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	Spokane Parishes Can't Be Sold to Pay Abuse Victims By Nicholas K. Geranios The Associated Press, carried in Seattle Post-Intelligencer June 16, 2006 http://seattlepi.nwsource.com/local/274163_spokane16.html Spokane -- A federal judge ruled Thursday that individual parishes of the Roman Catholic Diocese of Spokane are not owned by the bishop and thus cannot be sold by him to pay victims of clergy sex abuse. The ruling by U.S. District Judge Justin Quackenbush overturned a decision made in August by a bankruptcy judge who had ruled that the bishop held title to all parish assets and thus could sell them. It appeared to be a victory for about 80 parishes that risked losing churches, schools and other facilities to pay the claims of victims. It could be a loss for the abuse victims, who may be left with the much smaller assets of the bishop and insurance payments to divide in any settlement. In his oral ruling, Quackenbush reversed U.S. Bankruptcy Judge Patricia Williams. Quackenbush remanded the case back to Williams to determine once again the status of individual parishes in the case. Quackenbush also strongly encouraged the parties to settle the case, which already has cost millions in legal fees. "It reduces the pot at this point," said Gayle Bush, one of numerous lawyers representing victims. "This would be a substantial victory for the parishes." Shaun Cross, a lawyer for the diocese, called the decision a huge victory and predicted it would lead to serious settlement talks during a mediation session set for July 7. "The parishes paid for the land of the individual parishes, paid for the operation of the parishes and held a resulting trust," Cross said. "Yes, the bishop has legal title, but the beneficial interest is held by each of the parishes." But attorney James Stang, who represents many of the abuse victims, said Quackenbush's oral decision was somewhat unclear, and might require a trial to determine the exact status of parish assets. "We have to try to figure out what kind of values the parish properties will contribute to an overall settlement of claims," Stang said. Parishes could volunteer money to any settlement, or might be compelled in a trial to contribute money, Stang said. Quackenbush's decision could be appealed, although it would take a long time to reach an appellate court, Stang noted. "We are looking forward to trying to reach a resolution," Stang said. The diocese, which must pay the legal bills of victims, has said it is spending $300,000 to $500,000 a month on legal fees. In the past, Spokane Bishop William Skylstad has said the bishop's office has assets of about $11 million. But counting assets of individual parishes, the settlement pot had been estimated at more than $80 million. "Our consistent position has been that the bishop holds the parish properties in trust," said Skylstad, head of the U.S. Conference of Catholic Bishops. "Judge Quackenbush confirmed our position." The decision also "helps foster an atmosphere in which healing and reconciliation can continue to take place," Skylstad said. The diocese filed for bankruptcy protection in 2004, citing claims by abuse victims of about $81.3 million against assets of about $11 million. About 120 individual claims of sex abuse have been filed against the diocese. Skylstad was among clergy accused of sexual abuse. Earlier this month, Skylstad said a private investigator hired by his lawyer found no proof behind a woman's claim that she was abused as a girl when Skylstad was a priest in Spokane in the early 1960s. In May, Williams rejected a $45.7 million proposed settlement negotiated with 75 victims who filed claims saying they were sexually abused by priests. Williams ruled that any settlement must cover all victims. So far, the diocese has reached agreements with former insurance carriers to provide $16 million to victims. The diocese still is feuding with two former carriers and a trial is scheduled for the fall. Cross said insurance and diocese assets now total between $31 million and $33 million for the victim settlement pool. The diocese serves about 90,000 Catholics in 82 parishes in 13 Eastern Washington counties. Quackenbush's decision was immediately hailed by an attorney in Oregon who represents individual parishes in the bankruptcy filing of the Archdiocese of Portland. "The judge's decision recognizes what Oregon Catholics have always taken as an article of faith -- that contributions made to parishes are meant for the parish, not the Archdiocese," attorney Douglas Pahl said.
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