Archdiocese to tackle economic settlements for abuse victims

By Jean Hopfensperger
Star Tribune
October 14, 2014

http://www.startribune.com/local/east/279227102.html

This May 16, 2014 photo from a video deposition provided by Jeff Anderson & Associates, shows former priest Thomas Adamson, who is at the center of a lawsuit against the St. Paul-Minneapolis Archdiocese in which a settlement was announced Monday.

The historic settlement of a clergy abuse lawsuit Monday now moves to a sticky second phase as attorneys try to negotiate financial settlements for dozens of other church lawsuits either filed or pending court action.

Under the “new era of cooperation,” the Archdiocese of St. Paul-Minneapolis and victims’ attorneys will work to forge out-of-court settlements for the lawsuits filed since Minnesota relaxed its statute of limitations on older abuse cases last year. That includes three cases scheduled for trial in January.

“We agreed to a noneconomic portion of a global settlement; now we will try to achieve an economic portion of a global settlement,” said Charles Rogers, a Minneapolis attorney recently retained by the archdiocese to negotiate with victims’ attorney Jeff Anderson.

Anderson said his office has filed 16 lawsuits to date on behalf of alleged victims of clergy sex abuse. Dozens more are pending. And the Minnesota Child Victim’s Act, which opened the doors to lawsuits from decades-old abuse, doesn’t expire until May 2016. Those cases also will need to be negotiated.

Neither side predicts that a global economic settlement will be easy. But it makes more sense to assist victims than to pour money into lawyers fees and litigation, they said.

“We still have the ability to bring cases [to court] if we need to, the ability to bring cases to trial if we need to, but we intend to reorder priorities so our energy is going to resolution and reconciliation instead of confrontation and litigation,” said Anderson.

The focus on economic settlements comes a day after the opposing parties stood before a packed news conference in St. Paul and announced they had reached agreement on a 17-point plan to overhaul how the archdiocese handles abuse complaints.

That plan was part of a settlement in the first lawsuit filed under the Minnesota Child Victim’s Act. The lawsuit was filed on behalf of a Twin Cities man who was sexually abused by former priest Tom Adamson in the 1970s, after the priest had been transferred from the Winona Diocese where he also had been accused of abuse.

In the weeks and months ahead, both sides will meet to review pending cases of clergy sex abuse, archdiocese finances, insurance policies and more, attorneys said. At this point, it’s impossible to predict the price tag for the archdiocese or financial settlements for abuse survivors.

Average payout: $100,000

The average settlement for victims in these global settlements is about $100,000, said Charles Zech, director of the Center for the Study of Church Management at Villanova University in Pennsylvania. Some abuse victims receive more, some less, depending on the severity of the abuse, he said.

A global settlement for all victims is a much more fair method of compensation than the first-come, first-served basis used by courts, said Zech. Plaintiffs in the early lawsuits often receive much more than those at the end, he said.

A financial audit of the archdiocese released earlier this year showed a $3.9 million deficit. But Thomas Mertens, chief financial officer for the archdiocese, concluded that as of June 30, “the financial condition of the archdiocese is solid,” even with the liability looming from the recent wave of abuse lawsuits.

The audit acknowledged the archdiocese is uncertain how it will pay for future claims.

“Unknown claims can go back many years where insurance may not have been available or coverage limits were minimal,” the audit noted. “Also punitive damages and other claims may not be covered by insurance at all.”

The Rev. Charles Lachowitzer, vicar general for the archdiocese, said at Monday’s news conference that bankruptcy was an option that the archdiocese would consider — but just one option.

Risks of bankruptcy

The Rev. James Connell, a retired Catholic priest and certified public accountant in Milwaukee, said the bankruptcy route has risks.

The Milwaukee archdiocese, for example, filed for bankruptcy in July 2011, and settlements with child abuse victims and others still haven’t been reached, said Connell, a member of a national group called Catholic Whistleblower.

Legal wrangling over which church assets actually belong to the archdiocese is part of the delay, he said. Insurance companies are disputing some of the claims. And a flood of 571 claims, not all for child sex abuse, were filed against the archdiocese before the window to file was closed in February 2011, he said.

“Clearly those types of things are a risk,” said Connell. “At the same time, the driving force [behind such settlements] is the good will of all concerned.”

That good will, at least for now, is present in the Twin Cities.

“You can look around the country and there’s a model that you fight every claim,” said Rogers. “A lot of money goes to lawyers instead of victims.

“We all want the same thing — healing and a fair resolution,” he said. “We need to move on, but never forget.”