The diocese, which filed for Chapter 11 bankruptcy in December in the wake of a $4.9 million verdict in a child sexual abuse case, filed the suit on June 24.

Mediation between the diocese and representatives of the 125 people who filed abuse claims in the bankruptcy process is set to begin July 19.

“The action was commenced as a precautionary measure to ensure that all appropriate parties would participate in the mediation process,” diocese spokesman Kyle Eller told the News Tribune. “The mediator now has authority to compel participation in the mediation process if necessary.”

The suit names as defendants the Liberty Mutual Group, Catholic Mutual Relief Society of America, Fireman’s Fund Insurance Co., Church Mutual Insurance Co. and Continental Insurance Co.

The lawsuit alleges that the companies have breached their contracts with the diocese because they have “failed to acknowledge their full coverage obligations” to cover any judgments or other legal expenses stemming from the abuse claims.

“As a direct and proximate result of the insurers’ breaches of their respective policies, the diocese has been deprived of the benefit of insurance coverage for which substantial amounts of money were paid with respect to the underlying actions and claims,” the suit states.

The complaint asks the U.S. Bankruptcy Court to declare that the five insurers are obligated to pay for any judgments or out-of-court settlements reached in the ongoing litigation.

Mike Finnegan, whose St. Paul law firm represents most of the claimants, is in the unusual position of siding with the diocese on the issue.

“What this tells me is that the diocese has been putting its insurance companies on notice,” he said. “There has been a pushback by insurance companies to honor the insurance and honor the protection that the diocese has bought for years and years.”

Finnegan said the suit tells him that that the diocese has “lots and lots of insurance” — which is a good thing for both sides, he said.

Similar issues have been encountered in other diocesan bankruptcy cases, including the Archdiocese of St. Paul and Minneapolis, which sued 20 insurers last October under similar circumstances. Finnegan said the battle with the insurers in that case — which includes many of the same companies involved in the Diocese of Duluth case — still is pending.

“This is definitely one area where both the survivors and the diocese have a common interest in making sure that these insurance companies are held responsible under their policies,” he said. “In my experience, in a lot of other cases around the county, insurance companies have played a significant role in the resolution of those cases. It’s an important battle to be fought.”

The Diocese of Duluth is the 15th diocese or religious order in the United States to file for bankruptcy. All previous cases have resulted in some form of settlement.

The bankruptcy filing was prompted by the sizeable verdict handed down by a St. Paul jury in November in the first case to go to trial under the Minnesota Child Victims Act, which temporarily suspended the statute of limitations for victims of decades-old child sexual abuse cases to file suit.

The three-year window closed on May 25.