercury Insurance Company is a Connecticut corporation
with its principal place of business in Connecticut.
80. Defendant St. Paul Surplus Lines Insurance Company is a Delaware corporation
with its principal place of business in Connecticut.
81. Defendant Swiss Re Corporate Solutions Capacity Insurance Corporation
(formerly known as, or otherwise responsible for the liability of, First Specialty Insurance
Corporation) is a Missouri corporation with its principal place of business in Missouri.
82. Defendant Tenecom Limited (formerly known as, or otherwise responsible for the
liability of, Winterthur Swiss Insurance Company and Yasuda Fire & Marine Ins. Co. (U.K.)
Ltd.) is a United Kingdom corporation with its principal place of business in the United
Kingdom.
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83. Defendant TIG Insurance Company (formerly known as, or otherwise responsible
for the liability of, Transamerica Insurance Company) is a California corporation with its
principal place of business in New Hampshire.
84. Defendant Travelers (Bermuda) Limited is a Bermuda corporation with its
principal place of business in Bermuda.
85. Defendant Travelers Casualty and Surety Company (formerly known as, or
otherwise responsible for the liability of, Aetna Casualty and Surety Company) is a Connecticut
corporation with its principal place of business in Connecticut.
86. Defendant The Travelers Companies, Inc. (formerly known as, or otherwise
responsible for the liability of, Travelers and Phoenix of Hartford Insurance Companies) is a
Minnesota corporation with its principal place of business in New York.
87. Defendant The Travelers Indemnity Company (formerly known as, or otherwise
responsible for the liability of, Gulf Insurance Company) is a Connecticut corporation with its
principal place of business in Connecticut.
88. Defendant United States Fidelity and Guaranty Company (formerly known as, or
otherwise responsible for the liability of, United States Fidelity & Warranty Company) is a
Connecticut corporation with its principal place of business in Connecticut.
89. Defendant United States Fire Insurance Company (formerly known as, or
otherwise responsible for the liability of, U.S. Fire Insurance Company) is a Delaware
corporation with its principal place of business in New Jersey.
90. Defendant Universal Re-Insurance Company Limited is a Bermuda corporation
with its principal place of business in Bermuda.
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91. Defendant Utica Mutual Insurance Company is a New York corporation with its
principal place of business in New York.
92. Defendant Wausau General Insurance Company (formerly known as, or otherwise
responsible for the liability of, Illinois Employers Insurance of Wausau) is a Wisconsin
corporation with its principal place of business in Massachusetts.
93. Defendant Westport Insurance Corporation (formerly known as, or otherwise
responsible for the liability of, The Manhattan Fire & Marine Insurance Company) is a Missouri
corporation with its principal place of business in Missouri.
94. Defendant XL Bermuda Limited (formerly known as, or otherwise responsible for
the liability of, XL Insurance (Dublin) Ltd. and XL Insurance (Bermuda) Ltd.) is a Bermuda
corporation with its principal place of business in Bermuda.
95. Defendant XL Insurance Company SE (formerly known as, or otherwise
responsible for the liability of, XL Europe Limited) is an Irish corporation with its principal
place of business in the Republic of Ireland.
96. Doe Defendants 1-100 are liability insurers that issued or subscribed to Insurance
Policy(ies) sold to BSA and/or Local Councils which provide coverage for Abuse Claims,
including but not limited to those listed in the attached exhibits as issued by Doe Defendants.
III. JURISDICTION AND VENUE
97. The foregoing allegations are incorporated herein by reference.
98. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because
the amount in controversy exceeds $75,000 and the parties are citizens of different states.
99. This Court has personal jurisdiction over each Defendant because each of them is
now, or within the time period relevant to the claims asserted herein, or within the time period
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relevant to the issuance of the Insurance Policies by the Defendants to BSA and/or Local
Councils is or has been licensed to do business in Texas; is transacting or has transacted business
in Texas; has contracted to insure persons, property, or risks located in Texas; has contractually
or otherwise consented to submit to personal jurisdiction in Texas; and/or has other significant
contacts with Texas. Each Defendant therefore has sufficient contacts with Texas that give rise
to the present action, has continuous and systematic contacts with Texas, and/or has consented
either explicitly or implicitly to the jurisdiction of this Court.
100. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(2) as a substantial
part of the events giving rise to the claim occurred in this judicial district.
101. Declaratory relief is appropriate pursuant to 28 U.S.C. § 2201 and Federal Rule of
Civil Procedure 57, as there is a ripe and justiciable controversy between the parties.
IV. FACTUAL BACKGROUND
A. The Boy Scouts’ Abuse Claims
102. BSA is a non-profit corporation founded in 1910 and chartered by an act of
Congress on June 15, 1916. BSA’s mission is to prepare young people for life by instilling in
them the values of BSA’s Scout Oath and Law and encouraging them to be trustworthy, kind,
friendly, and helpful. Since its inception, more than 130 million Americans have participated in
BSA’s youth programs, assisted by more than 25 million volunteers. BSA’s national
headquarters has been located in Irving, Texas since 1978.
103. BSA carries out its Scouting programs through charters granted to local councils
assigned to specific geographic areas across the United States (collectively, “Local Councils”).
These Local Councils recruit and oversee the local organizations that administer BSA’s Scouting
programs—typically faith-based institutions, clubs, civic associations, educational institutions,
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businesses, and groups of citizens (collectively, “Chartered Organizations”). BSA, Local
Councils, and Chartered Organizations together form an interconnected organizational structure
that carries out BSA’s mission.
104. In recent years, BSA, along with its Local Councils and Chartered Organizations,
has been named as a defendant in numerous lawsuits alleging injury from sexual abuse in
Scouting. The allegations in these claims and complaints range in severity, but all paint a
horrific picture of abuse suffered by thousands of children over the course of many decades.
These victims assert various legal theories, generally claiming that BSA, Local Councils, and
Chartered Organizations were liable for negligence, gross negligence, negligent retention,
negligent supervision, fraudulent concealment, willful and wanton misconduct, constructive
fraud, and breach of fiduciary duty.
105. In 2020, approximately 275 lawsuits asserting Abuse Claims were pending in
state and federal courts across the country. Facing mounting litigation costs and seeking to
achieve a global resolution of the Abuse Claims, BSA filed a petition for chapter 11 bankruptcy
in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on
February 18, 2020.
B. The Bankruptcy Proceedings and Formation of the Trust
106. After years of negotiations among BSA, its creditors, its insurers, Local Councils,
and Chartered Organizations, the Bankruptcy Court issued an order approving the Plan (the
“Confirmation Order”) on September 8, 2022. The United States District Court for the District
of Delaware (the “District Court”) affirmed the Confirmation Order on March 28, 2023. The
Plan became effective on April 19, 2023 (the “Effective Date”).
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107. During the bankruptcy, 82,209 unique and timely claims were filed alleging
injury from sexual abuse in Scouting programs. The “staggering and apparently unprecedented”
number and nature of these claims, as described by the District Court, required sophisticated
resolution.
108. The Plan achieved this resolution through a structure that created the Trust, which
assumed liability for the Abuse Claims, as well as certain assets to pay Abuse Claims. Under the
Plan, the Trust is responsible for processing, liquidating, and paying compensable Abuse Claims.
Specifically, the Plan provides that “the sole recourse of any holder of an Abuse Claim against a
Protected Party”—which term includes, as relevant here, BSA, Local Councils, and certain
insurance companies that settled with BSA prior to confirmation of the Plan (the “Settling
Insurance Companies”)—“on account of such Abuse Claim shall be to and against the
Settlement Trust[.]” Plan, Art. X.F.1. In other words, “[a]ll Abuse Claims shall be channeled to
and resolved by the Settlement Trust[.]” Id. Art. V.N.
