Diocese of Springfield Wins Cathedral High School Insurance FightWhen Ann Southworth became president of Cathedral High School, she was excited to implement a new plan to invigorate the school and increase enrollment.
A longtime educator and assistant superintendent in Springfield Public Schools, she was also a member of Cathedral’s board, and had helped shape some new ideas for the school.
But that was in May 2011, one month before devastating tornadoes tore a 39-mile path of destruction through Western Mass., and the 52-year-old Cathedral High School, which had also housed middle-school students since a 2009 merger with St. Michael’s Academy, was directly hit.
Southworth’s excitement over her new professional endeavor was quickly overshadowed by multiple challenges, starting with finding a temporary home for Cathedral’s grade 6-12 population — in less than two months.
“My first thought was, ‘we’ll overcome this; we’re going to keep going,’” she recalled, “and I found the principal, picked him up in the parking lot of Holy Cross, and we starting planning that next day.”
That summer, “a thousand details” had to be addressed, Southworth said, and administrators put on new hats — as realtors, searching for temporary quarters; as facilities managers, to move all offices to various buildings in and around Springfield; and as transportation coordinators, for getting students to wherever the new temporary home, or homes, would be.
Other church properties, including the St. Michael’s Priests Residence building and Our Lady of Mt. Carmel, were damaged as well, while the St. Jude Mission property in Springfield was hit hard by a microburst a month and a half later, and remains closed.
To diocesan leaders, pictures of Cathedral’s splintered roof and shattered windows spelled out an obvious need for major repairs, if not complete reconstruction. So, like many other commercial and residential property owners in the twister’s path, the diocese filed insurance claims in the millions for all four properties. Language in the policy with Catholic Mutual, the insurance company of which the Diocese of Springfield is a member, guided the determination of what the school believed to be ‘replacement value,’ Southworth said.
But that summer of a thousand details turned into a two-year difference of opinion between the insurance company and the property owner, because the initial settlement offer was unexpectedly — and jarringly — low.
“You try to work things out internally, especially when you have close relationships, but with our cost estimates as high as $70 million, for the worst-case scenario, and their $13 million response, it was just too great a gap to make up,” said Mark Dupont, director of public affairs and co-secretary for communications for the Diocese of Springfield, detailing how, when it came to questioning literally every element of the claim, Catholic Mutual didn’t give up.
But neither did the diocese.
The long journey to work through a process called a ‘reference procedure’ (more on this later) finally culminated this past Sept. 10, when the Diocese of Springfield and Catholic Mutual announced an amicable resolution of all claims, totaling $60 million for tornado damage to all four properties. A final step with the Federal Emergency Management Agency (FEMA) still looms for potentially more storm-related compensation, but the major battle is now over.
“When you’re facing challenges and hardships, you rise to the occasion,” Southworth said. “You come out of it better … and we did.”
For this issue’s focus on education, BusinessWest met with members of the Diocese of Springfield to learn more about their two-year insurance battle to secure what they felt Cathedral was entitled to, proving that patience is only one of their virtues.
Bishop Timothy McDonnell explained to BusinessWest that the tornado that destroyed Cathedral High School and the other properties caused him many a sleepless night.
“But I couldn’t forget the words I had so often quoted to others, Mother Teresa’s words: ‘there’s nothing so bad that God can’t bring a greater good out of it — if we let him,’” he recalled.
Looking over the past two years, McDonnell said Mother Teresa’s words have been prophetic in the case of Cathedral, but the situation has been trying nonetheless for students, teachers, and parents. School choice and charter schools have affected the academic marketplace across the country, and specifically enrollment at Cathedral, which now stands at 236, said Dupont. The current goals are 300 high-schoolers and 200 in the middle school, but those figures could change as the school’s final footprint emerges.
“The school is struggling,” he said. “It’s fine to have a life raft, but you don’t want to live in the life raft.
“The tornado would have been devastating anyway,” Dupont went on, “but it came at such a pivotal point when we were ready to take that next step with Ann. And next thing you know, it was ‘where are they going to have classes in September? Where are we going to put the students we have?’”
Many of the options the diocese investigated involved undeveloped vacant space or non-academic space. Creative solutions were pitched by the city of Springfield, commercial realtors, and Springfield Technical Community College, but state regulations for using the college space would take far too long into the year to wait.
