Portland Archdiocese Will Resist Judge’s Ruling Archbishop Says Church Will Follow Its Own Law

You wrote: "Actually, the problem is that Canon Law supports the bishop's contention, but it's not at all sure whether canon law trumps whatever legal arrangements the diocese has made in the past. It's awkward to cite canon law when you or your predecessor have signed a bunch of legal documents that say something different."

Incorrect. Within the Church CANON LAW TRUMPS ALL STATE LAWS. This was a Catholic parish. Canon law wins. Period. Whatever legal documents were signed by anyone are essentially meaningless if the Church demands a change in that legal structure to comply with canon law. Whatever changes the Diocese demanded, in accordance with canon law, the lay board could have easily made if they chose to do so. What was stopping them? Their pride. ONLY their pride.

"Because of the trusteeship controversy in the 19th century, most American dioceses put all property under the sole control of the bishop, as a sole person or corporation. That has proven to be a mistake, and it runs counter to current canon law. But many dioceses failed to implement the necessary changes, either because they were lazy, or foolish, or because their bishops liked the idea of exerting total control with no arguments."

Irrelevant. No matter what the past is the past is not the present. The lay board was told to comply with canon law. It has been told that for some time. It refused to do so. There was nothing stopping them from doing so other than their own PRIDE.

"It remains to be seen how this case will be settled. But the problems wouldn't arise if the previous bishop had taken the legal steps recommended earlier by the vatican at the time the Church's canon laws were revised."

Incorrect. The problem would not have arisen if the lay people at St. Stan's were orthodox and obedient. The whole problem stems from their actions and not the actions or inaction of any bishop. Woulda, coulda, shoulda just doesn't cut it. They were given a chance. They blew it. They wanted it that way. That sect will now be the collection spot for every malcontent, dissenter, pro-gay, pro-abortion, pro-divorce and remarry "once Catholic" in the city. One only has to know that Fr. Gerald Kleba congratulated the new priest at St. Stan's to know that the parish is headed toward heresy and schism at an alarming rate.

The new priest may lead the way in that regard: ""We thought he was homosexual. We had several problems with him. He said he wasn't homosexual, but we had certain proof that this wasn't true." Asked what proof, Guzowski said that other seminarians told him so." He may not be gay, but it is interesting that controversy and suspicion have followed this guy wherever he has gone. Yeah, he and St. Stan's were made for each other.

Archbishop John Vlazny told the Catholic Sentinel that he considers church buildings and land the property of individual parishes, NOT the archdiocese.

Whose. Name. Is. On. Those. Deeds? What he 'considers' (now that the $h¡†-is hitting-the-fan) may, in actuality, be quite different from what those legal documents prove.

The Portland archdiocese was the first Catholic diocese in the nation to declare bankruptcy when it sought protection from creditors in July 2004.

AND when (/if) those names have been changed in the last 18-or-so months...

Maybe canon law should trump American law. But it's not as clear as you seem to think. If all the Church property in Oregon is on record as owned by the Bishop as a sole corporation, and if that's what it says on the title deeds, then good luck persuading some leftist judge that American law doesn't apply.

There is a constitutional argument, and an argument in equity, and certainly a Catholic argument but that doesn't necessarily cut the mustard when all the title deeds have the bishop listed as sole owner and a secular American court has the jurisdiction.

The bishops in America have been delinquent in many ways, and this is certainly one of them. Those deeds should have been changed many many decades ago, but they were not. The bishops fell down on the job. They failed to obey Vatican directives. They failed to obey the new canon laws when they came out. Just as they fail so often to obey the Vatican in other areas. Now their power-drunk behavior has come back to bite them. Not all of them, but far too many of them.

That is the point. The good Bishop is about to learn a lesson in old fashioned Real Estate Law.

Incorrect. The problem would not have arisen if the lay people at St. Stan's were orthodox and obedient.

[read: docile, unthinking, unquestioning, and non-reactive - kinda like the Democrats want all of us to be, hey?]

The whole problem stems from their actions and not the actions or inaction of any bishop. Woulda, coulda, shoulda just doesn't cut it. They were given a chance. They blew it. They wanted it that way.

God will ultimately judge - and if those parishoners maintain the spirit and devotion they've had toward God and their Church in the past - I can think God will prosper that Congregation even if they may be worshiping Him without the "benefit" of diocesan "management".

That sect will now be the collection spot for every malcontent, dissenter, pro-gay, pro-abortion, pro-divorce and remarry "once Catholic" in the city.

Wow, so broad, and callous, a brush you use… Like, being under the 'thumb of rome' ever kept any such individuals OUT of a church?

…the parish is headed toward heresy and schism at an alarming rate.

