Since it started Chapter 11 bankruptcy reorganization in January 2011, the Archdiocese of Milwaukee has maintained that victims of clergy sexual abuse who had reached a settlement with the archdiocese should not be entitled to an additional settlement.
On Nov. 5, the U.S. Court of Appeals for the Seventh Circuit affirmed the decision by Judge Rudolph T. Randa in the U.S. District Court for the Eastern District of Wisconsin in which he ruled that those who had reached a settlement were not entitled to another one.
Through independent mediation, the archdiocese has paid more than $12 million in settlements to more than 190 victims of clergy sexual abuse. Of these, 84 filed a claim against the archdiocese in Chapter 11. However, the appeal at issue in the Nov. 5 ruling was filed by claimant John Doe, A-282. He had been sexually abused by Fr. Lawrence Murphy in 1974 while attending St. John School for the Deaf.
Doe participated in the archdiocese’s mediation program and received a settlement of $80,000 in 2007. In opposing the archdiocese’s motion for summary judgment, he maintained he had been “fraudulently induced into settlement with the archdiocese,” as stated in the background provided as part of the court of appeals’ decision.
The U.S. Bankruptcy Court initially ruled that the 2007 mediation and the bankruptcy action “were distinct disputes and that admission of communications made during the mediation was necessary to prevent manifest injustice,” the appeals’ judges wrote.
The bankruptcy court reconsidered its ruling, determining that the disputes were not distinct and that the communications from the mediation were not admissible. It granted summary judgment for the archdiocese regarding Doe’s fraudulent inducement claim. Randa affirmed that decision, leading to the appeal.
“The purpose of the mediation was to resolve Doe’s claim against the archdiocese relating to his abuse by Murphy, and Doe signed a complete release stating that the settlement resolved all disputes with the archdiocese,” the appeals court wrote. “A result that would undo that settlement and would allow Doe, years after the mediation settlement, the possibility of receiving more money from the archdiocese for the same abuse could discourage parties from quickly resolving their disputes through mediation.”
Jerry Topczewski, chief of staff for Archbishop Jerome E. Listecki, welcomed the decision.
“The archdiocese has maintained from the beginning that people who have received a large financial settlement from the archdiocese should not receive another,” he said.
A status hearing on the Chapter 11 reorganization is scheduled for 11 a.m., Wednesday, Nov. 19, in the courtroom of Judge Susan V. Kelley for the U.S Bankruptcy Court of the Eastern District of Wisconsin.
