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	Attorney Facing Disbarment Sued over Handling of Church Sex Abuse Case By Peter Smith The Courier-Journal November 12, 2011 http://www.courier-journal.com/article/20111112/NEWS01/311120045/1001/Attorney-facing-disbarment-sued-over-handling-church-sex-abuse-case?odyssey=mod|newswell|text|Home|p Already facing disbarment for alleged misconduct involving one class-action lawsuit, Cincinnati trial lawyer Stan Chesley is embroiled in accusations from former clients who accuse him of wrongdoing in a second case. Two lawsuits are pending in Kenton County, Ky., against Chesley, his Cincinnati law firm and a staff attorney. The lawsuits accuse them of defrauding four of the 252 sexual-abuse victims who shared in an $84 million class-action settlement with the Diocese of Covington, reached in 2006 in neighboring Boone County. They accuse Chesley and attorney Robert Steinberg of fraud, promising them higher payouts than they actually received and telling them their payments would be delayed or reduced if they refused to support the attorneys' fee requests. Judge Robert W. McGinnis has denied a request filed in Boone Circuit Court by Chesley and Steinberg to block the Kenton County lawsuits. McGinnis had presided over the final stages of the diocese case in 2009. The lawyers deny the charges and had asked McGinnis to declare the Kenton suits an improper attack on the "integrity of the settlement" already determined to be fair and final in Boone County. McGinnis' order — which he signed Nov. 4 without additional comment — comes as Chesley's professional fate remains in the hands of the Kentucky Supreme Court in another major Boone County class-action case. The Kentucky Bar Association recommended in June that the Supreme Court disbar Chesley. The bar concluded he took excessive fees and covered up the misconduct of other attorneys in a $200 million settlement reached in 2001 between makers of the fen-phen diet-drug combination and those who suffered heart problems from it. The $84 million settlement of the Diocese of Covington lawsuit remains one of the largest made by any Roman Catholic diocese in the nation — even though the diocese represents less than half a percent of the nation's Catholic population. The diocese acknowledged in 2004 it had received more than 200 allegations of sexual abuse against 35 priests in the previous 50 years. In the pending Kenton County cases, the four plaintiffs accuse Chesley and Steinberg of fraud and professional negligence. "I'm hoping now we can shed some light" on the case, said Louisville attorney Thomas Clay, who represents three clients suing Chesley and Steinberg — one of the victims, Tom Cardosi; a second represented by a second, Heather Moser; and the administrator of the estate of a third, Julane Simpson. Another victim, Christine Anderson, is representing herself in a separate lawsuit. "We're not attacking the fairness of the settlement," Clay said. "...We are attacking the way in which the settlement was administered" by the lawyers, he said. But Chesley and Steinberg called the allegations "baseless" and "frivolous" in court documents. They said the clients already had a chance to challenge the dollar amounts when the class-action case was pending in Boone Circuit Court. They cited an audit of the settlement money that found it was handled according to sound accounting principles. Attorney David Sloan, representing Chesley and Steinberg, noted that McGinnis didn't rule on the merits of the case, only on whether he could stop litigation in another court. "We will be filing motions to dismiss shortly" in Kenton County, he said. McGinnis' decision contrasts with ones issued earlier this year by the U.S. District Court for Eastern Kentucky, which heard the same claims. It ruled that the plaintiffs were trying to reopen a class-action case that a state court had closed. In the diocese settlement, victims could receive anywhere from $5,000 to $450,000 each depending on where they fit in one of four categories, ranked by the severity of abuse they suffered. The plaintiffs allege Chesley and Steinberg promised they would be placed in the highest-paying category and also share in a separate fund that could offer as much as $550,000 for "extraordinary" injuries. The plaintiffs allege they received less than they were promised. Chesley and Steinberg, however, say the clients received hundreds of thousands of dollars and that the lawyers didn't decide the amounts — court-appointed special masters did. Chesley and Steinberg submitted copies of correspondence they said prove they kept their clients informed. The plaintiffs alleged Chesley and Steinberg provided them no help in preparing requests for higher settlements to a court-appointed special master named to hear appeals. The plaintiffs allege the lawyers told them their "settlement amounts would be decreased, stalled or even denied if they did not support the attorneys' fee request." They are asking the court for damages that include forcing Chesley and Steinberg's firm to forfeit the estimated $18.5 million in legal fees from the case. The current lawsuits do not allege wrongdoing by anyone associated with the diocese. Under the Covington case's class-action status, a small group of plaintiffs filed suit but the settlement was open to anyone sexually abused by a priest or anyone else associated with the church before Oct. 21, 2003. Of 400 people claiming injuries, 252 received payments and the rest were denied, according to court documents. Victims were allowed to opt out of the settlement and pursue individual settlements if they chose — and some did. But their window for filing claims closed if they failed to opt out. Clients in the current lawsuits said that decided not to opt out because the lawyers allegedly promised them awards close to $1 million each. The fen-phen case involves some of the same actors as the diocese case. Former judge Joseph "Jay" Bamberger was disbarred last month by the Kentucky Supreme Court for his approval of the fen-phen settlement, which put tens of millions of dollars in excessive fees in the hands of three other now-disbarred lawyers. Bamberger also presided over the early stages of the diocese case and approved it for class-action status — a rarity in church-abuse cases nation-wide. But Bamberger retired in December 2003 after lawyers for the diocese questioned the judge's close friendship with Mark Modlin, a consultant to Chesley's firm. Modlin also was a consultant in the fen-phen case, and the Kentucky Bar's trial commissioner found that Bamberger knew Modlin stood to gain $2 million from the settlement.
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