They received a call from the superintendent of schools in Wilbraham, a Cathedral alum, who suggested the diocese look at Memorial Elementary School. While it made a difficult situation even more trying for students and their parents, due to school busing, after-school programs, and other issues, said Dupont, the diocese still had to spend $750,000 to upgrade the school. With little time to widen the search, Memorial became the life raft for Cathedral, while the middle-school students went to the diocese-owned Holy Cross campus on Eddywood Street in Springfield. Dupont said the location has worked, and the lease in Wilbraham will be extended for as long as necessary.
But ‘as long as necessary’ is difficult for parents to hear when they want answers as to why the diocese can’t make a decision on whether to repair or rebuild. Yet, until engineers are allowed to venture into the damaged building, the extent of the damage is unknown.
“When you’re engaged in negotiations with an insurance company, you have to be prudent in how you proceed,” Dupont explained. “Because we were holding them [Catholic Mutual] to the full commitment of the policy, we weren’t going to give them any sort of ‘out’ to get around it — replacement cost is replacement cost.”
A total of $20 million was initially advanced to the diocese for preliminary cleanup and other expenses that were incurred, considering the magnitude of destruction, Dupont explained. But the initial low-settlement response persuaded the diocese to utilize the aforementioned ‘reference procedure,’ a Massachusetts law afforded in settlement claims, allowing both parties to appoint representatives for each side and a mutually agreed upon ‘referee.’
“That referee listened to months and months of testimony and reviewed data to determine what the real damage was that they could see,” said Dupont, likening the parading of engineers on both sides to a “battle of the experts.”
Due to the claims being challenged on almost every point, the process dragged for months, but the decision upholding $60 million worth of claims was finalized in September, with no more debate.
However, the next hurdle involves FEMA, which coordinates the federal government’s role in preparing for and responding to all domestic disasters, natural or man-made. The diocese is hoping to recoup some of its tornado-related costs, but that remains to be seen, said Dupont.
“Their regulations are daunting and very strict, and rightfully so, but we couldn’t go to FEMA until the claim was resolved,” he explained. “And any potential outcome is predicated on whether you’ve aggressively pursued your claim with your insurance carrier first.”
During the insurance battle, work on the new strategic plan never slowed, said Southworth.
The plan calls for more of a day-school curriculum and an extended day, where students stay from 8 a.m. to 5 p.m., with regular academic classes followed by experiential learning such as fine and performing arts, community service, internships, and sports.
A focal point in the school’s strategic plan will be the International Baccalaureate Diploma Program, which will set Cathedral apart from other schools, she said. Even as a pilot program, 71% of seniors and 61% of juniors are enrolled in one or more classes.
Tuition for Cathedral is now $9,300, but McDonnell has charged the administration to find ways to make Cathedral more affordable for lower-income families. Currently 57% of students receive some form of tuition assistance through the diocese, alumni, and donors, but to grow the school’s population, something more is needed. Another part of the plan, the Cathedral Tuition Foundation, as it is called, will answer that important issue.
“Since the tornado, the alumni have rallied in support of Cathedral, and it’s leading to a campaign to endow tuition funding so that future generations of Panthers may benefit from the same first-class education that has always been Cathedral’s hallmark,” said McDonnell. Simultaneously, St. Michael’s Academy has been able to undertake its own plan to ensure its growth and stability.
“The connections that Cathedral has are really powerful,” Southworth added, mentioning just a few of the noteworthy alums, including Michael Ashe (’57), the current Hampden County sheriff; Richard Monaghan (’66), research biologist with the patent for the first cholesterol-reducing drug; and Derek Kellogg (’91), head basketball coach for UMass.
The word is out regarding the foundation, but Dupont likened it to a chicken-and-egg scenario, since donors don’t currently know what Cathedral High School is going to look like. But that isn’t deterring the diocese from testing the waters.
“We’re a people of faith,” he said, “and this is going to require people digging into their reserves of faith and saying, ‘I’m going to make this commitment, even though I’m not sure how the site is going to play out.’”
To this day, books and other educational materials remain in the damaged Surry Road school that teachers have not been able to retrieve, Southworth said. But not one lesson has been missed, even from the first day of classes in September 2011.
She said she’s committed to continuing that ‘show must go on’ mentality, adding that, as the FEMA process unfolds, she will continue implementing the invigorating plan that was her mission before disaster struck from the sky.
All agree that, whether the school is rebuilt or repaired, this new plan and new energy will help create a bright future for even more students of Cathedral High School — who are, after all, among the most valuable of the diocese’s assets.
Elizabeth Taras can be reached at firstname.lastname@example.org