Lawyer's Fee Challenged in Church Case
Archdiocese Deposits Money for Settlement

By Peter Smith
The Courier-Journal [Louisville KY]
Downloaded July 11, 2003

The Archdiocese of Louisville transferred $25.7 million into an escrow account for victims of sexual abuse yesterday, meeting a deadline set under a settlement reached with 243 plaintiffs last month.

In a related matter, one of the plaintiffs, Dr. William Handelman, wants to appear in court later this month to object to the settlement and to the 40 percent in fees that his lawyer, William McMurry, stands to gain.

McMurry, who negotiated the settlement, also faces challenges by other lawyers over his request for some of their fees. He said Handelman agreed to the fee percentage when he signed up with McMurry last year.

The archdiocese paid the entire settlement out of its savings and investments, rather than borrowing the money, said Brian Reynolds, the archdiocese's chancellor and chief administrative officer.

The settlement still awaits approval by Jefferson Circuit Judge James M. Shake, who has set a hearing for July 28 on the matter.

The archdiocese's department heads, meanwhile, have two weeks to recommend budget cuts as a result of the settlement, Reynolds said. These would go beyond the $2 million in cuts and the 34 job reductions already approved for the fiscal year that began July 1.

"A full financial accounting will be made to the people of the archdiocese , including a report on the impact of this payment on the programs and services provided by the agencies of the church," he said .

Reynolds said he could not say how much the archdiocese still has in savings ; that awaits an audit report later this year, he said. But, he added, "While not including parish savings or donor-restricted gifts, these (settlement) funds represent the majority of our unrestricted investments."

The archdiocese had about $50 million in unrestricted net assets as of its last audit in June 2002, but Reynolds has said that figure has fallen significantly since then, mainly because of declines in the stock market .

McMurry said the settlement money would be placed in an interest-bearing trust account pending Shake's ruling on whether to approve the settlement and how to divide it among the plaintiffs.

McMurry has proposed hiring a lawyer who specializes in dividing large legal settlements to decide on the payments based on whether victims suffered one of five levels of abuse, ranging from nongenital fondling to rape. Other lawyers representing smaller groups of plaintiffs have suggested victims split the settlement evenly or through some other formula.

Handelman, a cardiologist and native who was abused by retired priest Louis Miller in the 1960s, filed a motion this week asking to testify before Shake at the hearing on July 28 .

Handelman said yesterday that he believed McMurry and Ann Oldfather, an attorney on McMurry's legal team, told him plaintiffs would have the final say on any settlement.

Instead, he said, McMurry and Oldfather presented the $25.7 million settlement to plaintiffs as a done deal. Divided among 243 plaintiffs, minus attorneys' fees, "this won't even pay the counseling bills of some of these guys," Handelman said, adding that the church should have paid twice as much.

Handelman acknowledged that he signed an agreement with McMurry stating that the lawyer would receive 40 percent of any payout the same agreement McMurry says he reached with his other clients.

But Handelman said McMurry also told him he would be willing to consider lowering the fee if the case did n o t go to trial.

"I think he left doors open verbally that now he's trying to shut," Handelman said. "If he had put in five years of work and we'd gone to trial (and he received) 40 percent, I wouldn't complain. He put in a year's work and didn't prepare for trial. I think he's a little on the greedy side here."

Handelman said he wants to hear the reaction of Judge Shake and of the other plaintiffs. "If h is h onor says, `Bill, it isn't worth it,' then I'll move on."

McMurry defended his handling of the case.

He said he met with Handelman on numerous occasions and kept all plaintiffs informed about the class-action negotiations. He said he made it clear that plaintiffs were designating his and Oldfather's firms to make the final decision on a settlement.

"That's interesting that he is the only one of 243 people that got that impression" that plaintiffs would decide, McMurry said.

"It was a matter of frequent chiding by him to me and the other lawyers that our fees were too high," McMurry added. "Our typical response was , `That's interesting, coming from a highly paid physician.' "

McMurry said he never gave the impression the 40 percent fee was negotiable, a percentage he says courts have repeatedly approved in large settlements.

"The lawyers working with me put in countless hours," McMurry said. "The risk of losing these cases on technical legal issues was quite real."

Handelman is now represented by attorney Wallace Rogers, who also represents Kyle Burden, the only plaintiff who chose not to enter into the class-action negotiations and instead to seek a jury trial in his allegation of abuse by a priest.

Shake has the final say on attorneys' fees.

Last week, lawyers representing smaller groups of plaintiffs objected to McMurry's bid to receive 20 percent of their clients' settlements. They said Oldfather promised that McMurry's team would not seek any fees in their cases. McMurry says he earned the fees by being the lead attorney and negotiator.

Susan Archibald, president of the victims advocacy group The Linkup, said some victims are angry about the 40 percent fees, while others recognize this was their agreement all along.

"It's pretty much standard and not unusual, but it's tough to swallow, especially if you're not getting much in the end," she said. "It's also tied to the fact that money doesn't bring full closure" for victims.

Mike Turner, the first plaintiff to sue the archdiocese in April 2002, said he was "thrilled" with McMurry's handling of the cases and said he dealt sensitively with victims.

"What do these people really want?" he said. "I mean, we took $25 million. We signed a contract with Bill (guaranteeing 40 percent). He did one hell of a job."


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