Insurers Pushed To Settle Archdiocese Abuse Claims

The Archdiocese and claimants alleging abuse by priests and other clergy came to a tentative agreement last year on what the Archdiocese would pay, but insurance companies' contributions remain an issue.

Now attorneys for the claimants are preparing to ask U.S. Bankruptcy Judge David Thuma to permit state lawsuits or claims put on hold by the bankruptcy filing to go forward – a move that could conceivably allow juries to assess damages to individual survivors after public trials and prove much more costly for the insurance companies.

The Archdiocese itself plans to file a legal action as early as Monday asking a judge to settle undisclosed questions involving the relationship "between the Archdiocese and its insurance carriers," an Archdiocese attorney said Friday during a hearing in Albuquerque.

A recent three-day mediation that involved the insurance companies, Archdiocese and claimants, led by a nationally recognized mediator, was positive and should continue, said Archdiocese attorney Thomas Walker, referring to mediator Paul Van Osselaer of Texas.

"I'm hopeful and I know everyone gets tired of hearing that word as time drags on," Walker said. "But I'm encouraged."

Jim Stang, a California attorney who represents survivors, countered during Friday's hearing that while some progress had been made, "we are very far from resolution of this case in terms of the dollars involved."

He noted that in the recent USA Gymnastics bankruptcy settlement involving sexual abuse claims against a former team doctor, survivors on average will receive $800,000 each. In recent days, the University of Michigan announced a $490 million settlement of sexual abuse claims involving a former school doctor in which survivors will be paid an average of more than $400,000 each, Stang added.

"We look to settlements from around the country for guidance as to what the fair value of what these (Archdiocese) abuse claims would total," Stang said. "If they're not paying attention to the trends going on around the country, they're making a serious mistake."

There has been no disclosure of what the Archdiocese is willing to contribute, or what insurance companies are offering.

And Rob Charles, a Tucson attorney representing Archdiocese parishes, said that citing such multimillion dollar payouts might not sit well with New Mexico parishes that have committed "probably more than they can" toward the Archdiocese's financial settlement.

The Archdiocese has had numerous insurance carriers since claims of sexual abuse by priests and other clergy surfaced decades ago and so far has paid $52 million, including insurance proceeds and its own money, to settle about 300 cases out of court, according to The Associated Press. That would average out to about $175,000 per victim.

The Archdiocese filed for bankruptcy protection in 2018 in part so it didn't have to face exposure from individual state lawsuits alleging clergy sexual abuse.

One issue Friday was whether the upcoming Archdiocese legal action involving the insurance issues will be sealed.

Prior court filings, orders and hearings have been sealed at the Archdiocese's request to ensure its contracts with insurance carriers, which had confidentiality clauses, weren't breached.

Thuma, while not immediately ruling on that question, said Friday, "My prejudice is to not seal things, especially in a case like this where there's public interest and the public has a right to know…"

Merit Bennett, a Santa Fe attorney, told the judge, "The words 'under seal' in this type of matter concern me because I filed my first (child sexual abuse) lawsuit against the Archdiocese in 1994 and ever since then the words 'under seal' seem to perpetuate the fact that all of the abuse was under seal for many, many generations."

If the insurance case is sealed, Bennett said, "The public is going to basically say, 'Well, this is more of the same.'"

Stang added, "These insurance policies, one might say, are the most important assets of this (Archdiocese) estate and to do this behind closed doors is not appropriate."