109. Pursuant to the releases set forth in the Plan, “all holders of Abuse Claims shall,
and shall be deemed to, expressly, conclusively, absolutely, unconditionally, irrevocably, and
forever discharge and release . . . each and all of the Protected Parties and their respective
property and successors and assigns of and from all Abuse Claims[.]” Plan, Art. X.J.3. As a
result, the Trust is the only entity with liability for Abuse Claims asserted against BSA or Local
Councils.
110. In order to resolve the Abuse Claims and compensate BSA’s victims, the Plan
transferred certain asserts to the Trust—most importantly, the rights under the Insurance Policies
as well as proceeds payable under certain settlements reached with insurers during the pendency
of the Bankruptcy Case. The Plan transferred to the Trust any claims, causes of action, or rights
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of BSA and Local Councils against the Defendants arising from or related to the Insurance
Policies; the right to receive any proceeds or benefits from these claims, causes of action, or
rights; and all other rights, claims, benefits, or causes of action of BSA and Local Councils under
or with respect to the Insurance Policies (the “Insurance Rights Transfer”).
2
A list of the
Insurance Policies issued to BSA and currently known to the Trust (the “BSA Insurance
Policies”) is attached hereto as Exhibit A. A list of the Insurance Policies issued to Local
Councils and currently known to the Trust (the “Local Council Insurance Policies”) is attached
hereto as Exhibit B.
111. The Plan further provides that the Trust is the sole entity with the right to pursue
claims against and seek coverage from the Defendants arising out of or related to the Insurance
Policies. In order to facilitate the Insurance Rights Transfer set forth above, the Plan enjoins “all
[p]ersons that have held or asserted, that hold or assert, or that may in the future hold or assert
any claim or caused of action . . . against any [i]nsurance [c]ompany based upon, attributable to,
arising out of, or in any way connected with any [Insurance Policy]” from “taking any action for
the purpose or directly or indirectly collecting, recovering, or receiving payments, satisfaction, or
recovery with respect to any such claim or cause of action[.]” Plan, Art. X.H.2.
112. The BSA Settlement Trust Agreement (the “Trust Agreement”) and the Trust
Distribution Procedures (the “TDPs,” and with the Trust Agreement, the “Trust Documents”),
which are attached to and considered part of the Plan, govern the Trust. The TDPs make clear
that the Trustee is obligated to “determine . . . whether any [Defendant] issued coverage that is
2
See Plan, § I.A.157 (setting forth the “Insurance Assignment,” which includes but is not limited to, “the assignment
and transfer to the Settlement Trust of (a) the Insurance Actions, (b) the Insurance Action Recoveries, . . . and (d) all
other rights, claims, benefits, or Causes of Action of [BSA], [or] Local Councils . . . under or with respect to the
Abuse Insurance Policies (but not the policies themselves)”); see also id. § IX.A.3.j (declaring that the “Plan’s
transfer of rights under BSA Insurance Policies . . . is authorized and permissible notwithstanding the terms of any
policies or provisions of applicable law that are argued to prohibit the assignment or transfer of such rights”).
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available to respond” to an Abuse Claim and, if so, she “shall seek reimbursement for” such
Abuse Claim.” TDPs, Art. X. The Trustee has a “duty to preserve and maximize the assets of
the . . . Trust” for the benefit of holders of Abuse Claims. Id.
C. The Boy Scouts’ Insurance Program
1. Overview
113. The Insurance Policies issued to BSA provide general liability coverage for policy
periods between 1972 and 2020. From 1978 onward, the Named Insured in all of these policies,
BSA, was headquartered in and a citizen of Texas. From January 1, 1975 onward, Local
Councils were generally listed as additional insureds under these policies.
114. The Local Council Insurance Policies provide general liability coverage from
1942 until 2019. Many of the Local Council Insurance Policies list BSA as an additional
insured.
