Court Upholds Dismissal of Claim in Milwaukee Archdiocese Bankruptcy

By Annysa Johnson
Milwaukee Journal Sentinel
March 4, 2014

The Catholic Archdiocese of Milwaukee, which faces more than a dozen civil fraud lawsuits over its handling of clergy sex abuse cases, filed for Chapter 11 bankruptcy protection in January. As the case proceeds, we'll have updates, analysis, documents and more.

A federal appeals court has upheld the dismissal of a claim in the Archdiocese of Milwaukee bankruptcy that was filed by a man who was molested by a priest at age 7 and who had signed a $100,000 settlement agreement with the church in 2007.

John Pilmaier had filed a claim in the bankruptcy asserting that the archdiocese lied to him to induce him to sign the agreement. The 7th Circuit Court of Appeals has ruled that Pilmaier's attorneys "failed to show that the alleged misrepresentations were a substantial factor in his decision to accept the settlement."

The ruling upholds earlier decisions by U.S. Bankruptcy Judge Susan V. Kelley and U.S. District Judge Rudolph T. Randa but applies a different legal standard.

Pilmaier is one of about 90 individuals with prior settlements who filed claims in the bankruptcy alleging they were misled by the archdiocese during their settlement talks. It was not immediately clear whether the appeals court decision in Pilmaier's case would affect those because of the narrow issues addressed by the court.

The appellate decision focused not on whether the archdiocese misled Pilmaier, but whether he adequately stated what effect that alleged misrepresentation had on his decision to sign the settlement agreement.

Pilmaier said he was disappointed by the court's decision but grateful that his case brought attention to the archdiocese's mediation program, which he and others argue took advantage of vulnerable survivors.

"Catholics should be particularly concerned that their church is comfortable lying to and deceiving the people they have hurt the most, the victims of clergy sexual abuse and their families," he said.

Pilmaier's attorney, Jeffrey Anderson, who represents most of the 575 men and women with child sex abuse claims in the bankruptcy, said an appeal was unlikely.

"That's something we're still deciding," Anderson said. "But the only appeal is to the U.S. Supreme Court, and it's highly unlikely that the court would hear the case because it is such a fact-specific determination."

Anderson said he believed the decision would have no effect on the other claims involving individuals with prior settlements for that same reason.

"Still, it does bear heavily on this survivor, and for that it's both sad and really hard for him and us to accept," Anderson said.

Jerry Topczewski, chief of staff for Archbishop Jerome Listecki, said in an email to the Milwaukee Journal Sentinel that each decision by the court brings the archdiocese closer to emerging from its 3-year-old bankruptcy.

Pilmaier, who filed a claim under seal in the bankruptcy, is identified in court records as Claimant A-49. The Journal Sentinel does not identify victims of sexual abuse without their consent. Pilmaier, who is active with the Wisconsin chapter of the Survivors Network of those Abused by Priests, agreed to be identified for a story on his case in July.

Pilmaier was molested by the late father David Hanser at his rectory after Hanser called him out of his second-grade classroom at St. John Vianney School in Brookfield in 1977. He settled with the archdiocese for $100,000 in 2007 but sought to set that aside in the bankruptcy, arguing that archdiocese Chancellor Barbara Anne Cusack lied to him during his mediation by stating that the church knew of no other allegations involving Hanser before he molested Pilmaier.

Cusack issued a statement in July in response to questions from the Journal Sentinel saying she "told the truth" in all of the 100-plus mediations in which she was involved, including Pilmaier's.

The archdiocese filed for Chapter 11 bankruptcy protection in January 2011 to deal with its mounting sex abuse claims. Under a reorganization plan filed last month, the archdiocese would set aside up to $3.7 million to compensate 128 victims who were molested by its own diocesan priests, with the possibility for more from insurance litigation.








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