Attorneys for the complainant, Gamal Awad, called the settlement "a victory and a measure of justice."
According to the archdiocese, the case was settled for $125,000. "We pursued this case fully and take every allegation seriously," archdiocese spokeswoman Susan Gibbs said Tuesday.
Stallings, one of two men accused in the lawsuit, broke from the Catholic Church in 1989 and founded the Imani Temple, a congregation that combines Catholic rites with African music and customs.
Stallings did not return calls Tuesday.
He has denied allegations of abuse in the past.
According to the lawsuit and Awad's attorneys, Awad said he was initially abused at age 14 by a seminarian training in Stallings's rectory called Brother Joseph.
The lawsuit says Awad's brother reported the abuse to Stallings the day after the incident, but Awad was abused again shortly afterward by the seminarian and Stallings in summer 1984.
Awad, still 14 at the time of the second incident, was working on renovating Stallings's house and was staying in the rectory's attic to avoid a long trek home.
Awad said that the seminarian tried to seduce him in the attic and that when Awad went to tell Stallings about it, Stallings pulled him into an embrace and groped him.
In the lawsuit, filed last year in D.C. Superior Court, Awad, who is 40 and lives in California, said he had repressed the memory until recent years.
Awad, a military veteran, survived the Sept. 11, 2001, terrorist attack on the Pentagon and said that the trauma of the incident began to revive memories of the abuse.
"Our client felt he needed to stand up for himself and stop being a victim," said Awad's attorney Adam Horowitz.Stallings's dealings with young men in his parish were the subject of scrutiny in the late 1980s, when a series of front-page articles in The Washington Post quoted two unnamed former altar boys as saying that he had abused them.
Stallings's former pastoral assistant, who was 22 at the time, spoke publicly about having a two-year sexual relationship with him.
Stallings denied all of the allegations and had left the Catholic Church by the time the articles were published in 1989. He was excommunicated in 1990.
In 2001, Stallings married a Japanese woman in a mass wedding in New York officiated by the Rev. Sun Myung Moon of the Unification Church.
He has been part of efforts to widen Moon's influence among black clergy and to oppose celibacy.
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