Gallup Diocese Faces Huge Bills, Possible Civil Suits

By Olivier Uyttebrouck
Albuquerque JournalI
November 6, 2015

http://www.abqjournal.com/671587/news/gallup-diocese-faces-huge-bills-possible-civil-suits.html

Legal and professional costs in the Diocese of Gallup bankruptcy case have climbed to more than $3.2 million as the case enters its third year this month and attorneys prepare for a third round of mediation talks.

Meanwhile, a Texas law firm has asked U.S. Bankruptcy Judge David T. Thuma of Albuquerque to allow 15 alleged victims of sexual abuse by priests to file civil lawsuits against the diocese.

All 15 allegedly were abused by priests at churches in Winslow, Ariz., where the diocese posted seven priests identified as having had “credible allegations” of sexual abuse made against them.

They are among 57 alleged sex abuse victims who have filed claims against the Diocese of Gallup in the Chapter 11 reorganization bankruptcy filed by the diocese in November 2013.

Attorneys representing some of the alleged victims have sought Thuma’s permission to bring some of the civil cases to trial in state court. Thuma will consider the requests at a hearing Tuesday.

The judge’s permission is required because the bankruptcy case halted 13 civil lawsuits filed against the diocese. It also prevents attorneys from filing additional lawsuits.

At an Oct. 15 hearing, Thuma said he would consider allowing certain civil cases to proceed to trial if attempts fail to mediate a settlement in the bankruptcy case. He asked attorneys to select cases covered by the diocese’s insurance policies. At least 17 of the 57 sexual abuse claims predate 1965, when the diocese had no insurance coverage.

Richard Fass, a Houston attorney who represents the 15 alleged Winslow victims, said Wednesday that all 15 claims are covered by insurance policies issued to the diocese by two insurance companies.

Thuma also has ordered a third round of mediation for Dec. 3-4. Attorneys have said that two earlier mediation attempts failed because attorneys were dissatisfied with the amount of money offered by the diocese.

Attorneys for the alleged victims contend that a civil court trial would hasten a settlement by establishing the monetary value of claims against the diocese.

Attorneys for the diocese counter that civil court judgments would spend down the limited funding available to pay for a settlement.

A settlement also would pay for legal and professional expenses. Court records show that attorneys and other firms have requested a total of $3,229,014 for fees and expenses through Sept. 30.