Denominational Agencies—Legal Liability – Part 2

A Missouri court affirmed a jury verdict of $1 million against a denominational officer who sexually harassed a female minister.

Church Law and Tax2002-03-01

Denominational Agencies – Legal Liability

Key point 4-11.1. Clergy who engage in sexual contact with an adult or minor are subject to civil liability on the basis of several legal theories. They also are subject to criminal liability.

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 10-18.3. There are several legal defenses available to a denominational agency that is sued as a result of the acts or obligations of affiliated clergy and churches. These include a lack of temporal control over clergy and churches; a lack of official notice of a minister’s prior wrongdoing in accordance with the denomination’s governing documents; lack of an agency relationship; the prohibition by the first amendment of any attempt by the civil courts to impose liability on religious organizations in a way that would threaten or alter their polity; and elimination or modification of the principle of joint and several liability.

Seduction of Counselees and Church Members

Negligence as a Basis for Liability

Denominational Liability

* A Missouri court affirmed a jury verdict of $1 million against a denominational officer who sexually harassed a female minister. A woman (“Sandra”) expressed to her pastor (“Pastor Ron”) that she was interested in pursuing ordination. She eventually was ordained, and became an assistant pastor to Pastor Ron. He was terminated six years later. After her termination, she sued Pastor Ron, her denomination, and two denominational officials, claiming that Pastor Ron had sexually harassed her and coerced her to have sexual relations in exchange for his sponsorship and support of her ordination as a minister. Sandra further alleged that she complained to a denominational officer (“Elder John”) who said that he would see that the improper conduct stopped. However, she asserted that Elder John used his knowledge of these problems and his supervisory position to begin sexually harassing her and coercing her to have sexual relations with him. She alleged that the improper sexual conduct ended after she made numerous objections, but that Elder John then began attacking her professionally. She alleged that on one occasion he grabbed her breast in the church lobby in view of a number of other ministers. She alleged that despite her complaints, other denominational officers took no corrective action. She claimed that she was terminated in retaliation for her complaints. Sandra settled out of court with Pastor Ron, and the case was presented to a jury which awarded $15,000 in actual damages and $1 million in punitive damages against Elder John, and actual damages of $25,000 and punitive damages of $4 million against the denomination. The denomination appealed.

Intentional failure to supervise clergy

The court acknowledged that the first amendment “bars government from involving itself in purely ecclesiastic matters, including, but not limited to church doctrine, hiring, firing and retention of church employees and or ministers.” However, the Missouri Supreme Court has allowed churches to be sued on the basis of an intentional failure to supervise clergy since “liability for intentional torts can be imposed without excessively delving into religious doctrine, polity and practice” because “religious conduct intended or certain to cause harm need not be tolerated under the first amendment.” The court noted that intentional failure to supervise clergy has the following elements: (1) a supervisor (or supervisors) exists; (2) the supervisor (or supervisors) knew that harm was certain or substantially certain to result; (3) the supervisor (or supervisors) disregarded this known risk; (4) the supervisor’s inaction caused damage; and (5) the minister who engages in wrongful acts is upon the premises in possession of the supervisor or upon which the minister is privileged to enter only as the supervisor’s agent. The court concluded that Sandra failed to prove a number of these required elements, and therefore the denomination could not be liable for her injuries on this basis. The court focused on the second requirement, that denominational officials knew that harm was certain or substantially certain to result. The court observed,

There was evidence at trial that [Elder John] had sexually assaulted another church member 20 years ago. However, even [Sandra] admits there is no evidence that any church official knew of this incident. She argues two other bases for imputation of knowledge to the denomination. First she argues that she complained to several other ministers of Elder John’s misconduct. Again, however, this was after the battery by Elder John and, as noted before, there was no subsequent sexual assault. There was some evidence that Sandra complained to another minister about Elder John’s conduct in the early 1990s. This minister was apparently at the same hierarchical level as Sandra and there is no evidence the complaint was forwarded to anyone even at the same level as Elder John. Sandra’s last theory is that because of his high managerial position, the knowledge of Elder John should be imputed to the church. She relies upon the general proposition that knowledge of its officers and agents is imputed to an entity …. [However it is only] the knowledge of an agent of a corporation regarding matters within the agent’s scope of employment and authority and to which his employment or authority extends is imputed to the corporation. [The denomination] properly points out that it is not within the scope of a minister’s employment to commit sexual misconduct [and it] points to other cases refusing to impute to a corporation the agent’s knowledge of his own unauthorized act.

The court concluded that for a church to be liable on the basis of intentional infliction to supervise clergy, “the victim must present evidence of actual knowledge by someone at the same managerial level of the wrongdoer. There was no such evidence in this case [and] there was no evidence of sexual harassment by Elder John” after Sandra complained to denominational officials. The court reversed the jury’s verdict with respect to the denomination.

The court affirmed the jury’s verdict against Elder John based on sexual battery. It rejected Elder John’s argument that the $1 million punitive damage award was excessive because its ratio to actual damages ($15,000) “was 66:1.” The court concluded, “Elder John ignores that there was evidence at trial from which the jury could believe that not only did he commit a battery by grabbing Sandra’s breasts but that act was merely the culmination of a long history of far worse verbal and physical sexual harassment by him against her. The degree of reprehensibility of his conduct is the most important indicum of the reasonableness of a punitive damages award.

Application. Consider the following three points.

1. This case illustrates the significant personal liability that is associated with acts of sexual misconduct by clergy. Elder John is personally liable to Sandra in the amount of $1,015,000, representing $15,000 of actual damages and $1 million of punitive damages. Punitive damages are damages a jury can assess for especially reprehensible conduct as a means of “punishing” the defendant and thereby deterring similar conduct by the defendant and others in the future. Such damages are not covered by insurance.

2. This case is also important because it limits the liability of churches and denominational agencies in cases of clergy sexual misconduct. For churches or denominational agencies to be legally responsible for a minister’s sexual misconduct, they must have prior knowledge that the minister was a risk, and this knowledge (1) is not imputed to the church or denominational agency on the basis of the minister’s status as an officer (since the conduct is outside the scope of his employment), and (2) must be by someone at the “managerial level” and pertain to similar acts of wrongdoing occurring prior to the incident in question.

3. There is one other aspect of this case that should be noted. Had Sandra been able to prove that denominational officers were aware of prior acts of sexual misconduct by Pastor Ron or Elder John, there is little doubt that the court would have affirmed the $4 million jury verdict against the denomination. This graphically illustrates the importance of responding appropriately to allegations of misconduct. And remember, the $4 million award was for punitive damages that would not have been covered under the denomination’s liability insurance policy. Weaver v. African Methodist Episcopal Church, 54 S.W.3d 575 (Mo. App. 2001).

© Copyright 2002 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: m66 m40 c0202

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold 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. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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