Diocese Clear: Settlements or Bankruptcy
By Todd Ruger
October 21, 2004
CLINTON, Iowa — The Catholic Diocese of Davenport erased any question
Wednesday about whether the men who have filed allegations of sexual abuse
by priests will get their day in court on time.
“It’s not going to happen,” diocese attorney Rand Wonio
told a judge in Clinton County District Court. Referring to the first
trial, scheduled to begin Nov. 1, he said, “We’re either going
to settle these claims or we’re going bankrupt.”
During a hearing before District Judge C.H. Pelton, the diocese asked
him to delay the trials on the sexual abuse allegations — scheduled
on a basis of about one per month — by 30 days so it can work further
with insurance companies to reach settlements.
Without a delay or a settlement, the diocese says damages sought by at
least 40 victims — those who have already come forward and those
who have yet to do so — may prompt it to file for bankruptcy as
early as Friday.
“We filed this motion for one reason and one reason alone: to avoid
bankruptcy,” Wonio told Pelton. “It’s not a bluff, it’s
not a threat. It’s just a fact.”
Bishop William Franklin has said that allowing a trial to go forward would
be unfair because it could exhaust the diocese’s assets, leaving
later claimants with nothing.
A bankruptcy filing would put a hold on trials against the diocese and
move them to bankruptcy court. The plaintiffs could request that the lawsuits
be brought back to state court.
The judge is expected to rule on the motion yet this week.
The diocese originally asked in court filings for a four-month delay,
but it changed that to 30 days Wednesday morning because the diocesan
corporate board said insurance company negotiations can get done “in
the next 30 days or not,” Wonio said.
Craig Levien, the Quad-City attorney for at least 37 men alleging sexual
abuse, told Pelton the diocese only wants the delay in hopes the Iowa
Supreme Court will agree to hear its requests.
Those requests ask the state’s highest court to put the trials on
hold while it considers a diocese appeal of Pelton’s decisions not
to throw out the cases on statute-of-limitations issues.
The diocese said it just learned of the amount sought by claimants last
month and needs more time before the first lawsuit, filed by a man identified
in court documents only as John Doe IA, is scheduled to go to trial in
less than two weeks.
Levien said the diocese has been aware of insurance issues since May 2003,
when he filed the lawsuit for John Doe IA, who was abused after his mother
paid now-defrocked priest James Janssen to baby-sit him.
“These are not new issues,” Levien told Pelton. “Appeal
after appeal after appeal, that is what John Doe IA has faced.”
Both attorneys say settlement negotiations are continuing.
While the diocese says the financial demands of the claimants exceed its
assets, Levien says the diocese has adequate assets to cover the demands.
The diocese reported total net assets of about $10 million in an audited
financial statement published in the Catholic Messenger during November.
That total included real estate, portfolios and other assets.
Levien said his independent investigation found $15 million to $20 million
in diocese assets.
Across the nation, only the Portland Archdiocese and the Tucson Diocese
have filed for bankruptcy after paying sexual abuse settlements in the
millions of dollars.
Levien and Wonio agreed that bankruptcy would be bad for everybody involved.
It also would be an expensive and lengthy process, Wonio said. The Tucson
Diocese estimates legal and professional fees will cost $2 million to
$4 million over a projected minimum of two years.
Levien said the Davenport Diocese will face the full value of the claims
in a bankruptcy, which would leave claimants with no choice but to seek
assets from individual parishes.
Bankruptcy is not the only option, he said, citing the crisis in Boston
where a new bishop came in and settled cases because “he knew what
the right thing was.”
But Wonio said comparing Davenport with Boston is ludicrous because Boston
had a $100 million chancery it could sell to settle 500 claims, but now
faces 200 more.
He added that the diocese knows of many others who became sexual abuse
victims at the hands of Janssen, the Rev. Francis Bass and the Rev. William
Janssen was defrocked by the Vatican this year at the request of the diocese,
and requests to defrock Bass and Wiebler are pending.
“There will be a second wave of claims,” Wonio said.
Todd Ruger can be contacted at (563) 383-2493 or firstname.lastname@example.org.