Chapter Three: Introduction To The Suit

The lawsuit formally known as Hampden Superior Court Civil Action 05-602, which resulted in an 8.5 million dollar settlement between the Springfield Diocese and our insurers, began on June 14, 2005. It concluded with dismissal almost exactly three years later, in late June, 2008. It covered roughly 60 years of history, since the earliest reported claim was from 1948.

The case grew to include thousands of pages from Diocesan files, millions of dollars in legal fees, 8 out-of-state insurance companies (and one – Lloyd's of London – from out of the country), 1 state agency (the Massachusetts Insurers Insolvency Fund, who stepped in for the insolvent Home Insurance), 26 lawyers and interested parties, a half-dozen lawyers for the underlying claimants (those with allegations against the Diocese), 186 docket entries and 146 court papers (motions).

One of the few light moments came when Lloyds addressed a wistful query to the bench asking to be deposed in London, or, if not London, then would the Court kindly consider Boston,which had not only counselors on retainer for Lloyds but, also, readily available first class hotels. The Court was in a stern mood and ordered them, forthwith, to appear in Springfield.

Possibly the first question that comes up is why the Diocese sued the insurance companies in the first place. That's an easy one. The Diocese paid out 7.7 million to settle 46 claims of sexual abuse in August of 2004. Over the next year or so they asked for reimbursement from their insurance companies, only to find that the companies refused to pay, citing negligent supervision issues which could render coverage null and void. In other words, the incidents in question were arguably not "accidents" as defined by the insurance industry.

A related question is why the claims were not made, for the most part, against the individual priests, but rather, against the Diocese. This too, has a straightforward answer. Most priests may be rich in virtue but they are almost never rich in money. When a claim is made, it is necessary to make it against someone who can pay. Additionally, there is the "knew, or should have known" argument of the church-as-employer which often assigns blame to supervisors for the actions or negligence of their employees.

A side issue is that, largely because of its status as corporation, the Diocese first and foremost defends itself. It does not ordinarily try to clear the name of, nor defend priests accused of abuse, who must provide their own lawyers. In practice, however, jury trials of priests or dioceses are almost unheard of. Two other types of trials take their place: canonical trials, which are secret, and civil trials for damages, which are not. Thus the importance of the insurance trial for public awareness – even though it was almost foreordained to end in settlement.

The employee argument is not straightforward. For example, the church sometimes argues that it is not an employer, and that priests are sub-contractors who come and go as they please. Courts have differed on how closely a priest resembles an employee.

The suit was very specific to insurance coverage for the 18 years between 1968 and 1986. The reason is that the Diocese, as far as it knows, had no general liability insurance before 1968. And, as of 1986, all subsequent insurers had exclusions against sexual abuse. Indeed, two of the original defendants (Colonial Penn and Interstate Fire and Casualty) were dropped from the suit for this reason.

Ironically, secondary coverage policies from two other insurance companies (American Home and National Union Fire Insurance) were found during the discovery process and just six months before settlement the judge ordered that these policies would drop down to provide primary coverage (Papers 132 and 135, not online).

In one sense the fact that multiple carriers were involved is beneficial for the layman. Because of the horrendous complications of arguing each individual policy, most of which overlapped, the insurance companies were forced to put their case into a more concise form. This approach is helpful for those who don't work in cubicles.

Settlements may sound like a lot of money, especially million-dollar ones. In this settlement, 5 million is to go to the 60 or so current claimants, and 3.5 million to reimburse the Diocese for money they paid to the claimants whose cases were settled in 2004.

But, the dollars for settlements pale in comparison to jury awards. A recent example occurred in the Burlington Diocese of Vermont. In May of 2008 they were found liable and a man was awarded $8.7 million. That's one man, one case. The Catholic Observer editorialized about this award in its May 23 issue (see Settlement Articles on the WMC site).

The local editorial complained that jurors did not hear about how the Burlington Diocese had mended its ways (the judge had barred that testimony). The editorial predicted that if the jurors had learned more about present-day conditions and attitudes, the results would have been different.