115. Based on the evidence the Trust has been able to obtain to date, the Insurance
Policies promise in their affirmative grants of coverage, without limitation and with varying
wording, to indemnify the insured for, or to pay on the insured’s behalf, all damages and defense
costs that the insured becomes legally obligated to pay:
a. because of personal injury caused by an occurrence during the policy
period;
b. on account of personal injuries caused by or arising out of an occurrence;
c. by reason of bodily injury which occurs after the retroactive date and
before the end of the policy period and is caused by an occurrence; or
d. pursuant to similar wording.
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116. As a result of the Insurance Rights Transfer, the Trustee is entitled to enforce
these promises and to receive the proceeds of the Insurance Policies pursuant to the policies’
affirmative grants of coverage.
117. Under the terms of the Insurance Policies and applicable law, the Insurance
Policies provide insurance coverage for BSA’s and/or Local Councils’ liability and defense costs
for or in connection with the Abuse Claims. Pursuant to the Insurance Rights Transfer, the
Trustee is entitled to enforce BSA’s and Local Councils’ rights to such coverage and to receive
the proceeds of the Insurance Policies with respect to BSA’s and Local Councils’ liability and
defense costs for or with respect to the Abuse Claims.
118. The Abuse Claims trigger the Defendants’ coverage obligations under the terms
and conditions of the Insurance Policies and applicable law, and the damages and defense costs
incurred for or in connection with the Abuse Claims are within the coverage grants of the
Insurance Policies because, without limitation, the Abuse Claims seek damages and defense
costs that the insured becomes obligated to pay:
a. because of personal injury caused by an occurrence during the policy
period;
b. on account of personal injuries caused by or arising out of an occurrence;
c. by reason of bodily injury which occurs after the retroactive date and
before the end of the policy period and is caused by an occurrence; or
d. pursuant to similar wording.
119. Based on the evidence available to the Trust to date, under the terms of the
Insurance Policies and applicable law, each of the Defendants is jointly and severally liable to
BSA and/or Local Councils for the full amount of BSA’s and/or Local Councils’ liability and
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defense costs for or in connection with the Abuse Claims that trigger their policy periods, subject
only to any applicable attachment points and any applicable limits of liability of the Insurance
Policies. Pursuant to the Insurance Rights Transfer, the Trustee is entitled to enforce BSA’s and
Local Councils’ rights to such coverage and to receive the proceeds of the Insurance Policies
with respect to BSA’s and/or Local Councils’ liability and defense costs for or with respect to the
Abuse Claims.
120. Throughout the policy periods of the Insurance Policies, the insured risk was
located primarily in Texas because, among other reasons, BSA’s headquarters was located in
Texas. Texas, with 5,369 Abuse claimants, is second only to California in the number of victims
asserting Abuse Claims.
121. All applicable conditions precedent to coverage or recovery under the Insurance
Policies, if any, have been satisfied, compliance with such conditions precedent is excused, such
conditions precedent do not apply, or Defendants have waived or are estopped or otherwise
precluded from relying on such conditions precedent.
122. Defendants sold the Insurance Policies to BSA and Local Councils in
consideration of substantial premiums. BSA and Local Councils have paid any and all necessary
premiums for the Insurance Policies.
123. Each of the Insurance Policies has been in full force and effect since it was sold to
BSA or Local Councils, including at all times material to this Complaint.
124. No exclusions or limitations in the Insurance Policies (other than any applicable
attachment points and limits of liability) apply to coverage for the Abuse Claims.
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2. Defendants’ Pre-Petition Refusals to Provide Coverage
125. BSA and Local Councils incurred significant defense fees and costs in defending
against the pre-petition Abuse Claims. Many Defendants have disputed their obligations
regarding these costs, and have failed to promptly pay BSA’s and Local Councils’ defense costs
and settlements, including costs of BSA’s retained national coordinating counsel.
126. For several years prior to BSA’s bankruptcy, BSA and certain Local Councils
were engaged in litigation in multiple forums in multiple cases regarding coverage disputes
arising from Abuse Claims under certain Defendants’ policies. These coverage actions were
limited in scope, involved a small number of Defendants, and concerned coverage for less than
one percent of the Abuse Claims that have been asserted and channeled to the Trust for
evaluation, processing, and, where appropriate, payment. The Trust was not a party to any of
these actions.
