Paine Hamblen's Motion To Dismiss Lawsuit

The Honorable Frederick P.
Corbit
1 Bradley S. Keller, WSBA #10665

Ralph E. Cromwell, Jr., WSBA #11784
2
Jofrey M. McWilliam, WSBA #28441
3 Byrnes Keller Cromwell LLP
4 1000 Second Avenue, 38th Floor
Seattle, WA 98104
5 (206) 622-2000
6 Facsimile No.: (206) 622-2522
7 Ragan L. Powers, WSBA #11935
8 Hugh McCullough, WSBA #41453
DAVIS WRIGHT TREMAINE
9 1201 Third Avenue, Suite 2200
10 Seattle, Washington 98101-3045
(206) 757-8123
11 Facsimile No: (206) 757-7123
12
UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF WASHINGTON
13
14
15 THE CATHOLIC BISHOP OF

SPOKANE, a/k/a THE CATHOLIC
CASE NO. 04-08822-FPC11
16 DIOCESE OF SPOKANE,
17
Debtor.
Adv. Proc. No. 14-80001-FPC
18 THE CATHOLIC BISHOP OF
SPOKANE, a/k/a THE CATHOLIC
19 DIOCESE OF SPOKANE, a Corporation
DEFENDANTS MOTION TO DISMISS
20 Sole, and MAGGIE LYONS, Plan Trustee, REGARDING FED. R. CIV. P. 60(b)
Plaintiffs,
21
22 v.
PAINE HAMBLEN, LLP, a Washington
23
Limited Liability Partnership, f/k/a PAINE,
24 HAMBLEN, COFFIN, BROOKE &
MILLER, LLP; GREGORY JOHN ARPIN
25
individually, and the marital community
26 composed of GREGORY JOHN ARPIN
DEFENDANTS MOTION TO DISMISS REGARDING
FED. R. CIV. P. 60(b) - 1 (CASE NO. 14-80001-FPC)
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
SEATTLE, WASHINGTON 98104
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 1 of 37
1 and JANE DOE ARPIN; SHAUN McKEE

2 CROSS individually, and the marital
community composed of SHAUN McKEE
3 CROSS and JANE DOE CROSS;
4
Defendants.
5
I.
INTRODUCTION AND RELIEF REQUESTED
Judge Williams prior order approving the fees paid to defendants in the
underlying bankruptcy is res judicata as to any challenge to those fees. Accordingly,
before the Court conducts a two-week trial on plaintiffs claims, it should first address
9
10
the gateway issue of whether plaintiffs can meet their burden under Federal Rule of
11
Civil Procedure 60 to set aside Judge Williams order. This is not a light burden. Our
12
judicial system places a high premium on the finality of final judgments.
13
14
15
Rule 60 requires that someone who wants to set aside a final judgment must
promptly bring the matter to the attention of the court which entered the order. In most
instances, Rule 60 limits the time to act to one year. Here, plaintiffs waited over seven
16
17
years. Rule 60(b)(6) is a catch-all provision which replaces the one-year limit with the
18
requirement that the moving party act within a reasonable time. However, the cases
19
interpreting this provision agree that it should be used sparingly to avoid manifest
20
injustice and only where extraordinary circumstances prevented the party from
21
taking timely action to correct an erroneous judgment.
22
Here, none of the claims alleged by the Diocese even comes close to claiming
23
24
25
manifest injustice, nor are there any extraordinary circumstances that precluded
earlier action. Quite the contraryBishop Cupich told his Vicar General that the
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 2 of 37
1
2
3
current claims are simply an attempt to throw mud at Paine Hamblen to try to get some
insurance money:
So, I met with him [Bishop Cupich]. I walked him through the
complaint, showing him where each point, each paragraph was in error.
The one paragraph I did not know about is the issue of conflict of interest
and whether Paine-Hamblen should have filed or not filed, that I dont
know about. Okay. But all the other material in the complaint I told
Bishop Cupich that it was inaccurate, and that I had told his attorneys that
it was inaccurate.
****
4
5
6
7
He said that -- he had two responses. Is, one is that we are

throwing mud at Paine-Hamblen to see if any mud sticks.
10
11
And two is that we had to say all these other things to activate their
insurance.
12
13
Dep. of Fr. Steven Dublinski (Dublinski Dep.) 42:10-17, 42:22-43:1 (Ex. 1).1 Not
14
surprisingly then, the substantive errors alleged by the Diocese often boil down to a
15
difference of opinion between the current Bishop Cupich and former Bishop Skylstad
16
17
over judgment calls where there was no clear right answer. As for the conflicts of
18
interest, assuming they exist, they are subtle and no one has been able to identify any
19
harm they caused because there is none.
20
Moreover, all of the alleged errors and conflicts have been in plain view for
21
years. Rather than bring this matter to this Court within a reasonable time so that
22
Judge Williams could have addressed whether her order should be set aside, the
23
24
25
26
All exhibits referenced herein are attached to the Decl. of Ralph E. Cromwell, Jr., in
Supp. of Defs. Mot. to Dismiss Re Fed. R. Civ. P. 60(b).

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 3 of 37
1
2
3
Diocese has deliberately delayed for years. Indeed, there is testimony from the
Dioceses inner circle that it deliberately delayed filing the current action for months
until after Judge Williams had retired because they were concerned she would not view
this matter favorably.
6
7
8
9
10
Under these circumstances, the strict requirements of Rule 60 cannot be met and
plaintiffs are not entitled to set aside Judge Williams Order approving defendants
fees. Accordingly, because Judge Williams fee approval Order is res judicata, there is
no need to spend weeks trying plaintiffs claims, which should be dismissed.
II.
11
12
13
A.
FACTUAL BACKGROUND
Bishop Skylstad and His Management Team Still Support the Work Done
by Defendants.
In their Complaint and Motion for Order to Show Cause, the Diocese, through
14
15
its current Bishop Blase Cupich, broadly attacks the work done by defendants in the
16
underlying bankruptcy. However, defendants worked for Bishop William Skylstad,
17
not Bishop Cupich. Bishop Skylstad filed this Chapter 11 in 2004, hired and directed
18
Paine Hamblen as debtors counsel, negotiated a consensual plan of reorganization that
19
was confirmed in 2007, and served as Bishop of the Spokane Diocese until he retired
20
in the fall of 2010. As the Corporation Sole, Bishop Skylstad was Paine Hamblens
21
22
23
24
client and the person ultimately responsible for the many decisions at issue in this
litigation.
In his deposition, Bishop Skylstad continues to support the work done by Paine
25
Hamblen, stating that he viewed defendants as very capable legal counsel during the
26
bankruptcy and does not feel differently today. Dep. of Bishop William Skylstad
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 4 of 37
1
2
3
(Skylstad Dep.) 88:16-89:10 (Ex. 2). He does not regret the many difficult choices
he made with Paine Hamblens guidance and counsel. Bishop Skylstad feels that his
goals in filing the bankruptcyfairness for the victims and ensuring the continuation
of the Churchs missionwere largely achieved. Id. at 10:9-13:24. He feels that
Paine Hamblen did a remarkable job in negotiating a Plan that protected Parish
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
assets given the potential liability. Id. at 13:15-19. In contrast to the current theory of
Bishop Cupich that Bishop Skylstad should have pursued a cram down to force a cap
on future claims, Bishop Skylstad testified that he did not want a cram down, favoring
a consensual Plan that facilitated healing in the Diocese:
A. . . . its a much more positive aspect of those proceedings to look at a
consensual arrangement. I have always been very strong about
consultation and working toward a resolution with agreement of everyone,
and rather than looking at a cramdown, which is kind of a forced situation
that can leave some hard feelings on whatever side. So, I think its better
to work together to bring some kind of resolution rather than looking to a,
sort of an adversarial approach that a cramdown might take.
Skylstad Dep. 22:4-12 (Ex. 2).
In the same vein, Bishop Skylstad noted that Bankruptcy Judge Gregory Zive,
appointed as mediator in the underlying bankruptcy (ECF 1195), urged him to work
out a consensual plan, Skylstad Dep. at 82:16-19, advice on which Bishop Skylstad
placed considerable value. Id. at 82:24-25. Bishop Skylstad acknowledged that the
23
bankruptcy entailed hard choices, id. at 61:1-3; see id. at 7:5-6, 9:2-9. However, he
24
feels that he did the best [he] could and that Paine Hamblen did remarkably well in
25
getting the Diocese to a consensual Plan that was approved. Id. at 91:3-92:13. He told
26
Father Steve Dublinski, his Vicar General, in 2014 that the current claims against
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 5 of 37
1
2
3
4
Paine Hamblen amount to making a mountain out of a mole hill. Dublinski Dep.
37:1-2 (Ex. 1); Skylstad Dep. 153:7-10 (Ex. 2).
Bishop Skylstad is not the only member of the Dioceses inner circle that is
skeptical of the claims now brought by Bishop Cupich. Virtually every member of
Bishop Skylstads management team during the bankruptcy has testified that they do
7
8
9
10
not agree with the claims currently brought by Bishop Cupich. Mike Geraghty, the
long-time Diocesan counsel for the Spokane Diocese from 1978 through 2012, was
kept informed throughout the bankruptcy. Dep. of Michael Geraghty (Geraghty
11
Dep.) 47:17-48:11 (Ex. 3). He feels that Paine Hamblen competently represented the
12
Diocese during the bankruptcy. Id. at 48:12-18; 73:6-20. Amazingly, although he had
13
been the Diocesan Attorney since the late 1970s and was deeply involved throughout
14
15
16
17
18
19
20
21
22
23
24
the underlying bankruptcy, Mr. Geraghty was never shown a draft of the current
Complaint against Paine Hamblen before they were sued to comment on its accuracy
or the quality of defendants work. Id. at 64:7-17; 64:25-65:3. He promptly resigned
when he learned that Bishop Cupich had decided to file this action. Id. at 64:18-22.
Father Dublinski was the Vicar General from 2002-2014, serving in essence as
Bishop Skylstads top lieutenant during the bankruptcy. Dublinski Dep. 11-12 (Ex. 1).
He was the principal person at the Diocese responsible for processing the sexual abuse
claims that led to the bankruptcy and served as a liaison with Paine Hamblen. Id. at
12-14. In his deposition, he was particularly critical of the current claims against Paine
25
Hamblen, recounting how he asked for a meeting with Bishop Cupich upon first seeing
26
the Complaint to express concern about factual inaccuracies:

