Tribe, Insurers & Church at Odds Over Money

BILLINGS, Mont. (CN) - Insurers say they have no duty to defend a Catholic diocese from the Northern Cheyenne Tribe's claims that the church withheld millions of dollars destined for a school and home for Cheyenne children.

The Catholic Mutual Relief Society of America and Cric Insurance Co. sued the Roman Catholic Diocese of Great Falls/Billings, Montana; the St. Labre Indian School Educational Association; and St. Labre Home for Indian Children and Youth, on Nov. 4 in Federal Court.

The insurers seek declaratory judgment.

The 83-page lawsuit tells a long and winding tale.

Since 1952, the Roman Catholic Diocese of Great Falls/Billings has used a direct mail campaign called "The Race of Sorrows" to raise money for the St. Labre School, a preschool through 12th-grade school, and St. Labre Home for Indian Children and Youth, a nonprofit supporting at-risk children.

The Northern Cheyenne Tribe filed a lawsuit in 2005, claiming that the campaign generated tens of millions of dollars over the years, using the "plight" of the tribe as its hook, and that the diocese owes the tribe a fair cut of the donations.

"This enterprise has reaped enormous financial revenue and benefit to [St. Labre] during this past half-century," the complaint states. "For example, proceeds from the enterprise in just two of the past four years have been $27 million and $30 million. Obviously, tens of millions have turned into hundreds of millions of dollars, which have been gathered by defendants by marketing the [NCT] people and their 'plight' and 'needs' for some half century." (Brackets in complaint, which abbreviates Northern Cheyenne Tribe as NCT.)

The tribe claimed the money should be put into a trust to benefit the people it was supposed to benefit.

The Catholic Mutual Relief Society of America is a nonprofit corporation founded in 1889. It covers 111 of the 195 dioceses in the United States and Canada for "certain property and casualty risks," according to the complaint.

The insurer claims: "Catholic Mutual has no duty ... to defend or indemnify the St. Labre School, the St. Labre Home or the Diocese ... because the surviving allegations of the complaint, even if true, do not constitute bodily injury, personal injury, advertising injury or property damage occurring during the coverage period."

The insurers' lead counsel is Bradley Luck, with Garlington, Lohn & Robinson, of Missoula.

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