By Diane Weaver Dunne
Hartford Business
September 28, 2009
http://www.hartfordbusiness.com/news10370.html
Lawyers representing 84 plaintiffs in the child sex abuse lawsuits involving a former doctor at Saint Francis Hospital will meet with hospital representatives for three days in early October to negotiate a settlement.
As the hospital faces potential settlements of possibly $50 million or more, litigation experts say that its weakened financial status could serve as an advantage during the mediation scheduled for Oct. 6, 7 and 8.
Saint Francis ended fiscal year 2008 with a $32 million deficit and doubled its outstanding debt to $268 million to construct a new 10-story patient tower.
The settlement talks pertain to sex-abuse claims stemming from George Reardon, an endocrinologist employed by Saint Francis for nearly three decades.
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West Hartford Police estimate there could be in excess of 500 to 600 victims of Reardon, accused of sexually assaulting and photographing children in sexually provocative poses — often with their siblings — in his office at the hospital.
To date, only 135 of the victims have come forward in lawsuits against the hospital. Of that, 84 are under the age of 48 and eligible to file a lawsuit under the state's statute of limitation laws.
An additional 98 victims identified by West Hartford Police are not part of any current lawsuits, said Lt. Donald Melanson, a detective with the youth division of the West Hartford Police.
When the Catholic Church sex-abuse claims were negotiated, the parties developed a formula in which the most injured received the largest amounts. The settlements resulted in $1.8 billion being paid out to plaintiffs between 2004 and 2008.
Between 19 percent and 49 percent of sex abuse settlements related to religious institutions have been covered by insurance policies in place at the time the abuse occurred, according to the 2009 report by the Center for Applied Research in the Apostolate at Georgetown University. Some dioceses sold off many of their real estate assets to cover the settlements.
Bargaining Chip
Collin Zick, a partner of Foley Hoag, a business law firm specializing in litigation and arbitration with offices in Boston and Washington, D.C., said that Saint Francis' weakened financial status could be its bargaining chip for the negotiations.
"The worse off you are, the more leverage you have," said Zick, who added, "[They should say] we are not doing well. We can't afford to pay you a lot of money. We feel terrible about this and we want to provide something. Let's be realistic and get a number. Let's not get caught up in litigation for years. I can give you a few dollars for now, but if you are holding out for a pot of goal, good luck to you," Zick said.
If forced to go to trial, legal costs would be extensive, Zick said. He suggested that the hospital make clear to the plaintiffs that if forced into bankruptcy, they would become creditors, minimizing their monetary payment to just pennies on the dollar.
If the settlement does result in a significant multimillion settlement, Zick said the hospital will unlikely borrow the money, or use its charitable foundation, but rather sell off assets or liquidate its investments.
"[Donors] really don't want to be paying money to address some irreprehensible behavior of an individual," Zick said.
According to Saint Francis' 2008 audited financial report, its total net assets were $213 million, and its unrestricted net assets were $130 million.
James T. Murphy, a civil trial lawyer in Rhode Island with extensive experience representing religious and youth organizations accused of sexual misconduct, said that usually the accused pedophile is either dead or has no assets. The institution then becomes responsible because it put the pedophile in the position to commit the abuse.
"The anger level on the part of plaintiffs who were hurt [in sex abuse cases] is not usually found in an ordinary medical malpractice case. You are dealing with a deep, deep hurt to the soul and psyche. How do you ever put a dollar figure on that? How do you heal that?" Murphy asked.
The negotiation will need to address what the settlement money will mean to the plaintiffs versus how that money could be used to benefit the community, Murphy said.
It is also important that the defendant institution — Saint Francis — have established new policies and procedures that would prevent future sex abuse from occurring again, Murphy said. Saint Francis officials did not respond to a request for comment.
Potential For More Claims
Court documents filed in the Superior Court Complex Litigation Docket in Waterbury allege numerous instances of sexual abuse of young children by Reardon. According to the documents, Reardon would lock children alone in examining rooms for several hours, would remove children — even those who were not his patients — from their beds in the pediatric ward in the middle of the night to be brought to his office, and would bring children in and out of the hospital in the middle of the night as well.
"The victims that we have spoken to have given descriptions that coincide with what we've seen in the photos," said Melanson.
Police recovered between 50,000 and 60,000 photographs and 130 reel-to-reel motion pictures from Reardon's former West Hartford home in November 2007.
"It is very difficult — based on number of slides and people who have not been identified and those who have come forward — to determine [the exact number of victims]," Melanson said.
Reardon gained access to the children under the guise of conducting an ongoing growth study for decades, in which he never was required to provide a written report to hospital officials.
The lawsuits allege that his activities could not have gone unnoticed by other hospital employees.
Several complaints had been previously lodged against Reardon, but hospital officials and the state Department of Health cleared the doctor until 1993, when he voluntarily surrendered his medical license. He never faced criminal charges. Reardon died in 1998.
Richard Kenny, co-counsel with Attorney Susan Smith, represents 36 of the 84 victims subject to the mediation talks in October. He said that most of the abuse happened after 1970 when a complaint was lodged by a victim's parent who was reportedly promised by a hospital official that Reardon would not be permitted to hurt other children again.
Ten other law firms will be involved in the mediation talks, Kenny said.
United Strategy
"[The law firms] have had many meetings. Our approach will be very unified. There is no division with the plaintiffs' attorneys on this. We all stand or we all fall."
Attorney Paul Edwards, a partner of the law firm Stratton Faxon that is representing 23 plaintiffs subject to the October negotiations, said their "stories of the abuse are horrifying."
"Anything would not be a surprise based on what I have seen and heard, nothing would not surprise me about Dr. Reardon's abuse of those children inside the walls of that hospital. If these cases go to trial, there will be an overwhelming amount of information revealed about what was going on inside that hospital."
Edwards said that a lot of the testimony has been protected under protective order.
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