Lawsuit Filed by Diocese of Duluth Will Ensure Mediation Participation
A lawsuit has been filed by the Diocese of Duluth against five insurance companies in an effort to force their participation in settlement discussions. The lawsuit came after the diocese filed for Chapter 11 bankruptcy in December in the wake of a nearly $5 million verdict in a child sexual abuse case.
Mediation is scheduled to begin July 19 between the diocese and representatives of 125 people who filed sexual abuse claims.
The goal of the lawsuit was to ensure all parties would participate in mediation, according to a spokesman from the diocese. This gives the mediator the authority to compel participation if it’s necessary.
Defendants in the suit include Catholic Mutual Relief Society of America, Fireman’s Fund Insurance Company, Church Mutual Insurance, Col., Liberty Mutual Group, and Continental Insurance Company.
Alleged in the lawsuit is the fact that the named insurance companies have breached their contract and “failed to acknowledge their full coverage obligations” to cover judgments and legal expenses. This has resulted in the diocese being deprived of the coverage they paid for. The complaint asked that the court obligate the five insurance to pay for any judgments or out-of-court settlements that are reached as a result of litigation or mediation.
Diocese throughout the country have faced similar issues in their bankruptcy cases, including those in Minneapolis and St. Paul. They sued 20 insurers in 2015 under similar circumstances, but the case is still pending. The Diocese of Duluth is the 15th in the United States to file for bankruptcy. The filing was the result of the verdict handed down in November by a St. Paul jury in the first case to go to trial under Minnesota’s Child Victims Act that suspended the statute of limitations for abuse survivors to file a lawsuit.