Colorado Pastor’s Defamation Claim Falls Short

A Colorado pastor could not prove a former member knew his derogatory statements about her were false when he made them.

Key point 4-02.02 Ministers are considered “public figures” and as a result they cannot be defamed unless the person making an otherwise defamatory remark did so with malice. In this context, malice means that the person making the defamatory remark either had actual knowledge that it was false or made it with a reckless disregard as to its truth or falsity.

A Colorado federal court dismissed a pastor’s claim that she had been defamed by a church member who made numerous false and derogatory statements about her on social media.

A woman (the “pastor”) has been the pastor of a church since its founding in 1982. In recent years, a church member (the “defendant”) became disenchanted with the pastor’s leadership and doctrinal teachings.

In 2017, the defendant left the church and, soon after, allegedly started posting “defamatory, false, and slanderous statements” about the pastor on various social media accounts. Posts included the following accusations:

  • The pastor knew that her two sons were guilty of immoral contact, including sexual abuse, but refused to act and “covered it up.”
  • The pastor “is the ringleader herself, the wicked witch of the West.”
  • The defendant referred to the church’s parishioners as a “crazy bunch of people” who were “brainwashed.”
  • The defendant posted a two-hour video on Facebook, using his personal Facebook account, where he made various statements about the pastor, including accusations that she required parishioners to obtain her “permission” before making purchases; that she was “spreading lies;” that she told the defendant’s parents to “put him out” on the street at age sixteen; and that she threatened to remove parishioners who did not “pledge” money to the church. He also referred to the church as a “cult,” and characterized its members as “being under bondage.” The defendant later posted this “same exact” video to YouTube.
  • The defendant made social media “postings” about alleged “abuse” within the church.
  • The defendant posted an image on Facebook depicting a photograph of the pastor next to a photograph of “the notorious Jim Jones,” a man reportedly “responsible for the murder/suicide of 918 individuals including 304 children.” The pastor claimed that the defendant posted the image “with malice,” in an attempt “to draw a clear analogy between the two individuals depicted.”
  • On a different occasion, the defendant posted an “email” in which he stated that the pastor engaged in “fraud,” and “received funds” totaling “5 million dollars.”

The pastor later sued the defendant in a federal district court in Colorado. The pastor claimed that the defendant was liable on the following grounds: defamation and intentional infliction of emotional distress.

Defamation

As to her first claim, the pastor alleged that the defendant published numerous “false” and “defamatory” statements about her on the internet, including: (1) that the church is a “cult;” (2) that there was “abuse” within the church; (3) that the pastor engaged in “fraud,” received funds totaling $5 million, and allowed her “corrupt” sons to participate in the church; and (4) that the pastor is a “witch;” and that one of her sons is “almost a sex offender.” In addition, the pastor alleged that the defendant further defamed her when he published a photograph of her next to a photograph of Jim Jones.

The court noted that defamation is “a communication that holds an individual up to contempt or ridicule thereby causing him to incur injury or damage.”

The required elements of a defamation claim are: (1) a defamatory statement concerning another; (2) that is false; (3) communicated to a third party; (4) causes injury to reputation; and, if the victim is a “public figure,” clear and convincing evidence of malice.

In this context, malice means statements were “uttered with knowledge of their falsity or in reckless disregard of their truth.” Malice can be shown if the defendant “entertained serious doubts as to the truth of the statement or acted with a high degree of awareness of its probable falsity.” Further, “a defendant who willfully chooses not to learn the truth prior to publishing an allegedly false statement can be found to have acted with malice.”

The pastor claimed that the defendant’s malice could be inferred from the fact that the statements he made about the pastor were all “demonstrably false.”

The court disagreed, noting that the pastor “did not direct the court to sufficient evidence that defendant knew, or strongly suspected, that his statements concerning [the pastor] were false.” The court also noted that, were the pastor treated as a private figure for purposes of the lawsuit, the pastor still failed to show evidence that the defendant “negligently failed to ascertain the truth of his statements before publishing them.”

Intentional infliction of emotional distress

The pastor’s second claim was for intentional infliction of emotional distress. The court noted that to prevail on this claim the pastor needed to demonstrate: (1) the defendant engaged in extreme and outrageous conduct; (2) the defendant engaged in such conduct recklessly or with the intent of causing the pastor severe emotional distress; and (3) the defendant’s conduct caused the pastor to suffer severe emotional distress. The pastor claimed that she had “suffered emotional distress and trauma” due to the defendant’s publication of the many bitter and abusive statements concerning her and her family.

But the court dismissed this claim, noting that the pastor “did not direct the court to sufficient evidence to demonstrate that the defendant acted recklessly, or with the intent to cause emotional distress.”

