The Roman Catholic Diocese of Trenton, New Jersey has voluntarily withdrawn its lawsuit against four liability insurers over coverage for sexual abuse claims brought against the diocese under the New Jersey Child Victims Act.
The diocese sued in February alleging that the insurers were refusing to agree upon a cost-sharing formula to deal with the hundreds of sexual abuse lawsuits brought against the diocese. The diocese claimed at that time that despite many months of negotiation with the insurers, there had been “minimal progress” toward finalizing an agreement with respect to the defense of the underlying claims and fair compensation to victims.
However, court records show that on August 1 the diocese submitted a notice of voluntary of dismissal, without further explanation, following months of apparent continued negotiations with the insurers.
Insurance Journal’s requests to the diocese and its lawyers for further explanation had not been answered by press time.
The insurers involved in the suit are Century Indemnity (Chubb), First State (Hartford), St. Paul Fire and Marine (Travelers) and National Union Fire (AIG) of violations under the state’s Unfair Claim Settlement Practices Act.
The lawsuit filed in federal district court accused the insurers of failing to act “reasonably promptly” with respect to claims; not attempting in good faith to effectuate settlements of claims in which liability has become reasonably clear; and not providing reasonable explanations for denial of claims.
The diocese said in February that disagreements were over whether certain self-insured retentions in certain policies have been exhausted and also over the proper interpretation of the trigger of coverage. According to the suit, the insurers have had differing responses to the claims.
The diocese wanted the court to declare that each of the insurers is obligated to provide a defense. It also wanted the court to determine whether self-insured retentions under the St. Paul and National Union policies have been satisfied. The diocese also sought damages and costs for an alleged breach of contract by the insurers.
Meanwhile, the diocese February complaint noted, the “underlying litigation remains ongoing, substantial defense costs continue to accrue, and settlement discussions with certain underlying claimants are difficult or impossible to conclude due to minimal guidance and participation from the insurance companies.”
The Child Victims Act (CVA), enacted in 2019, extended the statute of limitations for civil claims related to alleged sexual abuse, allowing victims more time to file lawsuits. The CVA also opened a two-year revival window as of December 1, 2019, for victims to file claims that were previously barred by earlier statutes of limitations.
Interested in Carriers?
Get automatic alerts for this topic.