This prediction was wrong. In a Burlington Diocese case concluded on Dec. 17, 2008, a different jury heard about current child-protection conditions. Lawyers for the diocese had Kevin Scully, a former Burlington Police Chief and now the diocese’s director of safe environment, talk about the diocese’s efforts to prevent child sexual abuse by church personnel. Jurors also heard a lengthy deposition from Bishop Matano – and yet still concluded that the victim was entitled to $900,000 in compensatory damages, and $3.5 million in punitive damages. There are about 20 church abuse lawsuits still pending in Vermont.

In Springfield, there has never been a civil lawsuit that actually went to trial, so the subject of reimbursement looms large. And, deciding how, exactly, the underlying claimants could prove to both Diocese and insurers that they were owed money was the subject of a bitter controversy that raged throughout the case.

In Paper 57 (not online), the insurers wanted the order of depositions to be 1. settled claimants, 2. pending claimants, 3. lay witnesses, 4. lay personnel of Diocese and 5. clergy of Diocese.

Judge Agostini largely reversed this order. In his order for discovery (P.63) he ruled that the lay witnesses would be first, followed by lay personnel, clergy and others. He deferred claimant depositions to a second phase, writing that "I am also aware that sometimes complaints for declaratory judgment regarding insurance coverage are resolved without the need to depose claimants. In any event I expect by allowing the "dust to settle" after the above discovery, we will be in a better position to assess the need for depositions of the claimants".

Here, there is the first hint of a theme. At one point or another all of the parties referred to the possibility that the trial upon which all of the pretrial hearings and discovery and depositions and motions, counter-motions and counter-counter-motions hinged – the real thing – would never actually take place. And that possibility turned out to be true.

The suit at times resembled a trial within a trial, in which the arguments of motions and counter-motions took the place of arguments in open court. In addition to this proxy trial by motions there was also an awareness of the court of public opinion, which heard the arguments through various media outlets. These other trials should be kept in mind as we examine the progress of the suit.

This lawsuit got quite tangled at times, as a glance at the court docket shows. The scheduling orders started with a tidy outline of deadlines but they seemed to be taken more as suggestions than otherwise. Preemptive motions, petitions for protective orders, and emergency motions often made hash of the schedule. It didn't help that two companies were dropped, and two added, in the course of litigation.

Many of the court papers consist of numbing amounts of fax confirmations proving that parties and their lawyers were properly notified of the latest court business. Tucked here and there into the five boxes of files are some genuinely interesting arguments for and against the motions. The decisions by the judges are always significant and well-reasoned, if necessarily thick with legal citations. One opinion was written by an Appeals Judge, Fernande Duffly, and all others were by Judge John Agostini.

The lead attorney for the Diocese was John Egan. He was assisted by Kevin Withers, who appears to have written several of the motions, and also Edward McDonough, Jr. All three are from the legal firm of Egan, Flanagan and Cohen, P.C., in Springfield.

The case reached far back, spanning the administrations of Weldon, Maguire, Marshall, Dupre and McDonnell. Bishops Maguire and Dupre were deposed, as was Rev. James Scahill and other clergy. The civil lawsuit against Bishop Dupre, which at one time was bundled with the earlier settlement of 2004, was finally settled in 2008. Dupre contributed money to the settlement for the two men who brought suit against him.

Judge Agostini appears to have handled the case with lots of patience – but three years is a long time. Everything seemed to take longer than it should. He observed once that "…as we take one step forward, there's always one step back". He preferred not to interfere with the merits of discovery. He warned the litigants that once discovery was concluded, the parties were likely to be bound to their initial responses without the opportunity to "supplement" them with information from a second deposition.

At one point he did a little scolding: "A word of caution. It is my sense that discovery is becoming unnecessarily strident and devolving into petty squabbles, more typical of novice counsel. This must stop. If such distinguished counsel cannot conduct routine discovery, including the locations of depositions, without resorting to the court's intervention, this will be an expensive and painful journey for all of us". (P.101)

Agostini often cited the need for motions to be written "with particularity". He quoted approvingly the "rigorous presumption of openness" as a guide to what evidence should appear in court. In one of his decisions, he even quotes Oliver Wendell Holmes: "…those who administer justice should always act under the sense of public responsibility…every citizen should be able to satisfy himself with his own eyes as to the mode in which a public duty is performed…".

