Archdiocese Loses Land Ruling
A Judge Allows Plaintiffs in Priest Sex-Abuse Cases to Take to Court the Question of the Ownership of Roman Catholic Property

By Steve Woodward
The Oregonian [Portland OR]
August 5, 2004

U.S. Bankruptcy Judge Elizabeth Perris sided Wednesday with the plaintiffs in priest sex-abuse cases in allowing them to pursue their claim that the Archdiocese of Portland is the true owner of an estimated $500 million in real estate, cash and investments.

The Roman Catholic archdiocese contends that it is merely the trustee for the property, nearly all of which it says really belongs to its 124 parishes in Western Oregon.

The judge gave the plaintiffs until Aug. 18 to file a legal action in bankruptcy court seeking a ruling on the property's actual owner. If the judge rules that the property belongs to the archdiocese rather than the parishes, the property will become available to pay claims to abuse victims who have so far asked for $307 million.

That figure is sure to rise by millions. An additional 41 abuse cases against the archdiocese have not yet sought specific dollar amounts, according to filings by the archdiocese. Moreover, an additional 20 lawsuits are waiting to be filed, according to testimony in the Bankruptcy Court hearing Wednesday.

The number of unknown future lawsuits -- and how to pay claims -- is one of the key issues in the bankruptcy case.

Thomas Stilley, an attorney for the archdiocese, had sought the judge's approval to negotiate settlements for present and future lawsuits first, before tackling the issue of the archdiocese's property ownership. The size of the settlements, he told Perris, might be small enough for the archdiocese to pay out of its own assets and proceeds from insurance policies. That might eliminate the need for litigation over property ownership, he said.

Perris said the ownership question needed to be decided first.

Stilley estimated that legal appeals on the ownership issue would be expensive and could take as long as 10 years to resolve. Albert Kennedy, an attorney for the plaintiffs' committee, countered that the issue could be wrapped up in less than a year.

"Our hope is to bring this to a fair conclusion as soon as reasonably possible," Kennedy said after the hearing.

Stilley stuck to his prediction. "We really do think this is going to take years," he said.

Both sides indicated their willingness to work out a dispute resolution process for the lawsuits. Perris gave them until Oct. 1 to develop a process. The two sides also must agree on a way to ensure that personal injury claimants don't unwittingly waive their right to a jury trial.

Archdiocese attorney Thomas Dulcich noted that the archdiocese has settled more than 100 claims in the past four years.

"Ninety-five percent of the claimants have an interest in getting compensation and getting on with their lives," Dulcich said.

Perris also gave the archdiocese until Sept. 15 to initiate legal action against General Insurance Co. of America, an indirect subsidiary of Safeco, and about a dozen other insurers that sold liability policies to the archdiocese. The archdiocese says the insurers are refusing to pay $17 million owed toward settlements of past lawsuits.

Other insurers have contributed more than $25 million to the archdiocese's settlements.

The archdiocese filed for Chapter 11 reorganization in Bankruptcy Court on July 6 in the wake of mounting claims from sex-abuse cases.

Among those attending the hearing was Barbara Blaine, president of the Survivors Network of Those Abused by Priests, a 5,000-member Chicago-based organization for priest-abuse victims. Blaine was in Portland this week to meet with local victims of priest sex abuse.

"I wanted to come out and support survivors in Portland," she said. "They're doing a brave, heroic thing. If they had not come out, most of the perpetrators would still be out there molesting people."

Steve Woodward: 503-294-5134;


Any original material on these pages is copyright © 2004. Reproduce freely with attribution.