What this means for pastors and churches

Pastors and other church leaders sometimes experience the wrath of a disgruntled member who uses social media to communicate false and derogatory information to the public. Such events can be extremely painful, causing victims to ask what can be done.

Here are some tips to keep in mind:

Defamation is an injury to reputation.

To establish a claim for defamation, a victim must prove the following four elements: (1) a statement (whether verbal (slander) or in writing (libel)), (2) concerning another, (3) that is false, and that (4) injures reputation.

Since a landmark US Supreme Court ruling in 1964 (New York Times v. Sullivan), it has become much more difficult for “public figures” to prove defamation. The Court’s reason: when people voluntarily thrust themselves into the public eye, they must expect to be the target of criticism.

Thus, in addition to the other four elements of defamation summarized above, public figures must prove that defamatory statements were made with malice. Malice must be shown by demonstrating statements were made with knowledge of their falsity or with reckless disregard of their truth or falsity. Malice is difficult to establish, meaning that the success rate of defamation claims involving public figures is low.

Although few courts have addressed the question, it is likely courts will deem ministers to be public figures. As a result, ministers will be required to show more than damage to their reputations to establish defamation. They also must demonstrate that the allegedly defamatory remark was made with malice. That is a much harder path for prevailing in a civil lawsuit they file against persons who defame them.

Of note, this specific case shows the difficulty with proving malice when a pastor is considered a public figure. It also shows a burden of proof still must be met, even if a pastor is considered a private figure (although it is more likely a pastor will be considered a public figure).

  • At least two justices of the United States Supreme Court (Justice Clarence Thomas and Justice Neil Gorsuch) have called for a re-examination—and possible reversal of—New York Times v. Sullivan. Such a development would make it much easier for ministers, and other public figures, to maintain defamation lawsuits despite their statuses as public figures.
  • Even if a defamation claim is not an option, there are other grounds ministers can pursue against persons making unfounded and derogatory comments about them on social media. These include intentional infliction of emotional distress (as this case illustrates, also difficult to prove), and a variant of “invasion of privacy” consisting of public disclosure of private fact.
  • Many courts have ruled that the “ministerial exception”—which generally prohibits the civil courts from resolving internal employment disputes between churches and clergy—applies to defamation claims brought by ministers against their current or former churches. But other courts have reached the opposite conclusion and have said that such claims can be resolved so long as this can be done without inquiries into church doctrine and polity.

Banks v. Jackson, 2022 WL 1451904. (Colo. 2022).

Related Topics:

Sexual Abuse Screenings and Liability

Key point 10-04.2. Some courts have found churches not liable on the basis of negligent


Key point 10-04.2. Some courts have found churches not liable on the basis of negligent selection for the molestation of a minor by a church worker since the church exercised reasonable care in the selection of the worker.

Key point 10-09.2. Some courts have found churches not liable on the basis of negligent supervision for a worker's acts of child molestation on the ground that the church exercised reasonable care in the supervision of the victim and of its own programs and activities.

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.

A federal court in Colorado ruled that a church was not liable on the basis of negligence or fiduciary duty for a Sunday School teacher's sexual relationship with one of his adolescent students off of church premises. A 40-year-old male (the "defendant') became a volunteer Sunday School teacher at his church for a group of adolescent minors. The church had a "two-deep" policy for certain settings where two adults had to be present, including Sunday classrooms with children ages 11 or younger. The church did not apply the two-deep policy to teenage Sunday School classes because there were several teenagers in the classroom, the doors were not locked, the church was full of people, other adults were frequently in and out of the classroom, and the class was short.

The church did not conduct background checks on Sunday School teachers, and none was conducted on the defendant. If a criminal background check had been conducted, it would have revealed the following:

  • 2002: The defendant was arrested for a misdemeanor violation of a restraining order;
  • 2002: In a domestic relations matter, a permanent protective order was entered by consent with no admission of the allegations;
  • 2003: The defendant was found guilty of four counts of violation of a custody order (class 5 felony), fined, and sentenced to 60 days work release and three years' probation as a result of his moving with his children to Tennessee without court approval;
  • 2003: The defendant pled guilty to violating a restraining order, resulting in a fine, suspended jail sentence, and probation.
  • 2005: The defendant was arrested for violating a restraining order for calling his ex-wife 38 minutes after the time permitted by the order.
  • 2005: The defendant was arrested for violating a restraining order for calling his ex-wife eight minutes prior to the time permitted by the order.
  • 2008: The defendant was arrested for misdemeanor violation of a restraining order. He had called his daughter on her birthday.

In the Sunday School class the defendant taught, there were anywhere between five and 12 students, including both boys and girls. There was no co-teacher. There were two doors to the room, which were closed during class. The doors had a peephole that allowed people to look into the room. During class, the defendant became acquainted with a 15-year-old girl (the "plaintiff"). He often texted her while teaching, but was never alone with her during class and had no physical contact with her.

