March 08, 2005

Diocese, insurance company to settle

Boston Globe

By Michael Paulson, Globe Staff | March 8, 2005

The Roman Catholic Archdiocese of Boston has reached a settlement with one of its two major insurance carriers to cover a portion of the cost of the $85 million settlement with 541 victims of clergy sexual abuse, the archdiocese said yesterday.

The archdiocese declined to describe the size of its settlement with the Lumbermen's Mutual Casualty Co., but two people familiar with the terms of the deal put it at $20 million.

The archdiocese had sued Lumbermen's in US District Court in Massachusetts in March 2004, seeking to force the insurance company to pay an unspeci- fied portion of the settlement. The insurance company filed a counterclaim the next month, arguing that the archdiocese had been so negligent in its handling of abusive priests that it should reimburse Lumbermen's for everything the insurance company had already paid out.

Yesterday the two sides filed a stipulation in court, agreeing to dismiss the litigation.

The archdiocese is still in negotiations with another insurance company, Travelers, but that company is thought to have significantly less financial liability than Lumbermen's did, because about 80 percent of the alleged abuse incidents took place when Lumbermen's was the primary archdiocesan insurer.

The $20 million deal means that the archdiocese will have to shoulder the larger share of the cost of its October 2003 agreement with abuse victims.

The primary funding for the settlement, which was paid with borrowed money, is to come from last year's $99 million sale to Boston College of a 43-acre portion of the archdiocesan headquarters in Brighton.

Posted by kshaw at March 8, 2005 07:15 AM