An attorney for the Catholic Diocese of Spokane faces a contempt of court hearing for allegedly threatening a bankruptcy trustee with a personal lawsuit.
The hearing involving attorney Greg Arpin will be held Feb. 22 in front of U.S. Bankruptcy Court Judge Patricia Williams.
Arpin, of the Spokane law firm Paine Hamblen LLP, has represented the diocese for years and has played a major role defending it during the child sex-abuse scandal that forced the diocese into a protracted and expensive bankruptcy.
Although the bankruptcy case has been largely resolved through a $48 million settlement with victims of clergy sex abuse, a slew of late and unexpected claims have been filed that could cost the diocese millions more.
Arpin and the diocese have been fighting the legitimacy of these new claims – some of which have been approved and paid. They lost arguments in Bankruptcy Court and have appealed to U.S. District Court.
Despite the appeal, Williams ordered bankruptcy trustee Gloria Nagler to proceed with the payments.
On Jan. 13, Arpin sent an e-mail to Nagler.
The e-mail “threatened to sue the plan trustee personally if the diocese’s position was ultimately sustained on appeal, but after funds were released from the plan trust,” Nagler wrote in court records.
The issue was presented to Williams, who ordered Arpin to appear in person.
Nagler asked that Arpin be sanctioned, fined at least $10,000, and ordered to pay attorney fees related to the matter rather than billing the diocese.
“The diocese’s strategy here is clear: force the plan trustee to violate the court order in fear of future litigation by the diocese, or force her to resign,” Nagler wrote, adding that there is no insurance policy to cover her performance.
John Munding, a diocese bankruptcy attorney with another firm, disputed that Arpin issued a threat.
“Greg is a well-respected lawyer and I can assure you that the diocese didn’t threaten anyone,” he said.
Arpin declined to comment for this story.
Munding said Arpin’s e-mail to Nagler falls well short of the threshold for holding a lawyer in contempt of court.
William Etter, who is representing Arpin in the contempt matter, said everyone involved in the diocese bankruptcy “has strong feelings about what has happened and what’s going on now.”
He said Arpin remains concerned that bogus claims are being paid, thereby denying money to victims with legitimate claims or possibly forcing the diocese to raise more money.
“There were no uncivil words or threats to justify a contempt order,” Etter said.
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