The plaintiff later sued the defendant, and church, claiming that the church was responsible for the defendant's wrongful acts on the basis of negligent hiring and supervision.

The plaintiff began communicating with the defendant outside of class. Initially, it was "just regular conversation," usually by texts. But over the next few months they communicated by text messages hundreds of times, and by phone "thousands and thousands of times." This usually occurred between 9 p.m. to 2 a.m. or 3 a.m., when the defendant got off work. The relationship ultimately resulted in sexual intercourse on at least two occasions, at the plaintiff's home. The defendant led the plaintiff to believe he wanted to have a long-term relationship with her. He said he wanted to marry her. She considered marrying him when she turned 18. However, the plaintiff saw on Facebook that the defendant had another woman in his life. Once plaintiff realized she was not going to get married to the defendant, she felt hurt, betrayed, manipulated, and angry. She called and told her mother, who reported the matter to the police. At first, plaintiff told her mother that she had been raped because she felt like she had—that the defendant had manipulated her into believing it was okay.

The defendant pled guilty to sexual assault with a 10-year age difference, a class 1 misdemeanor.

Negligent hiring

The court began its opinion by noting that negligent hiring involves an "employer's responsibility for the dangerous propensities of the employee, which were known or should have been known by the employer at the time of hiring, gauged in relation to the employee's job duties …. An employer has a duty to exercise reasonable care in making his decision to hire …. The requisite degree of care increases, and may require expanded inquiry into the employee's background, when the employer expects the employee to have frequent contact with the public or when the nature of the employment fosters close contact and a special relationship between particular persons and the employee."

The plaintiff claimed that the church had a duty to protect her from the sexual assaults occurring off church premises, and that it violated this duty by appointing the defendant as a Sunday School teacher. The court disagreed:

Plaintiff argues this duty existed because the church was aware of the defendant's history of domestic violence and crimes involving his own children, but failed to discover his character to cause harm to women and children. The undisputed facts, however, are to the contrary. Instead, the evidence establishes that, at the time of his calling [as a Sunday School teacher] the defendant had been a church member for several years; his membership record bore no annotation for abuse; and [church leaders] were only aware that around the time of the end of his first marriage he had taken his children across state lines, which [church leaders] viewed as domestic issues between a husband and wife. Such facts show no propensity or characteristic that put the church on notice that the defendant posed a risk of harm to minors as implicated in this case.

The plaintiff also argued that the church had a heightened duty to investigate due to the defendant's regular contact with the public. The court disagreed, noting that even if teaching a weekly 40-minute Sunday School class to a limited number of students in a group setting was sufficient "regular contact" requiring an independent inquiry, that inquiry would have shown violations relating to domestic disputes that did not "put the church on notice of any character or propensity on the part of the defendant to engage in sexual misconduct involving a minor at church or, for that matter, anywhere else."

Negligent supervision

In a claim for negligent supervision against an employer, the plaintiff must prove that the defendant "knew his employee posed a risk of harm to the plaintiff and that the harm that occurred was a foreseeable manifestation of that risk." As with negligent hiring, liability is "predicated on the employer's antecedent ability to recognize a potential employee's attributes of character or prior conduct which would create an undue risk of harm to those with whom the employee came in contact in executing his employment responsibilities."

The plaintiff claimed that the church was responsible for the defendant's acts on the basis of negligent supervision. In particular, she cited the lack of:

  • training of the defendant before assigning him the role as a Sunday School teacher;
  • a co-teacher in the Sunday School class;
  • a window in the closed Sunday School classroom door; and,
  • supervision in general.

The court noted that "before a duty of care may exist there must be a connection between the employer's knowledge of the employee's dangerous propensities and the harm caused. In this case, there is insufficient evidence that any alleged supervision deficiencies caused the harm." For example, "there is no evidence that the defendant's lack of training on religious education was the cause of the sexual intercourse, and it should go without saying that an employer need not have to train a 40-year-old adult male that he is prohibited from engaging in sexual intercourse with a 15-year-old. There is also no evidence that the lack of a co-teacher or a window in the classroom door caused the harm—the sexual interactions occurred at night, outside of plaintiff's house."

"Grooming"

The plaintiff alleged that the defendant "groomed" her during Sunday School class, that the grooming occurred due to a lack of supervision, and that the intercourse would not have occurred without the grooming. The court noted that the plaintiff failed "to identify specific conduct constituting grooming; to tie that conduct to the Sunday School class; and to explain how that conduct would have been deterred by some specific form of supervision." Even if this conduct could be deemed grooming, "it would be dwarfed by the non-controllable instances of identical conduct. Plaintiff testified that she and the defendant exchanged hundreds of text messages and thousands of calls outside of church—all between about 9 p.m. to 2 a.m. or 3 a.m.—when the defendant got off work. If any grooming occurred, it was far from a time and place connected with the defendant's 'employment' at the church."

