The Third Circuit affirmed the District Court's finding that the insurers had no duty to defend day care and youth centers for bribes and kickbacks allegedly paid to two state court judges. Markel Int'l Ins. Co. v. W. Childcare, LLC, 2013 U.S. App. LEXIS 14017 (3d Cir. July 8, 2013).

   In 2009 and 2010, numerous civil actions were filed against the day care and youth centers along with two Pennsylvania state court judges. The actions alleged that the defendants conspired to knowingly violate the constitutional rights of youths through the payment of bribes and kickbacks in exchange for influence in the construction of the insureds' juvenile detention facilities and sentencing of juvenile offenders to those facilities. 

   The insurers issued policies to the day care and  youth centers to cover bodily injury and property damage that arose in connection with the operation of the centers, but were limited to accidental injury and damage, and excluded expected or intended conduct. The policies also excluded injuries that arose out of willful violation of penal statutes or were caused by the insured with the knowledge that the actions would violate the rights of another.

   The insurers filed suit seeking declarations that they had no duty to defend or indemnify. The District Court granted summary judgment to the insurers.

   The Third Circuit affirmed. The insurers had no duty to defend because the underlying actions did not allege "occurrences." The alleged reckless and intentional conduct was not "accidental" under Pennsylvania law. The allegations also fell under the exclusion for a knowing violation of the rights of others.