Maybe this explains why the requests from local media such as Channel 3 TV and Channel 22 for permission to film the pretrial hearings were routinely approved.

Two precedent-setting clergy cases, Ryan v. Ryan, 419 Mass. (1994) and the Talbot case were cited often. The first case involved protected documents in an annulment case and had much to do with privacy.

The Talbot case is formally known as Society of Jesus v. Commonwealth, 411 Mass. (2004). In it, Rev. James Talbot faced a criminal complaint for sexual assault and the state sought personnel documents by way of subpoena to build its case. The Jesuits sought to quash the subpoena by raising a host of issues: freedom of religion, church autonomy, and confidentiality issues, calling the hunt for documents an intrusion into privacy. They viewed the search as an infringement on religion, because if it went forward, they would not be able to keep the confidence and carry out the discipline of their priests. Talbot also spawned an appeal, which can be seen here.

In the Diocese v. Insurers suit, the document fight and the issues about supervision were probably the two main issues. They are closely related.

The insurers were always seeking to broaden the scope of documents to help determine the legitimacy of claims and the Diocese was equally adamant about narrowing the availability of documents. The Diocese largely lost the fight. But that does not explain why the insurers nevertheless gave them 8.5 million dollars – especially since they were trying hard to walk away with no payout whatsoever, as they had done in 2004.

Here are some distinctions to be made about negligent supervision claims, from an HR manual on the web. These concepts are the raw material for many of the motions and counter-motions of the lawsuit between the Diocese and insurers:

…to establish a claim of negligent supervision an individual generally must demonstrate the following elements:

* The employer knows, or should have known, that an employee is engaging in wrongful conduct.
* The employee's wrongful conduct is substantially certain to cause injury to a third party.
* The employee's conduct, through intentional or negligent action, results in injury to a third party.
* The injury was a reasonably foreseeable consequence of the employer's lack of supervision.

… a negligent supervision claim might be successful if the employee's conduct occurred while subject to the supervision or control of the employer. Even then, employers generally must have had some reason to anticipate the harmful conduct by the employee before they may be held liable for failing to prevent the harm through properly supervising the employee.

…a claim that an employer failed to take proper care in supervising its employees fills the gap between a claim for negligent hiring and a negligent retention claim. The best way for an employer to avoid negligent-supervision claims is to pay close attention to the conduct of employees after they are hired, to take prompt action if observation indicates that a particular employee may be behaving inappropriately, and to clearly document such actions and observations as they occur.

[This information was found at the website of Ceridian, a business services company specializing in human resources:,2481,14760-65471,00.html]


Now, I want to introduce two key issues that we'll hear more about, and also give a Guide to the Papers, which will help readers find their way among the court papers posted on the WMC site.

The key issues are: the importance of documents when negligent supervision is contested, and a question about cooperation clauses in insurance policies – what happens when the cooperation breaks down?

but first...................

A Guide to the Court Papers (capsule reviews)

If someone wanted to get to the meat of the papers, they would do well to stick to the judge's decisions (sometimes called Decision and Order, or Memorandum). These are valuable on many counts. One, they have the best writing. Two, the judge proceeds by summarizing each side, often includes a "discussion" section, and then lays down the law. Thus, you get the concise version of each side's argument without wading through verbal swamps. In this case, the judge's most important decisions are in Papers 77, 86, and 89.

Another important paper is number 69, which is the Insurers' summary of the issues raised by the documents in the privilege log of the Diocese. This is a 33-page explanation of why they want to see the documents, coupled with an attack on the reasons put forth by the Diocese to shield the documents.

The proposed Protective Order drafted by the Diocese (part of P.82) is also important. This 4-page document is often referred to in subsequent papers. The Diocese sought to put it into action, the Insurers sought to deep-six it, and the judge weighed their arguments.