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 6 of 37
1
2
3
4
So, I met with him. I walked him through the complaint, showing
him where each point, each paragraph was in error. The one paragraph I
did not know about is the issue of conflict of interest and whether PaineHamblen should have filed or not filed, that I dont know about. Okay.
But all the other material in the complaint I told Bishop Cupich that it was
inaccurate, and that I had told his attorneys that it was inaccurate.
5
6
7
8
9
10
11
12
13
Dublinski Dep. 42:10-17. In response, Bishop Cupich told Father Dublinski that the
Diocese intended to throw mud against Paine Hamblen to see what would stick and
that some of the allegations were included simply to activate insurance coverage:
A. He said that -- he had two responses. Is, one is that we are throwing
mud at Paine-Hamblen to see if any mud sticks.
And two is that we had to say all these other things to activate their
insurance.
Dublinski Dep. 42:22-43:1 (Ex. 1).
Like Mike Geraghty, Father Dublinski then tried to resign as Vicar General but
14
15
Bishop Cupich asked him to reconsider. Id. at 43:12-13; 58:10-16. Father Dublinski
16
agreed to stay on, but the result was that he and Bishop Skylstad were then asked to
17
attend a meeting where they were lectured about the need to be more supportive of this
18
lawsuit:
19
20
A. Well, I was told to come to a meeting for an update on the present

lawsuit, to meet with diocesan attorneys.
21
Q. And who were the diocesan attorneys?
22
A. Well, our -- the diocesan attorneys at that time were Mr. Gould and
Parker, and they were not present.
23
24
Q. All right. So, who was present?

A. Ford Elsaesser and John Munding.
25
****
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 7 of 37
A. Ford Elsaesser and John Munding expounded on Paine-Hamblens

responsibility for the future claims being -- not being -- that Morning Star
was not carved out, that the agency question had not been sufficiently
dealt with. And at the end of -- Bishop Skylstad and I, neither one of us
really participated in the conversation. We were basically being talk[ed]
to. At the end of which we were told, The lawsuit has been filed. Get on
board.
2
3
4
5
6
Shortly before his deposition, Father Dublinski finally resigned as Vicar
8
9
10
General. Id. at 58:17-20. Elsewhere, Father Dublinski noted the irony in Elsaesser
and Munding criticizing Paine Hamblens handling of future claims in that those
11
provisions of the Plan were largely worked out by Elsaesser and Munding in their
12
then-role as counsel for the Association of Parishes given that the Parishes were
13
securing the payment of future claims:
14
A. That the leadership of the Association of Parishes said, since we are

taking on all the liability or a portion of, the major portion, lets say, the
major portion of the liability . . . that they would do the negotiations and
would not allow the diocese to be part of it.
15
16
17
Q. And when you -- when they took on the negotiations and didnt allow
the diocese to be a part of it, who did you understand then was doing the
negotiation for the parishes?
18
19
A. The team from the Association of Parishes, so you had John

Munding, Ford Elsaesser, and the committee.
20
21
22
Dublinski Dep. 75:4-17 (Ex. 1).
23
Bishop Skylstad and His Staff Do Not Agree that Defendants Had Conflicts
of Interest.
24
With regard to defendants alleged conflicts and nondisclosures, the Diocese
25
26
B.
emphasized in its Motion to Show Cause that the defendants represented Bishop
Skylstad as an individual in the John Doe matter (Spokane Cnty. No. 02-2-06393-9)
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 8 of 37
1
2
3
but did not disclose this to Judge Williams. ECF 2815 at 2:8-25; Compl. dated Oct.
17, 2002 (Ex. 5). A second matter, K.M. (Spokane Cnty. No. 06-2-04950-5), filed
almost two years into the bankruptcy, has been the subject of some discovery. See
Compl. dated Nov. 13, 2006 (Ex. 6). However, again, the testimony of Bishop
Skylstad and his staff is that they are supportive of defendants work and aware of no
7
8
9
10
11
12
factual basis for these after-the-fact conflict allegations.

To begin, Bishop Skylstad does not believe that defendants ever represented him
as an individual:
I always felt Greg Arpin represented the diocese and not me personally.
That was, I think, very clear.
Skylstad Dep. 129:10-11 (Ex. 2); Nov. 18, 2004, Engagement letter (Ex. 7). Similarly,
13
14
Bishop Skylstad went through the retention letter that Paine Hamblen wrote in
15
November of 2004 just prior to filing bankruptcy and explained how he understood the
16
portion of the letter addressing who the defendants would represent:
17
18
A. This means, I think, that they were responsible for representing the
diocese and not to any specific, as it says, any officer, agent, partnership.
They represent the diocese as a corporation sole.
19
20
21
22
23
24
****
Q. And was this accurate, as far as you knew, when the bankruptcy was
filed, that Paine-Hamblen was only representing the diocese and not any
of the individuals?
A. Thats correct.
Skylstad Dep. 127:4-14 (Ex. 2).
25
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 9 of 37
1.
With regard to the John Doe matter, Bishop Skylstad explained that the abuse
3
4
5
6
7
The John Doe Matter.
happened in 1973 at a parish called St. Marys but, that in 1973, he was the rector of
Mater Cleri Seminary elsewhere and had no role in supervising the alleged abuser. Id.
at 130:1-131:24. Accordingly, Bishop Skylstad testified that he believed he was
named in the John Doe matter only in his capacity as Bishop:
10
A. I presume that in my role as a diocesan bishop that that would be the

role against whom they would make the complaint. I never considered
that to be a personal, you know, a personal affront to me. It was in my
role as a diocesan bishop or as a pastor.
11
Q. Never ever?
12
A. Not really.
8
9
13
Id. at 270:19-25. This was consistent with the testimony of Greg Arpin, who testified
14
at length that Bishop Skylstad had no possible connection to the abuse of John Doe in
15
1973 and could have no conceivable personal liability.
16
17
18
19
20
21
Well, there are no claims made against Bishop Skylstad in this -- theres
no claim for damages against Bishop Skylstad . . . . [T]he claim of abuse
with John Doe happened before ODonnell was under the supervision of,
at the time, Father Skylstad. So theres no connection factually, nor could
there be a connection factually. And, in fact, at some later point in time,
Bishop William Skylstad was . . . voluntarily dismissed from the case
because of that.
Arpin Dep. 132:19-133:5 (Ex. 4).
22
23
Bishop Skylstads testimony that the defendants did not represent him as an
24
individual is also consistent with the Complaint itself in John Doe, which pleads four
25
causes of action, and then carefully describes who each claim is alleged against, none
26
of them being against the Bishop in any personal capacity:

