Chapter Nineteen: Q & A, Revisited

(these Q & A are taken from the July 11 article in the Catholic Observer; Mr. Egan's comments are in italics)

Q. (C. O.) Why did the Springfield Diocese sue its insurance companies?
A. (Egan) …..after the 2004 settlement was announced, new claimants came forward. The diocese was unable to proceed to resolve these claims until its dispute with the insurance carriers was resolved.

The claimants that Egan refers to were 20 in number but they were not new. All were pending when the $7.75 million settlement for the 46 consolidated claims under Attorney Stobierski was announced, see Springfield Republican of Aug. 17, 2004. It's never been explained why the consolidated claims were honored but not the others. The leftover claims grew to 30 by the time of the insurance suit in June of 2005, and to 61 by the time of the 2008 settlement. Bishop McDonnell was not unable to settle the leftover claims, but he was unwilling. There is a difference.

The Diocese, like many corporations, has funds for a rainy day. On Nov. 15, a portfolio of $30 million was referenced in a story in the Springfield Republican. Almost certainly, far more is available. We don't know the true amount of Diocesan assets because it's hidden from the laity.

Q. (C. O.) What happened in the lawsuit?
A. (Egan) The insurance carriers investigated all the pertinent records of the diocese (80,000 pages) and took sworn testimony of multiple diocesan officials and witnesses outside the diocese. The diocese took sworn testimony from representatives of each insurance carrier. This "discovery" process took several years. At the same time, a Hampden County Grand Jury was reviewing the same records and taking testimony under oath from officials of the diocese.
On Sept. 27, 2004, the District Attorney announced that the grand jury had completed its investigation and found no evidence of knowledge of sexual abuse, no evidence of destroyed records, or a cover-up on the part of the diocese..….

Most of these statements are not true or amount to fact-fudging.

The claim is made that 80,000 pages were examined by the insurers', but nowhere does this figure appear in the court papers. But, the figure of 80,000 often appears in accounts of the 2004 grand jury investigation of Bishop Dupre. Egan often conflates them, though the number of papers, objectives, timing and personnel of the investigations are different. The insurance trial did not begin until June of 2005, some 9 months after the grand jury inquiry had ended.

The 2004 grand jury did not absolve the Diocese, as Egan claims, because that was not their function. Their charge was to gather evidence against Dupre. They found enough evidence to charge Dupre with 2 counts of child rape. The DA said that they did not find chargeable evidence that Dupre had personally destroyed documents, obstructed justice, or tampered with witnesses – but said nothing about the Diocese.

It is a marvel that Attorney Egan still doesn't get it. The Washington Post, the AP, the Boston Globe and the Springfield Republican all reported that the conclusions of the grand jury related to Dupre, not the Diocese.

Q. (C. O.) Why did the diocese settle for less than it paid?
A. (Egan)… one of our major carriers was insolvent…..the diocese, out of concern for the victims, agree to waive the charitable immunity cap of $20,000 and not assert any statute of limitation or other legal defenses. This was a pastoral decision made by the bishop, and the insurance carriers were not bound by it. Finally, by settling now, the diocese was able to spare the claimants from undergoing depositions conducted by the insurance company lawyers.

These statements are not true. They imply that the Diocese was giving away the store for altruistic reasons — which was hardly the case.

Home Insurance Co. was declared insolvent in June of 2003. The Diocesan response at the time was to petition the court to delay five lawsuits. Soon, the MIIF (Massachusetts Insurance Insolvency Fund, a state agency) stepped in to cover the liabilities of Home. The Home insolvency was a complicating factor, but not for the reason that Egan suggests. The MIIF proved to be an especially tough negotiator during pre-trial hearings.

During the trial, additional carriers became liable. Three long-forgotten policies turned up during the discovery process. Two of these policies (from American Home Assurance Co. and National Union Fire Insurance Co.) were ordered by the judge to 'drop down' to provide primary coverage on Feb. 11, 2008. Thus, at the time of settlement there were at least five companies liable for damages. There is no connection between the ability of the carriers to pay and the decision by the Diocese to settle for less than it paid out.

The concessions referred to (suspension of SOL, waiving charitable immunity, etc.) were not pastoral decisions, but rather carefully crafted deals. The limit on charitable immunity is $20,000, a measly sum under the circumstances, and the victims wisely pushed to have this threshold set aside for the more egregious cases. The SOL suspensions were part of the tolling agreements dating from January of 2005. The tolling agreements permitted the second wave of victims and the Diocese to set their arguments aside while the insurance trial was being fought. In return for suspending the ticking clock of the SOL, the Diocese got to remove their name from the lawsuits (leaving the names of the accused priests) and got a respite from the pending claims.

