Malpractice Case Filed by Spokane Diocese Sent to Court

Yakima Herald-Republic
December 18, 2014

http://www.yakimaherald.com/news/latestnews/2758443-8/malpractice-case-filed-by-spokane-diocese-sent-to

The Catholic Diocese of Spokane can take its legal malpractice claim to trial against a law firm that handled its 2007 bankruptcy over priest sex abuse claims, a federal bankruptcy judge ruled.

The decision on Wednesday means former Spokane bishop Blase Cupich, who now serves as archbishop of Chicago, will likely have to testify in February about his decision to seek $3.6 million in legal fees from the Paine Hamblen law firm.

“I have every reasonable expectation that he will testify,” said Robert Gould, who is representing the diocese in the bankruptcy proceedings, The Spokesman-Review reported.

Cupich contends that Paine Hamblen lawyers underestimated how many victims would come forward with sex abuse claims after the bankruptcy was first resolved.

A $1 million fund was created to handle future claims, based on Paine Hamblen’s estimates of how much it would cost the diocese to settle the allegations. But the fund was quickly depleted, raising the prospect of foreclosure on some Catholic parishes that had been put up as collateral.

In documents submitted to the court, Cupich said he believed Paine Hamblen bungled the bankruptcy. The bankruptcy was settled before Cupich became bishop of Spokane.

Paine Hamblen disputed the malpractice claims, pointing to the current vitality of the Catholic Church in Spokane following the $48 million bankruptcy settlement. The law firm also contended the diocese purposefully delayed filing its lawsuit until an unfavorable judge retired.

“You can end this now, and you should end this now,” Paine Hamblen attorney Ralph Cromwell said to U.S. Chief Bankruptcy Judge Frederick Corbit.

The judge, however, said he wanted to get it right because it would be unfair to dismiss the malpractice lawsuit without allowing all parties to testify in open court.

“There has been a lot of time, money and anger involved in this case,” Corbit said.