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 10 of 37
IV.
FIRST CAUSE OF ACTION: NEGLIGENCE AND BREACH OF

FIDUCIARY DUTY AGAINST SPOKANE DIOCESE AND
INLAND NORTHWEST COUNCIL, BSA [i.e., Boy Scouts of
America]
V.
SECOND CAUSE OF ACTION: NEGLIGENT INFLICTION OF

EMOTIONAL DISTRESS AGAINST SPOKANE DIOCESE AND
THE INLAND NORTHWEST COUNCIL, BSA
VI.
THIRD CAUSE OF ACTION: CHILD SEX ABUSE AGAINST

ODONNELL
2
3
4
5
6
7
8
9
10
VII. FOURTH CAUSE OF ACTION: VICARIOUS LIABILITY

(RESPONDEAT SUPERIOR) AGAINST DEFENDANTS
SPOKANE DIOCESE AND INLAND NORTHWEST COUNCIL,
BSA
11
John Doe Compl. at 6:11-13, 9:4-6, 10:10-12, 11:3-5 (emphases added) (Ex. 5). In
12
short, the testimony was that the Bishop was not and could not be sued in any personal
13
capacity.
14
15
Nevertheless, Father Dublinski initially recalled that Mike Geraghty believed
16
that Bishop Skylstad had been sued personally in the John Doe matter and that
17
everyone discussed whether that presented an issue. Dublinski Dep. 23:3-9 (Ex. 1). In
18
contrast, Geraghty testified that he never believed that the inclusion of Bishop
19
Skylstad in the John Doe matter was an attempt to name him as an individual.
20
Geraghty Dep. 30:5-12 (Ex. 3). Geraghty believed it was simply confusion about how
21
22
to name the Diocese as a Corporation Sole. Id. Mr. Geraghty also believed that he
23
called John Alison, one of John Does attorneys, to clarify that there was no intent to
24
individually name Skylstad. Id. at 30:14-22, 104:12-21.
25
Moreover, as Father Dublinski continued to testify, he began to qualify his
26
initial testimony that Geraghty believed that Skylstad was being sued as an individual.
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 11 of 37
1
2
3
First, Father Dublinski explained in some detail that, while the Complaint alleges that
John Doe was abused at a Parish called St. Marys, Dublinski Dep. 29:6-8 (Ex. 1), that
Bishop Skylstad never served at St. Marys and thus could have no possible personal
liability for the alleged abuse, id. at 28:17-29:8. Father Dublinski recalled discussion
of this apparent lack of personal liability and that it caused doubt that Bishop Skylstad
7
8
9
10
11
had, in fact, been named as an individual:

There was some conversation as to the bishops exact involvement in the
case itself. Was he named -- was, was, was the complaint actually against
him, or was it against the diocese? Did it really name him as being a
person who had done something?
Dublinski Dep. 27:13-17 (Ex. 1); see also id. at 29:16-30:23. Father Dublinski also
12
13
14
15
16
17
18
recalled that there was confusion among some plaintiffs about how to name the
Diocese:
. . . Did you need to name Bishop Skylstad separately, or was he included
in the diocese, or how did that all work? So, there was a certain amount
of confusion amongst lawyers on how to title these or how to, who to
name in these complaints.
Id. at 25:15-20.
19
Father Dublinski was clear that Bishop Skylstad had no personal assets other
20
than a ham radio, id. at 23:11-13; that he did not have any personal interest that was
21
adverse to the Diocese in the John Doe matter, id. at 32:10-20; and that there was no
22
23
24
need to have separate counsel for Bishop Skylstad and the Diocese, id. at 23:19-24:1.
All of this is consistent with the testimony of Skylstad, Arpin and Geraghty.
25
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 12 of 37
2.
As for the K.M. matter, Bishop Skylstad explained that it involved a
3
4
5
6
The K.M. Matter.
housekeeper who found an adult content book while cleaning the room of a Father
Marier and complained about his fitness as a priest. Skylstad Dep. 140:13-144:16
(Ex. 2). Bishop Skylstad eventually issued a press release as Bishop, defending the
priest after the priest underwent counseling, was returned to a Parish, but faced critical
media coverage about being placed in proximity with children. Id. at 143:9-22; Nov.
13, 2006, Press Release (Ex. 8); Arpin Dep. 150:14-151:17 (Ex. 4). The housekeeper
10
11
12
13
14
then sued Bishop Skylstad almost two years after the bankruptcy was filed, claiming
the press release constituted defamation. Skylstad Dep. 144:1-6 (Ex. 1); K.M. Compl.
(Ex. 6).
Bishop Skylstad felt strongly that he was being sued for his conduct as Bishop.
15
Skylstad Dep. 144:17-145:18 (Ex. 1). This is consistent with the testimony of Greg
16
Arpin, who testified that, notwithstanding that the Complaint purported to name
17
18
19
20
Bishop Skylstad personally, it clearly pertained to his actions as Bishop in defending

one of his priests. Arpin Dep. 152:8-15 (Ex. 4). K.M. was viewed as a nuisance claim
and all defense costs were paid by an insurer rather than the Diocese. Id. at 152:23-
21
153:4, Geraghty Dep. 63:9-12 (Ex. 3). To generate leverage, the plaintiffs attorney
22
threatened adverse publicity if the Diocese did not pay money:
23
24
25
26
A. No. The word I used was blackmail. And, yes, that she was going
to use the public forum to try to, or the threat of the public forum to try to
get some money out of the diocese.
Q. After the lawsuit was filed, was there then any publicity about it, that
you recall?
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 13 of 37
1
2
3
4
5
6
A. Yes, there was some.

Dublinski Dep. 66:25-67:6 (Ex. 1). There was concern that publicity might disrupt the
mediation then being conducted by Judge Zive and the attorneys for the creditor
committees were aware of the situation. Arpin Dep. 153:2-12 (Ex. 4). There was talk
of trying to invoke the automatic stay. Dublinski Dep. 99:17-100:4 (Ex. 1). Instead,
the case was dismissed several months after it was filed on summary judgment.
Skylstad Dep. 145:20-146:19 (Ex. 2); Mar 30, 2007, email (Ex. 9).
9
10
11
12
13
Finally, Bishop Skylstad, Father Dublinski, and Mike Geraghty all agreed they
had no criticisms of Paine Hamblens work in either the John Doe or the K.M. matters.
Skylstad Dep. 140:1-3, 145:10-12 (Ex. 2); Dublinski Dep. 33:14-17 (Ex. 1); Geraghty
Dep. 32:18-22, 62:7-16 (Ex. 3). Nor could any of them think of any possible way in
14
which the Diocese was damaged because of the work Paine Hamblen did in defending
15
the John Doe and K.M. matters. Skylstad Dep. 140:4-7 (Ex. 2), Dublinski Dep. 33:3-6
16
(Ex. 1), Geraghty Dep. 62:22-25 (Ex. 3).
17
C.
18
Immediately upon Arriving in Spokane, Bishop Cupich Hires Independent

