(CN) - After settling claims over the suicide of a boy who was allegedly molested by his priest, the St. Louis Archdiocese is not entitled to insurance indemnification, the 8th Circuit ruled.
Allen Klump sued the Archdiocese of St. Louis, Mo., in 2003 for wrongful death, claiming that a priest's sexual molestation of his son Christopher led to his son's suicide.
After settling with Klump for an undisclosed amount, the archdiocese sought indemnification from its insurer Chicago Insurance Company (CIC).
A federal judge agreed with CIC, however, that the policy did not cover the Klump settlement since the archdiocese could not be held legally liable for Christopher's death.
The St. Louis-based 8th Circuit affirmed Wednesday.
Under Missouri law, a religious organization cannot be held liable for negligence because the court would then have to determine how a "reasonably prudent diocese" would act, which would "excessively entangle [the court] in religious doctrine, policy, and administration," in violation of the First Amendment, according to Missouri Supreme Court precedent.
Klump's allegations of recklessness in his wrongful death suit amount to a claim of negligence, the court ruled.
Therefore, "while we agree with the archdiocese that an insured must evaluate several risks in contemplation of settlement, these cases applying the potential liability standard also reveal that the insured must remain cognizant of the underlying liability rules, which the archdiocese failed to appreciate in this case," Judge C. Arlen Beam wrote for the three-judge panel.
The archdiocese complained that if it held no legal liability, then the state court wrongly denied its motion to dismiss Klump's lawsuit.
But Beam emphasized that "the intentional aspect of [Klump's] claim remained viable," since religious conduct certain to cause harm is not protected by the First Amendment.