One of the Archdiocese of Milwaukee's insurance companies should have been allowed to ask the Wisconsin Supreme Court to rule on whether it is liable for the church's actions in its handling of child sexual abuse cases, U.S. District Judge Rudolph T. Randa has ruled.

However, the ruling may be moot because OneBeacon Insurance Co. has negotiated a tentative settlement with the archdiocese, church spokesman Jerry Topczewski said.

Randa said U.S. Bankruptcy Judge Susan V. Kelley erred earlier this year when she refused to lift an automatic stay so OneBeacon could pursue the liability question. He remanded the case back to Kelley for further action.

Before the archdiocese entered bankruptcy in January 2011, lower courts had ruled that OneBeacon was not liable for its sex abuse claims because they involved intentional acts rather than accidents. The archdiocese had appealed to the state Supreme Court, but the case was automatically stayed when it entered bankruptcy.

OneBeacon said it has already paid $400,000 to the archdiocese as part of its bankruptcy, according to the court record. And the archdiocese has sued it for an additional $2.6 million in legal fees.

Randa said OneBeacon is likely to prevail at the Supreme Court.

In the meantime, Randa said, "OneBeacon is stuck paying defense costs that the state courts have already said OneBeacon is not legally obligated to pay.

"In essence," Randa continued, "OneBeacon is being held hostage, forced to bankroll an interminable and highly contentious bankruptcy proceeding. The automatic stay is the only thing that stands in the way of clarity for OneBeacon and the Archdiocese."