Insurance company settled with Minnesota diocese to pay sexual abuse victims

Sep. 3—WINONA, Minn. — Southeast Minnesota's three most recent sexual abuse trials were decided in favor of the alleged victims, netting millions in settlements.

But those three survivors — two from Lourdes High School, one from St. Mary's Parish and School in Winona — are still unpaid.

They're one step closer to getting monetary compensation, though, after a $30 million settlement with an insurance company that covered the Diocese of Winona-Rochester in the 1970s, when the survivors were in school.

In 2021, the diocese, associated parishes and schools, and two insurers paid $28 million in a settlement with more than 145 survivors who had filed claims against the Minnesota church. That settlement did not include any contributions from United States Fire Insurance Company, the diocese's largest insurer. Instead, the Diocese and survivors continued to litigate against the insurance company for several more years.

The case was scheduled to go to trial in September and October 2026. On Aug. 27, a trustee representing the Diocese of Winona-Rochester told Winona County Court a settlement had been reached.

Jeff Anderson and Associates, a law firm representing survivors of sexual abuse by Catholic priests, pointed out that according to the diocese's bankruptcy agreement, U.S. Fire was responsible for paying its three most recent survivor payments — the Rochester and Winona cases.

According to court documents, Doe 254 and Doe 222, in Rochester, were granted verdicts of $7.6 million and $4.8 million in damages, respectively.

Doe 539, the St. Mary's Parish and School alumnus, got a judgment of $4.5 million in damages.

Josh Peck, an attorney with Jeff Anderson and Associates, said those three survivors won't be paid those exact amounts — but they will get something.

The $30 million settlement will be divided again among the 145 survivors who filed claims against the diocese, via bankruptcy proceedings.

Over the past decade, Peck said, institutions responsible for paying survivors of sexual abuse have delayed payments in the hopes claimants would give up or simply die of old age before their cases could go to trial.

"It feels like they're being abused again, when (organizations) are avoiding any responsibility," Peck said.

Thus, after a settlement, the relief for survivors is "immense."

"They (organizations) were hoping to pay nothing," he said. "These survivors didn't let them get away with that."

In 2018, the Diocese of Winona-Rochester sued several insurers, claiming they failed to cover damages incurred after members of the clergy sexually abused children in their care.

According to the suit, the insurers were required to pay sums the Diocese incurred "as a result of covered claims, as long as any part of the alleged injury took place during the applicable policy period," as well as attorney's fees for the Diocese.

According to court documents, various insurers disputed coverage, claiming the damage to the abused people did not result in "bodily injury" or "personal injuries," the abuse itself did not fit under insurance policies, or that the claims related to a specific abuser, Father Thomas Anderson, were precluded by previous claims.

The Diocese filed for bankruptcy, and the insurance claims lingered there for several years. Several insurance companies settled, while other organizations, like Lourdes High School and Rochester Catholic Schools, were dropped from ongoing survivor suits.

By 2025, only U.S. Fire had yet to pay.

Father Will Thompson, the Diocese of Winona-Rochester's vicar general, said that while survivors surely feel the most relief after the settlement, the diocese also sees it as a chance to reopen conversations — and hopefully avoid facing more victims seeking damages in trial.

Thompson also sees the loose threads being tied up one by one, as the window for "impaired unknown tort" claimants to file for relief closes in a few more months.

He believes the diocese has begun to find its way forward since the 2021 bankruptcy reorganization. The U.S. Fire settlement, a "major hurdle," was one of the last pieces of litigation barring the diocese from communicating directly with survivors, who might also be litigants.

"One of the big things this opens up is an opportunity to work with victims of abuse toward greater healing," Thompson said. "The door really opens back up for those conversations."

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