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The Roman Catholic Diocese of San Diego is in trouble yet again, this time with its own insurance company. Catholic Mutual Relief Society of America, the insurance provider for San Diego and other Catholic dioceses, has filed a lawsuit against the diocese alleging that it violated the terms of its insurance policies by allowing sexual abuse claims by clergy from 1958 through 1990.

According to the lawsuit, the diocese knew during those years that some clergy members had proclivities toward sexual abuse of children such that coverage is precluded under the policies that were in effect then. The insurance company is seeking a court order that would release it from any obligation to “defend or indemnify” the diocese or any parish against such claims.

Many of the 400 claims that are currently pending in San Diego Superior Court allege clergy abuse in the 1960s, 1970s, and 1980s. The attorney who represents more than 100 claimants, said that the lawsuit filing is “posturing” and is intended to rattle both the diocese and the alleged victims.

According to the lawsuit, insurance policies in place years ago effectively capped how much could be paid out. The company argues that the diocese violated the terms of the insurance policies last month when Cardinal Robert McElroy wrote a letter to parishioners on February 9th, announcing that the diocese may have to file for bankruptcy because of the sexual abuse claims. The following day at a news conference, Kevin Eckery, the diocese’s director of media and community relations, told reporters that the claims could cost the diocese $550 million.

The lawsuit claims that these statements were made without consulting with the insurance company, violating the “duty to cooperate” under the policy and “effectively placed an unreasonable baseline on the value on the potential settlement value of these claims.”

The lawsuit filing came as a surprise to the diocese, which has 93 parishes and some 1.6 million congregants in San Diego and Imperial counties. Eckery said that the diocese was disappointed that the insurance company sued and that it will be opposing the suit in court.

The Catholic Church has been embroiled in numerous sexual abuse scandals over the years, and the San Diego diocese is not the only one facing legal trouble. The diocese of Santa Rosa, which is facing about 130 claims, has already announced that it will file for bankruptcy. In addition, the bishop in the Sacramento Roman Catholic diocese said on Sunday that it may also have to consider bankruptcy because of more than 200 clergy abuse lawsuits filed there.

These lawsuits were made possible by assembly bill 218 (AB 218),  theCalifornia law that extends the statute of limitations for filing civil lawsuits related to childhood sexual abuse. Specifically, AB 218 extends the time frame in which a victim of childhood sexual abuse can file a civil lawsuit against their abuser or any entity that was responsible for the abuse, such as a school, church, or youth organization. Under AB 218, victims have until their 40th birthday or within five years of discovering that the abuse caused an injury or illness, whichever is later, to file a civil lawsuit. Prior to AB 218, victims of childhood sexual abuse in California only had until their 26th birthday to file a civil lawsuit. In addition to extending the statute of limitations, AB 218 also allows victims of childhood sexual abuse to seek treble damages, which are damages that are triple the amount of actual damages. The law also eliminates the requirement that victims prove that they tried to report the abuse earlier in order to seek damages. Overall, AB 218 is aimed at providing victims of childhood sexual abuse with greater opportunities for legal recourse against their abusers and the institutions that enabled the abuse.

In 2007, the San Diego diocese faced a similar, but smaller, wave of claims and sought bankruptcy protection. Its petition was dismissed after a settlement was reached in which the diocese paid out $198 million. The lawsuit filed by Catholic Mutual Relief Society of America on Friday claimed that the company contributed $75 million to that settlement.

The current lawsuit adds to the mounting legal challenges faced by the San Diego diocese, which has 93 parishes and some 1.6 million congregants in San Diego and Imperial counties. It remains to be seen how the lawsuit will affect the ongoing sexual abuse claims against the diocese.

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