• Key point 10-05.2. Some courts have found churches not liable on the basis of negligent selection for the sexual misconduct of a minister or other church worker involving another adult since the church exercised reasonable care in the selection of the worker.

• Key point 10-10.2. Many courts have ruled that the first amendment prevents churches from being legally responsible on the basis of negligent supervision for the sexual misconduct of ministers.

• Key point 10-12. Churches face a number of legal risks when they offer counseling services by ministers or laypersons. These include negligent selection, retention, or supervision of a counselor who engages in sexual misconduct or negligent counseling. A church also may be vicariously liable for a counselor’s failure to report child abuse, breach of confidentiality, and breach of a fiduciary relationship.

• Key point 10-13.2. Several courts have refused to hold churches and denominational agencies liable on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister. In some cases, this result is based on first amendment considerations.
Negligence as a Basis for LiabilitySeduction of Counselees and Church Members

A Texas court summarily dismissed a lawsuit alleging that a church was responsible on the basis of negligence and breach of a fiduciary duty for its pastor’s sexual relationship with a counselee. A church appointed a pastoral selection committee to recruit a new pastor. A candidate (“Pastor Phil”) met with the committee and members of the congregation. During the initial meeting, Pastor Phil was asked by a committee member if he had any “serious problems.” He interpreted “serious problems” to mean scandals or extramarital affairs with church members during his 20 years as a minister. He answered “no.” He was selected by the congregation as its new pastor. A few years later, Pastor Phil began counseling a woman (“Rhonda”) after she became distraught during a church service. Rhonda became emotionally dependent on Pastor Phil and confessed some of her sexual struggles to him. In time, the counseling relationship became sexual and continued for several months until it was discovered by the church board. Pastor Phil immediately resigned. Rhonda later sued Pastor Phil and the church.

The Pastor

Rhonda claimed that Pastor Phil had failed to properly handle the “transference phenomenon,” failed to use due care in the exercise of his duties as a counselor and spiritual advisor, and failed to use due care in fulfilling his duties as a pastor. A trial court noted that the transference phenomenon is a psychological theory developed by Freud that suggests that a counselee often develops a deep emotional attachment to and dependence upon his or her counselor during a counseling relationship as the counselee unconsciously attributes repressed feelings from past relationships to the counselor. S. Freud, Essential Papers on Transference (A. Esman ed., 1990). Rhonda alleged the sexual relationship is part of the damages resulting from the negligent failure to control the transference phenomenon. The trial court disagreed, and dismissed this claim on the ground that Rhonda was attempting to hold Pastor Phil responsible for “clergy malpractice” (a legal theory the court rejected). Rhonda did not appeal the dismissal of her claims against Pastor Phil.

The Church

Rhonda claimed that the church was negligent in hiring, training and supervising Pastor Phil, breached a fiduciary duty, and was negligent in failing to implement appropriate counseling policies. A trial court dismissed Rhonda’s claims, and she appealed. The appeals court agreed with the trial court’s dismissal of the claims against the church. With regard to the breach of fiduciary duty claim, the court noted that “Rhonda is prohibited by the first amendment [religion clauses] from pursuing a cause of action for breach of fiduciary duty.” The court based this conclusion on a decision by a federal appeals court. Dausch v. Rykse, 52 F.3d 1425 (7th Cir. 1994). The Dausch case is addressed in the January-February 1996 issue of this newsletter. In rejecting Rhonda’s allegations of negligent hiring, training, and supervision, the court observed,

As a general rule, courts will not attempt to right wrongs related to the hiring, firing, discipline, or administration of clergy. The training and supervision of clergy are part of the “administration” of clergy. To recover for negligent hiring, retention, or administration in a case such as this, a plaintiff must show that the church employed “an incompetent servant” and that the church knew, or by the exercise of reasonable care should have known, that the minister was “incompetent or unfit.” It must be shown that the church knew or should have known that the minister’s conduct as a counselor presented an unreasonable risk of harm to others. In the present case, [the church] established as a matter of law that it exercised reasonable care and yet did not know of any incompetence or sexual misconduct by [Pastor Phil], either before his hiring or during his employment, until the church was notified [of the affair with Rhonda]. When the church was notified, it terminated him as pastor the very next day …. [T]here was no evidence that [the church] should have known that [Pastor Phil] was likely to engage in misconduct during counseling. In light of the uncontroverted evidence of [the church’s] diligence and lack of notice, the trial court properly [dismissed the case].

Application. This case illustrates the difficulty that victims of sexual misconduct have in successfully suing churches when there is no proof that the church was aware of any prior misconduct by the offender. On the other hand, the case demonstrates the risk that churches face in not acting upon reliable evidence that a staff member or volunteer worker has engaged in inappropriate sexual conduct in the past. Many courts have concluded that such evidence imposes a duty upon the church to promptly investigate the information and respond appropriately based on the strength and nature of the evidence. Hodges v. Kleinwood Church of Christ, 2000 WL 994337 (Tex. App. 2000).

© Copyright 2001 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m67 c0301