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Clarifying When Churches Are and Aren’t Liable for the Actions of Volunteers

Key point 10-02. The doctrine of respondeat superior imposes vicarious liability on employers for the negligent acts of their employees committed within the scope of their employment.
Key point 10-18.2. Most courts have refused to hold denominational agencies liable for the acts of affiliated ministers and churches, either because of First Amendment considerations or because the relationship between the denominational agency and affiliated church or minister is too remote to support liability.
Key point 10-17.1. Punitive damages are monetary damages awarded by a jury "in addition to compensation for a loss sustained, in order to punish, and make an example of, the wrongdoer." They are awarded when a person's conduct is reprehensible and outrageous. Most church insurance policies exclude punitive damages. This means that a jury award of punitive damages represents an uninsured risk.

A federal district court in Oregon ruled that national and regional denominational agencies were not liable for the sexual molestation of a minor by a volunteer youth worker in an affiliated church. In 1993, a church assigned a 14-year-old girl (the "victim") to a "small group" overseen by a lay volunteer ("Carl"). The victim claims that at this time Carl began a process of "grooming" her that culminated in sexual abuse. The grooming behavior included paying special attention to her and telling her that he had a special bond with her, inviting her to his home and spending long periods of time alone with her, soliciting her opinion as to questions of theology and pedagogy, undertaking to provide her with Christian counseling, and cultivating the gratitude and loyalty of her parents.

Beginning the following year, when the victim was 15 years old, he began kissing and fondling her, and within a year was having sexual intercourse with her. The two engaged in sex acts as frequently as three times per week, in cars, in the victim's home, in Carl's home, and at church events. These acts continued for a period of years, until the victim was 20 years old.

There is evidence that other church small group leaders developed suspicions that the victim and Carl were involved in a sexual relationship during this period, and that one such small group leader reported his suspicions to two church leaders, but no investigation followed and no action was taken.

The church the victim attended is affiliated with the Evangelical Lutheran Church of America (ELCA). The ELCA's governing documents state it is organized into three expressions: the ELCA national organization, the synods or assemblies of congregations, and the individual congregations or churches that make up the synods. Eventually the victim terminated her relationship with Carl, and sued her church, a local synod, and the ELCA on several grounds, including negligent supervision and negligent retention. She sought damages in the amount of $6 million for pain and suffering, and $10 million for punitive damages.

Church Polity

The court made the following findings regarding church polity in the ELCA:

• The ELCA constitution sets forth certain terms and conditions with which the synods and congregations must comply in order to remain within the national denomination.
• The ELCA constitution specifies that affiliated churches are subject to the "oversight, direction, control, and discipline" of the ELCA and regional synod.
• The ELCA constitution specifies that each church of the denomination is required to be run by an ordained pastor, and that every such pastor must be selected and hired from a "roster" of "approved" pastors maintained by ELCA.
• The ELCA maintains similar "rosters" of approved persons for some lay leadership positions within congregations.
• Churches may select "non-rostered" lay leaders for positions within certain categories, including the youth leadership positions filled by Carl (a "non-rostered" lay leader).
• Each congregation is required to adopt the ELCA's model constitution, and adhere to a specific set of theological doctrines.
• If a congregation were to hire a lay leader who promulgated a different theological doctrine to persons in his or her charge, ELCA and synod would treat such hiring as a violation of the ELCA constitution.
• Congregations are under the direct control of the synods in connection with all doctrinal and theological matters, and synods have the power to discipline congregations for deviations from the approved ECLA theology.
• Under the ELCA constitution, "youth ministry" is a part of the "evangelical mission" of all three "expressions" of the denomination; responsibility for fostering youth organizations is entrusted by ELCA to the synods; and the Oregon Synod relies upon the congregations within its territory to fulfill the denomination's youth-ministry mission.
• In the 1980s and 1990s, the local church operated a youth ministry it referred to as the "Great Commission Subcommittee" or "GCS." The express purpose of GCS was to "share" ECLA theology with young persons, and there is evidence that church leaders viewed the program as a vehicle both for theological education and for recruitment of youth into the denomination. Children involved in the GCS program were divided into "small groups" of approximately ten children each, and each such group was assigned to a "small group leader." Small group leader responsibilities included conducting bible-study meetings; modeling "Christian leadership;" mentoring children within the group and "presenting the Gospel" to them; conducting group activities; and providing personal attention to the needs of the children within the group.
• In 1993, Carl was elected to chairman of his church's youth committee, at which time he also began serving as a GCS small group leader.

