Family Drained Priest Abuse Victim's Settlement Accounts

By Beth Miller
News Journal
July 30, 2014

http://www.delawareonline.com/story/news/local/2014/07/30/records-family-drained-priest-abuse-victims-settlement-accounts/13390945/

A 43-year-old Newark man who was sexually abused by a Catholic priest was victimized again by family members who used much of his $347,901 in settlement money to buy cars, jewelry and other property, a Chancery Court judge said in a scathing opinion Tuesday.

Duane Hardy was among more than 150 abuse victims who reached settlement with the Catholic Diocese of Wilmington in U.S. Bankruptcy Court in 2011. He was among those who had been sexually assaulted by the late Rev. Edward B. Carley, who died in 1998.

The money was meant to supplement his disability payments and provide for his care for a lifetime. A trust set up in his name, though, was drained by two family members, court documents say – his older sister, Sherry Hardy, and her son, Michael Hardy – to barely $3,000 in just five months' time.

Court records show both denied cheating their relative out of his funds, saying their purchases were made with his consent and often for his benefit. Neither Sherry nor Michael Hardy could be reached for comment Wednesday.

But Vice Chancellor Donald F. Parsons disagreed, ruling that Hardy's kin had failed in their duty, either as a result of intentional misconduct or gross negligence. Records were scarce, sometimes contradictory, and some statements were lies, Parsons said.

He removed them as trustees and said Hardy was entitled to recover $158,400 the duo spent on cars and house renovations and $90,000 in other unaccounted-for expenditures.

The ruling is a "Pyrrhic victory," though, said attorney Edward H. Wilson II of Roeberg Moore & Friedman, who represented Duane Hardy with lead attorney William Moore in the Chancery Court case. His client is unlikely to get much back, Wilson said.

"He was taken advantage of by people he should have been able to trust," Wilson said. "His settlement would never heal his emotional scars from his abuse, but it could have made his life comfortable until he dies."

Because of ongoing struggles with alcohol, drugs and persistent mental illness, Hardy asked the attorneys representing him in the civil abuse case – the firm of Jacobs & Crumplar – to help him protect his settlement money. Thomas Crumplar said a trust attorney not in his firm set up the trust with two of Hardy's family members as co-trustees.

The family members had been helpful during the Diocese's bankruptcy negotiations, Crumplar said, helping to relay messages back and forth from Duane Hardy, who was imprisoned at the time.

"His family was involved in assisting him in the lawsuit," said Crumplar, whose firm worked with The Neuberger Firm in representing many abuse claims. "There were no signs that they didn't have his best interests. But sadly, it appears that they didn't."

The money went quickly, court documents show.

Hardy's award included several disbursements – the first for $533,508.13, according to court documents. After attorneys' fees and other costs were deducted, Hardy got his first settlement check – $347,901 – on Oct. 27, 2011, and two accounts were opened at WSFS Bank.

Hardy's kin found and furnished an apartment for him in Newark, and he moved out of the Wilmington home he had shared with them on West Third Street. They paid several months of rent in advance and provided about $10,000 toward trips to Atlantic City, New Jersey.

Court documents show Duane Hardy saw little of the remaining money.

Instead, cash gifts of at least $36,700 were distributed to assorted friends and family. About two weeks after opening the trust accounts, Sherry Hardy bought a 2011 Lincoln for $49,900, and Michael Hardy bought a 2006 Mercedes Benz for $36,000 with cash from the account.

By December, people were asking Duane Hardy questions about his family's spending sprees. They had spent about $75,000 to renovate their West Third Street home, including new granite counters and new appliances – investments they said would pay off for Hardy when the property was sold.

As questions arose, his kin responded by getting Hardy to sign a release, granting them free use of the cash "for business and personal use." By the end of December, the trust had shrunk to $106,900.

Hardy was unable to get his kin to show him any account records, so he went to the bank to see for himself – stunned to see how low the balance had dropped. His kin then moved the cash into two other accounts without Hardy's knowledge, court documents show.

In February, Sherry Hardy wrote a letter to the Jacobs & Crumplar law firm, instructing them not to deal with Duane Hardy, but only to communicate with her and her son, Michael. Crumplar says he froze the accounts at that point.

Later that month, with less than 10 percent of the money remaining, Duane Hardy filed a complaint against his kin, only to drop it after they promised to buy him a vehicle and show him the account statements.

His kin later transferred vehicle titles to others and shifted other resources in an attempt to avoid losing them to legal challenges, Parsons wrote in his opinion.

"It's disgusting. It's shameful," Wilson said. "What they didn't count on was his willingness to fight them in court."

Wilson said he and Hardy's lead attorney, Bill Moore, do not expect to be paid for their efforts on their client's behalf.

"All this could have been avoided if a professional trustee was appointed," Wilson said. "Instead, these defendants, who were both unemployed, on welfare, on unemployment, with no high-school degrees and prior debt judgments against them, were selected."

Contact Beth Miller at (302) 324-2784 or bmiller@delawareonline.com. Follow on Twitter @BMiller57.