Catholic church settles lawsuit against lawyers

The law firm of Paine Hamblen has settled a bankruptcy malpractice case regarding its multi-million dollar representation of the Catholic Diocese of Spokane. A settlement signed Friday by the law firm and the church ends the acrimonious lawsuit and closes a bankruptcy case that was first filed in December 2004. The settlement amount and some other terms were not disclosed, though neither side was awarded lawyer fees and court costs. The two sides reached the agreement with the help of retired U.S. Bankruptcy Judge Ralph Mabey, who led a mediation effort in mid-January. “The settlement does not constitute an admission of wrong doing by either side; 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,” the two sides said in a joint press release. The wording was stronger in court records: “Paine Hamblen lawyers and staff did not act in bad faith and did not engage in knowing or fraudulent misconduct in connection with their representation of the Catholic Bishop at any time.” Jane Brown, the managing partner of Paine Hamblen, said her firm is “very happy with this result.” In most Chapter 11 bankruptcy cases, such financial settlements are open to public inspection. The legal transparency helps ensure that the terms are in the best interests of creditors. In this matter the diocese and Paine Hamblen sought a confidentiality clause, in part because the bankruptcy case had long ago been settled with a sweeping $48 million plan that has paid creditors, which in this case were the victims of clergy sex abuse.