Fiduciary relationship

The plaintiff also claimed that the church was liable for the defendant's wrongful acts on the basis of a breach of its "fiduciary duty" to her. In particular, she asserted that the church and defendant were acting as fiduciaries in providing religious instruction and creating a setting for interaction which created trust and reliance. In support of her argument, plaintiff further noted that the defendant and church placed themselves in a position of superiority, trust, and influence and she, then age 15, was vulnerable and dependent.

The church countered by asserting that "no court has recognized a fiduciary duty based on a basic clergy-congregant relationship" much less a Sunday School teacher-student relationship. In other words, attending church or its Sunday School "does not create a fiduciary relationship between the church/school/teacher and the parishioner/student."

The court concluded:

What is notably absent is any evidence that the defendant and church [the defendants"] assumed any duty to act in plaintiff's best interest or that plaintiff reposed any trust or confidence in and relied on defendants to protect her interest. Instead, she was a visiting parishioner, present at church services like all other parishioners and at Sunday School like other young men and women. She was free to attend or not attend, as demonstrated by her testimony that she attended anywhere from three to 20 occasions. Such undisputed facts do not support the existence of a fiduciary relationship between defendants and plaintiff. Similarly, plaintiff's bare allegations and arguments that a fiduciary duty existed, without any evidentiary basis to show such a duty in fact existed, are insufficient.

What This Means For Churches:

This case is instructive for the following reasons:

First, it demonstrates that not all crimes render one unfit for children's ministry. The defendant's criminal record was limited to various violations of child custody agreements.

Such crimes, the court concluded, did not suggest that he was a risk to minors.

Second, the court concluded that a failure to conduct a criminal records check on a church volunteer who will work with minors does not, by itself, make a church liable for the volunteer's wrongful acts. A failure to conduct a criminal records checks is irrelevant if such a check would not have revealed any crimes suggesting that the person poses a risk of harm to minors.

Third, the court suggested that the "degree of care increases, and may require expanded inquiry into the employee's background, when the employer expects the employee to have frequent contact with the public or when the nature of the employment fosters close contact and a special relationship between particular persons and the employee." However, the court concluded that an "expanded inquiry" into the defendant's past would not have revealed any facts suggesting he was a risk of harm to minors.

Fourth, the court rejected the plaintiff's argument that it was responsible for her injuries on the basis of negligent supervision since it failed to adequately train the defendant, did not have a co-teacher in the classroom, and did not have a window in the classroom. It noted that there was "insufficient evidence that any alleged supervision deficiencies caused the harm." For example, "there is no evidence that the defendant's lack of training … was the cause of the sexual intercourse, and it should go without saying that an employer need not have to train a 40-year-old adult male that he is prohibited from engaging in sexual intercourse with a 15-year-old. There is also no evidence that the lack of a co-teacher or a window in the classroom door caused the harm—the sexual interactions occurred at night, outside of plaintiff's house."

Fifth, the plaintiff alleged that she and the defendant had exchanged hundreds of text messages and thousands of calls outside of church. Such communications, the court concluded, were too far removed from the church to serve as a basis for liability. But, at a minimum, they suggest that social media contacts between adult youth workers and minors in the youth group are inappropriate, and may lead to a sexual relationship that in some cases may expose a church to liability. Such communications should be absolutely banned.

Any need to communicate with minors should be done through their parents. When social media communications evolve into "sexting," this can expose the adult participant to criminal liability, as has been noted in several previous articles in this newsletter. Lindeman, 2014 WL 2505647 (D. Colo. 2014).

* See also Insurance, Drew v. Insurance Company, 2014 WL 2436273 (D.N.J. 2014), in the Recent Developments section of this newsletter.

Related Topics:

Tithing When You’re Bankrupt

Can bankruptcy trustees recover charitable contributions made by bankrupt debtors?

Key point 9-09. Bankruptcy trustees are prohibited by the federal Religious Liberty and Charitable Donation Protection Act from recovering contributions made by bankrupt debtors to a church or other charity prior to declaring bankruptcy, unless the contributions were made with an intent to defraud creditors. This protection extends to any contribution amounting to less than 15 percent of a debtor's gross annual income, or more if the debtor can establish a regular pattern of giving more. In addition, the Act bars bankruptcy courts from rejecting a bankruptcy plan because it allows the debtor to continue making contributions to a church or charity. Again, this protection applies to debtors whose bankruptcy plan calls for making charitable contributions of less than 15 percent of their gross annual income, or more if they can prove a pattern of giving more.