Counsel and Begins Investigating a Malpractice Claim.
19
In contrast, Bishop Cupich took a different view of Paine Hamblens work
20
almost immediately upon arriving in Spokane. In August of 2010, while Bishop
21
22
Skylstad was introducing him around the Diocese, Bishop Cupich warned Bishop
Skylstad that there was some dissatisfaction over the handling of the bankruptcy and
23
24
25
that he intended to look into it. Skylstad Dep. 90-91 (Ex. 2). Skylstad replied that he
had done the best he could and that Paine Hamblen had done remarkably well. Id.
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 14 of 37
1
2
3
Bishop Cupich ignored Bishop Skylstad. Within a month, Bishop Cupich

involved new bankruptcy counsel, announcing that Ford Elsaesser should be copied on
communications. Emails dated Sept. 15 and 21, 2010 (Exs. 10-11); Dep. of Blase
Cupich (Cupich Dep.) 29:16 (Ex. 12). Elsaesser came in with detailed knowledge of
the events during the bankruptcy by virtue of having served as counsel for the
7
8
9
10
Association of Parishes. See Dublinski Dep. 74:25-75:17 (Ex. 1). By 2011, Bishop
Cupich had hired his current malpractice counsel who repeatedly interviewed Vicar
General Dublinski about the underlying events. Id. at 17:9-22. Mike Miller, the
11
Financial Secretary of the Diocese during the bankruptcy, was likewise interviewed.
12
Id. at 18:24-19:20.
13
14
15
16
17
18
19
20
21
Bishop Cupich then involved United States District Court Judge Hogan as a
mediator to address certain future claims, many of which involved alleged abuse at
Morningstar Boys Ranch. Cupich Dep. 33, 40 (Ex. 12). By 2011, Bishop Cupich and
his new counsel, Ford Elsaesser, were actively discussing a potential malpractice claim
against Paine Hamblen as a part of the mediation process:
How did you learn that the mediation in Seattle, how did you first
learn that the diocese was considering this lawsuit, who was that from?
A. Ford Elsaesser.
22
Q. And was that a discussion between you and Mr. Elsaesser alone, or
were there other people present?
23
A. Bishop Cupich was present.
24
Dublinski Dep. 20:5-11 (Ex. 1).
25
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 15 of 37
D.
The Diocese Has Repeatedly Avoided and Delayed in Asking That the
Order Approving Defendants Fees Be Set Aside.
Regardless of what one thinks of the merits, it is clear that the Diocese has
repeatedly avoided and delayed in asking this Court to set aside the Final Fee Order.
The possibility of a claim against Paine Hamblen and the need to set aside Judge
6
7
8
9
Williams Order has been in plain view for years. Bishop Cupich was considering a
malpractice claim as early as August of 2010 and almost immediately involved
independent bankruptcy counsel, Ford Elsaesser, to advise him. By 2011, Bishop
10
Cupich had retained malpractice counsel, who were busy with witness interviews.
11
Bishop Cupich then mediated a number of future claims and discussed a malpractice
12
claim in the context of that mediation. The mediated future claims were settled by late
13
14
15
16
2011 or early 2012, with the $1.1 million paid in settlement being claimed as damages
in the current adversary proceeding.
So when the Diocese went to Judge Williams in June of 2012 seeking her
17
approval of the mediated settlement (see ECF 2692), it had an obvious and convenient
18
opportunity to raise the issue of setting aside the Order approving Paine Hamblens
19
fees. It had malpractice counsel, independent bankruptcy counsel, a malpractice claim
20
21
22
23
investigation that had been underway for at least a year, and knew of alleged damages
in the form of the settlement that it was about to ask Judge Williams to approve.
However, rather than mention any of this to Judge Williams, the Diocese chose to
24
remain completely silent. According to the transcript of the hearing before Judge
25
Williams, Ford Elsaesser and John Munding participated as counsel for the Diocese
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 16 of 37
1
2
3
4
but neither said a word to her about a claim against Paine Hamblen or a need to set
aside the Order approving defendants fees. See ECF 2692.
Similarly, in its Motion to approve Settlement, the Diocese said only that the
disputes about future claims had been resolved, that the claim process had been a
success, and that there is no pending litigation relating to this part of the Plan.
7
8
9
10
11
12
13
14
15
16
17
18
ECF 2692 at 3:14-15. Indeed, the Diocese requested that the Court close the
bankruptcy proceedings, and the Order approving the Settlement entered by the Court
stated:
Upon Entry of the Order Approving the Settlement and such
accompanying orders as are appropriate to implement the Settlement, the
Court having previously entered the final decree in this matter shall close
this case . . . .
ECF 2707 at 8:9-12. The Order was entered by Judge Williams on July 3, 2012.
Three months later, the Diocese filed suit against Paine Hamblen in Spokane
County Superior Court on October 8, 2012. See Compl. (ECF 2816 at Ex. 14 thereto).
There is no notice of this filing anywhere in the bankruptcy docket. The Diocese was
represented by Mr. Gould, who had been busy interviewing Father Dublinski and Mike
19
20
Miller since at least 2011. In this state court action, the Diocese claimed that the
21
defendants representation of the Diocese in the bankruptcy proceedings was
22
conflicted and that the Plan, and in particular the future claims provisions, was the
23
result of malpractice on the part of defendants. See id. at 10-12. The complaint
24
25
specifically asked for disgorgement of all fees paid to defendants as a remedy. Id. at
13. Nowhere in the Complaint was there any request that the previous Order entered
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 17 of 37
1
2
3
by Judge Williams approving those fees be set aside. See generally ECF 2816 at
Ex. 14.
Defendants removed the action to federal court where it was assigned to United
States District Judge Rice. Notice of Removal filed in E.D. Wash. No. 12-CV-00583-
TOR (Dist. Ct. ECF 1) (Ex. 13). If one wants to be charitable and assume that it never
7
8
9
10
11
12
13
14
15
16
occurred to the Diocese that Judge Williams prior orders needed to be set aside,
defendants cured that by immediately raising the issue in their first affirmative defense,
asserting that the prior Order of Judge Williams approving defendants fees was res
judicata:
5.
Res judicata. The orders and judgment entered in plaintiff
Dioceses bankruptcy approving defendants fees and confirming the plan
of reorganization constitute an approval of the quality of defendants legal
services and the appropriateness of the fees paid to defendants and are res
judicata as to some or all of the claims asserted herein.
Affirmative Defenses 5 (Dist. Ct. ECF 4) (Ex. 14). Similarly, in the Joint Status
17
Report that went to Judge Rice, defendants again noted that they believed Judge
18
Williams prior order approving defendants fees were res judicata unless set aside.
19
Joint Status Report at 7:24-8:1 (Dist. Ct. ECF 5) (Ex. 15). In response, the Diocese did
20
21
22
23
nothing about moving to set aside Judge Williams Order.

On March 6, 2013, Judge Rice issued an order to show cause why the District
Court had subject matter jurisdiction over the Dioceses claims. Order to Show Cause
24
(Dist. Ct. ECF 9) (Ex. 16). On May 15, 2013, Judge Rice dismissed plaintiffs claims
25
without prejudice under the Barton Doctrine, specifically holding that only the
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 18 of 37
1
2
3
4
5
6
7
8
9
Bankruptcy Court had jurisdiction to decide whether the Diocese could proceed with
its claims:
It is undisputed that Plaintiff did not obtain leave of the bankruptcy
court before initiating the instant action against Defendants for acts done
in their official capacity. See Crown Vantage, Inc., 421 F.3d at 970.
Thus, under the dictates of the Barton doctrine, this Court lacks subject
matter jurisdiction over the claims in this suit.
Order Dismissing Case at 5:19-6:3 (Dist. Ct. ECF 12) (Ex. 17).
If anything more was needed to jolt the Diocese into going to Judge Williams to
10
set aside the Order approving defendants fees, surely this was it. Defendants were
11
advocating as a primary defense that Judge Williams prior Order was res judicata.
12
When the Diocese tried to avoid the issue by first going to state court and then
13
14
15
16
17
18
19
20
21
22
23
ignoring the issue in federal court when defendants raised it, the result was that a
United States District Judge formally ruled that no court had jurisdiction to do
anything about the Dioceses claims until it went back to Judge Williams for leave to
proceed.
Nevertheless, the Diocese did not return to Judge Williams to ask that the Final
Fee Order be set aside. Instead, the Diocese made a strategic decision to delay for
months until she retired. In response to Judge Rice nonsuiting the claims of the
Diocese, Bishop Cupich asked Father Dublinski whether it would be better to
immediately refile in front of Judge Williams or whether it would be better to wait
24
until Judge Williams retired. Father Dublinski responded that many of Judge
25
Williams rulings had not been favorable to the Diocese:
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 19 of 37
Q. Did Bishop Cupich say whether a decision had been made to refile it,
or they were just thinking about it?
A. They were thinking about it. And he asked a question as to my

opinion as to whether to refile it while Patty . . . Williams was still in, in
office or to wait until after she had left office.
3
4
5
****
6
7
A. Well, my response was that we had had difficulty with decisions by

