SPOKANE — A lawsuit filed by the Catholic Diocese of Spokane against the lawyers who led it through a 2004 bankruptcy related to sex abuse lawsuits is set for a February trial.
Bishop Blase Cupich stopped using the legal team at the Paine Hamblen law firm after he arrived in 2010.
He has since pursued a malpractice complaint that accuses the firm of failing to use a strategy that could have saved the diocese millions of dollars and prevented a new round of priest sex-abuse claims.
The Spokesman-Review reported Friday that the number of claims after the bankruptcy reached 230 in the past year. However, more than 150 of the 230 people who filed future claims had their cases rejected by a former federal judge tasked with reviewing them and awarding payouts.
Many of those people alleged they were abused by Jesuit priests at a Catholic boarding school in Omak.
Details of the claims, including the allegations and payouts, are kept secret from the public by a court order. Some of those details, however, are trickling out as the malpractice suit unfolds.
Bishop Cupich declined to be interviewed about the case against Paine Hamblen.
Jane Brown, Paine Hamblen’s managing partner said the firm stands behind the work of its lawyers.
Cupich is pressing a conflict-of-interest claim against Paine Hamblen for representing the diocese during its bankruptcy while the firm also defended former Bishop William Skylstad against claims of negligence and covering up decades of sex abuse by now-defrocked priest Patrick O’Donnell.
Skylstad never had to testify in front of a judge or jury about his tenure 40 years ago as a priest at Spokane’s Assumption Parish, where O’Donnell admitted to molesting scores of boys.
Shaun Cross, the Paine Hamblen attorney who led the diocese bankruptcy case, said in a deposition the diocese faced an excess of $100 million in potential judgments. It made bankruptcy the best alternative for the diocese, which had about $10 million in assets.
The diocese bankruptcy eventually drew about 180 claims of clergy sex abuse. It took several years to finally pool together $48 million to settle those cases and pay the lawyers.
The bankruptcy settlement, however, left open what Paine Hamblen and the diocese considered at the time to be a very narrow possibility of new claims.
Instead, the diocese is scrambling once again to cope with new claims, and parishes are concerned about the possibility of paying more cash for settlements or property foreclosures, according to court documents.
Cupich said in court documents that Paine Hamblen failed to adequately address that risk, even though a study estimated the diocese could have between $8 million and $20 million in future claims exposure.
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