127. In 2017, Defendant National Surety initiated litigation against BSA and one of the
Local Councils in Cook County Circuit Court in Illinois, in the case captioned National Surety
Corporation v. Boy Scouts of America, et al., No. 2017-CH-14975 (the “Illinois Action”).
National Surety sought declaratory relief regarding its obligations to provide coverage under two
of its policies, for Abuse Claims asserted by 18 victims (the “Hacker Victims,” so named for the
perpetrator who abused them). National Surety also named several other defendants, including
Defendant Allianz, certain other insurers,
3
and the Hacker Victims themselves.
128. In 2018, BSA filed a complaint against National Surety, Allianz, and the Settling
Insurance Companies in Dallas County, Texas, in the case captioned Boy Scouts of America v.
Insurance Company of North America, et al., No. DC-18-11896 (the “Texas Action”). BSA
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These insurers included several Settling Insurance Companies, in addition to other insurers named as defendants in
this Complaint.
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sought declaratory and other relief regarding coverage for Abuse Claims asserted by the Hacker
Victims and one other victim.
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129. For years, BSA, National Surety, and Allianz were involved in forum-related
disputes in both the Illinois Action and the Texas Action. No rulings on the merits were made in
either action before the actions were automatically stayed by the filing of BSA’s bankruptcy
petition on February 18, 2020.
130. Given the piecemeal nature and limited scope of the Illinois Action and the Texas
Action as compared to the comprehensive relief sought in this Complaint, the Trustee has
moved, contemporaneously with the filing of this Complaint, to dismiss both the Illinois Action
and the Texas Action.
3. Defendants’ Involvement in the Bankruptcy Proceedings
131. During BSA’s bankruptcy proceedings, many Defendants filed objections to the
Plan. Among other things, these Defendants argued that the Plan impermissibly impaired their
rights to assert coverage defenses following confirmation of the Plan. The Defendants who
opposed the Plan further asserted that they had no obligation to cover Abuse Claims because of
the terms of their Insurance Policies, the manner in which Abuse Claims will be evaluated and
potentially paid by the Trust, or both, among other defenses. Both the Bankruptcy Court and the
District Court rejected Defendants’ arguments that the Plan unlawfully impaired their rights
under the Insurance Policies and confirmed the plan over the insurers’ objections. Nonetheless,
4
BSA sought declaratory relief regarding coverage for Abuse Claims generally—in other words, not tied to a
specific Abuse Claim—only with respect to policies issued by Insurance Company of North America and Century
Indemnity Company. Both insurers are Settling Insurers and BSA’s claims against both entities will be resolved in
accordance with the terms of the settlement agreement. BSA was also engaged in separate pre-petition coverage
litigation with other Settling Insurers regarding coverage obligations for Abuse Claims generally; those actions will
similarly be resolved in accordance with the terms of the settlement agreement.
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these Defendants continue to challenge the Plan, and have appealed the District Court’s decision
to the Third Circuit.
132. Despite these Defendants’ refusal to acknowledge their coverage obligations
under the Insurance Policies, BSA and Local Councils were able to reach agreement with some
of their insurers prior to confirmation of the Plan. Twenty-nine of BSA’s and Local Councils’
insurers paid more than $1.6 billion to resolve their liabilities for Abuse Claims.
133. The Trustee now seeks to resolve the remainder of BSA’s and Local Councils’
insurance coverage.
V. CAUSES OF ACTION
COUNT ONE
Declaratory Judgment (All Defendants)
134. The preceding paragraphs are set forth herein by reference.
135. Defendants have disputed, declined, or failed to perform fully their coverage
obligations with respect to the Abuse Claims or, upon information and belief, will dispute,
decline, or fail to perform fully these obligations. Among other things, many of the Defendants
filed objections to the Plan and Confirmation Order. Despite that the District Court affirmed the
Bankruptcy Court’s ruling in all respects, most of the Defendants have appealed that ruling and
continue to maintain their objections to the Plan to avoid payment of Abuse Claims under their
policies.
