Diocese faces lawsuit over settlement

Attorney Gregg Meyers is suing the Catholic Diocese of Charleston and asking for a jury trial in an attempt to collect nearly $1.4 million.

The civil suit, filed March 10 with the state's 9th Circuit Court of Common Pleas, accuses the diocese of breach of contract, fraud and unjust enrichment. It refers to a special settlement independently arranged last August by Meyers and the diocese on behalf of 11 individuals, some of whom were sexually abused by diocese officials and some of whom are related to the victims. These plaintiffs opted out of the class-action settlement approved last July that obligated the diocese to pay up to $12 million to eligible individuals.

Diocese officials rejected Meyers' complaints, saying it would abide by the terms of the agreement.

"We will fulfill it as agreed upon," diocese spokesman Steve Gajdosik said.

Meyers said the terms of his independent agreement required the diocese to pay $1.375 million "after arbitration rulings," which concluded Feb. 13. But the diocese, in a March 3 letter, informed Meyers that no funds would be paid until a final disbursement of all funds involved in the class action.

Meyers' agreement with the diocese, however, says nothing about a contingency, he said. The money owed would be drawn from the initial pool of funds earmarked by the diocese since class-action payments will not reach $12 million, according to those involved in the case.

Meyers wants the court to require payment.

"The diocese is in breach of its obligations under the Aug. 30 agreement, and will make no payment under its obligations from that agreement without an order that it do so," the new lawsuit states.

The Aug. 30 letter from attorney A. Peter Shahid Jr., who represents the diocese, states that "the $1.375 million will be paid from the surplus funds, if any, after the claims process has been completed." If insufficient funds remain after the class-action money is disbursed, the diocese nevertheless will pay Meyers' clients "sometime after January 1, 2008," the letter states.

Gajdosik said the claims process has not yet been completed. Money in the escrow account has not been returned.

Meyers also has cited "fraudulent inducement to contract" and "breach of contract accompanied by a fraudulent act" in his suit, claiming the diocese never intended to fulfill the obligations spelled out in the Aug. 30 agreement and unilaterally altered the terms of the independent settlement, an assertion the diocese rejected.

Furthermore, Meyers claims, by avoiding payment, the diocese is benefiting financially.

The diocese says it must reach a final tally of all financial obligations before it can pay Meyers' clients, and that this was understood at the time the agreement was forged. Gajdosik confirmed that the $12 million cap would not be exceeded once all funds were disbursed.

"The Diocese of Charleston has sufficient funds guaranteed to be able to pay the claim, upon return of the funds held in escrow," Gajdosik said.

Meyers accused the diocese of employing a delay tactic. His clients have a right to be paid regardless of the status of class-action settlement since the two agreements are distinct, he said.

"I don't care where the $1.375 million comes from," he said.

Some of his clients are in bad shape financially and need the money. They were told by the diocese that they would be paid by February 2008, Meyers said.

He decided to sue once he received the letter from the diocese earlier this month, recognizing what he characterized as an attempt at stonewalling, he said.

Gajdosik said the diocese is simply following the terms of the agreement and will release the funds to Meyers' clients at the appropriate time.

"The Diocese of Charleston categorically rejects Mr. Meyers' speculations," Gajdosik said. "The diocese devised the agreement. It is not in our interests to now renege upon it."

Reach Adam Parker at 937-5902 or aparker@postandcourier.com.