The Archdiocese of Santa Fe, in the throes of Chapter 11 bankruptcy, sued four insurance companies this week, claiming they failed to fulfill their liability coverage contracts for sexual abuse claims.
The archdiocese hopes to raise enough money, including through insurance, to settle the bankruptcy case involving more than 400 people who say they were victims of clergy sex abuse, with some claims dating back decades.
At least one lawyer sees the archdiocese’s lawsuit as a step towards a resolution in the case, which spans more than three years and is in its third mediator. Although it is clear that the archdiocese and its insurance companies have not reached agreements on the payments, the lawsuit reveals the seriousness of the disagreements between them.
The named defendants in the lawsuit are Great American Insurance Co., Arrowood Indemnity Co., St. Paul Fire and Marine Insurance Co., and United States Fire Insurance Co. Representatives for three of those companies could not be reached for comment. Thursday, nor could three of the prosecutors representing the archdiocese.
A man from the United States Fire Insurance Co.’s legal department said his company does not comment on ongoing litigation.
The lawsuit seeks a declaratory judgment from U.S. Bankruptcy Judge David Thuma, which generally outlines the rights and obligations of the parties in a contract. The lawsuit says this would “end or materially reduce the existing controversy between the parties.”
Aaron Boland, a Santa Fe attorney who represents one of the accusers, said the lawsuit “will open the door to real conflict.” Boland said he sees it as a positive step.
The lawsuit “pulls the curtain back” on the case, he said. “The hope is that this will move things towards justice.”
Earlier this month, Thuma rejected the archdiocese’s request to seal court documents involving “confidential insurance documents” out of public view.
The archdiocese and its attorneys wrote in the lawsuit against the insurers that they had hoped for an order from the judge allowing them to “file this complaint under seal.” After some of the accusers’ lawyers objected, the archdiocese and insurers backed out of the claim, and Thuma decided not to seal the documents.
Boland said he was glad Thuma didn’t allow the records to be sealed. “It’s nice to see that the rules of the public courthouse apply to the church,” he said.
He added that he hoped “transparency will lead to pressure” on the archdiocese and insurance companies.
The complaint accuses the insurers of “failing to meet contractual commitments to provide liability coverage to the Archdiocese for claims alleging decades-old sexual abuse.”
The archdiocese has raised funds – through property sales, property auctions and contributions – to settle those alleging abuse, although the amount of funding it would need to settle the case is unclear. has not been specified.
Insurance payments are also expected to fund a large portion of the settlement.
The lawsuit says that in the 1990s, the archdiocese sought coverage for sexual abuse claims from insurers who had sold liability to the Catholic organization between February 1953 and April 1986, and they entered into a series of disputes. agreements.
Some settlements have released some insurers from their continuing insurance obligations, the suit says, but settlements with insurers named as defendants in the suit have not released them from liability.
Those agreements and coverage “remain in effect to this day,” the lawsuit says, and insurers have “a continuing obligation to provide insurance coverage for present and future sexual abuse claims.”
The insurers “failed to fulfill their contractual obligations to provide insurance coverage for sexual abuse claims, nor did they accept or acknowledge their obligations,” the document says, adding that their actions “impeded and hampered” the archdiocese’s ability to reach a resolution in the bankruptcy.
Boland said the suit could provide a useful boost.
“The church goes to court for help and says, ‘Our insurance company isn’t paying us.’ I’d like to think that’s a good sign,” he said.