On Eve of Trial, San Diego Diocese Files for Bankruptcy Protection

By Michael Fisher
The Press-Enterprise [San Diego CA]
February 27, 2007

On the eve of trial, the Roman Catholic Diocese of San Diego announced it is filing for Chapter 11 bankruptcy Tuesday just hours after its final settlement offer was rejected by the attorneys for dozens of people who claim to have been sexually abused by priests.

The filing, which drew swift condemnation from victims' advocates, immediately halts the more than 140 lawsuits targeting the diocese, including a trial scheduled to start today in San Diego involving a longtime Inland priest. A Colorado woman accuses Monsignor Patrick O'Keeffe of sexually abusing her at St. Adelaide Church in Highland in the early 1970s.

Legal experts said Tuesday's bankruptcy filing will not stop litigation against the San Bernardino Diocese, named in at least 17 pending lawsuits, including some targeting the San Diego Diocese. It was unclear if Tuesday's filing will unravel the San Diego Diocese's pledge to indemnify the San Bernardino Diocese in cases alleging clergy sexual misconduct before 1978, when the San Diego Diocese managed Inland parishes.

Unlike its neighboring diocese, the San Bernardino Diocese has "no plans to file for bankruptcy at this time," said the Rev. Howard Lincoln, spokesman for the 1.2 million-member Inland diocese.

"We have a comparatively low number of cases against our diocese ... as compared to San Diego, at more than 140, which means our total potential liabilities are much less," Lincoln said. "We believe we have sufficient insurance coverage to handle pending claims."

In a pastoral letter issued Tuesday, San Diego Bishop Robert Brom said the church "put money on the table that would have stretched our financial capability to the limit, but demands were made which exceeded the financial resources of both the diocese and our insurance carrier."

Those suing the diocese and victims' advocates criticized the 11th-hour bankruptcy as a tactic aimed at further delaying the long-stalled lawsuits while also preventing public disclosure of the role church leaders played in protecting priests accused of sexual misconduct.

"This is a morally bankrupt move by a self-serving bishop who's afraid to face tough questions about coddling and concealing pedophile priests, said Mary Grant, western regional director of the Survivors Network of those Abused by Priests, or SNAP, a nationwide victims' group.

Accuser Responds

The Colorado woman who accuses O'Keeffe of abuse said she was not surprised at the diocese's move to avoid today's trial in her lawsuit and dozens of other cases.

"This hasn't been about the money," Nicki Rister said. "It's been about exposing the Catholic Church. They are absolutely scared to death of what (a trial) is going to show the public.

"It's going to show them that the church destroyed documents and they were hiding all kinds of pedophiles and they were moving them around," she said.

O'Keeffe, now 70, spent 35 years working at Inland churches. He was dismissed from all parish duties in 1994 after the San Bernardino Diocese settled a lawsuit brought by one of three adult women who had accused him of sexual misconduct. He returned to his native Ireland in 2002.

In California, past clergy abuse cases have settled for an average of $1.2 million to $1.6 million each, attorneys said. At that rate, the San Diego Diocese faced having to pay up to $225 million to settle the lawsuits.

With the filing, the San Diego Diocese becomes the fifth of the nation's 196 dioceses to declare bankruptcy. The others are dioceses in Tucson, Ariz.; Davenport, Iowa; Spokane Wash.; and Portland, Ore.

Brom said the decision to declare bankruptcy was authorized by diocesan committees of lay people and priests as early trial judgments against the diocese stood to deplete it resources so "that there would be nothing left for other victims."

"We have concluded that Chapter 11 reorganization is now the best way available for us to compensate all of the victims as fairly and equitably as our resources will allow," Brom wrote. "To this end, we are presenting to the court an accurate statement on available diocesan assets. ... Our participation in this process will demonstrate that this is not a 'cop out,' but a sincere effort to face up to our responsibility."

The bankruptcy petition was set to be filed Tuesday night after the diocese's final settlement offer was rejected by attorneys for those suing the church, said Michael Webb, an attorney for the San Diego Diocese.

