O'Malley offers $55m settlement
Plaintiff lawyers voice optimism

By Ralph Ranalli and Stephen Kurkjian, Globe Staff, 8/9/2003

Moving to end the massive civil litigation surrounding the worst scandal in the US history of the Roman Catholic Church, Boston Archbishop Sean P. O'Malley yesterday made a $55 million settlement offer to 542 people who say they were sexually abused by clergy members.

Since being named archbishop, O'Malley has consistently pledged to make settling abuse claims his top priority. The settlement offer, made nine days after O'Malley was installed as archbishop, appears to be nearly twice what any diocese or archdiocese has paid at one time to settle claims of sexual abuse.

Because the $55 million would be divided among so many plaintiffs, however, lawyers for alleged victims said they are considering the offer as a starting point for negotiations. Even so, they said that O'Malley's decisive action, in contrast to more than a year of frustrating and unproductive settlement talks that preceded it, was cause for cautious optimism. ''Any negotiation has to start in a certain place, and this is a good place,'' said Roderick MacLeish Jr., a lawyer for the firm Greenberg Traurig, which represents about 260 plaintiffs. ''We believe that there is a lot of good faith being shown by the archdiocese. There are still a lot of obstacles, but we are finally having a worthwhile and constructive dialogue.''

Jeffrey Newman, another lawyer for Greenberg Traurig, said the offer shows that O'Malley is ''absolutely committed to ending the terror that has been visited on innocent victims'' by abusive clergy.

Newman said that the afternoon was promising enough for lawyers at the meeting to inform Superior Court Judge Constance M. Sweeney, who is presiding over the 542 claims, that they are requesting a suspension of almost all of their litigation against the archdiocese. The lawyers also said they wanted to postpone a conference with Sweeney scheduled for later this month.

According to a copy of the offer obtained by the Globe, the church would agree to give up all its legal defenses -- including any arguments under state law regarding the statute of limitations and the church's statutory immunity from large judgments.

Recent state Supreme Judicial Court rulings had appeared to strengthen the archdiocese's legal position on both issues. Lawyers involved in the case, however, said that O'Malley appears to have decided that the harm to the church of dragging the scandal out in the courts outweighs any benefit from defeating legally weak or factually questionable claims in court.

According to the settlement offer, victims would be paid an amount ''based on the type and severity of the abuse and damage sustained by each claimant.''

The letter also says that the archdiocese will have no role in dividing up the money -- that will fall to an outside mediator. The $55 million offer is valid as long as 95 percent of the victims agree to participate in the settlement.

But even those who opt out of the settlement will be provided counseling paid for by the archdiocese.

Under customary arrangements, a third or more of the $55 million would be paid to law firms representing the victims.

A spokesman of the archdiocese, the Rev. Christopher J. Coyne, declined comment on the offer yesterday, citing an agreement with the mediators not to comment.

But a church official, who spoke on condition that he not be identified, said that the settlement offer is being financed in part by $15 million raised through the recent sale of church property.

Much of the additional $40 million is expected to come from the insurance companies that provided coverage to the church during many of the years that the alleged abuse took place. O'Malley is planning to get the money from the insurance companies either through negotiation or, if necessary, by taking them to court -- a tactic he used successfully a decade ago when he settled 101 abuse claims in the early 1990s as bishop of the Diocese of Fall River, the official said.

The official said the archdiocese has no plans to sell the 16-acre property in Brighton that includes the headquarters of the archdiocese and the archbishop's residence to fund the settlement, as many victims and their lawyers have urged.

O'Malley announced yesterday that he has decided to live in the rectory of the Cathedral of the Holy Cross in the South End, rather than in the elegant residence on the Brighton grounds used by his four predecessors. In his weekly column in The Pilot, the archdiocesan newspaper, O'Malley said the church no longer needs ''all the symbols of the past.''

The Brighton property is also encumbered by a $38 million first mortgage line of credit given to the archdiocese last year by the Knights of Columbus to cover significant operating deficits. To date, the church has already spent about $27 million of that $38 million, the official said.

About 35 lawyers attended yesterday's 90-minute closed-door session at Le Meridien hotel in Boston, at which two mediators, Paul Sugarman and Paul A. Finn, outlined the archdiocese's offer.

Finn and Sugarman told the lawyers that the $55 million and the other details of the offer had been settled on during a meeting which they attended with O'Malley and Thomas H. Hannigan, O'Malley's newly hired attorney in the settlement talks.

Lawyers interviewed while leaving the meeting were mostly upbeat.

''We've got a change in attitude, tone, and methodology that is very significant,'' said Danvers attorney Alan L. Grenier, who represents 20 clients suing the archdiocese.

The positive statements yesterday were a marked difference from previous negotiations, during which plaintiff's lawyers said virtually no progress was made over more than a year despite three cooling-off periods, where most of the victims agreed to suspend active litigation in order the facilitate a settlement.

Other lawyers were more guarded. Carmen L. Durso, a Boston lawyer, said he wanted to hear from his clients before making an official response to the archdiocese's offer. He said the church's agreement to pay for psychological counseling, regardless of whether an alleged victim accepted the settlement offer, would be well received.

''What we hear from the victims so often is that they need professional and independent counseling,'' Durso said.

The lawyers at the meeting also agreed to form a steering committee composed of lawyers from five firms, who will collect the official responses from the other attorneys. That committee plans to meet next week and then communicate the responses to the offer.

''I think we still have a few months' worth of negotiation to get through,'' said Robert Sherman of Greenberg Traurig, one of the firms represented on the committee. Also on the committee are Boston attorney Mitchell Garabedian, who represents more than 100 victims, Durso, Timothy O'Connell of Charlestown, and Alan Cantor of Boston.

While the church's offer is technically $55 million, under the proposed agreement that amount could shrink depending on how many plaintiffs finally agree to sign on. For every one that doesn't, the agreement states that the offer would be reduced by 1/542d of the total, or about $101,000.

That average payout per victim under the proposed offer, $101,000 per claim, is similar to major settlements in Louisville, Ky., and Manchester, N.H., over the last two years and slightly less than the average of $116,000 paid to the victims of the Rev. John Geoghan by the Archdiocese of Boston last year under Cardinal Bernard F. Law.

Lawyers involved in the case cautioned, however, that individual cases vary in seriousness and averages are misleading and a poor basis for comparison.

Of the 542 claims, for example, approximately 40 were made by parents who are alleging loss of consortium with victimized children. In past settlements, such consortium claims have received relatively small awards.

In all, about 140 priests and brothers are named as alleged abusers in the claims, some of which date back to the late 1950s. One church employee, former youth worker Christopher Reardon, is also named as an abuser in a dozen claims.

Walter V. Robinson of the Globe staff contributed to this report.

This story ran on page A1 of the Boston Globe on 8/9/2003.