Arizona court file reveals Gallup Diocese’s $1M offer By Elizabeth Hardin-Burrola Gallup Independent correspondent religion@gallupindependent.com October 21, 2017 FLAGSTAFF, Ariz. – It was, perhaps, an offer that should not have been refused. In December 2015, when the Diocese of Gallup was embroiled in its bankruptcy case, its lead bankruptcy attorney made a $1million offer to the Sisters of the Blessed Sacrament that would have protected the Sisters and St. Michael Indian School from current and future clergy sex abuse claims. The Sisters, however, declined the offer. That decision has left the Sisters and St. Michael Indian School as the last two defendants in a clergy sex abuse lawsuit that was filed in Arizona’s Coconino County Superior Court by a Navajo plaintiff known as Jane L.S. Doe. The lawsuit centers on the sexual abuse the plaintiff says she was subjected to as a child by Brother Mark Schornack, OFM, the Franciscan friar who was her school bus driver. The Diocese of Gallup publicly identified Schornack as a credibly accused child abuser earlier this year. Other defendants named in the lawsuit – the Diocese of Gallup and Franciscan provinces in Cincinnati and Albuquerque – were dismissed after the Gallup Diocese successfully mediated a settlement fund for Doe and other clergy abuse claimants in its Chapter 11 reorganization case. “Given the liability of the Sisters with respect to existing claims and claims that may have arisen but not yet alleged, we are prepared to offer the Sisters the protection of a channeling injunction in exchange for a contribution of $1,000,000 that will be used to fund the plan and pay the tort claimants,” diocesan attorney Susan G. Boswell wrote Peter C. Kelly II, a Phoenix attorney who represents the Sisters of the Blessed Sacrament, in a letter dated Dec. 4, 2015. As Boswell explained in the letter, the channeling injunction allowed third parties like the Sisters to contribute money to the diocese's plan of reorganization and thereby become “protected from any present and future” abuse claims. Boswell’s $1 million offer was discovered during a recent inspection of the Jane L.S. Doe court file in Flagstaff. Phoenix attorney Robert E. Pastor, who represents plaintiff Doe, submitted Boswell’s letter as an exhibit in the lawsuit Aug. 23. Participating parties During the bankruptcy case, Boswell was sometimes at odds with the various insurance companies and other Catholic entities as she fought to bring them to the mediation table to fund the diocese’s plan of reorganization and its settlement fund for abuse claimants. In the “let’s make a deal” bargaining atmosphere of U.S. Bankruptcy Court, it is unlikely Boswell expected the Sisters of the Blessed Sacrament to actually pay the full requested $1 million. Based on the funding amounts of other parties, it was likely a starting figure for legal negotiations. The nine insurance companies and Catholic entities that ultimately funded the plan and became protected participating parties contributed the following amounts: Catholic Mutual contributed $11,550,000; Gallup Diocese, $3,020,000; Cincinnati’s St. John the Baptist Franciscan Province, $1.85 million; New Mexico Property and Casualty Insurance Guarantee Association, $1.85 million; Catholic Peoples Foundation, $665,000; St. Bonaventure Indian Mission and School, $550,000; Southwest Indian Foundation, $515,000; Diocese of Gallup parishes, $500,000; Albuquerque’s Franciscan Province of Our Lady of Guadalupe, $300,000; and Diocese of Phoenix, $300,000. Throughout the bankruptcy case, Boswell and other attorneys for the Gallup Diocese cited the Pennsylvania-based Sisters of the Blessed Sacrament and the Diocese of Corpus Christi in Texas as two Catholic entities with possible abuse claim liability that refused to become participating parties. Although Kelly, the attorney for the Sisters and St. Michael Indian School, filed a demand for a jury trial, a court filing he made on the same day Boswell penned her $1 million offer, a recent mediation session in the case was held Oct. 10. In a court hearing Sept. 25, Judge Dan Slayton told the attorneys he was ordering them to “talk to each other,” and he explained the need for the parties to engage in a good faith settlement. The next scheduled court hearing is Dec. 11. Cheri Wenger, the communications director for the Sisters of the Blessed Sacrament, was contacted for comment Thursday. She referred questions to Sister Sandra Schmidt, SBS, a board member of St. Michael Indian School and an official at the Sisters’ motherhouse. Schmidt did not respond Friday.

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