5 insurers sue Spokane diocese over settlements

By Janet I. Tu
Seattle Times staff reporter

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Five commonly owned insurance companies for the Spokane Roman Catholic diocese filed a lawsuit Tuesday saying they should not have to pay for settlements in sex-abuse cases involving five former Spokane priests.

In the lawsuit filed in Spokane County Superior Court, the five insurers — all part of CNA insurance companies — said they shouldn't have to pay, in part because some policies couldn't be found and because church officials had been aware of warnings against the abusive priests but didn't stop them.

"The diocese made conscious decisions not to protect children," said the lawsuit, which focused mainly on the case of the Rev. Patrick O'Donnell, a former Spokane priest who is the subject of a number of lawsuits facing the diocese.

O'Donnell, who served as a priest in Spokane from the early 1970s to the mid-1980s, has admitted in a deposition to abusing at least 30 boys during his priesthood.

Triggered by the failure of mediation talks with 28 men who say they were abused by O'Donnell, the Spokane diocese announced earlier this month that it plans to file for Chapter 11 bankruptcy. Bishop William Skylstad said the diocese was facing a number of pending and potential lawsuits that would cost more than it could afford.

Tuesday's lawsuit presumably would be stayed once the diocese files for bankruptcy, which it intends to do by Dec. 6. Any pending litigation would be halted by the filing while the bankruptcy court determines how to proceed.

"We're disappointed with this action," the Rev. Steve Dublinski, the diocese's vicar general, said of the insurers' lawsuit. "Our concern is that people who have legitimate claims from the diocese receive just, fair and equitable compensation. This particular maneuver threatens that."

CNA spokesman Charles Boesel declined comment.

Timothy Kosnoff, an attorney for the men who say they were abused by O'Donnell, said the insurers' lawsuit won't affect his clients.

"Money that's not available from [the CNA companies] is just money that's going to have to be paid by the diocese," Kosnoff said. "That's not the fault of the victims. So it doesn't affect our clients really at all."
 
Tuesday's lawsuit names as defendants the plaintiffs in suits against O'Donnell and four other priests, as well as other insurers of the Spokane diocese. That's so any court decision will be binding on them as well, Kosnoff said.

According to the lawsuit, the five CNA companies provided coverage for the Spokane diocese at various times from about 1958 to 1989. But, the suit alleges, "no party has located a copy" of some of those policies.

The suit also says the diocese didn't notify the insurers in a timely manner.

The insurers also say they shouldn't have to pay because their policies pay for "occurrences," which they define as "accidents." They argue that under Washington law, an intentional act does not constitute an accident, and that the diocese's supervision of O'Donnell and its handling of complaints about him were not accidents.

"O'Donnell's continuing abuse of children and their injury were natural consequences of the Diocese's conscious and intentional decision to leave O'Donnell in a position with unrestricted access to, and contact with, children," the suit alleges.

The suit also accuses the Spokane diocese of having settled two claims without the prior knowledge or consent of at least one of the CNA companies. CNA, one of the country's largest insurance organizations, is based in Chicago.

In the Seattle archdiocese, most settlements in sex-abuse cases to date have been covered by insurance companies, and archdiocese attorney Michael Patterson doesn't foresee that changing. The archdiocese is now facing 15 lawsuits involving 28 plaintiffs who allege abuse by eight priests. In addition, mediation talks with about 30 others who claim abuse by priests are set for December and January.

Seattle archdiocese officials say, at this point, they know of about 65 people total who've said they want compensation, including the 28 who've already filed lawsuits.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com