Diocese Settles Claims With More Insurance Companies

The Roman Catholic Diocese of Spokane has reached settlements totaling $4.25 million with two of its insurance carriers in a dispute over coverage of sex-abuse claims, Bishop William Skylstad says.

It is the second time in less than a month that companies that issued policies to the diocese have agreed to settle, rather than go to trial. With a proposed $5.25 million settlement offer from the diocese’s main insurer, more than $9.5 million is available for paying victims of sexual abuse by clergy, Skylstad said Thursday.

The offers must be approved by federal bankruptcy and district court judges.

“Today’s announcement is a major step toward bringing the healing and reconciliation we so desperately need within the Catholic community in the Spokane diocese, healing and recognition for the victims of sexual abuse and also for the entire Catholic community,” Skylstad said, reading from a prepared statement.

The diocese filed for Chapter 11 bankruptcy protection in 2004 because of sex abuse claims and has offered to settle the claims of 75 victims for $45.7 million. More than 100 other claims have been filed since.

The diocese is reviewing “claims of proof” filed by claimants not covered by the so-called “universal settlement,” but no sum has been attached to their claims.

“The reason we filed Chapter 11 was to make sure all the victims are treated fairly,” Skylstad said. “They’re not being left out in the cold in any way.”

He said church officials are working to find ways to pay the claims, but there are no plans to sell church assets.

“We have no intention of selling parishes,” Skylstad said. “We don’t want to get into a situation that will be above our means.”

Under the latest settlement proposal, Indiana Insurance Co. will pay the diocese $2.75 million for policies issued between 1977-79 and Aetna Insurance Co. will pay $1.5 million to settle claims for a policy issued in 1981.

Last month, the diocese reached a settlement with General Insurance Co. of America, a subsidiary of Seattle-based Safeco Insurance, for $5.25 million.

The diocese has claims pending against three other insurers, and a trial to resolve them is scheduled to begin in October, said attorney Greg Arpin, who represents the diocese in its bankruptcy case.

Diocese lawyers continue to negotiate with those insurers, Skylstad said.

Under terms of the proposed settlements, the insurance companies would be released from any further litigation, except for claims related to Morningstar Boys Ranch, which is operated by the diocese and has been the subject of abuse allegations.

Church officials previously said they thought insurance policies might provide about $15 million toward the abuse-claims settlement.

In 2004, the diocese cited abuse claims of about $81.3 million against assets of about $11 million.

The diocese serves about 90,000 Catholics in more than 80 parishes in 13 Eastern Washington counties.