MILWAUKEE — U.S. Bankruptcy Judge Susan Kelley ruled Thursday, Feb. 9, that claimants could not bring negligence claims against the Archdiocese of Milwaukee and disallowed a claim by an individual who had previously entered into a settlement. But she allowed claims that alleged fraud on the part of the archdiocese move ahead, saying the question of whether fraud claims should be dismissed on statute of limitation grounds needed to be considered in further proceedings.
Her ruling came after she heard about 90 minutes of arguments on the archdiocese’s objection to three abuse survivor claims that were among about 550 filed in its Chapter 11 proceeding involving sexual abuse. The court considered objections to all of the claims on the basis that any negligence or fraud claims are barred by the applicable statutes of limitation. The archdiocese also objected to one claim on the additional ground that the claimant had already entered into a settlement with the archdiocese in a voluntary mediation proceeding.
In effect, the ruling allows most of the claims to go forward, but had the archdiocese been successful in its arguments regarding fraud, a vast majority of the cases might have been ultimately dismissed.
Before hearing the arguments, Kelley asked archdiocesan attorneys Francis LoCoco and Daryl Diesing of the law firm Whyte Hirschboeck Dudek S.C., whether an attempt had been made to settle the issues before bringing them before the court. They said no, and she asked to meet with the two archdiocesan attorneys, as well as attorneys for the claimants, Jeff Anderson, Michael Finnegan, Albert Solochek and Wendy Gunderson in her office. They met for about 15 minutes to see if delaying the hearing or taking part of it at another time might improve the chance of a settlement, explained Kelley, but after what she called a frank discussion, the decision was made to go ahead with the planned arguments.
In front of a packed courtroom of about 60 observers, including victim/survivors and media, the archdiocesan attorneys successfully argued that because claimant A49 had participated in a settlement agreement and to date had received 90 percent of the $100,000 agreed upon, that his claim would be tossed out.
LoCoco argued that if the claimant wants to rescind that agreement, he’d have to pay back the money he already received.
Kelley also agreed with LoCoco’s argument regarding negligence that the statute of limitations for negligence is three years and it begins accruing at the last incident. In the cases of A12 and A13 before her, that statute had expired.
But on the argument of fraud regarding those same two claims, Kelley said the question of whether the fraud claims should be dismissed on statute of limitations grounds needs to be examined in further proceedings.
After a 15-minute recess, Kelley returned to the bench with her decision. She prefaced it by warning those gathered that she tends to become emotional when giving decisions. But even though the case before her is emotional, Kelley assured those gathered that her decision is not based on emotion or compassion, but on the law.
She assured the victim survivors that she has the deepest sympathy for them, especially after reading detailed accounts of the abuse they suffered.
“I was brought to tears more than once,” she said.
And she also has the deepest respect and reverence for the archdiocese, she said, noting she is a product of Catholic schools and that she sent her children to Catholic schools as well, and that she has deep respect for 99.9 of the priests and religious she has met.
“But neither my compassion or sympathy for victim survivors, nor my deep respect for the church can influence the decision I am called on to make today,” said Kelley.
Following the ruling, the archdiocese issued the following statement:
“The arguments before Kelley were very complex and the archdiocese is appreciative that she moved the case along and decided the motions so promptly. The archdiocese is hopeful that it will be able to use the decisions to assist the parties in the negotiation of a plan of reorganization and to move the Chapter 11 proceeding closer to resolution.”
After the hearing concluded, victim survivors gathered on the courthouse steps for an impromptu media conference and were highly critical of the archdiocese for challenging the claims in the first place, suggesting the archdiocese was victimizing the victims again.
When asked about that claim, Julie Wolf, spokesperson for the archdiocese, referred your Catholic Herald to a Feb. 2 letter from Archbishop Jerome E. Listecki sent to all Catholic households as part of the Catholic Stewardship Appeal mailing.
“The archdiocese wants to fairly compensate abuse survivors of diocesan priests with claims allowed by the bankruptcy court. At the same time, we want to ensure that the church is able to carry on its essential ministries to meet the needs of parishes, parishioners and other who rely upon the church for assistance….”
He further wrote, “As an organization, we have a responsibility to do the legal things necessary under the bankruptcy law to ensure that rightful claimants receive equitable compensation in the Chapter 11 proceeding,” he said, giving the example that someone who has already received a legal settlement should not be eligible for additional compensation and the archdiocese should also not be responsible for perpetrators who were not priests or employees of the archdiocese.
Sometime after Archbishop Listecki returns from Rome on Feb. 20, he is expected to meet with archdiocesan attorneys to discuss Kelley’s decision and decide upon the archdiocese’s next course of action.
