Priest-Abuse Damages Suit Goes Ahead

By Susan Evans
Tribune-Democrat Northern Cambria Bureau [Hollidaysburg PA]
October 23, 2003

HOLLIDAYSBURG – A long-stalled lawsuit to force insurance companies to kick in more to the Roman Catholic diocese’s payments in a high-profile sex abuse case will go forward.

Judge Hiram Carpenter ruled this week that the insurance lawsuit will be activated. If the church wins, the faithful could save more than $1 million.

The legal logjam in Blair County courts is on its way to being cleared in time for hearings on nine new sex abuse lawsuits against Altoona-Johnstown Roman Catholic Diocese.

Gathering dust in the courthouse has been a dispute between the diocese and its insurance companies over who is liable for damages awarded in an earlier sex abuse case.

Specifically at issue is a diocese lawsuit against its insurance carriers that has been on hold for more than a year.

Diocese attorneys repeatedly have asked that the suit go forward, complaining that its insurance claims are on hold, throwing its insurance fund into a $637,000 deficit.

Carpenter, also the judge in the new sex abuse lawsuits, ordered that the first insurance dispute conference be held Nov. 24.

That will follow by three weeks a hearing on preliminary issues involving the nine lawsuits, which represent 12 alleged victims who say that as young boys they were sexually abused by their priests.

The complicated insurance situation dates to the 1994 verdict against the diocese in the sex abuse case involving now-defrocked Francis Luddy.

Part of that verdict still is being contested.

The jury awarded $519,000 in compensatory damages as part of its verdict in favor of Michael Hutchison Jr., who said he was sexually abused in the early 1980s by Luddy.

The diocese withheld payment, pending further legal maneuvers, and finally ended up paying $1.2 million – the original sum plus interest and late fees.

The diocese’s legal costs and fees in the Luddy case were $1.35 million, and $1 million in court-awarded punitive damages still has not been paid, pending a decision from the Pennsylvania Supreme Court.

That court still has not ruled, and so the diocese’s dispute with its insurance firms has been in limbo.

But in the meantime, the diocese’s insurance companies have refused to reimburse the diocese for the $1.2 million paid so far, and the court has barred the diocese from pursuing reimbursements.

Carpenter’s new ruling allows the diocese’s action against its insurance carriers to proceed, though the issue of punitive damages is still pending with the higher court.

The diocese’s most recent financial report says the $1.2 million Luddy payment has caused a $637,000 deficit in the diocese’s insurance fund.

Carpenter said the same insurance companies will be involved in the new lawsuits now before the court, and that issues raised in the Luddy case must be resolved, even without the Supreme Court’s ruling.

The next hearing on the lawsuits is scheduled for Nov. 7. The first conference on the insurance case will be Nov. 24, with monthly status conferences after that until the issues are resolved.

Still at issue is whether the new suits, brought by Altoona attorney Richard Serbin, will be consolidated into one action, and whether the statute of limitations will apply because the abuse claims are old.


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