Ninth Circuit Says Diocese’s Insurance Did Not Cover Sex Abuse Claims

Metropolitan News-Enterprise

By ANN ANOOSHIAN, Staff Writer

The Ninth U.S. Circuit of Appeals yesterday ruled that the Diocese of Phoenix of the Roman Catholic Church was not covered by its insurance policy for sex abuse claims.

The panel, in a 2-1 decision, held that an “assault and battery” exclusion in the relevant policy precluded indemnification of the diocese, as well as of the individual priests. It overturned the ruling of U.S. District Judge Neil Wake of the District of Arizona, who held that the exclusion applied only to the offending priests.

The appeals court ruled in favor of Interstate Fire & Casualty Company, Inc., the excess liability carrier for the diocese, which brought a declaratory action after the diocese sought indemnification for settlements it paid in four lawsuits.

In its complaint, the diocese said it settled two claims in California alleging sexual abuse by Father John Giandelone in 2007, for approximately $1.3 million. The complaint also stated the diocese paid $1.8 million to settle claims in Arizona, alleging abuse by Fathers Mark Lehman, Dale Fushek and Phil Baniewicz.

Interstate Fire cited the exclusion of liability to “any Assured for assault and battery committed by or at the direction of such Assured.”

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