Diocese Clear: Settlements or Bankruptcy

By Todd Ruger
Quad-City Times
October 21, 2004

http://www.qctimes.com/internal.php?story_id
=1037685&t=Local+News&c=2,1037685

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 Wiebler.
.
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 truger@qctimes.com.