Court Papers for Hampden Superior Court Civil Action 2005-00602

Paper 50 (Diocesan Motion To Strike Appearance of Nixon Peabody), May 26, 2006
[Attorneys for the Diocese objected to one of the insurers being represented by the same law firm that represented other dioceses. They argued that this constituted a conflict of interest that would harm the Diocese.]

Paper 61 (Diocesan Motion To Extend Time To Respond To Discovery), July 17, 2006
[The insurers first request for discovery went to the Diocese on Oct. 18, 2005. Here, the Diocese reports that it is about two-thirds through its review of the papers which will be given to insurers, that it missed the deadline of June 30, and asks to have it extended to July 21.]

Paper 62 (Decision and Order on Motion To Strike Appearance of Nixon Peabody), July 17, 2006
[The judge responds to the Diocesan motion to dismiss the law firm Nixon Peabody by denying the motion.]

Paper 63 (Scheduling Order For Discovery), July 20, 2006
[The judge establishes two phases for discovery. In the first, all documents will be produced, and witnesses and everyone other than the claimants will be deposed. Then, the first phase will be evaluated. The second phase will include claimant discovery, and, if necessary, their deposition.]

Paper 67 (Insurers Motion To Compel Production of Documents), Aug. 3, 2006
[In this 6-page emergency motion the insurers describe the slow pace of discovery and complain that, under the circumstances, they can't meet court deadlines for deposing their witnesses. They state that since the first request on Oct. 18, 2005, they have not received a single document from the Diocese: "…the difficulty posed by the Diocese's intransigence is significant and the likelihood of prejudice to the Insurers is immediate…".]

Paper 69 (Insurers' Statement of Anticipated Discovery Issues), Aug. 11, 2006
[This is the Insurers' summary of the issues raised by the 7,686 pages in the privilege log of the Diocese. A 33-page explanation of why they want to see the documents, coupled with an attack on the reasons put forth by the Diocese to shield them.]

Paper 73 (Opposition To Insurers' Motion To Compel Discovery), Oct. 3, 2006
[The Diocese objects to the Insurers Motion to Compel P.72, (not available online), not to be confused with the earlier P.67, the Emergency Motion To Compel, which the judge allowed. Both motions seek to force the Diocese to produce documents that the Diocese wants to hold on to.]

Paper 77 (Decision and Order on Insurers' Motion to Compel), Jan. 3, 2007
[Possibly the most important paper of the suit. The judge rules on the battle over the papers that the Diocese wants to keep secret in an 11-page decision. He allows the insurers to see nearly all of them, but protects attorney-client correspondence of the Diocese. This decision is appealed by both parties.]

Paper 79 (Diocesan Status Report On Discovery Produced Under Court Order), Jan. 18, 2007
[The Diocese reports that it has turned over some papers to the insurers and not others, and explains why.]

Paper 82 (Diocesan Motion To Permit Discovery Under a Protective Order), Jan. 24, 2007
[The Diocese seeks to create a class of "protected responses" that, if ordered by the judge, will treat the papers given to insurers during discovery much like impounded documents which must be given back to the Diocese or destroyed within 30 days, and not disclosed to anyone else.]

Paper 83 (Insurers' Opposition To Diocesan Motion To Permit Discovery), Jan. 29, 2007
[The Insurers object to the proposed Protective Order.]

Paper 84 (Decision and Order After In Camera Review), Feb. 5, 2007
[Judge Agostini reports his decisions about which documents must be produced under the so-called "confessor-penitent" privilege after viewing them "in chambers", i.e., privately. The Diocese sought to protect 107 documents.]

Paper 86 (Decision and Order on Motion of the Diocese for Protective Order), Feb. 13, 2007
[The judge decides not to enforce the Protective Order sought by the Diocese.]

Paper 89 (Appeals Court Order Affirming Orders of Jan. 3, and Feb. 13, 2007), March 20, 2007
[Judge Fernande Duffly from the Court of Appeals upholds the decisions of Judge Agostini in his Jan. 3 (Paper 77) and Feb. 13 (Paper 86) rulings. This is 11 pages from a different perspective and makes for interesting reading.]