Patty Williams throughout the bankruptcy.
Q. Difficulty in what regard?
A. Nonfavorable decisions.
10
Q. Adverse to the diocese?
11
A. Yes.
12

Bishop Cupich then did nothing for nearly eight months, waiting until January
13
14
15
16
of 2014, after Judge Williams retirement, to announce that the case would be refiled.
Id. at 62:3-16. The Vicar General, Father Dublinski, is unaware of any reason for the
eight-month delay other than to wait for Judge Williams to leave the bench. Id. at
17
18
62:21-25. As a result, the Judge who lived through all of the bankruptcy proceedings,
19
the Judge who entered the Order at issue, the Judge who would know best whether she
20
felt she was misled or whether any BR 2014 violation was of any significance, was
21
deliberately sidelined with an attendant delay of months.
22
23
24
25
III.
A.
LEGAL AUTHORITY/ARGUMENT
Judge Williams Order Is Res Judicata Unless Set Aside.

Judge Williams entered a final Order approving defendants fees on October 4,
2007 (ECF 2235). An order approving a final fee application constitutes a final order
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 20 of 37
1
2
3
or judgment with res judicata effect that, after the appeal period has run, may only be
vacated or modified if the stringent requirements of Rule 60(b) have been met. See,
e.g., Grausz v. Englander, 321 F.3d 467, 472 (4th Cir. 2003) ([T]he bankruptcy
courts final fee order approving the [defendant] firms second and final fee
application is a final judgment on the merits.); In re Intelogic Trace, Inc., 200 F.3d
7
8
9
10
382, 386 (5th Cir. 2000) (same); In re Leisure Corp., 2007 WL 607696, at *9 (N.D.
Cal. Feb. 23, 2007) (bankruptcy courts order approving fees was a final
adjudication with res judicata effect); In re Rockaway Bedding, Inc., 454 B.R. 592,
11
598 (Bankr. D. N.J. 2011) (order approving a compromise in the settlement of fees is
12
a final order to which Rule 60(b) applies). See also Expeditors Intl Inc. v. Citicorp.
13
N. Am. Inc. (In re Colortran), 218 B.R. 507, 510 (9th Cir. BAP 1997) ([A]n order
14
15
16
approving a compromise . . . is final because it finally determines the rights of the

parties.).
Accordingly, plaintiffs acknowledge, as they must, that the Court cannot order
17
18
defendants to disgorge any fees without first vacating Judge Williams Order
19
approving the fees. Thus, in their Motion for Order to Show Cause, plaintiffs request
20
relief under two subparts of Rule 60(b): (b)(3) and (6). See ECF 2815 at 23-25.
21
22
23
24
25
26
However, as set forth below, plaintiffs cannot meet their burden under these two
subsections. Accordingly, plaintiffs claims must be dismissed.
B.
Standard for Relief Under Rule 60(b).

Rule 60(b) states:
(b) GROUNDS FOR RELIEF FROM A FINAL JUDGMENT,
ORDER, OR PROCEEDING. On motion and just terms, the court may

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 21 of 37
1
2
relieve a party or its legal representative from a final judgment, order, or

proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
3
4
5
6
7
(2) newly discovered evidence that, with reasonable

diligence, could not have been discovered in time to move for a
new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
****
(6) any other reason that justifies relief.
9
10
A motion under Rule 60(b)(1), (2), and (3) must be made within a reasonable
11
time and no more than a year after the entry of the judgment or order. Rule 60(c)(1).
12
A motion under Rule 60(b)(6) must be made within a reasonable time. Id. The party
13
requesting relief from a final order or judgment bears the burden of proving the
14
15
16
17
existence of a justification for Rule 60(b) relief. Cassidy v. Tenorio, 856 F.2d 1412,
1415 (9th Cir. 1998); In re Leisure Corp., 2007 WL 607696, at *4.
It should be emphasized that this motion under Rule 60 is not a motion for
18
summary judgment. A final judgment was already entered seven years ago. A motion
19
for relief under Rule 60(b) is post-judgment relief, and unlike a summary judgment
20
motion, this Court may, in its discretion, hold an evidentiary hearing or otherwise
21
22
23
resolve issues of fact and make findings and conclusions. See In re Intl Fibercom,
Inc., 503 F.3d 933, 939-40 (9th Cir. 2007).
24
25
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 22 of 37
1
2
3
4
5
6
7
8
C.
Plaintiffs Have Not and Cannot Meet the Requirements for Relief from
Judgment Under Fed. R. Civ. P. 60(b).
1.
Relief Under Fed. R. Civ. P. 60(b)(3) Is Time Barred.

a.
(b)(3) Is Subject to a One-Year Limit Which Cannot Be

Expanded.
First, because Judge Williams Order approving defendants fees allegedly was
submitted by conflicted counsel, the Diocese argues that this Court should examine
whether under FRCP 60(b)(3) the Firm [Paine Hamblen] made a misrepresentation or
engaged in misconduct. ECF 2815 at 23:17-19. However, motions for relief from a
10
final order under (b)(1), (2) and (3) must be brought within a reasonable time, but no
11
more than a year after the entry of the judgment or order. Rule 60(c)(1). The one-
12
13
14
15
year limit constitutes a time bar after which relief under these sections of Rule 60(b)
cannot be granted. Lyon v. Agusta S.P.A., 252 F.3d 1078, 1088 (9th Cir 2001).
Accord, e.g., In re Golob, 146 B.R. 566, 569 (9th Cir. BAP 1992) (A one-year statute
16
of limitations applies under Rule 60(b)(1), (2) and (3) and relief that is sought more
17
than one year after entry of the judgment or order is barred as untimely.). The one-
18
year limit is an absolute bar that cannot be enlarged:
19
20
21
22
The concept of reasonable time cannot be used to extend the one-year

limit. A motion under clauses (1), (2), or (3) must be denied as untimely
if made more than one year after judgment regardless of whether the delay
was reasonable. Nor does the court have any power to enlarge the time
limit of the rule.
23
11 Charles Wright, Arthur Miller & Mary Kane, Fed. Prac. & Proc. 2866 (3d ed.
24
2014). Here, rather than acting within one year, plaintiffs waited until January of
25
2014, nearly seven years, to seek relief.
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 23 of 37
Plaintiffs argue that the very nature of the conflicted position of Paine
2
3
Hamblen would make application of a one year deadline inappropriate under Rule
60(b)(3). ECF 2815 at 23:15-16. However, they cite no authority for that assertion.
As far as defendants can tell, there is none. As the case law and the relevant treatises
cited above state, the one-year time bar under Rule 60(b)(1), (2) and (3) is an absolute
7
8
9
10
time bar that the Court has no power to expand. Lyon v. Agusta S.P.A., 252 F.3d
1078, 1089 (9th Cir. 2001) (one-year time limitation is not to be repealed by judicial
fiat); In re Golob, 146 B.R. at 569 (the one-year statute of limitations cannot be
11
circumvented by asserting reasonable time under 60(b)(6)); 11 Fed. Prac. & Proc.
12
2866 (court does not have any power to enlarge the time limit of the rule).
13
b.
14
15
16
BR 9024 Does Not Apply.
Accordingly, plaintiffs argue that the one-year time limit is not applicable in this
case because of Bankruptcy Rule 9024, which incorporates Rule 60 into bankruptcy
matters. BR 9024 states that a motion to reopen a case, or for the reconsideration of
17
18
an order allowing or disallowing a claim against the estate entered without a contest is
19
not subject to the one year limitation prescribed in Rule 60(c). Accordingly, the
20
Diocese argues that, relying on the advice of counsel, it did not enter into a contest
21
over the fees such that the one-year limit does not apply. ECF 2815 at 23:14-15.2
22
23
However, under BR 9024, whether a party actually objects or not is irrelevant;

rather, the opportunity to object is equivalent to actually objecting and constitutes
24
25
2
26
No evidence is cited that any such advice was given or received.