A bankruptcy court in Colorado addressed the authority of bankruptcy trustees to recover charitable contributions made by bankrupt debtors within a year of filing a bankruptcy petition. A married couple (the "debtors") filed for Chapter 7 bankruptcy relief on December 31, 2009. In 2008, the debtors' gross earned income was $6,800 and they received $22,036 in Social Security benefits. Throughout 2008, the debtors made 25 donations to their church totaling $3,478. In 2009, the debtors' gross earned income was $7,487 and they received $23,164 in Social Security benefits. Throughout 2009, the debtors made 7 donations totaling $1,280 to their church.

The bankruptcy trustee attempted to avoid these charitable contributions and have the church return them to the court on the basis of a provision in the Bankruptcy Code that empowers a trustee to recover any transfer of funds or assets by a debtor for less than "reasonably equivalent value" within a year of filing a bankruptcy petition. The church cited section 548 of the Bankruptcy Code, which was amended by the Religious Liberty and Charitable Donation Protection Act of 1997 ("RLCDPA") to provide a defense against a bankruptcy trustee's power to recover transfers by debtors within a year of filing a bankruptcy petition. Amended section 548 provides: "A transfer of a charitable contribution to a qualified religious or charitable entity or organization shall not be considered to be a [voidable] transfer in any case in which—(A) the amount of that contribution does not exceed 15 percent of the gross annual income of the debtor for the year in which the transfer of the contribution is made."

The court addressed two questions: (1) Are Social Security payments included in gross annual income for purposes of the section 548 exception; and (2) if transfers exceed 15 percent, is the entire transferred amount voidable or just the transferred amount that exceeds 15 percent?

Social Security payments

The court noted that the plain language of section 548 was ambiguous as to whether "gross annual income" should include Social Security benefits. It also noted that the Bankruptcy Code does not define the term "gross annual income," and no court has defined the term within the meaning of section 548. However, the court noted that the Bankruptcy Code does exclude Social Security benefits when calculating current monthly income, and, the Internal Revenue Code only includes Social Security benefits in gross annual income if the taxpayer's modified adjusted gross income for the taxable year, plus one-half of Social Security benefits received during the taxable year, exceeds a "base amount" ($32,000). As a result, the court concluded that Social Security benefits are not included in computing gross annual income under section 548, and as a result only 15 percent of the debtors other income was shielded from the bankruptcy trustee.

voidable amount

If a debtor contributes more than 15 percent of gross annual income to a church, is the entire contribution recoverable by the bankruptcy trustee, or only the portion that exceeds 15 percent of gross annual income? The court concluded that only the excess above 15 percent is recoverable. It observed:

The RLCDPA was created to reverse the trend among the courts allowing avoidance actions to recover funds contributed by debtors to churches. The House Report states, "the safe harbor protects annual aggregate contributions up to 15 percent of the debtor's gross annual income." The term "up to" indicates an intent by Congress to bifurcate the avoidance amount beyond the 15% threshold …. It is doubtful that Congress would protect a debtor's right to donate 15% of their gross annual income to a charitable organization, but allow a trustee to avoid all donations if one cent over the 15% threshold is donated. From the church's perspective, voiding entire transfers above 15% of a debtor's gross annual income would place an undue burden upon churches. If the entire donation amount is voided churches would be obligated to investigate a donor's financial background in order to use funds within two years of receipt.

What This Means For Churches:

This case is significant because it represents the only court to address the question of whether Social Security payments are included in computing "gross annual income" for purposes of applying the section 548 exclusion. The court concluded that gross annual income excludes Social Security benefits, meaning that Social Security beneficiaries' contributions to their church are more likely to be recoverable by bankruptcy trustees. But, the court also ruled that if a bankruptcy debtor contributes more than 15 percent of gross annual income to his or her church, the bankruptcy trustee can recover only the contributions in excess of 15 percent of gross annual income. In re McGough, 2011 WL 2671253 (D. Colo. 2011).

Release Forms

Have your insurance agent and an attorney review releases before you use them.

Church Law & Tax Report

Release Forms

Have your insurance agent and an attorney review releases before you use them.

Key point 10-16.6. A release form is a document signed by a competent adult that purports to relieve a church from liability for its own negligence. Such forms may be legally enforceable if they are clearly written and identify the conduct that is being released. However, the courts look with disfavor on release forms, and this has led to several limitations, including the following: (1) release forms will be strictly and narrowly construed against the church; (2) release forms cannot relieve a church of liability for injuries to minors, since minors have no legal capacity to sign such forms and their parents’ signature does not prevent minors from bringing their own personal injury claim after they reach age 18; (3) some courts refuse to enforce any release form that attempts to avoid liability for personal injuries on the ground that such forms violate public policy; and (4) release forms will not be enforced unless they clearly communicate that they are releasing the church from liability for its negligence.

