Ruling That Bankruptcy Negates Sexual Abuse Lawsuit Is Under Challenge

Arizona Daily Independent News Network [Scottsdale, AZ]

September 4, 2022

By Terri Jo Neff

The Arizona Court of Appeals has agreed to hear arguments on whether federal bankruptcy law precludes a victim from suing the employers of the two Catholic priests who allegedly sexually abused her as a child several decades ago.

The woman, referred to in court records as Jane HM Doe, is now about 50. She filed a nine-claim lawsuit in February 2020 against the Roman Catholic Church of the Diocese of Phoenix, St. Mark Roman Catholic Parish Phoenix, and the Society of the Divine Savior USA Province concerning sexual abuse she alleges she suffered as a student at St. Mark in the late 1970s and early 1980s.

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Court records show Judge Joan Sinclair of the Maricopa County Superior Court dismissed the case in March 2021, ruling Doe had no standing to sue for the abuse because she filed for bankruptcy in 1993 and 2004. This would mean Doe’s bankruptcy trustees acquired her right to sue even if the statute of limitation expired in 1992, according to the judge.

That decision will now be considered by the Arizona Court of Appeals – Division Two during oral arguments on Oct. 25 in Tucson.

Doe’s lawsuit alleges the various Church defendants “knew or should have known” Father Donald Verhagen and Father James Bretl had engaged in sexual misconduct with children and were thus unfit to work as priests at the time they were assigned to work at St. Mark. The positions gave the men contact with several students, including Doe.

“The Roman Catholic Church’s culture pressured Jane HM Doe not to report the sexual abuse that Verhagen and Bretl committed against her,” Doe argues in court filings. “Because of that childhood sexual abuse, Jane HM Doe has suffered and will continue to suffer severe physical and emotional injury.”

Born in 1972, Doe had until her 20th birthday to initiate a lawsuit based on the statute of limitation in place at the time. The only reason she could sue in February 2020 was due to the Arizona Legislature passing a special statute in 2019 to give adults a new opportunity to sue for abuse committed against them as children even if the original statute of limitation expired long ago.

The legislation, Arizona Revised Statutes 12-514, changed the statute of limitations for filing a lawsuit for abuse from 2 years to 12 years beginning on a claimant’s 18th birthday. But most importantly for Doe, it provided a one-time opportunity for adults more than 30 years old to initiate a lawsuit by Dec. 31, 2020.

Included in the legislation were a few provisions as to legal action against non-perpetrators of alleged abuse. One of the provisions permits claims only if a non-perpetrator “knew or otherwise had actual notice of any misconduct that creates an unreasonable risk of sexual conduct or sexual contact with a minor by an employee, a volunteer, a representative or an agent.”

The other provision required a plaintiff like Doe to prove any claim against non-perpetrator “by clear and convincing evidence.” But Sinclair’s dismissal of Doe’s lawsuit due to the long-ago bankruptcy proceedings meant the case never got to the point of weighing evidence against the Church defendants.

The judge’s ruling is in keeping with the appellate arguments put forth by attorneys for the Church defendants that Doe “could have brought her claims against Defendants prior to her bankruptcy filings” and that it is “completely irrelevant” neither Doe nor a bankruptcy trustee could have initiated legal action after 1992 based on the statute of limitation in place at the time.

The “only relevant question is whether the claims had accrued” before Doe’s bankruptcy petition and if those claims then “became the sole property of Plaintiff’s bankruptcy estate” when Doe filed her bankruptcy petitions in 1993 or 2004, the defendants argue.

Court records show Verhagen and Bretl died several years ago. The Church defendants note in court documents that Doe’s case represents the first time the defendants heard of either priest being accused of sexual abuse “or harming a child in any way.”