Catholic Montana Diocese Abuse Settlement Concludes without Resolution

By Seaborn Larson
Great Falls [MT] Tribune
September 11, 2017

http://www.greatfallstribune.com/story/news/2017/09/11/catholic-montana-diocese-abuse-settlement-concludes-without-resolution/655790001/

Two days of negotiations toward a settlement between the Great Falls-Billings Diocese and 86 victims who were reportedly abused by eastern Montana priests ended last week in a stalemate.

The mediation sessions took place in federal bankruptcy court in Reno, Nevada on Sept. 6 and 7. On Monday, Judge Gregg Zive filed a notice effectively terminating the mediation between the two parties.

Bruce Anderson, an Idaho attorney representing the Great Falls-Billings Diocese in the settlement negotiations did not return calls from the Tribune for comment on the ending of the mediation.

Jim Stang, an attorney representing the creditors committee of abuse survivors who represent the whole group, said Monday that the committee still hopes to come back to the negotiation table with the diocese.

"Ultimately, we would like to have a negotiated settlement with the diocese and Catholic Mutual," which is the diocese's insurance carrier, he said.

Court documents indicate parties had previously disagreed about which assets are available to be put into the settlement pot. The creditors committee early on argued the properties belonging to the parishes belong to the diocese, according to court documents, while the diocese argued that under Canon Law, these properties were not diocesan properties but held in trust for the parishes.

The major non-estate asset in contention was the Capital Asset Support Corporation, which acts as an internal bank for the diocese and its parishes. For example, the parishes can make a request for funding from the entity, and then be paid if the corporation verifies that the funds are available for payout.

Court documents state the CASC had in previous mediation agreed to work with the creditors committee, in that the parishes could still withdraw money and the diocese and the creditors committee could submit claims toward the settlement.

After mediation dissolved last week, however, Stang told the Tribune he believes that issue needs to be settled by the courts in order for the negotiations to move forward.

"There needs to be some court work done on that," he said. "We tried to negotiate those issues with them. We've talked about this stuff. The lawyers for the diocese and my law firm have been throughthese issues before in other cases. That experience apparently is not enough to get us to a settlement in this case."

Parties are now taking a 10-day "cooling off" period in which nothing is done toward further litigation.

"We are spending the time talking to our committee members as to how best proceed to get this thing toward a settlement," Stang said.

If a judge were to review parish assets to make a determination on whether or not they are available to the settlement fund, a different bankruptcy judge would hear that case, not Zive.

"It was disappointing. We've been in other cases when mediations have been suspended or terminated and the parties get better clarity as to their legal rights and they go back to mediation. Maybe that's what we need here," Stang said. "Our goal is to reach a settlement with the diocese. That is our goal."

The case was filed against the diocese in 2012, with about a dozen alleged victims claiming they were verbally, physically and sexually abused in their youths by priests, nuns and church workers. The case eventually grew to more than 70 victims, who claim abuse from the 1940s to the 1990s.

The Great Falls-Billings Diocese, which covers the eastern half of Montana, filed for bankruptcy in late March. In a statement released March 31, church officials said "the diocese and its insurance carrier would both contribute to that comprehensive settlement, which would compensate the currently identified victims. There will be additional settlement funds for additional and unknown victims."

"The Diocese expects that its reorganization will be expedited by the pre-bankruptcy negotiations with all the affected parties," the statement reads.

Parties had been scheduled to work through the claims filed in the case through August, ahead of the September mediation sessions. At this time, the diocese would be able to raise any questions they had regarding the claims, Stang said in July.

The Helena Diocese, which covers the western half of Montana, concluded its own settlement with reported sex abuse victims in 2015 with a $21 million fund for the 362 victims who came forward.

Zive told the Tribune on Monday that details of the settlement negotiations are confidential, including the proposed settlement amounts.

"The mediator remains available if the Court or the parties believe future sessions would be beneficial," Zive wrote in the notice terminating the mediation.