Paper 93.A. (Claimants' Motion For a Status Conference), April 9, 2007
[In Paper 93, in one of the few appearances of the Claimants (sometimes referred to as the "underlying claimants"), their attorneys had urged a status conference in order to expedite the case. In this response, the Insurers agree with the goals of the proposed status conference but suggest that if a conference takes place it should concentrate on expediating the clergy deposition schedule which is already underway.]

Paper 101 (Decision and Order On Insurers Motion For Protective Order, May 25, 2007
[Only two pages of this paper are online. In this one, Travelers and Lloyds had asked for special treatment in having depositions taken in New Jersey and London, respectively, rather than Springfield. They are turned down.]

Paper 111 (Claimants' Motion Seeking to Force Mediation), Aug. 27, 2007
[In a rare appearance, John Stobierski, one of the attorneys for the Claimants, seeks to compel mediation. Although this motion is apparently not affirmed, the effort to bring the parties to mediation eventually succeeds; mediation begins in February.]

Paper 111.1 (Insurers' Response to Claimant's Motion For Mediation), Aug. 27, 2007
[The Insurers respond affirmatively, but insist on written responses from all the claimants as a condition for mediation. They also comment on recent positions and statements of the Diocese.]


Negligent Supervision

Earlier I quoted an HR manual about determining valid claims of negligent supervision. Many of these concerns apply to the Diocese v. Insurers case, but let's zero in on a single word:

"The best way for an employer to avoid negligent-supervision claims is to pay close attention to the conduct of employees after they are hired, to take prompt action if observation indicates that a particular employee may be behaving inappropriately, and to clearly document such actions and observations as they occur". (emphasis added).

Here, employers are told that their observations about misconduct are important and should be recorded. For example, noting even a hint of misconduct may be germane, since recording it does no harm. Even more so should letters of complaint, an irate phone call, or a poor evaluation be documented.

Also, they should make a record of their own actions in response to perceived or proven employee misconduct. These permanent records can act as a shield to mitigate liability in case of legal action.

By the same token, victim's rights groups emphasize that victims, too, need to place great emphasis on documentation. A "he said, she said" legal case can be extremely difficult to solve with no witnesses or corroboration. However, with more documents of many kinds, the clarity of the situation improves and the probability of the truthfulness of the allegation is more likely to emerge.

We must remember here that the lawsuit was not about sexual abuse per se. However, documentation about reports of abuse, whether alleged or proven, was important, because it tended to show what the administration of the Diocese did or did not do in response to reported abuse. The more that documents showed how the subject of abuse was handled, the more a pattern of behavior could be proven or disproven. Because of this, the insurers cast a very wide net.

The discovery process is most always important, but in this lawsuit the discovery process was practically the whole show, since there never was a trial. Most of the energy spent by the legal teams concerned the search for documents. The most hotly contested documents were the ones placed in various privilege logs by the Diocese during discovery.

The actual number of pages that the insurers fought to get and the Diocese just as staunchly fought to keep was 7,686. That is the number mentioned in Agostini's Paper 77, where he ruled on the matter.

Cooperation Clauses

As we know, the breakdown of the cooperation between insurer and insured is at the heart of the case. When the insurers refused to honor claims, the Diocese took them to court to force the issue.

Clearly, the Diocese felt the insurers had shirked their duties. The insurers' refusal to pay was not well-publicized before the suit, but during the pretrial hearings, it became clear that the insurers' felt that they, too, were owed certain duties, and, that the Diocese had fallen short. One of those duties is the responsibility of the insured to help the insurer investigate claims.

It is not always clear in the court papers how much or how little the Diocese helped to investigate claims prior to the rupture.

But, a different question came into high relief as the proceedings dragged on. What happens to this obligation to cooperate when the insurer refuses to cover claims made by the insured, and, in fact, walks away? Does the insured (the Diocese) continue to be bound by cooperation clauses? Must they continue to help investigate claims (and even provide documents that might undermine their suit) to the same companies that walked away from them?