Academy Insurer A Tough Defender
The insurance carrier for Holy Cross Academy, rocked by the murder of a woman preparing to be a nun and accusations of sexual abuse against two priests, is no stranger to scandal.
Church Mutual Insurance Co., founded in 1897 by a group of Lutheran ministers, is the nation’s largest insurer of houses of worship. During the past 15 years, the Merrill, Wis.-based company has fought thousands of sexual-misconduct civil cases and dozens of criminal ones.
But it has been years since the insurer has had to contend with such publicity and scrutiny as generated by the Holy Cross investigation, Church Mutual’s general counsel says.
About 10 years, in fact, said John Cleary, the company’s chief attorney – and it was also in Miami-Dade County.
Church Mutual carried the coverage on Old Cutler Presbyterian Church, where Bobby Fijnje, a 14-year-old baby-sitter and son of a church elder, was charged with sexually molesting preschoolers in his care. He confessed but later recanted.
The insurer paid for the teen’s defense lawyer as well as attorneys for other church officials. In 1991, Fijnje was acquitted by a Miami jury.
”The Fijnje case approached the level of frenzy” of the Holy Cross one, Cleary said. ”It was a very high-profile case. It involved various unsubstantiated allegations and a very zealous prosecutor.”
In intense legal fights like the Fijnje and Holy Cross cases, Church Mutual invests millions of dollars to hire a battery of investigators and lawyers to protect religious clients from criminal convictions and civil damages.
The operating practices of Church Mutual are not unlike other competitors in the billion-dollar niche market, including Brotherhood Mutual Insurance in Fort Wayne, Ind.
Several lawyers who have battled Church Mutual over the years say the attorneys hired to represent the company’s clients are smart and skilled in insurance-defense work.
But critics also say their prime concern is the company’s financial vulnerability, to the point of being insensitive sometimes to the accusers.
Tough Tactics
Attorney Stephen Kandell, who represented some parents who sued Old Cutler Presbyterian in the Fijnje case, said he experienced firsthand Church Mutual’s tough tactics.
”They wore down the parents, psychologists and everyone else” with many lengthy depositions, he said. ”Their first interest was not so much the welfare of the kids. Their interest was their money and the church.”
Despite the acquittal in the criminal case, Church Mutual settled more than a dozen civil claims for $1.6 million.
The reason: to avoid more costly litigation, Cleary said.
”I don’t believe there is insensitivity in the way we approach sexual-misconduct cases,” Cleary said. ”I can understand why an attorney who thinks he might have gotten a better settlement for his clients might say that.”
Criticism Denied
Miami civil attorney Peter Miller also said the criticism of insensitivity is ”absolutely untrue.” He has been Church Mutual’s go-to lawyer in more than 100 Florida cases, including those of Old Cutler and Holy Cross.
Miller said Church Mutual’s practice is to pay all legal bills but allow him to work independently on behalf of the carrier’s clients. He has ”carte blanche” to hire other lawyers to avoid conflicts of interest.
Miller said the insurer’s motivation is not all about saving money. Rather, it’s about finding out for itself what happened, because lives and reputations are on the line.
”I don’t bury my head in the sand. I want to know about everything up front,” Miller said. ”If we find that something occurred [such as sexual abuse], then we work as fast as possible to settle it. If we find there is no merit to a case, we fight it every inch of the way.”
Holy Cross has a $500,000 policy to cover incidents of sexual misconduct, Miller said.
Hefty Payroll
Church Mutual is footing the bill for more than a dozen lawyers, private investigators and a public-relations firm in the Holy Cross case.
But the insurer did not provide an attorney for the murder suspect, because Miller said he was capably represented by the Miami-Dade public defender’s office.
Ukrainian monastic student Mykhaylo Kofel confessed to slaying Sister Michelle Lewis on March 25 at the Byzantine Catholic school in West Kendall.
He also alleged that its religious leaders, Father Abbot Gregory Wendt and Father Damian Gibault, abused him over a four-year period.
Both men have denied the allegations through their Miami attorneys. Miller hired Wendt’s lawyer, Mel Black, with whom he worked on the Fijnje criminal defense. Black, in turn, recommended Richard Hersch, who is representing Gibault.
Miller said his own inquiry, including sending an investigator to Ukraine, has uncovered no evidence of sexual abuse by anyone in the Holy Cross community. He said he has shared information with police, who also have said they have not found any evidence.
”It is time for the murder case to go forward” to trial, he said.
The Holy Cross case is unique for Church Mutual, as it’s the first to involve murder.
Insures Thousands
The company, owned by its policyholders, covers more than 80,000 religious institutions nationwide – from churches to parochial schools to colleges. The carrier, with $270 million in sales last year, provides insurance for all denominations, but it has few Catholic policyholders because the church usually insures itself.
A spot check with insurance departments in five large states – California, Florida, New York, Illinois and Wisconsin – showed relatively few policyholder complaints against Church Mutual.
The company offers policies for property damage, workmen’s compensation and professional liability. In 1986, it began offering sexual-abuse coverage amid growing accusations of clergy misconduct.
The carrier receives two to three sexual-abuse claims every week, said Cleary, the general counsel. Most are resolved in-house or through settlement.
Cleary said he could not talk about the Holy Cross case, except to say: ”I haven’t had one in a while where this many attorneys have been hired, but this is an unusual case.”
Cleary said that in general, Church Mutual aggressively defends against any sexual-misconduct suit when it believes the accuser has made up a story – even if it costs millions of dollars and takes years to resolve.
Critics of Church Mutual say the insurer sometimes goes too far, using its lawyers to discreetly rally support against the accuser. And when the insurer loses a case, it often drags it out with more litigation.
Case in point: In 1991, Henry Jordan, a mentally disabled teenager, sued a popular Riveria Beach pastor for allegedly raping him. Jordan won in civil court, but it took seven years. Now Church Mutual is appealing.
Millions Awarded
A jury found the Rev. Thomas Masters, of New Macedonia Baptist Church, was liable for rape, false imprisonment and breach of fiduciary duty. Jordan was awarded $2.25 million for pain and suffering and another $205,000 for punitive damages.
Jordan’s attorney, Charles Torres, accused Church Mutual’s lawyers of helping to ostracize his client from the congregation. Jordan was labeled a liar and made unwelcome at New Macedonia.
”They went out of their way to make this kid’s life miserable, even when we had tremendous evidence at certain stages of the trial,” Torres said.
Miller, who is handling the appeal for Church Mutual, denied the allegations.
In another protracted case involving Church Mutual, a Denver woman sued a Methodist youth minister who she said began a sexual relationship with her when she was 14 and he was 30.
When Christa Bohrer ended the relationship, she claimed the Rev. Daniel DeHart told her she would go to hell.
Denver Case
A Denver jury awarded Bohrer $712,000 in damages in 1994, but Church Mutual challenged the judgment in a series of appeals – and lost.
”It was hard fought, and it took nine years,” said Bohrer’s lawyer, Joyce Seelen, who has faced Church Mutual more than a half-dozen times.
”They don’t like to negotiate settlements until their backs are to the wall – even once we have a verdict,” she said. ”They really believe they shouldn’t have to pay.”