Despite Bankruptcy Ruling, Debate Rages over Who Owns Catholic Parish

By Emily Stimpson
Catholic Online
June 28, 2006

Huntington, Ind. (Our Sunday Visitor) Who owns your local parish: The members of the parish or your bishop? According to the Catholic Church (and its canon laws dating back a millennium or so), the answer is the parishioners.

While the bishop's name usually appears on parish-property deeds and while the bishop can close or suppress a parish, he technically does not own it. Rather he holds it in trust for the parishioners, who paid for its construction and continue to pay for its operation.

Unfortunately, not everyone agrees with that answer. Across the country a growing number of plaintiffs' attorneys are working to convince the courts of just the opposite.

And, until recently, that was also the case in the Diocese of Spokane, Wash. Last month, a federal district court judge overturned a lower court ruling finding that the bishop did indeed hold the property in trust for the parishioners. This is good news for dioceses across the country.

In Spokane, after the diocese filed for bankruptcy in December 2004, plaintiff's attorneys took issue with the chancery's list of what it owned and with what it held in trust or was simply affiliated. They filed a lawsuit in federal bankruptcy court, naming as defendants 177 Catholic entities in the diocese, including every Catholic parish and school, as well as Catholic cemeteries, a boys' ranch, different charitable trusts and even a thrift shop.

"If the bishop had any interest in the organization, if he was on the board of directors, if it had any affiliation at all with the diocese, it was named," said Shaun Cross, attorney for the Spokane diocese. "The general thrust was that the bishop is king and owns everything."

That's exactly how the bankruptcy court judge who ruled against the diocese last August saw it. Fortunately for Spokane, a federal district court judge disagreed.

That ruling was welcome news to the diocese and the members of Spokane's 81 parishes. Plaintiffs' lawyers can appeal or may go after parishes individually where priests were stationed.

Threats to parishes

Dioceses around the country are concerned about the trend by lawyers to list parishes as diocesan assets. If they succeed, many predict a whole new class of victims of the clergy sex-abuse scandals will emerge Catholic communities whose parishes, schools and apostolates are sold off to cover the staggering costs of abuse settlements.

"This is not an imaginary scenario," said Francis Maier, chancellor of the Archdiocese of Denver. "Unless these efforts are stopped, Catholic communities will be robbed of their resources and robbed of their future."

For several years now, the abuse scandal has indirectly threatened American parishes, with the costs of litigation and settlement compounding the problems of shifting demographics, low Mass attendance and a shortage of priests. Those costs have been, in some cases, the proverbial straw, forcing dioceses to close parish doors that might otherwise have remained open.

But a new and more direct threat has emerged in the last year as plaintiffs' lawyers have begun naming individual parishes, not just bishops, in their lawsuits. And, in dioceses forced to claim bankruptcy because of those costs, attorneys are maneuvering to redefine the church in such a way that every Catholic entity in the diocese could potentially be sold to cover settlement costs.

That's the case in the Diocese of Portland, Ore., where diocesan attorneys are appealing a federal bankruptcy-court ruling that determined all parish property in the diocese belongs to the bishop and can be sold, if necessary, to settle claims with abuse victims.


"The initial ruling in Spokane was a stunner, but it encouraged more attorneys to start going after individual parishes. This should slow down that juggernaut," Maier said.

But while it may slow the juggernaut's pace, the ruling is probably not enough to stop it altogether, both because it sets no binding precedent for other courts and because the ruling, by itself, cannot correct the fundamental misconceptions of the church that shape these types of lawsuits.

According to Mark Chopko, general counsel for the U.S. Conference of Catholic Bishops, plaintiffs' attorneys don't hesitate to go after individual parishes because they conceive of the church as a vastly wealthy institution with ready access to money.

"What they don't understand is that almost 90 percent of what people give to the church stays in their parishes, paying to keep the lights on or keep the kids in their schools supplied with No. 2 pencils," Chopko said.

An even more fundamental misconception is the tendency to conceive of the church as a monolithic corporation along the lines of General Motors. And such misconceptions, said Chopko, only work to the plaintiffs' benefit.

"They want to plant the idea in people's minds that the church is a corporation, and in going after the church, they're simply going after a corrupt corporation."

Similar battles

Although attorneys for the Diocese of Spokane managed to convince the courts differently, the same battle will likely be waged in dozens of other dioceses across the country in the coming years, especially if the recent efforts in California and Colorado to lift the statute of limitations on laws governing lawsuits concerning the sexual abuse of minors are repeated elsewhere. Then, even dioceses that seem to be on solid footing now, could find themselves facing an avalanche of litigation targeting their parishes.

"We have to continue treating the victims with compassion and try to reconcile with them," said Chopko. "That's part of being church. But we can't shut down our parishes, our ministries, our schools. We can't stop feeding the poor and caring for the homeless, because of these settlements. What we're pleading for is a sense of balance."

Maier agreed.

"Catholics have to be engaged on this. That doesn't mean we don't hold guilty priests and bishops accountable," he said. "Clearly we should and do. But if we don't draw the line somewhere, we're going to lose it all."

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Emily Stimpson writes from Ohio for Our Sunday Visitor.


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