Diocese files response in 5th suit

On May 4, in response to a Complaint filed April 25 in federal district court by the Philadelphia Indemnity Insurance Company [PIIC], the Diocese filed a Motion to Stay the suit pending the results of an arbitration which had already commenced between the parties.

The suit, which is the fifth action against the Diocese and its elected leaders in the last 24 months, was announced on the Web site of the local TEC-affiliated congregations, led by Bishop Wallis Ohl.

The suit was brought by PIIC, which had accepted the Diocese for an indemnity policy in late 2006 providing coverage for legal expenses in the event the Diocese was sued. PIIC has not paid on the Diocese's claim under the policy, and, following negotiations between the parties, the matter was set for arbitration when the suit was suddenly filed on the 25th. PIIC claims the Diocese is no longer insured under the policy even though the Diocese paid and PIIC accepted substantial premium payments for this policy and several subsequently-issued insurance policies.

The Diocese's response asks the court to suspend the lawsuit and allow arbitration to go forward. The two documents filed May 4 are linked below.

The diocese has received good news this month from two federal courts: Two suits initiated in 2010 against diocesan leadership have been stayed until the appeal of the primary suit has run its course in state courts, and a third will not impede an arbitration process already under way.

On Wednesday, May 11, in Fort Worth, federal court judge Terry Means responded favorably to two motions filed by the Diocese seeking to stay the intellectual-property suits brought against Bishop Iker last fall. One, brought by The Episcopal Church last September, seeks to seize control of the diocesan seal and the name “The Episcopal Diocese of Fort Worth.” The other, filed a month later by All Saints’ Church on Crestline Road in Fort Worth, alleged that Bishop Iker had been using the parish’s seal and had improperly bestowed its name on another congregation. Subsequently Fr. Darryl Pigeon and the vestry of his Fort Worth congregation were added as defendants. Judge Means stayed the first suit in December; his decision of Wednesday confirms and extends that order. The stay on the All Saints’ suit is the first order he has issued in that case.

In his orders, Judge Means wrote that the cases “should be stayed pending resolution of the identity and ownership issues in the parallel state-court action [begun in the 141st District Court], including all relevant appeals.” Thus, both suits will await the outcome of the Diocese’s appeal to the Texas State Supreme Court.

In addition, on Friday, May 6, in a federal court in Dallas, Judge Sidney Fitzwater denied the request by the Philadelphia Indemnity Insurance Company (PIIC) for a restraining order which would have prevented an arbitration proceeding from going forward. In a separate order, he directed PIIC to “file supporting matter and a separate brief” of not more than 50 pages if it still intended to seek an injunction against arbitration. The Diocese has no duty to respond further unless PIIC acts on the judge’s instructions. To date, PIIC has not done so, and the arbitration is free to proceed.

These two developments clear the way for arbitration of the insurance dispute and remove the distractions of duplicative legal maneuvers against us.