Depending upon the viewpoints of those pealing "heresy" and "schism" and the viewpoints of St.Stan's Congregants. (your brush is showing again)

They do and say what they will based upon their beliefs, you do the same, and so do I and every other one of us - God will decide who, if all - if any - are pleasing to Him.

The bishops in America have been delinquent in many ways, and this is certainly one of them. Those deeds should have been changed many many decades ago, but they were not. The bishops fell down on the job. They failed to obey Vatican directives. They failed to obey the new canon laws when they came out. Just as they fail so often to obey the Vatican in other areas. Now their power-drunk behavior has come back to bite them. Not all of them, but far too many of them.

Amen.

That is the point. The good Bishop is about to learn a lesson in old fashioned Real Estate Law.

And Amen.

Unfortunately it will be the people he doesn't care about who will suffer the consequences of his office's incompetence/stupidity/greed (his or his predecessors').

There is a constitutional argument, and an argument in equity, and certainly a Catholic argument but that doesn't necessarily cut the mustard when all the title deeds have the bishop listed as sole owner and a secular American court has the jurisdiction.

The Bishop chose the bankruptcy court as a forum for deciding the issues. I suppose he could always dismiss the bankruptcy and take his chances in the state courts, but it is mighty arrogant of him to make the statements that he is making now.

As to the equity argument, that probably isn't going to fly. About all the debtors have left is the constitutional argument.

And any US bishop that doesn't have a team of lawyers working on updating structure and ownership documents in light of the bankruptcy filings probably should be re-assigned to counting pencils at the Vatican.

I couldn't agree with you more.

***I clearly understand the situation better than you do.***

If you understood at least 10% of "the situation" you would fully support St. Stanislaus parish. I have known a few GOOD Roman Catholic Bishops and I have known a few bullies, so I know exactly what a GOOD Bishop is, and Burke isn't anywhere near that category. He needs to repent and ask for forgiveness before it's too late.

***Burke was not asking that the property be given up***

Dude, what Universe are you in?

You have no idea of what you are talking about. I know Burke personally. Do you know anyone involved in this situation personally? Have you read any of the information out there about how St. Stan's is ALREADY turning into a collection spot for the pro-gay crowd in St. Louis? I bet not.

If you're going to say that Burke is a bad bishop then you have to say that Rigali is as well because he was headed down much the same path as Burke in regard to St. Stan's.

Does St. Stan's have the right to do what they did according to canon law? No. Does St. Stan's have the right of it according to the Vatican? No. Does St. Stan's even have a moral leg to stand upon? No.

And in case you did not realize this IT IS ALREADY TOO LATE UNLESS ST. STAN'S comes back to the Catholic Church to full communion. St. Stan's parish leadership is EXCOMMUNICATED. Get a clue.

Don't be a fool.

This is what the parishoners of St. Stan WHO STAYED LOYAL TO THE CATHOLIC CHURCH have to say about it all. Care to refute them?

"There is ongoing speculation about the reasons the board of directors changed corporate by-laws and assumed control over the parish finances. It is apparent that this situation exempted the board from the strict accountability required of all other parishes of the Roman Catholic Church. Contrary to public declarations, the board refused to conduct an independent financial audit by a certified public accountant, and to disclose details of parish operations, including procedures for awarding contracts and service agreements. The change of corporate bylaws was done with premeditation through amendments in 2001 and 2004. This itself is a clear violation of the original 1891 corporate bylaws, which explicitly state that corporation bylaws must be in conformance with diocesan rules, regulations and requirements."

Thus the dispute is not over property, but violation of canon law, the actualy original rules of the parish, etc. This rebelleion was begun in 2001 when the lay board WITHOUT ANY PROPER AUTHORITY VIOLATED THE RULES OF THE PARISH. The issue is AUTHORITY.

Here's what the Portland Archdiocese had on their webiste:

December 30, 2005

NEWS RELEASE
FOR IMMEDIATE RELEASE
For More Information, Contact:
Bud Bunce (503) 233-8373
bbunce@archdpdx.org

Statement of the Archdiocese of Portland Court Rulings

We are very disappointed that the Court ruled that under bankruptcy law the interests of the parishes in their own property can be eliminated. We believe that this ruling will not stand up under eventual review by higher courts. The Court was and is faced with many difficult issues in a case which itself is complex and unprecedented. However, we feel strongly that this decision is not supported by the facts or the law, and believe it infringes on Archdiocese's right and the parishioners’ rights to freely exercise their religion. We will review our options to appeal and evaluate the impact of this ruling on this litigation and other aspects of the bankruptcy case.

Throughout the bankruptcy proceedings, the focus of the Archdiocese has always been on settling and paying valid claims. The Archdiocese has and will continue to resolve claims fairly, justly and equitably, and will defend against those claims that are not valid. The Archdiocese has filed a plan of reorganization that proposes to accomplish both of these objectives.

