A federal judge in Montana has refused to hear a sex-abuse case brought by three Travelers insurance companies against a Helena Diocese, saying the state court is already handling the matter.

The Helena Independent Record reports the three Travelers companies—Travelers Casualty and Surety Co., United States Fidelity and Guaranty Co., and St. Paul Fire and Marine Insurance Co.—argued in a federal court lawsuit last year that they were not obligated to defend the Bishop in pending state litigation because the policyholder failed to provide timely notice of alleged sex abuse.

The carriers also wanted to add a claim based on the recent discovery of a 1994 settlement agreement that allegedly released St. Paul Fire and Marine Insurance Co. from any obligation to indemnify the Diocese for future sexual abuse claims and allegedly promised that the Diocese would pay the costs of any future claims.

But Senior U.S. District Court Judge Charles Lovell ruled late Friday that the latter claim would first require determinations of state law. He said the plaintiffs can raise the issue in the state proceedings, and that venue is the proper place for the entire lawsuit—at this point.

In the Helena district court lawsuits, individuals allege both male and female clergy committed abusive acts in Helena and other locations throughout Montana from the 1940s into the 1970s. The lawsuits allege that the Helena diocese engaged in a pattern of employing, sheltering and protecting clergy who it knew, or should have known, were engaged in sexual abuse.

The diocese says in response to the issues raised that it has made many changes and none of the priests currently at the diocese are named in the suit. Most of the accused clergy are believed to be dead.

Church officials have agreed to mediation in the cases and to open many of its financial and personnel records in the process.

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Federal Judge Refuses to Hear Insurer&rsquo;s Montana Diocese Sex Abuse Scandal Case

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Federal Judge Refuses to Hear Insurer’s Montana Diocese Sex Abuse Scandal Case