Justices are mum on diocese appeal
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By KEVIN O'CONNOR RUTLAND HERALD STAFF - Published: March 26, 2009
Going in, the statewide Roman Catholic diocese hoped to overturn and a former altar boy sought to uphold a record $8.7 million child-sex verdict. Coming out, the Vermont Supreme Court gave no answers — just questions that left both sides nervous.
The court's five justices, now considering the potentially bankrupting case of Perry Babel versus the state's largest religious denomination, offered a peek Wednesday into their decision-making process at an unusual public hearing before 200 spectators at Vermont Law School in South Royalton.
The diocese, the target of nearly 40 negligence lawsuits in Chittenden Superior Court, is appealing a record judgment against it last May for its 1970s hiring and supervision of a priest it knew had molested boys in Massachusetts and Indiana.
In a landmark verdict, a 12-person jury awarded Babel, a 40-year-old former Burlington altar boy, $950,000 in compensatory damages and $7,750,000 in punitive damages for claims that the former Rev. Edward Paquette fondled him 40 to 100 times three decades ago.
"This trial, in our view, was inherently unfair for a variety of reasons," church counsel Kaveh Shahi argued Wednesday. Specifically, the diocese believes the case wasn't filed within the state's statute of limitations and shouldn't be subject to punitive damages because of the First Amendment's separation of church and state.
Justices questioned the diocese's contention that the statute of limitations had lapsed.
"You don't have any dates associated with that," Justice Denise Johnson said. "What's the most damning evidence in your favor?"
Replied Shahi: "We have no information that's diocese specific."
But justices also asked Babel's lawyers why the lower court judge took the issue off the table.
"That is a jury question, is it not?" Justice John Dooley said.
Justices disagreed among themselves when Babel's lawyers said their client didn't know about the diocese's culpability until he read a 2005 newspaper article about another case. Some questioned why the plaintiff didn't make a connection earlier, spurring Justice Marilyn Skoglund to note, "A reminder — he was 8 years old."
As for punitive damages, the church argued that the jury's finding of "reckless disregard" was too limited, saying it also should have decided whether there was "malice."
Replied Justice Brian Burgess: "Malice includes reckless disregard."
And Shahi: "But, in addition, you must find the actor had a bad motive."
And Burgess: "I'm not sure your reading of the cases is correct."
That said, justices acknowledged they had questions about punitive damages involving institutions and also the specific instructions the judge gave the jury.
The 118,000-member statewide diocese, having spent seven years and at least $2 million to resolve nine other negligence lawsuits, still faces 22 more Chittenden Superior Court cases involving seven retired or recently deceased pedophile priests. Of those pending, 17 involve Paquette, including the next set to be heard this fall.
In addition, the church is appealing two other lower court verdicts against it, including a jury award of nearly $3.6 million to a different plaintiff last December for similar negligence involving the same priest.
On Wednesday, justices hinted they'd like to use their yet-scheduled ruling on the questions of statute of limitations and the First Amendment as a guide in other church appeals.
The diocese doesn't have insurance for priest misconduct, although it says it held a comprehensive liability policy from 1972 to 1978. But the church can't find its copy of the policy — it's now suing the United States Fidelity and Guaranty Co. in hopes of settling the issue — while its former insurer argues it isn't liable for cases in which the holder is found negligent.
A judge has placed a lien on the diocese's Burlington headquarters, a historic brick building on land overlooking Lake Champlain valued at more than $11 million — to ensure the $8.7 million verdict is paid if upheld.
After Wednesday's hourlong hearing — part of the Supreme Court's annual visit to the state's only law school — lawyers for both sides left without any idea what justices would decide or when they would do it. Even so, the standing-room-only crowd gave the session rave reviews.
"Last year, the cases were so boring," one student said. "This is a really good case."
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