The Archdiocese is committed to continuing its religious and charitable mission to Catholics and others, including thousands of schoolchildren, its parishioners, and the poor and dispossessed, as it has for its 157-year history in Oregon, no matter what obstacles confront it.

###

Catholic Sentinel article

Archdiocese intent on mission despite adverse ruling

01/05/2006 Ed Langlois

Despite a court ruling that could significantly boost the amount of sex-abuse settlements, leaders for the Archdiocese of Portland say the local church and its work will endure.

“The Archdiocese is committed to continuing its religious and charitable mission to Catholics and others, including thousands of schoolchildren, its parishioners, and the poor and dispossessed, as it has for its 157-year history in Oregon, no matter what obstacles confront it,” said a statement issued after the Dec. 30 decision by Federal Bankruptcy Judge Elizabeth Perris.

In a controversial ruling that asserts the primacy of secular law over church law in the matter of church bankruptcy, Perris said the archdiocese is the owner of parish and school properties.

That means parish and school real estate worth hundreds of millions of dollars can be tallied when the court decides how much claimants will be paid.

On the day in July 2004 when the archdiocese became the first in the U.S. to file for bankruptcy protection, Archbishop John Vlazny explained that church law forbids him from seizing parish assets.

“Parish property belongs to the parishes,” he said.

Perris cast aside arguments based on canon law, writing that “No First Amendment issue arises when a court resolves a church property dispute by relying on state statutes.” She also wrote that the archdiocese could have separately incorporated parishes when it formed, but chose not to.

A similar decision against the Diocese of Spokane is now under appeal, and attorneys are studying appeal options in the Portland case.

“We believe that this ruling will not stand up under eventual review by higher courts,” said the archdiocese’s statement.

“We feel strongly that this decision is not supported by the facts or the law, and believe it infringes on the Archdiocese’s right and the parishioners’ rights to freely exercise their religion,” the statement added.

Faced with questions about why property titles have the archdiocese or archbishop listed as owner, church attorneys explained that the property is held in trust for the use of the parishes and schools.

Including parishes and schools in the asset tally does not mean those institutions will be sold off automatically to pay settlements.

In her decision, Perris left open the question of whether such liquidation would be an undue burden on freedom of religion for western Oregon’s 400,000 Catholics.

The archdiocese in November offered a plan that would provide a fund of about $40 million for settlements, relying on borrowing. Now, with the parish and school properties counted in the archdiocese’s estate, there is much more at stake.

A hearing on the archdiocese’s $40 million proposal is set for Feb. 14. Church leaders say the plan offers fair settlements. But claimants must approve the plan, a result that seems doubtful in wake of the property decision.

Abuse plaintiffs and their lawyers mostly had their way in Perris’ ruling. Attorneys are paid a percentage of settlements, usually about a third.

When it filed for Chapter 11 protection, the archdiocese was facing a trial in which one plaintiff was seeking $135 million.

Before the bankruptcy, the archdiocese and its insurers had already paid $53 million to settle more than 130 claims.

“Throughout the bankruptcy proceedings, the focus of the Archdiocese has always been on settling and paying valid claims,” the archdiocese’s statement said. “The Archdiocese has and will continue to resolve claims fairly, justly and equitably, and will defend against those claims that are not valid.”

“This is not a decision we were expecting or hoping for,” says Doug Pahl, a Portland attorney representing parishes and parishioners in the bankruptcy. “But I don’t think this changes anything immediately.”

Catholics are concerned, says Pahl. But he tells them to continue supporting their parishes and expects that is just what they will do.

Precedents

In 2004, a federal bankruptcy attorney who asked to remain anonymous predicted that the Archdiocese of Portland would have a big job stating its property case in bankruptcy court.

The federal definition of what is the property of a bankrupt estate is “very broad and expansive,” the attorney said.

But Dan Murray, a Chicago bankruptcy attorney and professor at the Notre Dame Law School, told the Sentinel then that property issues in the case could be complicated for higher courts because the bankrupt entity is a church with long-standing practices.

Murray cited a 1976 U.S. Supreme Court Case eventually decided in favor of an Orthodox Diocese.

The question in Serbian Eastern Orthodox Diocese vs. Milivojevich was, To what degree can a civil court sit in review of a decision of a church court?

The U.S. Supreme Court held that the Illinois Supreme Court had run afoul of religious freedom and due process when it interfered with the Serbian diocese’s decisions about the status of a parish’s property.

