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	Church Insurer Wants to Probe Abuse Claims, Too By Sam Hemingway Burlington Free Press [Vermont] January 16, 2007 http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=/20070116/NEWS01/701160311/1009&theme= The statewide Roman Catholic Diocese's bid to get its one-time insurer to pay the costs of litigating 27 lawsuits alleging child sex abuse by a former priest has hit a snag: The insurer wants to probe the diocese's conduct in the cases. In papers on file in federal court in Burlington, Minnesota-based United States Fidelity & Guaranty Co. says it wants to examine what the diocese knew of claims that former priest Ed Paquette had molested boys in two states before he came to Vermont in 1972. Lawyers for the diocese initially refused to cooperate with the insurer's request, court records show, but last week signed off on an order approved by federal Judge William Sessions that will allow USF&G to conduct its review, as long as it's done confidentially. "All information subject to confidential treatment ... shall be filed under seal and kept under seal until further order of the court," Sessions wrote in his Jan. 8 order. Evidence developed in one of the Paquette cases last year indicated the diocese knew Paquette had molested altar boys in two states when it hired him and twice moved him to other parishes before dismissing him in 1978 after a rash of new abuse claims surfaced. Sessions' order is the latest wrinkle in the diocese's effort to address the looming financial impact of the priest abuse lawsuits it is facing in Chittenden Superior Court. Nine former priests are implicated, but most of the cases involve Paquette. The diocese claims it had liability insurance coverage from USF&G during the time Paquette was employed in Vermont but is unable to find its copy of the policy. The insurance company has not been able to find a copy of the policy either. In May, a month after settling a Paquette lawsuit for $965,000, the diocese placed its 128 parishes in individual charitable trusts to insulate them from the ongoing lawsuits. At the same time, the church sued USF&G, demanding it pay the church's ongoing legal fees and settlement agreements. The insurance company has subsequently agreed to pay the legal fees in the Paquette cases. It has argued, however, that it will not have to indemnify the diocese, or cover the cost of financial settlements, if it can invoke what's called the "intentional acts exclusion" by providing proof the diocese knew of Paquette's abuse of boys and let it occur. "It is inherently unfair to allow the insurer to pursue an issue that can prejudice the insured's defense in the underlying cases while those cases are pending," diocesan lawyer Kaveh Shahi of Rutland wrote in a court document opposing USF&G's position. Mark Errico, the New Jersey-based lead attorney for the insurer, declined comment on the case Monday. Shahi did not respond to a request for an interview. Contact Sam Hemingway at 660-1850 or e-mail at shemingway@bfp.burlingtonfreepress
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