Respondeat Superior

The victim claimed that the church defendants were liable for Carl's acts on the basis of respondeat superior. The court noted that under the respondeat superior doctrine, "an employer is liable for an employee's acts when the employee acts within the scope of employment." It further observed: "Three requirements must be met to conclude that an employee was acting within the scope of employment. These requirements traditionally have been stated as: (1) whether the act occurred substantially within the time and space limits authorized by the employment; (2) whether the employee was motivated, at least partially, by a purpose to serve the employer; and (3) whether the act is of a kind which the employee was hired to perform."

The court concluded that neither the ELCA nor Oregon Synod could be liable for Carl's acts on the basis of respondeat superior:

I find that neither entity had the requisite right to control at any material time … . It is clear that ELCA and the synod retained and from time to time actually exercised the right to control the content of the theological and ecclesiastical teachings of the servants or employees of the church. By contrast, there is no evidence that either ELCA or the synod ever asserted or attempted to exercise any right to control the manner or place in which those teachings were carried out, or in any other sense to control Carl's actions in connection with his provision of volunteer services to the church. Moreover, although it is reasonable to infer … that ELCA and/or the synod had, in consequence of those entities' authority to enforce the "covenant" of the ELCA constitution (including through expulsion of congregations that may deviate from approved doctrines and practices), the ability as a practical matter to exert further and broader-reaching influence over congregational supervision and oversight of lay volunteers, such de facto influence (or potential influence) over the church's relationship with Carl is insufficient to satisfy the right-to-control element of the respondeat superior analysis, which requires the right to control his actions in the course of his provision of services. I therefore agree with the parties that ELCA and the Synod cannot be liable in connection with Carl's conduct on a respondeat superior theory.

General and Apparent Agency

The court rejected the victim's claim that the church defendants were liable for Carl's acts on the basis of agency. The court noted that an agency relationship results from "the manifestation of consent by one person to another that the other shall act on behalf and subject to his control, and consent by the other so to act." An agency relationship can arise "either from actual consent (express or implied) or from the appearance of such consent." In either case, "the principal is bound by or otherwise responsible for the actual or apparent agent's acts only if the acts are within the scope of what the agent is actually or apparently authorized to do."

"Apparent authority" to do any particular act "can be created only by some conduct of the principal which, when reasonably interpreted, causes a third party to believe that the principal consents to have the apparent agent act for him on that matter. There accordingly are two keys to the analysis: (1) the principal's representations; and (2) a third party's reasonable reliance on those representations." The court further explained apparent agency as follows:

As to the first requirement—the representation by a putative principal—an agent's actions, standing alone and without some action by the principal, will not give rise to apparent authority. Rather, the principal must take some affirmative step in creating the appearance of authority, one that the principal either intended to cause or "should realize" likely would cause a third party to believe that the putative agent has authority to act on the principal's behalf. The principal's words, conduct, or other representation need not be witnessed directly by or made directly to the third party, but the representation of authority must be traceable to the principal for the principal to be liable on a theory of apparent authority.
As to the second key element—reliance—the third party, in deciding to deal with the apparent agent, must in fact rely on the principal's representation, and that reliance must be objectively reasonable. In assessing the reasonableness of the reliance, the analysis is influenced by what is customary and usual for certain positions or within certain professions.

