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The Catholic Diocese of Spokane has settled a malpractice case it filed against the law firm that handled its bankruptcy over priest sex abuse claims.
The church and the Paine Hamblen law firm settled Friday, but the terms of the settlement were not disclosed, The Spokesman-Review reported.
The malpractice lawsuit was set for a trial in February, but both sides reached a settlement through a mediation effort.
“The settlement does not constitute an admission of wrongdoing by either side,” both sides said in a joint statement. “Rather, it is a resolution of differences in an amicable manner which allows the parties to move forward with the important work that each conducts in the service of the common good.”
Jane Brown, the managing partner of Paine Hamblen, told the newspaper her firm is pleased with the outcome. Robert Gould, a lawyer hired by the diocese to pursue the malpractice case, declined comment.
The diocese filed for bankruptcy in 2004. It reached an agreement in 2007 to pay people who claimed abuse at the hands of priests dating back decades.
Former Spokane Bishop Blase Cupich, who now serves as archbishop of Chicago, reviewed the bankruptcy case when he arrived in 2010 and decided to pursue a claim against the law firm.
The church had sought $3.6 million in legal fees from the law firm, saying its lawyers underestimated how many victims would come forward with sex abuse claims after the bankruptcy was first resolved. The law firm had disputed the claim.
A $1 million fund was created to handle future claims after the bankruptcy case was first resolved, based on Paine Hamblen’s estimates of how much it would cost the diocese to settle the allegations. But the fund was quickly depleted, raising the prospect of foreclosure on some Catholic parishes that had been put up as collateral.
Paine Hamblen disputed the malpractice claims by pointing to the vitality of the Catholic Church in Spokane following the $48 million bankruptcy settlement.