The tolling agreements bought time for the victims. Without them, their claims would have lapsed during the three-year trial. The Massachusetts SOL is three years from the time that victims realizes their injuries can be traced to past abuse.

The SOL defense has nothing to do with the amounts of the awards for the second wave of victims, since the Diocese had already waived it. If the Diocese paid awards during the first wave to those whose SOL rights had run out, that might qualify as "pastoral".

But, the Diocese negated that possibility by demanding the full reimbursement of $7.75 million, plus court costs, throughout the trial. See Paper 111.1. If the "pastoral decision" referred to by Mr. Egan was forced by the terms of the settlement, then it cannot be considered either pastoral or a decision.

Egan expresses great compassion and solidarity with the victims, but these attitudes are suspect. During the trial, the Diocese and the victims were often opposed. For example, the victims opposed the "protective order", a key Diocesan strategy. They also opposed the Diocesan petition to have impounded documents (the "laicization documents) from the 2004 grand jury favorable to the Diocese allowed into testimony (though not into the public record). See Paper 89, pg. 11. In these matters the victims supported the insurers' lawyers, not those of the Diocese.

The statement about depositions is not true. The deposition of victims by insurance lawyers was prohibited by the Scheduling Order for Discovery (Paper 63), about a year into the suit. It remained a bargaining chip and was subsequently mentioned by the insurance lawyers. However, in Paper 111.1, we learn that the insurers have agreed to skip depositions, in exchange for written information.

It was Attorney John Stobierski, lawyer for the claimants, who successfully resisted attempts to reintroduce victim depositions, not Attorney Egan. See the Springfield Republican of Oct. 26, 2007, when an announcement was made about the final agreement to substitute written questions for the depositions. The Diocese demanded the full $7.75 million reimbursement, plus attorney's fees, throughout the trial, and yet caved at the last minute for a reimbursement of $3.5 million. The Diocese (and Mr. Egan) have yet to explain why they settled for $4.25 million less.

Q. (C. O.) Where will the settlement proceeds go?
A. (Egan)  …..claimants will be offered an arbitration process, which will permit recovering between $5,000 and $200,000 as determined by Commonwealth Mediation…..those who elect not to go into arbitration will be free to pursue their legal claims in a court of law, and the diocese will defend those claims with any lawful defense.

Nowhere in these answers do we learn that the amounts for the "process" were determined by Bishop McDonnell. The insurance companies provided reimbursement, and the mediation service provided distribution. Mr. Egan is hiding the fact that McDonnell lowballed the victims.

After the dust settled, the average award of the second wave was $76,000. The average award for the first wave of victims had been $168,478. By the way, the average award for a settlement of this type throughout the US is close to one million dollars. Although $5 million was allocated for the second wave, the mediation service held the awards to $4.5 million – so the remaining $.5 million went to the Diocese. Confidentiality agreements prevent us from knowing more about the process.

Egan's statements show how the settlement game is played. Those who opt into the process gain the money, but lose their right to sue. Those who don't participate lose the money, but retain their right to sue. This proves that the Diocese never gave up its legal defenses, unless it got something in return. Church officials made their decisions based on cutting their losses. In other words, they displayed typical corporate behavior.

Q. (C. O.) Why do you think the insurance carriers settled now?
A. (Egan) ….. in my judgment, the carriers came to the same conclusion as the grand jury: that this terrible abuse was done in secret, and that the victims were coerced by their abusers to keep the abuse secret for years….

This is grandstanding. Mr. Egan continues to argue the case here that he lost in court, except that now, confidentiality agreements are in place.

It's convenient for Mr. Egan to say that the insurers were converted to the same viewpoints that Mr. Egan holds, now that they cannot answer back. But, throughout the three-year trial, the carriers never gave a sign that they accepted Diocesan claims.

It's equally convenient for him to pretend that the conclusions of the grand jury mirror his own, now that they have disbanded. But, the record shows that the grand jury come to no conclusions about the Diocesan role in sexual abuse. Their charge was to examine the actions of Dupre, not the Diocese.


If we apply the Diocesan Playbook to Mr. Egan's Q & A, we find that the Diocese claims they were forced into the settlement (a decision made by not making a decision). Although Mr. Egan avoids responsibility by claiming"pastoral decisions", it's hard to find decisions that are not forced or strategic.

Even after a loss of $4.25 million, church officials try to hide the reasons for the loss. They also withhold information by insisting on confidentiality agreements to protect themselves, even though the Dallas Norms specifically called for an end to such measures.

The Diocese does not apologize for lowballing the victims, or for its past behavior as employer, or for maintaining its secrecy. On the contrary, it loudly proclaims its innocence, despite considerable evidence to the contrary.

The shortfall of $4.25 million strongly suggests that the Diocese was indeed negligent – and that a trial would have made this plain.