Diocese Might Establish $85m Fund for Victims

By Paul A. Long
Cincinnati Post [Covington KY]
January 10, 2006

Insurance companies for the Diocese of Covington have agreed to kick in nearly $45 million to a fund that will pay those who were sexually abused by priests or other church employees.

With the diocese contributing another $40 million, that will give victims a guaranteed $85 million, attorneys for those suing the diocese said during a fairness hearing Monday in Boone Circuit Court.

The fairness hearing was set to determine whether Special Judge John Potter would sign off on the settlement of the class-action lawsuit, filed against the diocese alleging a half-century of covering up sexual abuse.

The agreements with the two insurance companies - Catholic Mutual and the Fireman's Fund - were reached just minutes before the fairness hearing was to begin in Boone County, said Stan Chesley, one of the attorneys for plaintiffs in the case.

In the 3?-hour hearing, a number of local and national people spoke in favor of the settlement. Two who filed objections withdrew them, so no one opposed the settlement.

Still, Potter said he wanted to consider all the information before filing a written order. He said he would do so within three weeks.

The original settlement, announced in June 2004, was for $120 million, which would have made it the largest such award in the nation. At $85 million, it would be less than the record $100 million the Archdiocese of Orange County, Calif., agreed to pay in 2004 and on par with what the Archdiocese of Boston settled for in 2003.

But Chesley and his partner, Bob Steinberg, said the number of people filing claims was below expectations. Therefore, the insurance companies' liability is less than their originally intended sum of $80 million, he said.

"I thought there would have been more claims," Chesley said. "We are comfortable with the $85 million."

The bulk of the insurance money will come from Catholic Mutual, the Catholic Church's self-insurance fund, based in Omaha, Neb. The company will immediately put up $15 million in cash, with the remainder coming in $5 million installments over the next five years.

"This is the largest settlement Catholic Mutual has ever been faced with," chief financial officer Douglas Yenzer testified during the hearing.

The diocese said it would dig into its reserves and sell some of its property - including the Marydale Retreat Center in Erlanger, if necessary - to pay its share of the settlement if Potter approves it.

The diocese's attorney in the case, Carrie Huff of Chicago, said the settlement is in the best interests of the diocese, its members - and most importantly, the victims of sexual abuse. She said the diocese, under the leadership of Bishop Roger Foys, entered into the agreement to bring healing to those victims.

"This is not a grudging settlement," she said. "It's an amicable settlement."

Foys became the bishop of the Covington Diocese in July 2002. Since then, he has settled 58 cases of sexual abuse, paying out more than $10 million to victims. His efforts included a widely praised offer to meet with any victims of sexual abuse, Huff said.

Chesley agreed that Foys' participation was vital to the settlement.

"There was a therapeutic aspect of this case ... that could not have been done without Bishop Foys' coming forward and accepting responsibility for the church," Chesley said.

The settlement calls for a four-tier matrix that ties an individual's specific claims to a monetary range of damage awards. Huff said such a matrix is similar to the way the diocese settled other abuse claims, and ensures fairness and equality to different people with similar claims.

So far, 382 people have filed claims under the settlement; those still have to be examined to determine their legitimacy and eligibility under the terms of the class-action.

Three of those who were representatives of the class spoke in favor of the agreement Monday. In emotional terms, all three praised the works of their attorneys and the diocese.

One woman, identified by the pseudonym Freida Foe, lauded the diocese "for stepping up and doing the right thing."

A second victim cautioned that no amount of money could compensate "for our loss of innocence and our disappointment in our church." Still, she said, "I am satisfied," with the settlement.

Chesley also brought in several national experts in the fields of sexual abuse in the church and class-actions lawsuits.

One was the Rev. Thomas Doyle, who first warned the church of its sexual-abuse crisis in 1985. Since then, he has been active in ministering to victims and overseeing settlements throughout the world. In addition to being active in all 50 states, he said he has been involved in cases in Canada, Mexico, England, Scotland, Ireland, Northern Ireland, Spain and Israel.

Doyle, a former canon lawyer, said class-action lawsuits are the best way to settle such claims. The Covington class-action is the first of its kind in the nation.

Doyle said few people are willing to come forward as individuals to discuss their abuse and seek healing. Many more will do so under the anonymity that a class-action lawsuit can bring.

"We cannot begin to understand the horrendous nature of what this is all about," Doyle said. "There is no amount of money - no amount - that can heal the spiritual damage."

Also speaking in favor of the settlement was Arthur R. Miller, a professor at the Harvard Law School, and author of the 30-volume rules of civil procedure. An expert on class-action lawsuits, Miller was loquacious in his praise of Chesley and the settlement.

He said the key to approval of a class-action lawsuit was finding it "fair, reasonable and adequate."

"It seems to me that if you view fair, reasonable and adequate as a zone, this settlement is within that zone," Miller said.


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