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 24 of 37
1
2
3
a contest under Rule 9024. In re Leisure Corp., 2007 WL 607696, at *7.

Accordingly, in In re Leisure Corp., the District Court for the Northern District of
California rejected an argument very similar to that made here by the Diocese about
the effect of BR 9024. In that case, the plaintiff filed a Motion to Disgorge and Set
Aside All Orders Approving Defendant Prochnows Fees Under FRCP 60(b)(3)/Rule
7
8
9
10
9024. 2007 WL 607696, at *4. The plaintiff claimed that its lawyer applied duress
to prevent it from objecting to a settlement agreement that included a compromise of
professional fees, and that the lawyer had a conflict of interest that was not disclosed to
11
the Bankruptcy Court. See id. at *6. The District Court rejected that argument,
12
holding that the request for relief was time barred under Rule 60(b)(3) because the
13
plaintiff had had an opportunity to object to the fees had it so wished, such that the
14
15
16
17
18
Rule 9024 exception from the one-year bar did not apply. Id. at *5. Here, the Debtor
was represented throughout the bankruptcy by its long-time General Counsel, Michael
Geraghty, and thus even more clearly had an opportunity to object.
In any event, the assertion that Paine Hamblens final fee application was
19
granted without a contest is clearly wrong. The confirmed Plan specifically
20
permitted any party, including the Diocese and the Plan Trustee, to file an objection to
21
22
23
24
a claim, and in so doing to assert any legal or equitable defenses of the Debtor. See
Plan Article 22.1 (ECF 1774-1). Multiple objections to Paine Hamblens final fee
application were, in fact, asserted. See ECF 2221 at 3:1-9. In fact, so many objections
25
were filed to all of the final fee applications that the parties were sent to mediation
26
before Judge Zive. See id. at 6:18-28. Eventually, the claims and objections were then
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 25 of 37
1
2
3
compromised and settled. As part of compromising the objections to its final fee
application, Paine Hamblen reduced its fee request by more than $185,000. See id. at
5:19. Judge Zive approved the parties compromise and recommended that Judge
Williams approve the parties stipulated settlement. See id. at 6:18-28. The Court did
so and then approved final fees as compromised. ECF 2231; ECF 2235. To suggest,
7
8
9
10
therefore, that BR 9024 is applicable because the final fee applications were not
contested is just wrong. Not only was Paine Hamblens fee petition contested, the
contest cost defendants $185,000.
In short, plaintiffs request for relief from judgment under Rule 60(b)(3) is time
11
12
barred because it is brought more than one year after the Order approving fees was
13
entered. Because there is no authority that would permit this Court to expand the one-
14
15
16
year time limit, plaintiffs request for relief under Rule 60(b)(3) must be denied.
D.
Relief Cannot Be Granted Under Fed. R. Civ. P. 60(b)(6).

That leaves Rule 60(b)(6) as the alternative ground on which the Diocese seeks
17
18
to set aside Judge Williams Order. Unlike subparts (1), (2), and (3), Rule 60(b)(6)
19
does not include an inflexible one-year time limitation but requires instead that the
20
motion be brought within a reasonable time. Fed. R. Civ. P. 60(c)(1). However,
21
there are a number of other principles which strictly limit Rule 60(b)(6)s applicability.
22
23
1.
Fed. R. Civ. P. 60(b)(6) Cannot Be Used When the Conduct at Issue Is

Best Described Under Some Other Subsection.
24
First, Rule 60(b)(6) applies only when the reason for granting relief is not
25
covered by any of the other reasons set forth in Civil Rule 60. In re Kenny G. Enters.,
26
LLC, 2014 WL 4100429, at *15 (BAP 9th Cir. 2014). See In re Golob, 146 B.R. at
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 26 of 37
1
2
3
4
569 ([I]t is well established that a motion cannot be granted under Rule 60(b)(6) if the
motion can be justified under subsections (1), (2), or (3).).
In Golob, the Ninth Circuit Bankruptcy Appellate Panel expressly rejected an
effort to apply Rule 60(b)(6) to set aside an order approving a settlement and
compromise in bankruptcy, where the settlement was allegedly approved due to fraud
7
8
or misrepresentation, which would be covered by Rule 60(b)(3):
14
Here, the variance in terms between the first settlement and second
settlement was either due to mistake on the part of the debtors or fraud or
misrepresentation on the part of the bank. The debtors had categorized
the banks actions taken pursuant to the second settlement as
misrepresentation or possible fraud in pleadings submitted to the
bankruptcy court. However, on appeal, the debtors now assert that
exceptional circumstances are present and Fed. R. Civ. P. 60(b)(6) should
be applied in this situation. Such an attempt to circumvent the one year
statute of limitations should not be allowed.
15
In re Golob, 146 B.R. at 569. This principle that Rule 60(b)(6) cannot be used where
16
some other subsection applies is important here because many of plaintiffs allegations
17
appear to best fit under Rule 60(b)(1) rather than (6).
9
10
11
12
13
18
19
20
21
For example, failure to notify the Court regarding John Doe and K.M. under
Rule 2014 could reasonably be attributed to inadvertence, mistake, or excusable
neglect under Rule 60(b)(1). Everyone agreed that there was confusion about
22
whether Bishop Skylstad was being named personally in the John Doe matter. None
23
of the causes of action in the Complaint is directed to him as an individual. Moreover,
24
he had no personal involvement in the events constituting the abuse, so it was hard to
25
see how he could even theoretically have any personal liabilitynot to mention that he
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 27 of 37
1
2
3
had no personal assets. Similarly, with regard to K.M., everyone testified that they
believed that Bishop Skylstad was being sued for his acts as Bishop in defending a
priest who was being attacked in the press. The suit happened almost two years after
the bankruptcy was filed at a busy and stressful time as the mediation of a consensual
plan hung in the balance. Moreover, the K.M. matter was viewed as a nuisance
7
8
9
10
claim that was promptly dismissed, and for which the Debtor paid nothing (not even
fees, which were covered by Catholic Mutual).
Thus, even if Paine Hamblen could be faulted for having neglected to inform the
11
Court of the John Doe or K.M. matters, any such failure seems best described as a
12
mistake or inadvertence under Rule 60(b)(1). The fact that not a single lawyer of
13
the various parties, including lawyers involved in the cases, mentioned a word of them
14
15
16
17
to the Court at the time of Plan approval and final fee applications implies that nobody
believed the John Doe or K.M. cases had any significance to the proceedings. Even if
the failure to bring K.M. and John Doe to the Courts attention is given a more sinister
18
tint, and characterized as some sort of misrepresentation under (b)(3), under Golob,
19
that too would still preclude application of Rule 60(b)(6) and require application of the
20
one-year time bar that applies to both Rule 60(b)(1) (inadvertence) or (b)(3)
21
22
23
24
(misrepresentation or misconduct).
Importantly, the Court is not limited to the Dioceses designation of which
subpart applies to the conduct on which it seeks to set aside Judge Williams final
25
Order. Instead, Rule 60 gives this Court discretion to decide which subsection best
26
describes the relevant conduct. See In re Leisure Corp., 2007 WL 607696, at *5 (The
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 28 of 37
1
2
3
bankruptcy court did not abuse its discretion by ruling FRCP 60(b)(3) rather than
FRCP 60(b)(6) controlled Leisure Corporations claim for entitlement to relief.). See
also, e.g., Lyon, 252 F.3d at 1088 (rejecting claim for relief under FRCP 60(b)(6)
because the reason put forth by the party requesting relief from judgment is not
another reason at all, but fell within Rule 60(b)(1) or possibly 60(b)(3)). Here,
7
8
9
10
11
12
13
14
15
16
plaintiffs allegations are best fit under Rule 60(b)(1) such that the Dioceses motion is
barred by the one-year limit, and relief under Rule 60(b)(6) cannot be granted.
2.
Even If Those Limitations Do Not Apply, the Diocese Is Not Entitled