The court stressed that a principal "is vicariously liable for an act of its nonemployee agent only if the principal 'intended' or 'authorized the result or the manner of performance' of that act." It concluded:

Although a principal can be vicariously liable for the negligence of an agent who is not an employee, such liability arises only if the principal actually or apparently had a right of control over the agent's injury-causing actions "similar to the control that an employer exercises over an employee." The fact that a nonemployee is actually or apparently authorized in some general way to act on a principal's behalf is not a sufficient basis to impose vicarious liability on the principal for the actual or apparent agent's tortious conduct. Rather, to impose vicarious liability for a nonemployee agent's physical conduct, the principal must have—or appear to have—a right to control how the act is performed—that is, "the physical details of the manner of performance"—that is characteristic of an employee-employer relationship. (emphasis in original)

The court concluded that it was possible that Carl "was in an agency relationship with both ELCA and the synod." It observed:

From the evidence discussed above—including in particular evidence that, under the ELCA national organization's constitution, "youth ministry" is a part of the "evangelical mission" of all three "expressions" of the ELCA denomination, that responsibility for fostering youth organizations is entrusted by ELCA to the regional synods, and that the Oregon Synod relies upon the congregations within its territory to fulfill the denomination's youth-ministry mission—a finder of fact could reasonably conclude that the church was the synod's agent for purposes of fulfilling the ELCA youth-ministry mandate, and that the synod was ELCA's agent for those same purposes. Similarly, the evidence of record tends to establish that the church retained Carl on a volunteer basis to act as its agent for purposes of performing GCS small group leader and youth ministry services. The Oregon courts have consistently held that an agent of a second agent is an agent of the second agent's principal, so long as the first agent is charged with assisting the second agent in performing its duties to the ultimate principal. Carl's undisputed agency relationship with the church is thus imputable to both the synod and to ELCA.

However, the court stressed that "the fatal flaw" in the victim's agency theory

lies not in her failure to establish that Carl can properly be characterized as the agent of each of those entities for material purposes, but rather in her failure to adduce evidence from which a jury could reasonably conclude that either ELCA or the synod had any right to control the physical details of the performance of Carl's volunteer duties. ELCA and the synod retained the express rights to control the content of his theological and ecclesiastical teachings and to impose discipline for any deviation from ELCA-approved doctrine, but the record contains no evidence tending to suggest that either had the right to control the manner of his service. Because such control over the physical details of an agent's service is a sine qua non of vicarious principal liability, I agree with ELCA and the synod that neither of those entities can be held liable for Carl's complained-of intentional torts on a theory of general agency liability.

Punitive Damages

The victim's lawsuit asked for $10 million in punitive damages. The court determined that punitive damages were not available. Punitive damages are damages that can be assessed against a defendant for reckless or intentional acts. They are designed to both punish and deter. They generally are not covered by liability insurance policies as a matter of public policy.

Can punitive damages be assessed against a principal for the intentional or reckless acts of an agent? Yes, the court concluded, but only if the agent's conduct giving rise to exposure to punitive damages occurred within the scope of the agent's agency. It concluded:

While [the victim] takes the position here that the abuse she suffered was caused by or resulted from conduct undertaken within the scope of Carl's duties to the congregation, it is emphatically not the case that any evidence of record suggests that the congregation, ELCA, or the synod intended or authorized the tortious abuse itself, or indeed that any of those entities should have understood that sexual abuse was likely to result from Carl's provision of youth-ministry services. In the absence of any such evidence, imposition of vicarious punitive damages on the congregation, ELCA, or the synod would not have the effect of deterring further such misconduct by any agent thereof or of punishing a principal for authorizing an agent's torts. For that reason, and because no Oregon court has ever suggested that a master could be vicariously liable for punitive damages on the basis of intentional conduct by the master's servant of a kind the servant was not hired or instructed to perform, I recommend that the victim's prayer for punitive damages be stricken to the extent it seeks award of punitive damages against ELCA, the Synod, and/or the congregation.

What This Means For Churches:

Most incidents of child abuse in churches are committed by volunteers. This is not surprising. Consider the numbers. There are far more volunteers than paid employees who work with minors in churches, and so it is more likely that volunteers will abuse children than employees.

