A federal bankruptcy judge will soon decide whether hundreds of lawsuits against Catholic parishes and former parishes, schools and other entities in the Buffalo Diocese should be blocked from moving forward in state courts.
The diocese’s Chapter 11 filing in February immediately stopped lawsuits against the diocese from advancing as it goes through a reorganization.
In May, the diocese asked Chief Judge Carl L. Bucki of the U.S. Bankruptcy Court in the Western District of New York to extend that same protection to more than 400 Catholic parishes, schools and other entities that also have been named as defendants in Child Victims Act cases.
The diocese’s lawyers said the move would help pave the way for a “global resolution” of all CVA cases involving Catholic church entities in the Buffalo Diocese because “it will bring all parties to a single bargaining table and will encourage settlement from all sides.”
But several lawyers for plaintiffs in CVA cases have objected to the diocese’s injunction motion, which seeks an indefinite stay of all pending and future litigation against the Catholic parishes, schools and human service agencies that are separately incorporated and not part of the diocese bankruptcy filing.
Bucki is scheduled to hear arguments on the motion by teleconference Wednesday.
Now that Covid-19 related restrictions in the state courts have been lifted, some plaintiff’s lawyers are eager to launch into discovery and depositions on the way to trying cases.
The firm of Lipsitz, Green, Scime & Cambria, which represents 29 plaintiffs in Catholic church-related cases, last week began severing claims in state courts against the diocese. That move will allow it to proceed with claims against other non-bankrupt defendants. In May, the firm sent legal paperwork to several parishes demanding information about their insurance coverages.
“There’s probably many instances where the local parish has culpability and not necessarily the diocese in every single case,” said attorney Richard Weisbeck of the Lipsitz Green firm. “There can be separate negligent conduct between the diocese and the local parishes based on their actions or inactions.”
Ilan D. Scharf, an attorney for the official committee of unsecured creditors, called the diocese’s motion a “flagrant attempt to absolve" parishes and other sued Catholic organizations of any liability.
Scharf said the request for an injunction was “premised on the sham assumption that it will facilitate a global settlement.”
Rather, it will lead to mistrust and a denial of justice for survivors of child sex abuse and impede efforts to negotiate a settlement through negotiation. Pending litigation, discovery and trial dates motivate the diocese, parishes, other Catholic entities and insurers to come to the table and settle, said Scharf.
Scharf urged the court to consider a temporary stay of no more than 60 days, during which time the diocese would agree to hand over extensive and detailed records on the handling of clergy abuse cases, including priest personnel files; insurance policies dating back decades; and financial transactions from the past 10 years.
Lawyers for the diocese argued in court papers that the diocese “is the real target in the CVA cases and moving forward with discovery proceedings and trials … would force the diocese to participate in each CVA case to the detriment of its estate’s assets and the reorganization process.”
The diocese revealed in court papers that it has maintained a self-insurance plan since 1973 that includes parishes. The diocese pays up to $250,000 for general liability and maintains general liability excess policies with National Catholic Risk Retention Group for $14.75 million and with W.R. Berkley for $25 million.
If a CVA suit is successful against a participant in the diocese’s self-insurance plan, the claimant will look to that plan to pay the award, thus depleting proceeds that would be used for all abuse victims in a global settlement, diocese attorneys said.
The diocese also will be forced to incur even more legal costs if individual cases proceed against parishes in state courts, the lawyers said.