In spite of the pleadings of Attorney Jeffrey Anderson, U.S. Bankruptcy Judge Susan V. Kelley ruled Wednesday, Oct. 22, that the Milwaukee Archdiocese can throw out 11 sex abuse claims in its ongoing bankruptcy case.
In her ruling, Kelley refused to stay motions filed by the archdiocese arguing for dismissal of the claims, explaining that the claims in question fell into three categories.
“There are three classes of claimants,” among the 11, explained Kelley. “The first type, these survivors who had claims dismissed with prejudice by another court … these people had a court order dismissing their claims with prejudice – which legally means you can’t bring those claims again,” she said, adding, “but they have brought them and filed them here.”
The second type, she explained, are claims against non-debtor persons, members of a religious order or individuals not employed by the debtor which is the archdiocese. She noted it’s a legal issue whether the archdiocese could be responsible for the actions of someone not directly an employee or agent of the archdiocese.
The third type of claimant, she explained, “is a little dicier, a little harder for non-lawyers to understand.”
These involve claims made that the archdiocese said it had no knowledge of prior to the claim being filed.
These cases would not fall under negligence or fraud which had previously been litigated in this proceeding, she said, because the archdiocese had no prior knowledge that certain individuals were problematic and therefore could not have withheld that information.
Speaking to the court by telephone, Anderson, the Minnesota attorney whose firm represents most of the 575 individuals and seven of the 11 in question who have filed sex abuse claims against the archdiocese, was “urging, imploring and begging,” Kelley to stay the summary judgment claim objections, reminding her that litigation is going to be costly, “a cost to the depleted estate that can bear no further unnecessary expense,” he said of the archdiocese.
Anderson estimated that the archdiocese has paid nearly $18 million in legal fees thus far and to have the costs of litigating the 11 claims “just depletes (the estate) without any good coming from it or any clarity toward confirmation.”
He also reminded Kelley that in addition to monetary costs, “every time they (lawyers for the archdiocese) pick off a survivor or pick on a survivor’s claim, there is a human toll.”
Kelley, however, responded strongly to his suggestion that she would be harming survivors by refusing to stay the motion.
“I am sensitive – and you know that I am, Attorney Anderson – to the plight of the survivors. Please don’t suggest it is insensitive of me to rule that a claim that has been dismissed with prejudice by another court should be allowed here, because at this point, I have to apply the law.”
She also strongly reminded attorneys for both sides that she directed them to two mediation sessions – one held in Minnesota in September and the other July 20-Sept. 20, 2012, in Chicago – “and you could have gotten very creative with your settlements, but now, that didn’t work. So now it’s time to apply the law. And the law says if a claim has been dismissed with prejudice by another court, it should not be filed in this bankruptcy case and there is nothing insensitive about that.”
Attorney Frank LoCoco, representing the archdiocese by phone during the hearing, also took issue with the idea that the archdiocese or its attorneys is picking on victim/survivors.
“We are not challenging any of these claimants of whether abuse happened or not, none of them,” he said, explaining the archdiocese is only challenging whether it needs to compensate them as part of its bankruptcy settlement.
Scheduling the next court session for Wednesday, Nov. 19, Kelley said, “I hope we can continue to stay on track and move to final resolution.”