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Doe v. Archdiocese of Milwaukee

United States Court of Appeals, Seventh Circuit

November 5, 2014

JOHN DOE, Claimant A-282, Appellant,
v.
ARCHDIOCESE OF MILWAUKEE, Debtor-Appellee

Argued June 2, 2014

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 13-CV-00419 -- Rudolph T. Randa, Judge.

For In the Matter of: ARCHDIOCESE OF MILWAUKEE, Debtor - Appellee: Bruce G. Arnold, Attorney, Francis H. LoCoco, Attorney, Whyte Hirschboeck Dudek S.C., Milwaukee, WI.

For John Doe, A-282, Appellant: Jeffrey R. Anderson, Attorney, Michael G. Finnegan, Attorney, Jeff Anderson & Associates PA, St. Paul, MN.

Before FLAUM and WILLIAMS, Circuit Judges, and DOW, District Judge.[*]

OPINION

Page 438

Williams, Circuit Judge

" John Doe" settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese's motion for summary judgment by contending that his settlement was fraudulently induced. This argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation.

Page 439

Doe maintains an exception applies here, namely that the later action is " distinct from the dispute whose settlement is attempted through mediation." Wis. Stat. § 904.085(4)(e). We, however, conclude that Doe's bankruptcy action is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese's responsibility for the sexual abuse Doe suffered. Doe seeks damages in both the mediation and bankruptcy for the same sexual abuse; he does not seek separate or additional damages for the alleged fraudulent inducement. We conclude the exception in Wisconsin Statute § 904.085(4)(e) does not apply, and so we affirm the judgment of the district court.

I. BACKGROUND

John Doe, who is deaf, attended St. John's School for the Deaf in Milwaukee, Wisconsin. He was sexually abused as a student there in 1974, when he was seventeen years old, by Father Lawrence Murphy. Doe participated in the Archdiocese of Milwaukee's voluntary mediation program in 2007. He reached a settlement of $80,000 for his claims against the Archdiocese for fraud, negligence, and sexual battery. Doe signed a settlement agreement containing a confidentiality clause, another clause providing that the parties could not introduce as evidence in later proceedings matters including views expressed or admissions made during the mediation proceedings, and a provision stating that the settlement was entered into " to otherwise resolve and settle all disputes between them." These included " all claims of any nature that [Doe] has against the Archdiocese ... arising from any sexual abuse of [Doe] by Murphy ..."

The Archdiocese filed for relief under Chapter 11 of the United States Bankruptcy Code four years later. Doe filed a proof of claim (he is Claimant A-282) in the Archdiocese's bankruptcy proceeding for sexual abuse inflicted on him by Murphy. The proof of claim states that Doe was sexually abused by Murphy in 1974 and details the abuse. The Archdiocese objected to Doe's proof of claim on the basis that he participated in a mediation and executed a settlement agreement with a complete release in 2007 and moved for summary judgment.

Doe opposed the motion on the basis that he was fraudulently induced into settlement with the Archdiocese. Doe stated in an affidavit that the Archdiocese told him during mediation that $80,000 was the maximum amount of money it had available to pay him, that all the other sexual abuse survivors who signed settlement agreements were receiving $80,000, and that it would not be fair to pay him more than others. Doe also stated that the Archdiocese did not inform him that it was paying priests $10,000 to $20,000 to leave the Church and that he did not realize the extent of the Archdiocese's knowledge about Murphy's past history of abusing children. Doe asserts in the affidavit that had he known all this information, he would not ...


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