"It was a large amount. I won't say how much," Webb said of the offer. "There was a wide disparity."

Terry Giles, an attorney for Rister, disagreed, calling the San Diego Diocese's offer "offensive."

"It was ridiculous in form and substance. It was never defined how it would be paid or when it would be paid. They indicated it would take years and they indicated they would go into bankruptcy either way," Giles said.

Bankruptcy Court

The clergy abuse lawsuits targeting the San Diego Diocese will now be heard in bankruptcy court, and those suing join the diocese's creditors, said Dan S. Schechter, a law professor at Loyola Law School in Los Angeles.

"It's conceivable that settlements could be reached without trial," Schechter said, adding that would allow the San Diego Diocese to resolve its cases in bankruptcy court without publicly revealing how church leaders managed priests accused of misconduct.

Although the bankruptcy filing halts the pending cases against the San Diego Diocese, a co-defendant such as San Bernardino would not be afforded the same protection without filing bankruptcy as well, Schechter said.

"Those cases could go forward against the San Bernardino Diocese independently," he said.

If the San Diego Diocese reaches settlements through the bankruptcy court, the San Bernardino Diocese might be able to participate in the deals to resolve its part of the cases targeting both dioceses.

Attorneys for those suing the dioceses said Tuesday that they intend to aggressively pursue portions of their cases targeting the San Bernardino Diocese.

Officials with both the San Diego and San Bernardino dioceses said in 2004 that they had reached an agreement in which San Diego would indemnify the San Bernardino Diocese for costs it incurred defending or resolving cases alleging priestly misconduct prior to 1978.

Schechter said that agreement could result in the San Bernardino Diocese joining the list of creditors seeking compensation from the San Diego Diocese. Or the deal could be voided by the bankruptcy judge, he said.

More than 20 lawsuits have been filed targeting 14 Catholic priests or religious brothers who worked in the Inland area since the mid-1950s.

Legal Limbo

Rister's lawsuit is among 800 in Southern California that have been stuck in legal limbo for three years as attorneys tried to hammer out settlements. With the O'Keeffe case nearing trial, last-ditch settlement negotiations resumed earlier this month.

Given the sheer number of pending cases, the clergy sexual abuse litigation is not unlike other types of cases where large volumes of claims are filed, such as tobacco or gun lawsuits, said Timothy D. Lytton, a law professor at Albany Law School in New York and author of the forthcoming book "Holding Bishops Accountable: How Lawsuits Helped the Catholic Church Confront Clergy Sexual Abuse."

But settling might not be on the minds of all those who are suing over claims of childhood molestation by a priests.

"Most victims claim their primary motivation for suing is to have an opportunity to tell their story publicly and to be able to hold the church publicly accountable for what they claim was done to them," Lytton said.

The Orange County diocese in 2005 agreed to pay $100 million to 86 victims as part of a settlement that also required the release of church records outlining how some accused priests were managed by church leaders.

In September 2003, the Boston Archdiocese settled more than 550 lawsuits for $85 million, but without the same disclosures, leaving some feeling "cheapened by the process," Lytton said.

More than 800 lawsuits alleging sexual misconduct by Roman Catholic priests have been filed in Southern California since the scandal erupted in 2002.

2002: Monsignor Patrick O'Keeffe is charged with molesting a teenage girl in 1972 at a Highland church. Charges are later dropped because the accusations are too old.

2003: All Southern California lawsuits alleging clergy sexual abuse are assigned to a Los Angeles County judge to coordinate.

2003: The San Bernardino Diocese agrees to pay $2.1 million to settle its part of a lawsuit filed by two former altar boys molested by a priest.

2006: A judge sets a November trial date for the first of the more than 140 clergy abuse lawsuits pending against the dioceses in San Diego and San Bernardino. The cases are later postponed.

February 2007: A lawsuit filed by the woman who claims O'Keeffe abused her in 1972 is set to become the first Southern California clergy abuse case to reach trial until the San Diego Diocese files bankruptcy, halting all pending litigation.


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