Covington Diocese, Insurance Carriers Announce Settlement in
By Brett Barrouquere
Associated Press, carried in Kentucky.com
January 9, 2006
[See also Diocese Abuse Suit Settled for $85 Million,
by Peter Smith, Courier-Journal (January 10, 2006); Ky. Diocese
to Pay Up to $120 Million to Sex-Abuse Victims, By Alan Cooperman,
Washington Post (June 4, 2005); and the Doe
v. Roman Catholic Diocese of Covington website.
BURLINGTON, Ky. - Attorneys announced a settlement Monday in a federal
lawsuit that would lessen the total amount that could be paid out to alleged
victims of sexual abuse in the Covington Diocese.
The settlement in the federal case would mean alleged victims of abuse
would receive a total of up to $85 million instead of the $120 million
first proposed in the state class-action case, attorneys said.
The federal suit was brought by the diocese against its insurers.
The announcement Monday was made during a hearing in Boone County Circuit
Court in which a judge heard testimony on whether to accept a proposed
settlement in the class-action suit. The suit accuses the diocese of a
50-year cover up of sexual abuse by priests and other employees.
The judge did not immediately issue a ruling in that case.
The diocese had originally agreed to pay up to $120 million to abuse victims,
saying it would pay out $40 million and its insurance companies would
pay up to $80 million. Stan Chesley, the attorney for the plaintiffs alleging
abuse, said the original figure was based on an estimate that 700 to 800
victims would come forward.
Since there were only 361 valid claims - about half that amount estimated
- the amount paid by the insurance companies was also cut in half, Chesley
The diocese sued its self-insurance plan to force it to contribute its
share to the settlement fund.
The proposed $120 million would have made the Covington case the largest
such settlement of church-abuse claims in the country. However, the $85
million amount would not be the largest. A larger settlement was reached
in 2004 by the Diocese of Orange, Calif.
"This is an example of negotiating and hard bargaining," Chesley
The federal settlement in the insurance case calls for Catholic Mutual
Insurance to pay $40 million and Fireman's Fund Insurance to pay $5 million,
attorneys said Monday.
Catholic Mutual would put $15 million up in cash immediately, then pay
the remaining $25 million over a maximum of five years, said Douglas Wyenzer,
chief financial officer for Catholic Mutual. The company does not have
$40 million immediately available, he said.
"We would be forced to liquidate investments," Wyenzer said.
While they announced the settlement in the state court hearing, no settlement
documents had been filed in the federal case as of the conclusion of the
state court hearing.
The diocese has already put up $40 million in cash, leaving an initial
pool of $55 million available for payments, Chesley said. The goal in
both the settlements was to not bankrupt either the diocese or the insurance
company, Chesley said.
"Bankruptcy was not an option," Chesley said.
The Boone County court has received confidential forms from 382 people
saying they were abused by a priest or other employee of the Covington
Diocese. Twenty-one of those claims were rejected, but the rest from that
group will be able to submit claims.
Victims would receive awards ranging from $5,000 to $450,000, based on
severity of abuse, and those in the highest category would be eligible
to apply to a special fund for extraordinary claims.
Three victims, two middle-aged women and a middle-aged man, testified
briefly Monday, asking Judge John Potter to approve the settlement, even
though it cannot compensate for their emotional turmoil. The names of
the three were not released in court.
"It is my opinion that there is no amount of money that can compensate
for our loss of innocence or our disappointment in the church," one
of the women said.
Father Thomas Doyle, a Roman Catholic priest who has tracked abuse reports
since the 1980s, said even though the 361 claims seems like a lot, a minority
of victims likely came forward in this case.
"I believe sir, there are individuals out there you will never know
about," Doyle said. "They will suffer in silence and shame and
no amount of assistance will ever bring them out."
The class-action settlement comes on top of 58 cases settled by the diocese
with other people who had claims of abuse, said Carrie Huff, an attorney
for the diocese. The diocese paid $10.8 million to settle those cases,
"This money is a significant sacrifice for the diocese," Huff
said of the settlements. "We realize money can't fix this problem."