A Colorado court ruled that a release form signed by a parent whose minor daughter attended an offsite church activity did not relieve the church from liability for catastrophic injuries sustained by the daughter during the activity. A group of 60 teenagers attended a three-day church retreat at a ranch. All of the participants were required to submit a registration form, signed by at least one parent, that contained the following release of liability provision:

I give permission for my child to participate in [the event] and all activities associated with it. I further give consent for any medical treatment necessary to be given to my child in case of injury or sickness. I will not hold [the church] or its participants responsible for any liability which may result from participation. I also agree to come and pick up my child should they not obey camp rules.

After arriving and checking in at the ranch, the participants engaged in church-sponsored activities. One activity was riding an inner tube tied to an all terrain vehicle (ATV) driven around a frozen lake. A large boulder was embedded in the lake some thirty-five feet from shore. Two adult leaders drove the ATV towing youth participants around the frozen lake. A 17-year-old girl (the “victim”) got on an inner tube, and the ATV began towing her. On her second loop around the lake, the ATV went between the boulder and shoreline. The victim’s inner tube, still tied to the ATV, veered off and crashed into the boulder. The crash broke the victim’s back, resulting in permanent injuries.

The victim sued the church, claiming that its negligence resulted in the accident. The church asserted that the release form signed by the victim’s mother precluded it from any liability for the victim’s injuries. The jury returned verdicts against the church totaling more than $4 million. The court reduced the total to $2 million (the limits of the church’s insurance). With prejudgment interest and costs, the final judgment was $2.6 million. The church appealed.

The appeals court noted that in 2002 the state supreme court ruled that parents cannot prospectively waive liability on behalf of their minor children. The next year, the state legislature overturned this ruling by enacting a statute allowing parents to “release or waive the child’s prospective claim for negligence.” The legislature concluded that parents have a fundamental right to make decisions on behalf of their children, including deciding whether the children should participate in risky activities. It added that “so long as the decision is voluntary and informed, the decision should be given the same dignity as decisions regarding schooling, medical treatment, and religious education.” But it further provided that the statute does not permit a parent to waive a child’s prospective claim for “willful and wanton, reckless, or grossly negligent” acts or omissions.

The court concluded that the release signed by the victim’s mother in this case was not an “informed” decision as required by the statute permitting parents to release their minor children’s claims. It observed: “There is no information in the registration form describing the event activities, much less their associated risks. Stating that the children would participate in [the event] and all activities associated with it” does not indicate what the activities would involve and certainly does not suggest they would include ATV-towed inner-tube excursions around a frozen lake.”

The court stressed that release clauses “must be closely scrutinized” because they are “disfavored.” A release “need not contain any magic words to be valid; in particular, it need not specifically refer to waiver of negligence claims. But, “in every Colorado Supreme Court case upholding an exculpatory clause, the clause contained some reference to waiving personal injury claims based on the activity being engaged in.” The release clause in this case did not satisfy this requirement, and therefore was not enforceable.

Finally, the court ruled that the trial court improperly reduced the jury’s $4 million verdict to the amount of the church’s insurance coverage ($2 million). The court acknowledged that a state law allowed for levy and execution against assets of nonprofit entities only “to the extent” the entity would be reimbursed by liability insurance. But in cases where a plaintiff is not attempting to attach a nonprofit entity’s assets through levy or execution, there is no limit to the damages that can be assessed against such an entity. The court observed, “The existence and amount of liability insurance provides no basis for limiting a judgment against a nonprofit or charitable defendant. Rather, the issue of liability insurance is relevant only when a plaintiff seeks to levy and execute on a judgment.”

What This Means For Churches:
A release form is a document signed by an adult that purports to relieve a church (or other entity) from liability for its negligence. The courts look with disfavor on release forms, and this has led to several limitations, including the following:

