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	Insurance Won't Cover Claims against Archdiocese, Appeals Court Rules By Bruce Vielmetti Milwaukee Journal Sentinel November 23, 2010 http://www.jsonline.com/news/milwaukee/110150064.html Decision upholds two lower court rulings that found insurer not liable The Archdiocese of Milwaukee cannot tap its insurance company to compensate certain victims of clergy sexual abuse, the Wisconsin Court of Appeals ruled Tuesday. The decision upheld two lower court rulings that found the insurer not liable for the negligent misrepresentation alleged in civil lawsuits pending against the archdiocese because it constitutes intentional acts rather than accidents. The ruling jump-starts the lawsuits, which have stalled for a year while the archdiocese appealed the insurance issue. And it is likely to complicate ongoing settlement talks between victims and the church, which could face potentially mammoth judgments if juries find it guilty of fraud or negligent misrepresentation at trial. The archdiocese is considering whether to appeal to the state Supreme Court, said its attorney, John Rothstein. "It was certainly our hope that insurance companies would be in the mix to provide more financial resources," said Jerry Topczewski, chief of staff for Milwaukee Archbishop Jerome Listecki. "It makes the challenge of resolving these cases all the more daunting." Plaintiffs' attorney Jeff Anderson of St. Paul, Minn., said he welcomed the ruling as a green light to move the cases forward, to trial if necessary. "Whether they have or don't have insurance isn't importance to us," Anderson said. "What's important is that we get it moving forward, get the truth out and the secrets disclosed." Talks began this fall The archdiocese began settlement talks in October with 17 victims represented in 11 civil fraud cases now pending in Milwaukee County Circuit Court. That mediation has since ballooned to encompass at least 24 victims, including some who had not yet filed suit, according to both sides. They declined to comment further on the status of those talks. Anderson said he will move forward on the lawsuits, scheduling depositions and seeking church documents under the legal discovery process, even as the settlement talks continue. He said newly retired Auxiliary Bishop Richard Sklba is scheduled to be deposed in January. Tuesday's ruling covers 10 cases involving 16 victims who sued the archdiocese alleging it committed fraud by moving priests with known histories of sexual abuse from parish to parish without telling parents. (The 17th victim filed suit after the appeals process began.) Anderson amended the cases to add negligent misrepresentation, a variation of fraud, because of its lower burden of proof and greater chance that it could be covered by insurance. The courts already have ruled that insurers are not liable for fraud. The archdiocese argued on appeal that OneBeacon Insurance Co. should be liable because the church never intended to hurt the plaintiffs; and that its actions constituted a "failure to act" rather than "negligent misrepresentation." But the three-judge panel disagreed: "The Archdiocese's awareness of its priests' histories of molestation and its non-disclosure to the plaintiffs 'may (have been) prompted by negligence, (but) it is nevertheless devoid of any suggestion of accident,'?" it said. The victim advocacy group SNAP, or Survivors Network of Those Abused By Priests, lauded the decision. "It means no organization, including religious organizations, can use insurance money if they're going to commit fraud," said Midwest co-director Peter Isely. Settlement funds limited The archdiocese has maintained that its resources available for settlement likely will be limited to its unrestricted operating assets and a portfolio of properties whose value it declined to specify. Operating assets were $1.6 million in the 2009-'10 fiscal year, down from $3.8 million the previous year, according to the latest figures available. The property portfolio includes the Cousins Center, which is already on the market and has been valued at as much as $8 million. He noted that half of the $17 million settlement it reached in 2006 with 10 California victims abused by Milwaukee priests who'd moved there was paid by insurance. Anderson balked at Topczewski's assertion that church resources are limited. "The church's resources are vast and unknown," he said. "The priority for us is to get the truth out. After that's done, we'll look at the financial realities." To date, the archdiocese has paid nearly $30 million to settle abuse cases and implement changes intended to protect children. On its website, www.archmil.org, the archdiocese lists 44 priests against whom credible allegations of sex abuse have been made. Bruce Vielmetti of the Journal Sentinel staff contributed to this report.
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