Vermont Diocese Sues Insurer to Recover Abuse Settlement Monies

Vermont’s Roman Catholic Diocese in Burlington has been searching for insurance documents dating back three decades, in hopes of showing it should recover the $965,000 it recently paid to settle a complaint about sexual abuse by a priest.

“There’s no question we had a Cadillac policy with the highest and best coverage,” said William O’Brien, the lawyer for the diocese. “Unfortunately for us, we cannot locate the actual, physical policy, and we’ve been searching for months.”

The church last month paid the settlement to Michael Gay of South Burlington, just as his allegations that he was abused by Rev. Edward Paquette during the 1970s were about to go to trial. The diocese took out a loan to pay the amount.

The diocese maintains it held a comprehensive liability policy with the United States Fidelity and Guaranty Co., which since has been sold to the St. Paul Travelers Companies of St. Paul, Minn.

“We’ve had communication with the insurance company, and it likewise cannot locate the policy,” O’Brien said. “But it is our best belief that there would not be an exclusion for sexual misconduct, and we believe the coverage may have been as much as $1 million per claim.”

Meanwhile, Judge Ben Joseph, who has been hearing matters related to a series of lawsuits against the diocese that allege abuse by priests, has said he will remain on the cases, at least for now.

The diocese has asked the judge to step aside, saying he has issued rulings unfair to the church and erred when he declined to impose the gag order the diocese had sought on public information about the cases.

“I took the motion home but I haven’t finished studying it,” Joseph said of the church’s request. “Until I make a decision regarding the motion, the case is still assigned to me.”

The remarks came during an emergency hearing in which the diocese had asked that its motion seeking Joseph’s recusal be sealed from public view. The judge denied that request.