NY archdiocese suit says insurers can't dodge duties, as abuse claims loom

New York City, N.Y., Jul 3, 2019 / 05:01 pm (CNA).- After a New York law temporarily allowed alleged victims of past sexual abuse to file lawsuits that had been barred by legal time limits, the New York archdiocese has filed a lawsuit against 31 insurance companies, charging that many intend to limit or deny insurance claims.

“The Archdiocese of New York has filed suit seeking to hold insurance companies to the policies they issued, and for which it paid premiums,” a spokesman said, according to the Wall Street Journal.

The lawsuit argued that the archdiocese is entitled to all benefits of the policies, including coverage of legal fees during litigation. The archdiocese could face substantial legal liability as a result of the Child Victims Act, signed into law in February by Gov. Andrew Cuomo.

The act allows for victims of child abuse to bring civil claims against their alleged abuser until the age of 55. Previously an accuser’s civil complaint had to be filed by age 23. Criminal prosecutions can now be brought if the victim comes forward before age 28.

The act creates a one-year “look-back” window for victims of any age to come forward.

The New York archdiocese’s lawsuit, filed in New York, charges that the Insurance Co. of North America, a subsidiary of Chubb Group of Insurance Cos., breached its contract with the archdiocese, the Wall Street Journal reports.

Chubb said it wouldn’t cover a legal claim concerning a lawsuit from a man who alleged sexual abuse by two clerics in the 1970s.

“Rather than honor its contractual obligation under the insurance policies they issued, Chubb has advised the archdiocese that it will not stand behind its insurance policies and contractual obligations,” an archdiocese spokesman said.

Chubb’s letter of denial said the accuser “alleges to have sustained injury that was expected and/or intended from the standpoint of the archdiocese,” and so did not fall under covered policy, the New York Law Journal reports.

The archdiocese’s attorneys countered that this misinterprets the accuser’s claim. They argued that the wording did not allege the archdiocese expected or intended sexual abuse.

The alleged abuse victim’s expected lawsuit against the archdiocese has not yet been filed but can become active when the one-year window opens in August.

Previous proposed versions of New York’s law on sexual abuse claims shielded public institutions including public schools from lawsuits. However, such lawsuits are allowed under the version that became law.

The New York Catholic Conference supported these changes allowing lawsuits against public institutions and did not oppose the final bill, Dennis Poust, Director of the New York Catholic Conference, told CNA.

James R. Marsh, an attorney representing 40 plaintiffs against the archdiocese, told the news site Crain’s New York Business that the lawsuit against insurers is “an unequivocal sign that the church is getting serious about dealing with its exposure.”

“With the New York Archdiocese facing significant financial liability after decades of heartbreaking sexual abuse, it appears that it is beginning the process of addressing its financial challenges head-on,” Marsh said. “That’s just what this filing represents: an institution seeking to ensure that liability is fairly shared with its own insurance companies.”

Michael Pfau, a lawyer representing 50 alleged victims in the New York archdiocese and 500 alleged victims around the state, told the New York Daily News it is not uncommon for insurance companies to initially balk at paying.

“This is a very positive step. We want to see the archdiocese secure coverage,” Pfau said, characterizing the lawsuit as “an acknowledgement that the Archdiocese of New York has enormous potential exposure.”

A law similar to New York’s has been passed in New Jersey, and Catholic institutions could face a wave of lawsuits there.

In October 2016, Cardinal Timothy Dolan of New York launched The Independent Reconciliation and Compensation Program as an arbitration process for victims. The archdiocese presented the program as a way for abuse victims to secure compensation more easily than through the courts. The arbitration process was presented as having lower standards of evidence to secure compensation, though participants in the program waived their right to future civil action.

More than 200 individuals applied for compensation before a November 2017 deadline. Scores of individuals received compensation totaling in the tens of millions of dollars.

It was in this process that an alleged victim of then-Cardinal Theodore McCarrick came forward, the New Yorker magazine reported in April.

The New York archdiocese’s further inquiry led to the June 2018 announcement that McCarrick, the former Archbishop of Washington, had been credibly accused of sexual abuse when he was a priest of the archdiocese.

In September 2018 the New York attorney general’s office issued subpoenas to all eight Catholic dioceses in the state, asking for documents related to sexual abuse allegations and the Church’s response to them.

At the time the New York archdiocese said it has shared with local District Attorneys “all information they have sought concerning allegations of sexual abuse of minor.”

“Not only do we provide any information they seek, they also notify us as well when they learn of an allegation of abuse, so that, even if they cannot bring criminal charges, we might investigate and remove from ministry any cleric who has a credible and substantiated allegation of abuse.”