  1. Release forms will be strictly and narrowly construed against the church.
  2. Release forms will not be enforced if they are ambiguous.
  3. Release forms will not be enforced if the person signing the form does not do so voluntarily.
  4. Release forms will not be enforced if the person signing the form is not informed (by the language of the form) as to the specific risk that is being released. Activities giving risk to injuries must be specifically mentioned.
  5. Several courts have ruled that release forms cannot relieve a church from liability for injuries to minors, since minors have no legal capacity to sign such forms and their parents’ signature does not prevent minors from bringing their own personal injury claim after they reach age 18. Some states, like Colorado, have enacted legislation giving parents the legal authority to release their minor children’s claims. But, as this case illustrates, there are still limitations that may prevent parents from releasing their children’s claims (i.e., voluntary and informed consent, and no release of gross negligence or reckless conduct).
  6. Some courts refuse to enforce release forms that attempt to avoid liability for intentional acts, gross negligence, or willful or wanton conduct. If a release form does not explicitly exclude such conduct from its terms, the form may be invalidated by a court.
  7. Some courts refuse to enforce release forms if they are “contracts of adhesion” based on a gross disparity in bargaining power between the releasor and releasee. To illustrate, if the person signing a release form has no ability to change it, this may suggest an unenforceable adhesion contract. On the other hand, some courts have ruled that a release form is not an unenforceable contract of adhesion if the party signing the form could walk away from the transaction and do business elsewhere. This exception may or may not apply to a church, depending on the circumstances. After all, is it realistic to say that a church member has the right to walk away and attend another church, and therefore a release form is not a contract of adhesion?
  8. Some courts refuse to enforce a release form that is inconspicuous. To illustrate, if the language of release is buried in another, larger document, without a bold heading and other devices to draw attention to it, it may be unenforceable.
  9. Some courts have ruled that release forms that do not contain a signature by the releasor are unenforceable. To illustrate, if the language of release is contained in a larger document, a signature line should appear directly after the language of release, as well as at the end of the document.
  10. Churches that send groups of adults to other locations for short-term missions projects should consider having each participating adult sign an assumption of risk form. So long as these forms clearly explain the risks involved, and leave no doubt that the signer is assuming all risks associated with the trip, they may be enforced by the courts. This assumes that the signer is a competent adult. Churches should consult with an attorney about the validity of such forms under state law.
  11. Churches should not allow a minor child to participate in any church activity (such as camping, boating, swimming, hiking, or some sporting events) unless the child’s parents or legal guardians sign a form that (1) consents to their child participating in the specified activity; (2) certifies that the child is able to participate in the event (e.g., if the activity involves boating or swimming, the parents or guardians should certify that the child is able to swim); (3) lists any allergies or medical conditions that may be relevant to a physician in the event of an emergency; (4) lists any activities that the parents or guardians do not want the child to engage in; and (5) authorizes a designated individual to make emergency medical decisions for their child in the event that they cannot be reached. Ideally, the form should be signed by both parents or guardians (if there are two), and the signatures should be notarized. If only one parent or guardian signs, or the signatures are not notarized, the legal effectiveness of the form is diminished. Having persons sign as witnesses to a parent’s signature is not as good as a notary’s acknowledgment, but it is better than a signature without a witness. The form should require the parent or guardian to inform the church immediately of any change in the information presented, and it should state that it is valid until revoked by the person who signed it. The parent or guardian should sign both in his or her own capacity as parent or guardian, and in a representative capacity on behalf of the minor child.
  12. Churches should not use releases without discussing them with their insurance agent and a local attorney. Wycoff v. Community Church, 251 P.3d 1260 (Colo. App. 2010).

    This Recent Development first appeared in Church Law & Tax Report, November/December 2011.

FLSA and the Ministerial Exception

Federal court rules that a seminarian cannot claim unpaid overtime compensation.

Church Law & Tax Report

FLSA and the Ministerial Exception

Federal court rules that a seminarian cannot claim unpaid overtime compensation.

Key point 8-08.7. Ministers who are employed to perform ministerial services, and who are paid a salary that meets or exceeds the “salary test,” are professional employees exempt from the provisions of the Fair Labor Standards Act. Ministers not compensated on a salary basis, or who earn a salary below the salary test, may not be covered by the Act. Department of Labor regulations suggest that the Act does not apply to any ministers, and a few federal courts have ruled that the so-called ministerial exception prevents the application of the Act to ministers.

A federal appeals court ruled that it was barred by the so-called “ministerial exception” from resolving a seminarian’s claim for unpaid overtime compensation. The court noted that federal courts “have grappled with determining whether a particular church employee, though not ordained, nevertheless should be considered a ‘minister’ for purposes of the ministerial exception.” It declined to adopt a specific test for deciding who is a ministerial employee, since “under any reasonable construction of the ministerial exception [a seminarian] meets the definition of a minister.” It concluded:

We hold that the First Amendment considerations relevant to an ordained minister apply equally to a person who, though not yet ordained, has entered into a church-recognized seminary program to become a minister and who brings suit concerning employment decisions arising from work as a seminarian. The principle of allowing the church to choose its representatives using whatever criteria it deems relevant necessarily applies not only to those persons who already are ordained ministers, but also to those persons who are actively in the process of becoming ordained ministers. Similarly, we can no more ask the church for a religious justification for its decisions concerning seminarians (ordained ministers in training) than we can ask the church to articulate a religious justification for its personnel decisions concerning its ordained ministers …. [The plaintiff] challenges the sufficiency of his wages for duties performed as part of his seminary training to become an ordained Roman Catholic priest. Because the ministerial exception applies to those claims, we affirm the district court’s dismissal of the complaint.