to Relief Under Rule 60(b)(6).
a.
Extraordinary Circumstances Are Required.
Even if the Dioceses claims do not fit under (b)(1) or (3), it is clear that the
Diocese cannot satisfy the strict requirements of Fed. R. Civ. P. 60(b)(6). That
subsection must be used sparingly as an equitable remedy to prevent manifest
injustice. Delay v. Gordon, 475 F.3d 1039, 1044 (9th Cir. 2007). As such, the Rule
17
is to be utilized only where extraordinary circumstances prevented a party from
18
taking timely action to prevent or correct an erroneous judgment. Id. A party
19
seeking to re-open a case under Rule 60(b)(6) must demonstrate both injury and
20
21
22
23
circumstances beyond his control that prevented him from proceeding with the
prosecution or defense of the action in a proper fashion. Id. As a result, the Court
need not actually decide whether defendants committed malpractice or had a conflict
24
of interest to decide whether (b)(6) applies. Instead, the only issue is whether the
25
Diocese will suffer manifest injustice or whether something extraordinary
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 29 of 37
1
2
3
prevented the Diocese from acting earlier. Clearly, neither of these characterizations
applies here.
b.
4
5
The Alleged Conflicts Are Not Sufficient to Justify Relief in the

Ninth Circuit.
In this regard, the Dioceses principal argument is that defendants alleged
6
7
conflicts of interest constitute a fraud on the Court that justifies relief under
Rule 60(b)(6). The Diocese relies on two cases from courts outside the Ninth Circuit
that granted relief under Rule 60(b)(6) for undisclosed conflicts of interest by debtors
10
professionals. However, in each case, the undisclosed conflict was an actual conflict
11
that was acted upon to the detriment of the estate during the course of the
12
representation and thus caused injury in the proceedings. See In re Southmark Corp.,
13
14
15
181 B.R. 291 (Bankr. N.D. Tex. 1995); In re eToys, Inc., 331 B.R. 176 (Bankr. D. Del.
2005).
16
In Southmark, Coopers & Lybrand was hired to do accounting and investigatory
17
work to determine whether the estate had claims against third parties. At the outset of
18
the representation, Coopers was aware that the estate might have claims against Drexel
19
Burnham Lambert. See 181 B.R. at 293-94. Coopers failed to disclose that Drexel
20
21
was a client of Coopers and had received over $18.5 million in compensation from
22
Drexel over the prior three years. 181 B.R. at 297. During the course of its
23
representation, Coopers then did not investigate potential claims by the estate against
24
its other client, Drexel, and reassigned a staff member who expressed an interest in
25
pursuing a claim:
26
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 30 of 37
1
2
3
4
5
But when it came time to investigate Southmarks securities claims

against Drexel, Coopers pulled its staff, did not pursue the investigation
and did not disclose this activity to the Court.
Id. at 296. Given this rather glaring conflict, the Court concluded that Coopers had a
material adverse interest to the estate and that the estate might have pursued a
significant claim against Drexel. Id. at 297. Thus, there was an actual conflict that
was known and not disclosed, and which was acted upon to the detriment of the estate
during the professionals employment. Id.
9
10
11
12
Similarly, in eToys, the Court concluded that debtors counsel had an actual
conflict beginning in May 2001, when MNAT learned that the debtors had a claim
against Goldman, and that disclosure was mandated at the time counsel became aware
13
of the conflict. 331 B.R. at 191. The Court concluded that failure to disclose an actual
14
conflict was tantamount to fraud on the court, and justified relief under Rule
15
60(b)(6). Id. at 188. See also, In re Benjamins-Arnolds, Inc., 1997 WL 86463, at *10
16
17
18
19
20
(failure of an attorney employed by the estate to disclose a disqualifying conflict of

interest constitutes sufficient extraordinary circumstances to justify relief under
Rule 60(b)(6)).
Here, in contrast to these cases, there was no actual conflict of interest in the
21
John Doe and K.M. matters, nor has the Diocese explained how defendants work in
22
these matters affected the bankruptcy proceedings, altered or impacted the confirmed
23
24
25
26
Plan, or otherwise injured the Debtor. There is no way to show that the circumstances
here were extraordinary in any manner or that defendants did anything other than,
arguably, inadvertently neglect to inform the Court of a rather subtle issue connection.

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 31 of 37
1
2
3
Defendants do not mean to minimize the importance of disclosure under BR 2014.

Rather, the point is only that when someone wants to go back seven years to set aside a
final judgment, more than an error or lapse in judgment is required. Inadvertence,
especially when it does not impact the bankruptcy proceedings, simply does not
amount to a fraud on the court, and thus does not constitute extraordinary
7
8
9
10
circumstances.
This is particularly clear in the Ninth Circuit, which has stringent rules for
determining what constitutes a fraud on the court sufficient to justify relief under
11
Rule 60(b)(6). Under binding Ninth Circuit authority, in order to demonstrate a fraud
12
on the court sufficient to justify relief under Rule 60(b)(6), the fraud must involve an
13
unconscionable plan or scheme which is designed to improperly influence the court in
14
15
16
17
its decision. Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1104 (9th Cir.
2006). The court observed that even though it may have been fraud to forge a
signature and the fraud may have reached the court, the alleged conduct hardly
18
resembles an unconscionable plan or scheme which is designed to improperly
19
influence the court in its decision. Id. The court therefore concluded that neither
20
the alleged negligence at issue nor the purported fraud on the court fall among those
21
22
23
24
exceptional circumstances meriting Rule 60(b)(6) relief. Id.

Similarly, in In re Leisure Corp., 2007 WL 607696 (N.D. Cal. Feb. 23, 2007),
the Court held that duress allegedly applied by the attorney to accept a settlement
25
that resolved an adversary proceeding and approved counsels fees, as well as an
26
alleged conflict of interest . . . that was not disclosed to the court, did not justify
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 32 of 37
1
2
3
relief under Rule 60(b)(6). Id. at *6. The court rejected such relief, in part because the
Bankruptcy Court had an independent duty to determine whether the settlement served
the best interests of the estate, and whether it was fair and equitable under the
circumstances. See id. In so holding, the court expressly concluded that the alleged
duress and conflict of interest do not by themselves show fraud on the court. Id. at
7
8
9
10
*7.
Here, any failure to disclose an arguable connection to Bishop Skylstad does not
amount to an unconscionable scheme to improperly influence Judge Williams. The
11
most that can be said is that Paine Hamblen incorrectly concluded that it was not
12
representing Bishop Skylstad personally and that its employment application thus
13
contained an error. The alleged misconduct of counsel had no impact on the
14
15
16
17
proceedings, caused no injury to the Diocese, and does not constitute an extraordinary
circumstance that would justify relief under Rule 60(b)(6). See id.
c.
18
Debtors Deliberate Decision Not to Inform Judge Williams and

to Delay Seeking Relief Until She Retired Bars Relief Under
Fed. R. Civ. P. 60(b).
19
Finally, even assuming the circumstances might warrant relief under Rule
20
60(b)(6), the Dioceses deliberate decision to delay in seeking relief bars any relief. In
21
the Ninth Circuit, a party may obtain relief under Rule 60(b)(6) only where it can
22
demonstrate that circumstances beyond its control prevented timely action to protect
23
24
its interests. U.S. v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1049 (1993); In re
25
Wylie, 349 B.R. 204, 212 (BAP 9th Cir. 2006). Here, there were no circumstances
26
beyond the control of the Diocese that prevented it from acting for seven years.
14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 33 of 37
1
2
3
To the contrary, all of the facts that form the basis of the current allegations
against defendants were known to Bishop Skylstad and his advisors, including the
Debtors independent General Counsel, at the time of Plan confirmation and fee
approval in 2007. Moreover, immediately upon arriving in Spokane in 2010, Bishop
Cupich himself began investigating Paine Hamblens work. He immediately hired
7
8
9
10
11
12
13
14
15
16
17
new bankruptcy counselElsaesser and Mundingwho were well aware of all of the
underlying circumstances by virtue of their representation of the Association of
Parishes in the underlying bankruptcy. Malpractice counsel, Mr. Gould, was busy
interviewing witnesses starting in 2011.
Yet, between 2010 and 2012, the Diocese did nothing to bring its concerns to the
attention of Judge Williams. Instead, in June of 2012, when the Diocese was just
about to file suit against defendants in state court, the Diocese chose to say nothing to
Judge Williams, although the Diocese was actually in her courtroom asking for
approval of its settlement of future claims which constitutes part of the claimed
18
damages in this matter. Given the intent to then turn around and file suit in state court
19
seeking disgorgement of the fees approved by Judge Williams, the Dioceses silence,
20
coupled with the express representation to Judge Williams in pleadings that the Plan
21
22
23
24
was working, that no further claims were pending, and that the case could be closed, is
hard to characterize as anything other than a deliberate avoidance of Judge Williams.
If this was not enough, after the case was removed from state court and assigned
25
to Judge Rice, defendants repeatedly raised the issue of the res judicata effect of Judge
26
Williams Order, which the Diocese again studiously ignored.

