Mandatory Reporters and the Clergy-Penitent Privilege

Can confessions of child abuse be privileged conversations?

Church Law and Tax1992-11-01Recent Developments

Taxation – Church Property

Does the “clergy-penitent” privilege exempt ministers from the obligation to report child abuse? That was the difficult question addressed by an Alaska appeals court. A man sexually molested a 4-year-old child who had been placed in his care for an evening. The molester sought help through counseling with a minister. After learning of the individual’s sexual relations with a child, the minister reported the incident to the authorities. State troopers investigated the report, and the molester was prosecuted. The molester claimed that the troopers’ investigation, and the subsequent prosecution, were based entirely on information he provided to his minister in the course of confidential counseling. As such, it was protected by the clergy-penitent privilege and could not be basis for a criminal prosecution. A trial judge agreed that the statements made to the minister were covered by the clergy-penitent privilege. On that basis, the judge ruled that the minister could not be called as a witness to testify regarding the statements made to him by the molester in the course of their confidential counseling session. On the other hand, the judge ruled that the minister had a legal obligation to report the abuse, and this duty was not affected by the clergy-penitent privilege. The molester appealed the trial judge’s ruling, and an appeals court concluded that the trial court’s decision was correct. The Alaska clergy-penitent privilege specifies that “a person has a privilege to refuse to disclose and to prevent another from disclosing a confidential communication by the person to a clergyman in his professional character as a spiritual adviser.” The privilege applies “at all stages of all actions, cases, and proceedings.” This is broad language, meaning that the privilege is not confined to “in court” testimony. The court concluded, however, that the minister’s “report of sexual abuse was made in an out-of-court statement that was unrelated to any action, case, or proceeding then pending. For this reason, although it divulged confidential communications between [the molester and the minister], the report did not amount to a violation of the … clergy privilege.” In summary, the court concluded that the clergy-penitent privilege applies only to pending “actions, cases, or proceedings,” and accordingly it prevents a minister from testifying in court regarding a conversation protected by the privilege. However, the privilege does not excuse a minister from making a report of child abuse (and thereby initiating an official investigation) since at the time of a report there ordinarily is no pending legal action. Of course, this case assumes that a minister has a mandatory duty to report child abuse. This is true in only about half the states. In those states in which ministers are not required to report child abuse, they are free to refrain from making reports on the basis of information they receive in the course of confidential spiritual counseling. Of course, even in such cases there may be legal and ethical reasons why a minister would want to report the abuse. Walstad v. State, 818 P.2d 695 (Alaska App. 1991).

See Also: Child Abuse Reporting | Failure to Report Child Abuse

Sexual Misconduct of Counselors

A court ruled that a pastoral counseling center could be sued for a counselor’s misconduct.

Church Law and Tax 1991-01-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

The Alaska Supreme Court ruled that a pastoral counseling center could be sued by a woman who was sexually seduced by a counselor. The woman claimed that she had visited the counselor on several occasions, and that the pastoral counselor “negligently handled the transference phenomenon” by taking advantage of her sexually. She allegedly suffered severe emotional injuries, and as a result sued the center and two of its directors for damages. She claimed that the center was legally responsible for the counselor’s misconduct on the basis of “respondeat superior”—a legal theory the makes an employer responsible for the actions of its employees committed within the scope of their employment. In explaining the “transference phenomenon,” the director of the center explained that “transference is a phenomenon that occurs that is similar to a state of dependency in which the client begins to project the roles and relationships and the images and experiences that they have had with other people previously in their life, especially other significant people such as mother, father, brothers, sisters, early teachers and adult models, upon the therapist.” The director acknowledged that the transference relationship is very “delicate” and “fragile,” and that a counselor has “a professional and ethical responsibility to manage that relationship so that the client is not damaged in any way.” A trial court summarily dismissed the lawsuit, concluding that the center was not responsible for the intentional and unauthorized misconduct of a counselor. The case was appealed directly to the state supreme court, which reversed the trial court’s decision and ordered the case to proceed to trial. The court announced a very broad interpretation of the respondeat superior doctrine. The court concluded that an employer could be responsible for an employee’s sexual misconduct that “arises out of an is reasonably incidental to the employee’s legitimate work activities”—even if the misconduct was intentional and unauthorized by the employer. This ruling ignores the vast majority of court rulings that have rejected an employer’s legal responsibility for the intentional misconduct of an employee. Perhaps the most significant aspect of the case is the lengthy and articulate opinion of a dissenting justice, who ably described the many weaknesses in the court’s decision. With regard to the claim that employer liability will “provide a spur toward accident prevention,” the dissenting justice observed: “Since a therapist’s sexual misconduct stems from his intentional disregard of well-established standards of professional conduct, there is little that an employer can do to reduce its occurrence.” The dissenting justice also rejected the argument that employer liability is necessary to “provide greater assurance of compensation for accident victims.” He observed: Imposing vicarious liability would tend to make malpractice insurance, already a scarce and expensive resource, even harder to obtain. It is also unclear whether malpractice insurance would even cover sexual misconduct. Whether or not mental health employers could insure against this risk, they would have to raise the cost of their services dramatically. Mental health services would be denied to those who are least able to pay. While victims of therapist sexual misconduct may enjoy a greater chance of being compensated, the cost of creating that benefit in reduced access to mental health services is unacceptable.” Finally, the dissenting justice rejected the argument that employer liability was required to “distribute” the costs of an enterprise among its beneficiaries: “Spreading the cost of therapist-patient sex to the consumers of mental health services is unfair. Therapist-patient sex, although not uncommon, is not an inevitable cost of mental health care. It is a cost imposed by therapists who intentionally disregard the standards of conduct of mental health professionals for personal sexual gratification.” There is little doubt that most courts will be more persuaded by the thoughtful analysis of the dissenting justice than by the aberrant ruling of the court. For now, the case proceeds to trial. In the meantime, churches and pastoral counseling centers in the state of Alaska should carefully review with legal counsel their counseling activities. Any further developments will be reported in future editions of Church Law & Tax Report. Doe v. Samaritan Counseling Center, 791 P.2d 344 (Alaska 1990).

