53 Insurance Companies Sued for Breach of Contracts in Diocese of Buffalo, N.Y. Bankruptcy Case

January 22, 2021, Western District of New York – Recently, the plaintiffs in the bankruptcy case of the Diocese of Buffalo, N.Y. (the “Debtor”) sued 53 defendant insurance companies for breach of contracts. The plaintiffs seek a declaratory judgment pursuant to the terms of insurance policies that the Debtor purchased from the defendant companies.

The underlying action against the Debtor involved multiple claims seeking damages stemming from the purported negligence on behalf of the Debtor that caused injury to the claimants due to sexual abuse. According to the plaintiffs, the underlying actions and claims were covered by the insurance policies and Debtors fulfilled all duties under each insurance policy. Thus, the plaintiffs assert that the Debtors are entitled to all the benefits provided by the insurance policies. 

Next, the plaintiffs argue that the Debtors have suffered damages equal to the sum they would be entitled to recover as benefits under the insurance policies. The Defendants breached their contractual obligations to the Debtors by failing to acknowledge full coverage obligation to defend/indemnify the Debtors in connection with the underlying actions and claims.

Accordingly, the plaintiffs seek a judicial determination of their rights by requesting the court to enter a declaratory judgment in its favor and against the defendant companies by declaring that the defendants are obligated to pay the costs to the Debtors for defending the underlying actions and claims.

Honorable Judge Carl L. Bucki is presiding over the Debtors’ bankruptcy cases. The case is In re The Diocese of Buffalo, N.Y. administered under Case No. 20-10322 in the United States Bankruptcy Court for Western District of New York. The law firm, Woods Oviatt Gilman LLP is representing the plaintiffs in the bankruptcy case.

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