Hundreds of Claims against Rochester-area Catholic Parishes Blocked, but at What Cost?
By Steve Orr
The parishes that make up the Diocese of Rochester, some of them already hobbled by declining attendance and flagging finances, are facing a new threat. A wave of litigation. The diocese’s parishes, as well as charitable affiliates like the Catholic Youth Organization and Camp Stella Maris, are facing more than 400 legal claims that allege sexual abuse of young people by priests and nuns connected to those organizations. Some parishes, like St. Kateri Tekakwitha in Irondequoit and Holy Name in Elmira, have been named in more than two dozen claims. Catholic Charities and the CYO have been named 15 times. If the lawsuits went ahead, the cost of defending them might be enough to put many parishes and affiliates permanently underwater. But for now, those lawsuits are on hold. U.S. Bankruptcy Judge Paul Warren, convening court remotely as the coronavirus pandemic plays out, has ordered that all of those claims be temporarily frozen. Warren is overseeing the diocese’s Chapter 11 bankruptcy case, which was filed in mid-September. The bankruptcy filing was driven by the need to cope with a wave of lawsuits filed under New York’s Child Victims Act, which allowed victims of child sexual abuse to bring suit against their abuser, no matter how long ago the act occurred. The diocese’s lawyers used only veiled language to describe their purpose, saying they wanted to "undertake an orderly process" to discuss those 400-plus legal claims privately. Lawyers involved in those discussions have declined to elaborate, but the experience in other diocesan bankruptcy cases provides clues as to what they've been discussing. The diocese’s goal, almost surely, is to short-circuit those abuse lawsuits for good, instead resolving the claims against parishes and other organizations as part of the settlement of its Chapter 11 case. That would spare the parishes from having to defend those cases in state court. But it could come at a price. Chain of responsibility Bishop.jpg Bishop Salvatore Matano promised parishioners their local churches would not be drawn in. (Photo: LAUREN PETRACCA/@LaurenPetracca/, STAFF PHOTOGRAPHER) When the Rochester diocese filed for Chapter 11 reorganization on Sept. 12, Bishop Salvatore Matano told parishioners he hoped their local churches would not be drawn in. "The parishes … and charitable entities such as Catholic Charities are separately incorporated," Matano wrote in a letter to church members that day. "The ministries and operations of the parishes and entities, such as our Catholic Charities agencies, should not be directly affected by the diocese’s Chapter 11 proceeding." In a sense, lawyers representing child sex-abuse claimants have taken Matano at his word. When they began to file suit last year over allegations of sexual misconduct by Rochester-area priests and nuns, they often treated the parish where the misconduct occurred as an independent entity and named it as a co-defendant.
If a priest or other minister was accused of sexually abusing a child at summer camp or a CYO swimming pool, the lawyer would sue the CYO or the camp as well. Some lawyers went further, suing not just the parish where the alleged abuse took place but every parish where that priest had ever spent time. If those parishes had been absorbed in a merger, the newly formed parish were sued as well. Parishes such at St. Kateri and Immaculate Conception in Corn Hill, which had never employed a priest who had been publicly accused of child sexual abuse, have nonetheless been sued repeatedly over abuse allegations. The lawyers argued in their filings that all of these entities had exercised some degree of control over the priest during his career and shared a responsibility for protecting children from his predation. In the most extreme example of this tactic, a Rochester-area man sued 14 different parish organizations where the priest he accused of abusing him, the Rev. Otto J. Vogt, had been assigned over the span of 45 years. The alleged acts of abuse occurred while Vogt was working in only one of those parishes, St. Paul of the Cross in Honeoye Falls. Fittingly, St. Paul of the Cross no longer exists as a separate parish. 'Continuing to work on a resolution' Even as the bishop was arguing his parishes were stand-alone entities and plaintiffs’ lawyers were papering them with lawsuits, everyone involved knew there was another side to the argument. While most parishes and Catholic charitable affiliates in the Rochester diocese are separately incorporated, they remain under the sway of diocesan leaders. The bishop and his vicargeneral, for example, are by law members of every parish corporation. Matano acknowledged this countervailing argument the day his diocese filed for bankruptcy protection, saying, "We have submitted ourselves to the judgment of the court." By asking that the bankruptcy court to freeze litigation against the parishes and affiliates, the diocese may be indicating that is a legal judgment that the bishop would rather avoid.
If other diocesan bankruptcies are any guide, diocesan leaders are hoping that parishes eventually can be covered by what is known as a channeling injunction. That is a court order that forbids new lawsuits over past acts of child sexual abuse and moves all such claims into the bankruptcy arena, where damages would be paid to abuse survivors out of a trust. The Rochester diocese undoubtedly will seek a channeling injunction as part of the resolution of its Chapter 11 case. The trust would be funded by money contributed by the diocese and the companies that provided it with liability insurance coverage over the decades when abuse took place. In some diocesan bankruptcies, a channeling injunction has been issued to cover parishes and charitable affiliates as well. As part of the 2018 resolution of the Minneapolis-St. Paul archdiocese case, for example, its 187 parishes agreed to contribute to the $210 million settlement pot. Most of that money came from insurance but the archdiocese and parishes together ponied up $40 million, the majority of it from the archdiocese. Such agreements hinge on acceptance of the idea that the assets of parishes and charitable affiliates are, like those of the diocese itself, fair game. The parties can negotiate to resolve what cash or property are essential to the church's ongoing ministry and what assets are not essential and thus available to help lard the settlement fund. Lawyers familiar with diocesan bankruptcies have said no judge has ever ordered the sale of a parish church to help fund a settlement. But other assets could be subject to liquidation. Whether an agreement of this sort will emerge in the Rochester diocese's bankruptcy is still unknown. It may hinge on the outcome of the negotiations now underway among the battery of lawyers representing the diocese, the parishes, their insurance companies and the claimants who say they were sexually abused by church ministers. The parish lawsuit stay was on the calendar of a virtually hearing Thursday, but on Wednesday Judge Warren extended the freeze through the end of April. In a short written order, Warren said he had been told "the parties are continuing to work on a resolution." Contact watchdog reporter Steve Orr at sorr@democratandchronicle.com or at (585) 258-2386. Follow him on Twitter at @SOrr1. This coverage is only possible with support from our readers. If you don't already have a digital subscription, please sign up today.
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