Ex-Spokane bishop denies smear tactics in diocese’s legal battle

By Kip Hill
Spokesman-Review
December 16, 2014

http://www.spokesman.com/stories/2014/dec/16/ex-spokane-bishop-denies-smear-tactics-in/

Cupich

Spokane’s former Bishop Blase Cupich disputes the testimony of a now-resigned top lieutenant, saying he never directed attorneys to sling mud at the law firm that guided the Spokane Diocese through bankruptcy.

In a declaration filed earlier this month with the federal Bankruptcy Court in Eastern Washington, Cupich said he directed diocese attorneys to “put pressure” on Spokane law firm Paine Hamblen by naming two of its top attorneys and their spouses in a legal malpractice lawsuit. But he didn’t advise them to throw mud at the firm “to see if any mud sticks,” as Steve Dublinksi, Cupich’s vicar general until his resignation last summer, testified in October.

“At no time did I say that we were filing the case as a way to throw mud at this law firm or besmirch their reputation,” Cupich wrote in a declaration, filed by the diocese’s legal counsel Dec. 3. “It was always a matter of trying to let them know we were serious and hoping that some aspect of our case would get their attention and stick with someone in the firm who could provide some common sense.”

The diocese, with the assistance of Paine Hamblen, filed for bankruptcy 10 years ago. It reached an agreement in 2007 to pay people who claimed abuse at the hands of priests dating back decades.

Instead of closing the chapter for the local church, the agreement left what was intended to be a narrow opening for new claims by people who did not participate in the bankruptcy.

That opening became widely used as more than 200 new claims eventually were filed. The claims threatened the church with foreclosures on its largest parishes, including Our Lady of Lourdes Cathedral.

Upon his 2010 arrival in Spokane, Cupich began investigating the work of Paine Hamblen on the case, eventually concluding the firm did not adequately anticipate the number of victims who might come forward after the well-publicized bankruptcy was settled.

His findings coincided with another mediated settlement that he helped orchestrate that staved off foreclosures and brought financial stability to the diocese.

Cupich has since been installed as the archbishop of Chicago by Pope Francis. The Spokane Diocese has not yet named a successor.

Paine Hamblen contends that Cupich hid his intentions to file a legal malpractice lawsuit for years as he fashioned settlements with the people who filed new claims.

Cupich also rebutted those claims, saying it was Michael Hogan, a federal judge who agreed to mediate the new claims, who informed him that Paine Hamblen had bungled the bankruptcy.

“In the spring of 2011, I decided to contact Seattle attorney Mr. Robert Gould to learn more about what would be involved in potentially filing a malpractice action,” Cupich wrote in his declaration.

The archbishop said he was advised not to file the malpractice lawsuit while the diocese was involved in mediation. However, Paine Hamblen says the delay was to gain a strategic advantage, as the judge who handled the previous bankruptcy was approaching retirement and the diocese believed its chances of attaining an award in excess of $4 million from the law firm would be easier with another judge on the bench.

Dublinski left the diocese last summer, citing “policy differences” with Cupich in a letter obtained by the media. The archbishop says in his declaration that Dublinski first approached him after the legal malpractice lawsuit was filed. Dublinski claimed to be having trouble sleeping and was considering resigning. Cupich persuaded Dublinski to stay.

Then this summer, Dublinski resigned. Cupich learned of the departure when he found a resignation letter and office keys Dublinski left on his desk.

The diocese has since dropped one of the two named Paine Hamblen attorneys from its lawsuit, Greg Arpin. The other, Shaun Cross, left the firm shortly after the diocese bankruptcy was finalized.

Frederick P. Corbit, the chief federal bankruptcy judge for the Eastern District of Washington, will hear arguments Wednesday in Spokane about whether the legal malpractice lawsuit should proceed.