If the New York Archdiocese — which covers downstate counties including Hudson Valley churches — loses, that could set a precedent for denying coverage of diocese in upstate New York, lawyers say.
The legal move by the Archdiocese of New York to sue dozens of its insurance companies could impact survivors seeking to file sexual abuse suits next month when the state’s window opens.
In what many plaintiffs’ lawyers are calling a positive first step, the archdiocese is seeking a court order to force 32 of its insurance companies to honor their policies with the archdiocese.
Attorney Mike Pfau, of Seattle-based Pfau, Cochran, Vertetis & Amala, thinks it’s a welcomed step from the archdiocese.
“The Archdiocese owes a moral and corporate debt to the survivors of abuse,” Pfau said.
Pfau said the suit isn’t just to secure a source of funding for the coming settlements and judgments, but to also enforce the insurance contract provision that provides for defense costs.
Pfau represents 50 clients who plan to file claims against the archdiocese come Aug. 14 when the one-year window opens to file claims.
If the court grants the order, the archdiocese can access funds for legal defense fees and possibly settlements.
If the insurance carriers win the case, the archdiocese would be exposed to massive legal costs.
If the New York Archdiocese — which covers New York, Bronx, and Richmond counties along with Westchester, Rockland and other Hudson Valley counties — loses, that could set a precedent for denying coverage of diocese in upstate New York, Pfau said.
James Marsh, of New York-based Marsh Law, agrees that the upstate dioceses, like Rochester, are in worse shape financially than New York Archdiocese.
“We expect that many of the diocese upstate will declare bankruptcy, Marsh said. “Many don’t have the assets of the New York Archdiocese.”
Pfau thinks bankruptcy is a mixed bag, bringing benefits andrisks.
“While bankruptcy streamlines the payment process for survivors, issues with transparency arise,” Pfau said.
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