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	More Church Properties Face Liens By Sam Hemingway Burlington Free Press July 5, 2009 http://www.burlingtonfreepress.com/article/20090705/NEWS02/90704005/-1/NEWS05 A drop in the value of church property has led a Burlington judge to put liens on four church-owned rest homes and part of the state Roman Catholic diocese’s investments in order to cover monetary awards in two priest sex abuse cases. Among the properties affected are the St. Joseph’s Home for the Aged on North Prospect Street in Burlington, rest homes in Derby and Rutland, the now-closed Camp Holy Cross site in Colchester and $1.8 million of the diocese’s $8.5 million financial portfolio. The move was made after a real-estate appraiser hired by the diocese determined the 32-acre site of the diocesan headquarters on North Avenue in Burlington was worth $6 million, not the $11 million amount assigned to the property on the city’s grand list. The two cases resulted in $12.3 million damage awards following separate jury trials in 2008. To assure payment of the award, liens were placed on the headquarters property while the diocese appealed the verdicts to the Vermont Supreme Court. Both cases involve men who were altar boys at Christ the King Church in Burlington in the late 1970s, when they claim the Rev. Edward Paquette molested them. According to church documents, the diocese knew Paquette had molested children in three states, including Vermont, before assigning him to Burlington. “The court finds that there is no bond, insurance or other security available to satisfy the judgments, other than the property and assets of the Roman Catholic diocese,” Judge Dennis Pearson wrote in a five-page June 19 ruling on file at Chittenden Superior Court. The attorney for the two men, who also represents 20 other former altar boys alleging long-ago priest molestation, says he plans to file court papers claiming the diocese has transferred millions of dollars of assets to other entities so his clients can’t get at them if they win their cases. “We anticipate bringing a fraudulent-conveyance action against the diocese for having transferred 100 properties and financial assets out of its name and into other entities it created,” lawyer Jerome O’Neill said in an interview last week. Diocesan attorney Tom McCormick said O’Neill’s allegation was groundless. “He’s wrong about all of that,” McCormick said. “It’s not anchored in evidence or affidavits.” Paperwork filed with the court in advance of Pearson’s ruling on the liens offers a rare glimpse of the business side of the statewide diocese. The documents show the diocese has four investment accounts and owns hundreds of stocks and bonds. The portfolio was found to be worth $8.5 million in April, up from $7.3 million at the end of 2008 but still less than its original cash value of $10.5 million. The portfolio is managed by investment advisors at Chittenden Bank. In terms of real estate, an insurance company has estimated the replacement cost of all buildings owned by the diocese at $400 million, but there is no accounting in the court papers for the value of land owned by the diocese. Among the properties now subject to liens under Pearson’s ruling, the St. Joseph’s Home for the Aged property was worth $1.9 million. The Loretto Home in Rutland was valued at $1 million; Michaud Memorial Manor in Derby, $431,000; and the St. Joseph’s Kervick Home in Rutland, $250,000. The figures were based on municipal appraisals. McCormick said the financial documents show the diocese is not a wealthy entity, and more large jury verdicts, if they occur, pose a threat to the church’s financial stability. “The diocese has limited assets,” McCormick said. “These kinds of verdicts cannot continue. The diocese does not have the assets to pay the ongoing costs of these verdicts.” McCormick said the diocese believes the court was wrong to allow the juries to award punitive damages to the former altar boys in the two 2008 cases and hopes the state Supreme Court agrees. Of the $12.2 million awarded the two men, $11.1 million of it was for punitive damages, or money the diocese must pay as punishment for the decisions that allowed Paquette, a known pedophile, to gain access to altar boys. “How many times is the diocese going to be punished for the same mistake?” McCormick said. O’Neill said the liens were filed to protect his clients’ rights to whatever the final damage award is, and they have no plans to take control of the properties involved. “We have no intention of owning any of these,” O’Neill said. “We are just requiring the diocese to face reality and come up with the money to pay these judgments.” The financial documents also show, in 2006, the diocese transferred $4,819,000 in investments to an entity set up to manage pensions for church employees, and another $3,704,000 to a trust associated with Vermont Catholic Charities. The moves came shortly after the diocese agreed to pay Michael Gay, another altar boy molested by Paquette, $965,000 to settle his claim against the diocese. O’Neill contends the transfers, as well as Bishop Salvatore Matano’s decision to set up individual charitable trusts for some 400 parishes around the state, were fraudulent because there were done to keep his clients from having access to the assets if they won their cases. “Defendant diocese has been seeking to move its assets out of the reach of its creditors, and specifically those whom its priests molested as children,” O’Neill claimed in a May 22 filing. The diocese, in papers filed at Chittenden Superior Court last month, says it wants to meet with O’Neill to try to settle some or all of the remaining cases through mediation, rather than undergo more trials. “If the court is inclined to order a single mediation for a group of these cases or all of the pending cases against the diocese, the diocese is prepared to explore such an approach in the interest of efficiency,” a June 11 motion said in part. O’Neill disputed the sincerity of the diocese’s request, contending a secret mediation session held in November 2008 had turned out to be a “total waste of time and money.” “All the mediation did was to give our clients a false hope that the diocese was genuinely interested in resolving their cases on fair terms,” O’Neill charged in court papers. “Nothing could have been further from the truth.” O’Neill, in an interview, said a court order prevented him from providing details about what happened at the mediation sessions. He said the diocese in 2006 could have settled many of the pending cases for about the same amount of money Gay received, but the size of the two 2008 damage awards has raised the amount of money his clients will accept to resolve their claims. “This is the result of the choice the diocese made to try these cases,” O’Neill said. Contact Sam Hemingway at 660-1850 or shemingway@bfp.burlingtonfreepress.com. 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