“The fallacy fatal to the judgment of the Illinois Supreme Court is that it rests upon an impermissible rejection of the decisions of the highest ecclesiastical tribunals of this hierarchical church upon the issues in dispute, and impermissibly substitutes its own inquiry into church polity and resolutions,” said the U.S. Supreme Court decision, written by Justice William Brennan. “For where resolution of the disputes cannot be made without extensive inquiry by civil courts into religious law and polity, the First and Fourteenth Amendments mandate that civil courts shall not disturb the decisions of the highest ecclesiastical tribunal within a church of hierarchical polity, but must accept such decisions as binding on them, in their application to the religious issues of doctrine or polity before them.”

— Ed Langlois

Letter from Archbishop John G. Vlazny

In letter to parishioners, Archbishop Vlazny reacts to ruling

01/05/2006 Archbishop John Vlazny

Dear Friends in Christ,

On December 30, 2005, the Bankruptcy Court issued a number of rulings in the Archdiocese of Portland’s Chapter 11 case. At this point, I want to be sure you know just what the court’s decision does and does not mean for parishes.

The Court’s rulings do not resolve the property lawsuit in our Chapter 11 case. The Court ruled only on certain specific legal issues. The Court ruled that parishes have no separate civil legal existence — that they are merely part of the Archdiocese — and that parish real estate, therefore, belongs to the Archdiocese.

The Court did not rule on the question of whether the elimination of parish and high school interests in their property would violate the Religious Freedom and Restoration Act. That issue will have to be decided at a trial some time in the future. We will fight hard to protect the First Amendment rights of parishes and parishioners.

Neither did the Court rule on whether other types of parish and school assets (cash, bank accounts, investments, endowments, etc.) are held in trust for a specific charitable purpose, or otherwise for restricted use. There is substantial evidence that various parish, school and Archdiocesan assets are held in charitable trust or otherwise for restricted use. It is still too early to say which, if any, parish or school assets could ultimately become available to pay claims in the bankruptcy or whether that will even be necessary. Those decisions remain for another day.

The Court was and is faced with many difficult issues in our case, which is complex and unprecedented. We are reviewing our options to appeal and evaluating the impact of these rulings on other aspects of our bankruptcy case. Our attorneys believe that various aspects of the rulings will not stand up under eventual review by higher courts.

You have often heard me say that parish assets belong to the parish, as has been our understanding and practice under Canon Law, and that I do not intend to seize parish assets to pay creditors of the Archdiocese. My commitment remains to uphold Canon Law and respect the rights of each parish under Canon Law. If this means I must appeal Bankruptcy Court rulings to a higher court, I will do so.

From the outset of the lawsuits against the Archdiocese six years ago, our primary focus has been on resolving the claims and bringing closure and healing where possible. This has remained the primary focus of the Archdiocese during the bankruptcy. We continue to believe that finding a reasonable way to resolve the remaining claims is the best path to a conclusion of the bankruptcy. Reasonable compensation of valid claimants while continuing the mission of the church was and is my goal. The Tort Claimants’ Committee nonetheless filed an Adversary Proceeding in the bankruptcy court to litigate the issue of the parish assets, which has forced us to spend much time and money in defense.

Where do we go from here? Regardless of the Court’s rulings, the ultimate question is not how much property the Archdiocese owns, but rather, how much the Archdiocese owes to creditors with valid claims. We have resolved and will continue to resolve valid claims fairly, justly and equitably. We will also defend against potentially invalid claims, as we have in the past. To date, we have resolved by disallowance or settlement more than 70 of the child sex abuse claims filed; approximately 115 claims remain. We have proposed to make available close to $40 million to fund the pending and settled-but-unpaid claims and believe this amount will provide fair, just and equitable compensation. The Archdiocese has filed a plan of reorganization, which, if confirmed, would pay these and other claims as early as April 30, 2006. The Archdiocese is also working to settle the Adversary Proceeding on the property of the estate and resolve the entire bankruptcy. We will continue to work cooperatively with the attorneys for the parishes and parishioners to achieve a feasible resolution of this litigation.

Please continue to pray that we will find a way to conclude the bankruptcy of the Archdiocese fairly and justly for all concerned. I appreciate your past generosity and good works in support of the mission of the Church and urge you to remain steadfast in giving of your time, talent and treasure.

Despite the many challenges we face, I am hopeful for good things for our Church in Western Oregon. Many blessings to each of you in the year ahead!

Sincerely yours in Christ,

Most Rev. John G. Vlazny

Archbishop of Portland in Oregon

** My commitment remains to uphold Canon Law and respect the rights of each parish under Canon Law. If this means I must appeal Bankruptcy Court rulings to a higher court, I will do so.**

Sounds like the Archbishop is ready to play hardball.

Maybe. Ther Serbian case sounds interesting. Thanks.

Just because you wear a collar doesn't mean that you and your property is above the law.

These bankruptcy cases never should have been filed. Putting the courts in control of Church property was, well at best, a poor decision.

I agree!