Internal Revenue Service – Part 1


Church Law and Tax 1989-05-01 Recent Developments

Internal Revenue Service – Administration

The IRS “Annual Report” for fiscal year 1988 contains some interesting information. Only 1.03% of personal income tax returns filed in fiscal year 1988 were audited (down from 1.09% in 1987). However, the actual audit rate varied significantly depending on the IRS district involved and the amount of income reported. For example, the audit rate was 1.45% in Anchorage, Alaska, 1.44% in San Francisco, and 1.36% in Manhattan, New York, but only 0.55% (i.e., about half of a percent) in Boston and Newark. For returns reporting income of at least $50,000 (none on Schedule C), the audit rate was 2.32%. The audit rate jumped to 4.2% for taxpayers reporting income of at least $100,000 on Schedule C.

Church Official Could Not Bring Securities Fraud Action Against Brokerage Firm as an Individual

In 1984, church property that had been used by a Christian Methodist Episcopal (CME) Church

In 1984, church property that had been used by a Christian Methodist Episcopal (CME) Church in Alaska was sold for $1,400,000. The funds were invested with a major securities brokerage firm while the church located a new church facility. The funds were invested with the brokerage firm allegedly on the basis of its oral representations that the funds would earn a return of "not less than 15%" without any loss of principal.

The brokerage firm initially invested the funds in stocks, bonds, and treasury bills. After the church official who invested the funds expressed dissatisfaction with the account's performance, an options account was established. The account was closed several months later when it became clear that it was losing money. As a result of the funds' poor performance (it allegedly lost nearly $200,000), the church official responsible for the investment was "demoted" by the church.

This official thereafter filed suit against the brokerage firm, alleging that the firm had been guilty of securities fraud as a result of its false representations regarding investment performance and its failure to give adequate warning regarding the risks associated with options arrangements.

The court acknowledged that the church could bring a securities fraud action against the brokerage firm, but concluded that the church official responsible for the investment of the funds church official who invested the funds bring the action individually. And, since the church had decided not to pursue the case against the brokerage firm, the church officer's personal claim against the firm had to be dismissed.

The church officer, concluded the court, "acted solely as an agent of the church, and it is well settled that an agent has no action in tort because another has tortiously harmed the principal." Linsey v. E.F. Hutton & Co., Inc., 675 F. Supp. 1 (D.D.C. 1987)

Court Upheld the Validity of Proxy Votes in Church Business Meetings

During a regular church business meeting, a member moved to terminate the services of the

During a regular church business meeting, a member moved to terminate the services of the church's minister. Of the members present, 42 voted to retain the minister, and 32 voted to remove him. In addition, one of the 32 dissidents produced a list of 57 proxy (absentee) votes to remove the minister from office. The moderator of the business meeting refused to recognize the proxy votes, and the attempt to remove the minister failed.

The dissident members thereafter filed a lawsuit seeking a court order upholding the validity of proxy votes in church business meetings. A state trial court ruled against the dissidents, and the case was appealed directly to the Alaska Supreme Court.

In an important decision, the court reversed the trial court and held that the proxy votes should have been counted. It based its decision on the provisions of the Alaska Nonprofit Corporations Act (under which the church had incorporated) which authorized proxy voting by members of nonprofit corporations absent a contrary provision in an organization's charter or bylaws.

The court rejected the church's claim that requiring it to recognize proxy votes violated the constitutional guaranty of religious freedom.

Finally, the court observed that a church could easily avoid the recognition of proxy votes by simply amending its charter or bylaws to so state. Herning v. Eason, 739 P.2d 167 (Alaska 1987).

Internal Revenue Service


Your chances of being audited by the IRS are highest (2.61%) in Nevada and lowest (0.47%) in Rhode Island, according to recently released IRS data. The five states with the highest audit risk are Nevada, Alaska, Utah, Wyoming, and California. The five states with the lowest risk are Rhode Island, Kentucky, Indiana, Massachusetts, and New Hampshire. The national average in 1986 was 1.1%, down from 2.3% in 1975. The IRS plans to audit 1.23% of all individual income tax returns in 1987, and 1.32% in 1988.

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