As lawsuit looms, Diocese of Nashville transfers ownership of
Diocese being sued over abuse puts assets into parishes' hands
By SHEILA BURKE - Staff Writer
Sunday, August 21, 2005
The Catholic Church has shifted ownership of nine Midstate properties,
an action critics say was calculated to protect assets from the
kinds of huge settlements that have been awarded to victims of priest
Diocese of Nashville officials filed paperwork so that eight churches
and one school would be owned by the parishes or school instead
of the bishops who had owned the properties for decades.
The diocese is being sued for $68 million by two victims of abuse.
The parishes are not named as defendants.
The lawsuits were filed in January 2000 and later merged, and the
nine property transfers all have taken place since.
Seven of them happened in the past 15 months, during which time
the state Supreme Court was considering reviving the lawsuit, which
had been dismissed by a lower court. The suit was revived in January.
Officials with the Roman Catholic Diocese of Nashville say the
church is not doing anything untoward. They say the diocese has
been engaged in an effort to ensure that property deeds accurately
reflect the true owners of the property.
Critics say the Nashville diocese's move to distance itself financially
from individual parishes mirrors legal strategies employed in recent
years by dioceses in Portland, Ore., and Spokane, Wash. All three
dioceses are in legal battles with alleged victims who have argued
that the parishes are part of the dioceses.
"A blind, dumb man can figure out what they're doing,"
said David Brown, a 58-year-old Memphis man who says he was raped
as a teenager by former Nashville priest Paul Haas, who has since
died. The diocese settled Brown's case for $5,700, the cost of his
therapy. "I can understand a corporation doing this, (but)
these are men of God."
The courts' decisions are being closely watched across the country,
and some experts suspect that the effects of the rulings could be
felt in priest molestation lawsuits nationwide.
"Many dioceses are waiting to see how the courts rule in Spokane
and Portland because right now it's uncharted territory," said
Charles Zech, an expert on church finances at Villanova University.
At stake are millions of dollars to plaintiffs. The value of the
diocese would be among the factors considered by a jury determining
how much to award in damages.
Lawyers for the alleged victims in the Nashville case have argued
in court documents that the Catholic Church is trying to reduce
its value to minimize the amount it would have to pay if it loses
at trial, scheduled for March 2006.
"Why is only some of the parish property transferred
And why did the transfers occur after the (lawsuit) was filed?"
the lawyers asked in court records.
Attorneys for the plaintiffs known only as John Doe 1 and
John Doe 2 and lawyers for the church declined to comment
for this story, citing a request by the trial judge that they not
Because the church pays no taxes and therefore its properties
are not assessed it's impossible to know the value of the
Tennessee properties that have changed hands.
Real estate agents estimated that Father Ryan High School alone
is worth at least $5 million.
"It's certainly millions and millions of dollars," said
David Huddleston with the commercial real estate firm of Grubb &
Catholic Church officials have said that the transfers of deeds
to the parishes has been a decade-long process and that the timing
had nothing to do with the filing of a lawsuit.
But The Tennessean's review of ownership records for the 29 Midstate
parishes in Cheatham, Davidson, Maury, Montgomery, Robertson, Rutherford,
Sumner, Williamson and Wilson counties found that seven transfers
occurred during the past 15 months. Another church was transferred
in 2002. A high school was transferred in 2001, the year after the
lawsuit was filed.
In all, there are 54 parishes and missions in 38 counties that
encompass the Diocese of Nashville, and it was unclear whether some
of those outlying properties may have been transferred in years
The transferred properties were all formerly titled in the name
of the Roman Catholic Diocese of Nashville or the bishops who headed
The deeds on the parish properties now say that the churches are
the owners. For example, ownership of Nashville's Father Ryan was
transferred in August 2001 from the bishop to Father Ryan High School
The church maintains that the parish properties are merely held
in trust by the bishops.
The issue of transferred properties surfaced earlier this year
when the Diocese of Nashville furnished court-ordered financial
records to the lawsuit plaintiffs. The parishes were not included
in the disclosures.
The plaintiffs' lawyers also accused the diocese in court documents
of failing to disclose that it controls corporations that could
be valued at up to $100 million.
While ordering the church to turn over financial records about
the parishes and businesses to the plaintiffs, Davidson County Circuit
Court Judge Walter Kurtz has put off a decision on whether a jury
can consider them assets of the diocese.
Kurtz noted that other courts were grappling with the same issue.
Facing lawsuits seeking $155 million in damages, the Archdiocese
of Portland sought federal bankruptcy protection to work out settlements
in roughly 60 sex abuse cases. It was the first time a Catholic
diocese filed for bankruptcy.
The Diocese of Spokane filed for Chapter 11 bankruptcy in the face
of lawsuits by 58 plaintiffs.
In both cases, the Catholic Church is arguing that only the assets
of the diocese can be considered to pay creditors the plaintiffs
because the parishes are separate entities.
A decision in the Spokane case is expected this month.
"What's happening here and why Spokane has kind of jumped
out of the radar screen is because we're the first court that could
possibly make a decision on this issue," said Shaun Cross,
a lawyer for the Diocese of Spokane.
An appeal is likely no matter the decision, he said. Some experts
think the issue ultimately will land before the U.S. Supreme Court.
Though the cases in the Pacific Northwest involve bankruptcies,
the central underlying issue is identical, said Marci Hamilton,
a lawyer representing abuse victims in both Portland and Spokane.
"It's exactly the same principle: You reduce the amount of
money that could be on the table as part of a negotiated settlement,"
Lawyers for plaintiffs in all three cities say that ownership should
be determined by who controls the parishes. The Catholic Church
hierarchy is structured so that the bishop has near control over
every aspect of parish operations, the plaintiffs argue.
"He's got total, total control," said Ann Brentwood,
a former nun and one of the founders of Tennessee Survivors Network
of those Abused by Priests, or SNAP. "If somebody does something
the bishop doesn't like and doesn't want done, he can call a halt
to it at any time, and that's spiritually and financially."
Patout Burns, a professor of Catholic studies at the Vanderbilt
University Divinity School and board member at Hendersonville's
Pope John Paul II High School, disagrees.
"Just because you're a Catholic institution recognized as
such and operating as such does not mean you have something that's
under control of the bishop," he said.
Cross, the lawyer representing the Diocese of Spokane, said that
ultimately the church supports compensating abuse victims.
"But the issue is at what cost?" he said. "It (the
church) shouldn't be destroyed. Its mission shouldn't be taken away."
Published: Sunday, 08/21/05