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 34 of 37
1
2
3
Finally, when the case was subsequently dismissed by Judge Ricespecifically

because the Debtor had not brought the claim to the attention of the Bankruptcy
Courtthe Diocese then consciously waited another eight months until after Judge
Williams had retired because of concern that she would not view the Dioceses claims
in a favorable light. To deliberately engage in delay and forum shopping in this
7
8
9
10
fashion for tactical litigation reasons is certainly in some sense extraordinary, but it
clearly is not extraordinary circumstances beyond the control of the Diocese that
would justify setting aside Judge Williams Order. This type of deliberate delay is
11
especially prejudicial in a case in which plaintiffs seek disgorgement of fees. When a
12
law firm earns a fee, it distributes the money to partners who spend it, perhaps retire,
13
move to other firms, or go on with their lives. To come back many years later to ask
14
15
16
the firm to recapture these sums should be limited to rare circumstances of true
inability to act. That is not the case here.
IV.
17
18
CONCLUSION
The relief requested is time barred under Rule 60(b)(1), (2), and (3). Plaintiffs
19
cannot carry their burden of showing extraordinary circumstances under Rule
20
60(b)(6). The order approving Paine Hamblens fees cannot and should not be
21
vacated. Accordingly, there is no need for a trial in February and the Dioceses claims
22
23
should be dismissed with prejudice.

DATED this 10th day of November, 2014.
24
BYRNES KELLER CROMWELL LLP
25
26
By /s/ Ralph E. Cromwell, Jr.

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 35 of 37
Bradley S. Keller, WSBA #10665

Jofrey M. McWilliam, WSBA #28441
1000 Second Avenue, 38th Floor
Seattle, WA 98104
206-622-2000
Fax: 206-622-2522
Email: bkeller@byrneskeller.com
rcromwell@byrneskeller.com
jmcwilliam@byrneskeller.com
2
3
4
5
6
7
8
DAVIS WRIGHT TREMAINE

Ragan L. Powers, WSBA #11935
Hugh McCullough, WSBA #41453
1201 Third Avenue, Suite 2200
Seattle, Washington 98101-3045
(206) 757-8123
Fax: (206) 757-7123
Email: raganpowers@dwt.com
hughmccullough@dwt.com
Attorneys for Defendants PAINE HAMBLEN
LLP, GREGORY JOHN ARPIN and SHAUN
McKEE CROSS
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 36 of 37
1
2
3
4
5
6
7
8
9
10
11
CERTIFICATE OF SERVICE
The undersigned attorney certifies that on the 10th day of November, 2014, I
electronically filed the foregoing with the Clerk of the Court using the CM/ECF
system which will send notification of such filing to the following:
Robert B. Gould (rbgould@nwlegalmal.com)
Law Office of Robert B. Gould
4100 194th Street SW, Suite 215
Lynnwood, WA 98036
Robert J. Wayne (bwayne@trialsnw.com)
Robert J. Wayne, P.S.
200 Second Avenue W.
Seattle, WA 98119
Attorneys for Plaintiffs
12
/s/ Ralph E. Cromwell, Jr.

Byrnes Keller Cromwell LLP
1000 Second Avenue, 38th Floor
Seattle, WA 98104
Telephone: (206) 622-2000
Facsimile: (206) 622-2522
rcromwell@byrneskeller.com
Attorneys for Defendants
13
14
15
16
17
18
19
20
21
22
23
24
25
26

14-80001-FPC
Doc 118
Filed 11/10/14
38TH FLOOR
1000 SECOND AVENUE
(206) 622-2000
Entered 11/10/14 18:08:53
Pg 37 of 37

Paine Hamblen's Motion To Dismiss Lawsuit

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Paine Hamblen's Motion To Dismiss Lawsuit

Uploaded by

Copyright:

Available Formats

The Honorable Frederick P.

1 Bradley S. Keller, WSBA #10665

UNITED STATES BANKRUPTCY COURT

15 THE CATHOLIC BISHOP OF

Entered 11/10/14 18:08:53

1 and JANE DOE ARPIN; SHAUN McKEE

INTRODUCTION AND RELIEF REQUESTED

underlying bankruptcy is res judicata as to any challenge to those fees. Accordingly,

judicial system places a high premium on the finality of final judgments.

taking timely action to correct an erroneous judgment.

Entered 11/10/14 18:08:53

He said that -- he had two responses. Is, one is that we are

harm they caused because there is none.

Supp. of Defs. Mot. to Dismiss Re Fed. R. Civ. P. 60(b).

DEFENDANTS MOTION TO DISMISS REGARDING

Entered 11/10/14 18:08:53

this matter favorably.

underlying bankruptcy. However, defendants worked for Bishop William Skylstad,

Paine Hamblen as debtors counsel, negotiated a consensual plan of reorganization that

Entered 11/10/14 18:08:53

of the Churchs missionwere largely achieved. Id. at 10:9-13:24. He feels that

Entered 11/10/14 18:08:53

the Complaint to express concern about factual inaccuracies:

Entered 11/10/14 18:08:53

A. Well, I was told to come to a meeting for an update on the present

Q. And who were the diocesan attorneys?

Q. All right. So, who was present?

Entered 11/10/14 18:08:53

A. Ford Elsaesser and John Munding expounded on Paine-Hamblens

Dublinski Dep. 37:14-38:8 (Ex. 1).

Shortly before his deposition, Father Dublinski finally resigned as Vicar

securing the payment of future claims:

A. That the leadership of the Association of Parishes said, since we are

A. The team from the Association of Parishes, so you had John

Dublinski Dep. 75:4-17 (Ex. 1).

With regard to defendants alleged conflicts and nondisclosures, the Diocese

Entered 11/10/14 18:08:53

factual basis for these after-the-fact conflict allegations.

portion of the letter addressing who the defendants would represent:

Entered 11/10/14 18:08:53

The John Doe Matter.

A. I presume that in my role as a diocesan bishop that that would be the

1973 and could have no conceivable personal liability.

of them being against the Bishop in any personal capacity:

Entered 11/10/14 18:08:53

FIRST CAUSE OF ACTION: NEGLIGENCE AND BREACH OF

SECOND CAUSE OF ACTION: NEGLIGENT INFLICTION OF

THIRD CAUSE OF ACTION: CHILD SEX ABUSE AGAINST

VII. FOURTH CAUSE OF ACTION: VICARIOUS LIABILITY

Nevertheless, Father Dublinski initially recalled that Mike Geraghty believed

individually name Skylstad. Id. at 30:14-22, 104:12-21.

Moreover, as Father Dublinski continued to testify, he began to qualify his

Entered 11/10/14 18:08:53

had, in fact, been named as an individual:

Entered 11/10/14 18:08:53

As for the K.M. matter, Bishop Skylstad explained that it involved a

The K.M. Matter.

Bishop Skylstad personally, it clearly pertained to his actions as Bishop in defending

threatened adverse publicity if the Diocese did not pay money:

Entered 11/10/14 18:08:53

A. Yes, there was some.

(Ex. 1), Geraghty Dep. 62:22-25 (Ex. 3).

Immediately upon Arriving in Spokane, Bishop Cupich Hires Independent