136. Accordingly, and in light of the continuing dispute regarding the Defendants’
obligations to make such payments, an actual, justiciable, and ripe controversy exists among the
parties regarding the nature and extent of the Defendants’ payment obligations under the
Insurance Policies.
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137. The Trustee asserts and seeks a declaratory judgment that each of the Defendants
is obligated under each of the Insurance Policies it issued or subscribed to, including each policy
period of each such Insurance Policy, to provide coverage in full for BSA’s and/or Local
Councils’ liability for Abuse Claims that trigger the coverage obligations of the policy in
question as set forth above, subject only to any applicable attachment points and any applicable
limits of liability of the Insurance Policies in question.
138. Because the Effective Date has occurred, among other things:
a. BSA’s and Local Councils’ liability for Abuse Claims has been channeled
exclusively to and assumed by the Trust;
b. BSA has been discharged and released from liability for Abuse Claims,
except as expressly provided in the Plan and the Confirmation Order;
c. BSA’s and Local Councils’ rights to insurance coverage for Abuse
Claims, among other assets, have been transferred to the Trust pursuant to
the Insurance Rights Transfer;
d. The Trustee is required to “determine . . . whether any [Defendant] issued
coverage that is available to respond to [the] Claim . . . [and] shall seek
reimbursement”;
e. The Trust is solely responsible for holding, preserving, and maximizing
the Insurance Policies, and directing the payment of all compensable
Abuse Claims in accordance with the Trust Documents.
139. The Trustee is entitled to a declaration of the rights and obligations of the parties,
pursuant to 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57, regarding the nature and
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extent of the Defendants’ obligations under the Insurance Policies to pay insurance proceeds in
connection with Abuse Claims.
140. The Trustee does not have another adequate available remedy at law, including
because non-declaratory relief would not resolve coverage for future Abuse Claims.
141. The requested declaratory relief will terminate some or all of the controversy
between the Trustee and the Defendants.
COUNT TWO
Breach of Contract (All Defendants)
142. The preceding paragraphs are set forth herein by reference.
143. The Insurance Policies are each valid and enforceable contracts that remain in
effect.
144. As the holder of all rights under the Insurance Policies under the Insurance
Transfer, the Trustee has standing to pursue claims under the Insurance Policies.
145. BSA, Local Councils, and the Trust have satisfied all conditions precedent under
the Insurance Policies, including the payment of all premiums required by the Insurance Policies
146. The Abuse Claims allege bodily injury, personal injury, and/or mental anguish
occurring in whole or in part during the policy period of the Abuse Insurance Policies.
147. The terms of the Insurance Policies unambiguously require Defendants to defend
or reimburse the insured for any defense costs incurred in connection with the Abuse Claims, and
to indemnify the insured for any amounts the insured becomes legally obligated to pay for the
Abuse Claims.
148. Alternatively, the terms of the Insurance Policies are ambiguous and must be
construed in favor of coverage for the insured.
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149. Although the plain terms of the Insurance Policies obligate Defendants to pay in
full for certain Abuse Claims, upon information and belief, the Defendants thus far have refused
or will refuse requests that they pay claims billed to them prior to BSA’s bankruptcy and/or
have stated or will state definitively and finally that they will not pay any amount for any
Abuse Claim for which BSA or Local Councils and/or the Trust become legally obligated to pay.
150. Defendants have breached or will breach their contractual obligations under the
Insurance Policies by, among other things, refusing and failing to defend and/or delaying
payment and/or refusing to fully pay defense and indemnity costs, in connection with the Abuse
Claims in accordance with the express terms of the Insurance Policies.
151. In breaching and/or anticipatorily breaching their contractual obligations as set
forth above, the Defendants have deprived BSA and Local Councils (and now the Trust), or
threaten to deprive the Trust, of the insurance protection for which BSA and Local Councils paid
substantial premiums.
