May 17, 2006

Church sues ex-insurer to cover payoff

Rutland Herald

May 17, 2006

By KEVIN O'CONNOR Herald Staff

The statewide Roman Catholic Diocese of Burlington is suing its former insurer in hopes of recovering a record $965,000 priest-misconduct settlement it paid last month.

The diocese, which currently doesn't have insurance for sexual wrongdoing, has taken out loans to cover its settlement of the civil case of Michael Gay, 38, of South Burlington, versus the Rev. Edward Paquette the first of 20 child abuse lawsuits against Vermont Catholic clergy.

But the diocese says it held a comprehensive liability insurance policy with the United States Fidelity and Guaranty Co. at the time of Paquette's molestation of Gay in the 1970s. As a result, the church has filed a lawsuit in Chittenden Superior Court in Burlington seeking compensation from the insurer.

"There's no question we had a Cadillac policy with the highest and best coverage," church lawyer William M. O'Brien said Tuesday. "Unfortunately for us, we cannot locate the actual physical policy, and we've been searching for months."

Posted by kshaw at May 17, 2006 06:13 AM