Many persons who were molested as minors by a church volunteer sue the local church, and denominational agencies with which the church is affiliated, on the basis of agency. But as this case demonstrates, this is often a difficult, if not impossible, task. As a result, this case will be of assistance to churches and denominational agencies in the defense of sexual abuse claims involving volunteers. The key points are summarized below.

1. respondeat superior
The court dismissed the victim's claim that the church defendants were liable for Carl's acts on the basis of respondeat superior. As the court noted, liability on this basis requires that an employee's wrongful acts were committed in the "scope of employment." The court rejected the victim's argument that the authority exerted by the ELCA and synod over the theological teachings of the local church the victim attended was sufficient "control" to make the ELCA and synod liable for Carl's acts. It noted that there was no evidence that either the ELCA or synod ever "asserted or attempted to exercise any right to control the manner or place in which those teachings were carried out, or in any other sense to control Carl's actions in connection with his provision of volunteer services to the church."

2. agency
The doctrine of agency is often cited as a basis of liability for churches and denominational agencies in cases of child abuse. Victims may claim that the offender is an agent of the church and a denominational agency, or that the church is an agent of a parent denomination.

The court concluded that Carl was an agent of the church, synod, and ELCA based on provisions in the ELCA constitution. But, this did not make the church defendants liable for his wrongful acts because he acted as their agent "only for purposes of performing GCS small group leader and youth ministry services." The court concluded:

ELCA and the synod retained the express rights to control the content of his theological and ecclesiastical teachings and to impose discipline for any deviation from ELCA-approved doctrine, but the record contains no evidence tending to suggest that either had the right to control the manner of his service. Because such control over the physical details of an agent's service is a sine qua non of vicarious principal liability, I agree with ELCA and the synod that neither of those entities can be held liable for Carl's complained-of intentional torts on a theory of general agency liability.

This part of the court's decision is important, for two reasons. First, it correctly distinguishes between ecclesiastical and temporal control. While a denominational agency may exert some level of control over ecclesiastical functions of affiliated churches or clergy, this limited authority is not sufficient to make the agency liable for the temporal or non-ecclesiastical acts. Second, this aspect of the court's decision suggests that denominational leaders review their governing documents to ensure that they contain no language that could inadvertently convert local church employees and volunteers into general agents of the denomination.

The most significant part of the court's decision was that while it recognized that Carl may have been an agent (express or apparent) of his church, synod, and the ELCA, this did not establish that those entities were liable for his wrongful acts since the agency relationship failed to confer upon him the right to control the manner in which he performed his duties. The "fatal flaw" in the victim's agency theory was

her failure to adduce evidence from which a jury could reasonably conclude that either ELCA or the synod had any right to control the physical details of the performance of Carl's volunteer duties. ELCA and the synod retained the express rights to control the content of his theological and ecclesiastical teachings and to impose discipline for any deviation from ELCA-approved doctrine, but the record contains no evidence tending to suggest that either had the right to control the manner of his service. Because such control over the physical details of an agent's service is a sine qua non of vicarious principal liability, I agree with ELCA and the synod that neither of those entities can be held liable for Carl's complained-of intentional torts on a theory of general agency liability."

3. punitive damages
The court dismissed the victim's $10 million punitive damages claim on the ground that punitive damages can be assessed against a principal for the intentional or reckless acts of an agent "only if the agent's conduct giving rise to exposure to punitive damages occurred within the scope of the agent's agency." That is, the church defendants could not be liable for punitive damages based on the intentional conduct of its agent that he "was not hired or instructed to perform." This reasoning makes it more difficult for churches to be assessed punitive damages in sexual misconduct cases since the perpetrator obviously was not hired or directed to perform such wrongful acts. This is significant because punitive damages generally are not a covered loss under general liability insurance policies. Prasnikar v. Our Savior's Lutheran Church, 2014 WL 7499377 (D. Or. 2014).

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Posted:
  • December 23, 2015

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