152. As a direct and proximate result of the Defendants’ breaches and/or anticipatory
breaches of the Insurance Policies, the Trust has suffered or will suffer substantial monetary
damages and may continue to incur such damages in the future.
COUNT THREE
Bad Faith (All Defendants)
153. The preceding paragraphs are set forth herein by reference.
154. The Trust, and previously BSA and the Local Councils, presented evidence that
policies that provide coverage for Abuse Claims were issued to BSA from at least 1972 through
February 18, 2020, and were issued to Local Councils from at least 1942 through 2019.
Defendants have not disputed that coverage since 1942 extends to Abuse Claims for which BSA,
Local Councils, and/or the Trust, is legally obligated to pay.
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155. Notwithstanding the credible evidence of the policies’ existence and the lack of
any dispute by Defendants that coverage extends to Abuse Claims, the Defendants thus far have
failed to effectuate prompt, fair, and equitable settlements of claims billed to them prior to
BSA’s bankruptcy and/or Abuse Claims for which BSA, Local Councils, and/or the Trust will
become legally obligated to pay, or will fail to effectuate prompt, fair, and equitable settlements
of claims billed to them by the Trust for Abuse Claims for which the Trust will become legally
obligated to pay.
156. In refusing to effectuate settlements as set forth above, the Defendants have failed
to deal with BSA, Local Councils, and/or the Trust fairly and in good faith, or will fail to deal
with the Trust fairly and in good faith.
157. As a direct and proximate result of the Defendants’ bad faith dealings and/or
anticipatory bad faith dealings, the BSA and Local Councils (and now the Trust) have suffered
monetary damages and the Trust is likely to continue to incur such damages in the future.
Notice Regarding Additional Claims
158. Given the Defendants’ history in avoiding their obligations under the Insurance
Policies, as set forth above, the Trustee reasonably anticipates that the Defendants will refuse to
pay claims submitted by the Trust. The Trustee expressly reserves the right to amend this
complaint to set forth additional claims, including, but not limited to, statutory claims under
Chapters 541 and 542 of the Texas Insurance Code, in the event of such refusals.
VI. JURY DEMAND
159. The Trustee hereby requests a trial by jury.
VII. PRAYER FOR RELIEF
WHEREFORE, the Trustee respectfully prays that this Court grant the following relief:
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a. Declaratory judgment setting forth the rights and obligations of the
Trustee and the Defendants under the Insurance Policies with respect to
Abuse Claims;
b. Judgment awarding Plaintiff all damages sustained as a result of
Defendants’ breaches of contract;
c. Judgment awarding Plaintiff all damages sustained as a result of
Defendants’ bad faith;
d. Judgment awarding Plaintiff pre-judgment and post-judgment interest as
allowed by law;
e. Judgment awarding Plaintiff all costs of court;
f. Judgment awarding Plaintiff reasonable attorneys’ fees incurred in
prosecuting this action; and
g. Any and all other relief to which Plaintiff may be entitled.
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Dated: July 18, 2023 Respectfully submitted,
/s/Jeffrey M. Tillotson
Jeffrey M. Tillotson
Texas Bar No. 20039200
Email: jtill[email protected]
TILLOTSON JOHNSON & PATTON
1201 Main St., Suite 1300
Dallas, TX 75202
Telephone: (214) 382-3041
Facsimile: (214) 292-6564
Kami E. Quinn (pro hac vice application
forthcoming)
W. Hunter Winstead (pro hac vice application
forthcoming)
Emily P. Grim (pro hac vice application
forthcoming)
Sarah A. Sraders (pro hac vice application
forthcoming)
Rachel H. Jennings (pro hac vice application
forthcoming)
GILBERT LLP
700 Pennsylvania Avenue, SE
Suite 400
Washington, DC 20003
Telephone: (202) 772-2200
Facsimile: (202) 772-3333
Attorneys for the Honorable Barbara J. Houser
(Ret.), in her capacity as Trustee of the BSA
Settlement Trust
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