Friday, December 31, 2010

$6m interest

http://www.delawareonline.com/article/20101231/NEWS01/12310353
Clergy abuse in Delaware: Parish may owe $6 million in interest
St. E turned down pretrial settlement
By SEAN O'SULLIVAN • The News Journal • December 31, 2010

WILMINGTON -- The pain could get worse for St. Elizabeth Roman Catholic Parish.

Post-trial motions indicate the city church -- which also has elementary and high schools -- may be liable for $6 million to $7 million more than the $3 million awarded to plaintiff John Vai on Nov. 30, because parish attorneys declined to settle the case before trial for $1.5 million.
It is a legal wrinkle that raises stakes for other parishes, schools and religious orders facing priest abuse lawsuits allowed by the Delaware Child Victims Act, potentially exposing them to millions more in damages.
Under Delaware law, if a plaintiff's offer to settle a case before trial for a specific sum is turned down and the plaintiff goes on to win a judgment of more than that amount, he or she is entitled to receive interest on the amount awarded back to the date of the acts that caused injury, which in Vai's case is more than 40 years.
"That is standard procedure in any good personal-injury firm," said Tom Reed, a retired Widener Law School professor, adding it was a smart move by Vai's attorneys to make such an offer. "I don't see anything sinister there. It is just the way we practice law here in Delaware."
Reed said the development "may increase the number of settlements outright," as others seek to avoid what is happening to St. Elizabeth. "There are a lot of ramifications to this lawsuit," he said.
There are some 150 pending lawsuits or claims alleging abuse by priests in the Diocese of Wilmington, with 80 of them also naming a parish as a defendant. All lawsuits involving the diocese have been put on hold because of bankruptcy proceedings, but some lawsuits against individual parishes have been allowed to go forward because the parishes are considered separate corporate entities.
Jury selection is set to start Monday in the priest abuse case brought by Joseph Curry against St. Dennis Church in Galena, Md. -- which is part of the Roman Catholic Diocese of Wilmington -- and attorneys are set to meet Tuesday with Superior Court President Judge James T. Vaughn Jr. to pick a trial date for the lawsuit filed by Felix Flanigan against St. John the Beloved Parish of Wilmington.

Flanigan's case could be a virtual replay of Vai's in that the same abuser is involved -- defrocked priest Francis DeLuca, who admitted to molesting Flanigan in the 1960s just as he admitted abusing Vai, according to attorneys.




St. Elizabeth Parish attorney Mark Reardon this week expressed outrage that Vai's attorneys are now seeking interest on the $3 million that a jury ordered the parish to pay Vai as part of a $60 million judgment against DeLuca.
"Vai told the jury he did not file the lawsuit for money. If this is not about the money, then why is he pursuing this? We wanted to believe him," Reardon said.
He called the request "unprecedented" and "ridiculous" and argued that there is no factual or legal basis for Vai's attorneys to seek the additional money.
"You can be sure we will vigorously oppose this unfounded request," Reardon said.
Vai attorney Thomas S. Neuberger, who is representing plaintiffs in the vast majority of the more than 80 priest abuse cases, responded, stating that a jury found St. Elizabeth Parish -- through its inaction -- to be complicit in DeLuca's abuse of Vai from 1966 to 1969 and that the only reason the jury did not impose significant punitive damages on top of the $3 million compensatory award is because parish officials begged for mercy.
"[St. Elizabeth] showed no mercy to John Vai during the liability phase of the trial," Neuberger said. "They contended he was a liar. They attacked his daughter as a druggie. They made him open the wounds that were inflicted so many years ago," he said.
Attorneys for St. Elizabeth, in a court motion, estimated that 43 years of interest at 5.75 percent on $3 million would yield at least $7.5 million to as much as $32 million, if the court calculates compound interest. Neuberger said those numbers, particularly the $32 million, is "histrionic" and estimated the interest involved would likely be 5 percent and closer to $6 million.
Reed said the case brings up an unusual interplay between the Delaware Child Victims Act -- which suspended the civil statute of limitations to allow victims of childhood sexual abuse such as Vai to sue for acts that occurred decades ago -- and a state law designed to "reduce court congestion" by encouraging defendants to settle rather than face losing a case at trial.



"It is fair to say the Legislature probably didn't contemplate anything like this. But it did intend to benefit someone who suffered a terrible wrong and had a right to sue," Reed said. "It is a policy question and that is why we have a [state] Supreme Court. I can't see the Superior Court settling this definitively," Reed concluded.




Neuberger said things have been "quiet" since the Vai verdict and he hasn't seen any movement in deadlocked negotiations to reach a global settlement.
Diocese attorney Tony Flynn disagreed. "There have been settlement negotiations ongoing including as recently as last week," he said, adding that no deal has been reached.
He also noted that the diocese is in the process of filing a new bankruptcy plan that will address the objections raised by abuse survivors' attorneys to the previous plan and takes into account the recent jury verdict in the Vai case.
While the Delaware Supreme Court heard a challenge to the legality of the Delaware Child Victims Act earlier this month, which could potentially result in the dismissal of the 150 pending lawsuits, Flynn said the diocese is not waiting on a ruling in that case before taking action. "That could be months," he said.

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