By Mark Sauer and Jeff McDonald
The Union-Tribune [San Diego, CA]
June 1, 2007
http://www.signonsandiego.com/news/metro/20070601-9999-7m1diocese.html
A federal judge wants to borrow an idea from Major League Baseball to settle the key issue of how to put monetary values on cases of child sexual abuse by Roman Catholic priests.
Judge Louise DeCarl Adler outlined a plan yesterday in which attorneys for the Diocese of San Diego and those representing about 150 abuse victims would each submit a dollar amount for a specific case and an arbitrator would choose one of the two figures.
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| Bishop Robert Brom |
Under the plan offered by Adler: A victim's attorney might argue an egregious case involving the long-ago rape of a child by a priest is worth $1.6 million based on the facts of the abuse and on settlements or verdicts elsewhere in similar clergy cases. The diocese might argue that case is worth half that amount, or $800,000.
The arbitrator chooses one figure and that decision is binding, the same as when baseball arbitrators choose between a contract amount submitted by a player's agent and that submitted by his team.
As often happens in baseball negotiations, fear of losing big in looming arbitration tends to force a settlement, Adler said. She ordered attorneys for both sides to meet with U.S. Magistrate Judge Leo Papas before June 28 to discuss her arbitration proposal.
Attorneys representing the 150 plaintiffs whose lawsuits triggered the diocese's February declaration of bankruptcy welcomed Adler's idea on how to value the abuse cases.
"She is trying to lead us to settlement. That's the ultimate goal, and this is an interesting alternative that could work well," said San Diego attorney Irwin Zalkin, who represents dozens of sexual-abuse plaintiffs.
Diocese attorney Micheal Webb, who sat alongside Bishop Robert Brom at a contentious question-and-answer session earlier yesterday, said he needed time to study Adler's proposal and discuss it with church officials.
"I plan to talk to Mr. Papas very soon," Webb said. "Nobody is wedded to this plan yet; I don't accept it or reject it out of hand."
During questioning by plaintiffs' attorneys in a morning session, Brom acknowledged that abuse by priests has caused severe emotional damage in victims' lives. Such abuse "is tremendously harmful and shameful and has consequences," he conceded.
The morning hearing also aired questions about the accuracy of asset values the diocese reported to the court.
Plaintiffs' attorneys contended the diocese has systematically low-balled the value of its properties and holdings to the bankruptcy court in order to minimize the amount of money it might eventually have available to pay victims.
"It would appear that they're hiding assets," said Andrea Leavitt, who represents nine of the clergy-abuse plaintiffs.
The San Diego diocese declared bankruptcy Feb. 27, the day before the first of the abuse lawsuits was scheduled to go to trial, putting them on hold.
That same day, a $65 million deal for a diocese school property was changed. Instead of paying the entire amount at closing, William Lyon Homes would pay $25 million in cash and $40 million over several years for the former University of San Diego High School campus in Linda Vista, records show.
This amendment to the deal would have likely delayed settlement payouts to victims, their attorneys said.
Church officials said Lyon Homes demanded the change and maintained that the timing of the agreements was unrelated to the bankruptcy filing.
In its initial reorganization plan, the diocese offered to pay $95 million to sex-abuse victims, with half the money coming from insurance. Attorneys for the victims pointed out that the Lyon Homes deal alone would generate significantly more than the diocese's $47.5 million share of the settlement.
They also noted that an offer of $31.5 million from Shea Homes for the soon-to-close Marian High School property in the South Bay could increase the settlement pool far beyond what the diocese has offered.
The diocese also was questioned about a $14.5 million payment it received from a corporation it set up to build the new Cathedral High School campus in Carmel Valley. The same amount was eventually transferred to a trust fund the diocese contends is restricted.
Diocese officials testified they do not know how that transfer happened.
Mark Sauer: (619) 293-2227 mark.sauer@uniontrib.com
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