What This Means For Churches:
This case is significant for three reasons. First, it is a decision by a federal appeals court, which lends considerable force to its conclusions. Second, the court ruled that the ministerial exception applies to seminarians and others involved in training to become a minister, as well as to currently active ministers. Third, the court concluded that the ministerial exception applied not only to employment disputes between churches and clergy pertaining to selection, termination, and discrimination, but also to claims under state and federal minimum wage and overtime pay laws. Alcazar v. Corporation of the Catholic Archbishop, 627 F.3d 1288 (9th Cir. 2010).

This Recent Development first appeared in Church Law & Tax Report, November/December 2011.

Clergy Compensation Disputes

Court rules that it cannot resolve a pastor’s lawsuit for breach of contract.

Church Law & Tax Report

Clergy Compensation Disputes

Court rules that it cannot resolve a pastor’s lawsuit for breach of contract.

Key point The First Amendment allows civil courts to resolve internal church disputes so long as they can do so without interpreting doctrine or polity.

A Colorado court ruled that it was barred by the First Amendment from resolving a pastor’s lawsuit seeking additional compensation from his church on the basis of breach of contract. An ordained pastor (the “plaintiff”) served as the senior pastor of a church for nearly 20 years. He sued his church for breach of contract as a result of the church’s alleged failure to compensate him fully for his services as pastor since 1991. He relied on representations and assurances by the church that it would compensate him whenever it was financially able to do so. According to the lawsuit, the church had obtained substantial proceeds from the sale of church property, and as a result was obligated to perform on its assurance of compensation.

The church denied any liability on several grounds, including the fact that the pastor had not adequately performed his duties as pastor. It also argued that the pastor’s breach of contract claim “arose directly out of the ministerial relationship … and therefore, under the First Amendment to the United States Constitution, the court was precluded from exercising jurisdiction.”

The trial court dismissed the case, concluding that it could not exercise jurisdiction because resolution of the claims would involve excessive government entanglement with religion. The plaintiff appealed.

A state appeals court noted that churches have autonomy in making decisions regarding their own internal affairs and that the “church autonomy doctrine prohibits civil court review of internal church disputes involving matters of faith, doctrine, church governance, and polity.” Bryce v. Episcopal Church, 289 F.3d 648 (10th Cir.2002).

A state appeals court began its opinion by noting that “the threshold inquiry here is whether the underlying dispute is a secular one, capable of review by a civil court, or an ecclesiastical one about discipline, faith, internal organization, or ecclesiastical rule, custom or law. While civil courts have jurisdiction to render decisions in religious controversies involving rights outside the doctrinal realm, such disputes must be resolved by application of secular or neutral principles of law, thereby avoiding any impermissible inquiry into ecclesiastical questions.”

The court noted that one of the issues to be resolved was whether the pastor properly performed his duties as a pastor. Analysis of that issue “would require inquiry into the church’s bylaws and the nature of the pastor’s responsibilities as defined in his job description.” The court continued:

The bylaws provide, among other requirements, “The Pastor is responsible for leading the church to function as a New Testament church. The Pastor will lead the congregation, the organization, and the church staff to perform their tasks in accordance with 1 Peter 5.” Similarly, the job description states, among other duties, that the pastor shall “carry out other responsibilities put upon the pastor by scripture, as the under shepherd” and “fulfill personal responsibility to witness and encourage people to become part of the church fellowship.”

The determination whether [the plaintiff] has performed such duties adequately would necessarily entangle the court or a jury in matters that are purely ecclesiastical. Accordingly, the trial court properly ruled that the First Amendment precluded it from exercising jurisdiction.

The court based its conclusion, in part, on a previous federal appeals court case holding that matters such as a minister’s salary, place of assignment, and duties are matters of church administration and governance and are thus beyond the purview of civil authorities. McClure v. Salvation Army, 460 F.2d 553 (5th Cir.1972).

Application. This case indicates that the reluctance of the civil courts to resolve internal church disputes extends to disputes over clergy compensation, so long as a resolution of such claims would require a civil court to delve into matters of church doctrine and internal governance. Since most clergy compensation disputes involve matters of professional competence and internal church governance, they generally are beyond the authority of the civil courts to resolve. Jones v. Crestview Southern Baptist Church, 192 P.3d 571 (Colo. App. 2008).

This Recent Development first appeared in Church Law & Tax Report, March/April 2009.

Breach of Fiduciary Duty

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.

Church Law & Tax Report

Breach of Fiduciary Duty

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.

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.

* A Connecticut court ruled that a priest and archdiocese were not liable on the basis of a breach of a fiduciary duty for the priest’s sexual relationship with an adult woman since no fiduciary duty arose under the circumstances. A 40-year-old woman (the “plaintiff”) with a long history of psychiatric and emotional problems sought out the “advice, counsel and friendship” of a priest. At the time, the priest was serving as an associate priest at a local church and was also an employee of the archdiocese. The plaintiff did not engage in formal counseling with the priest; rather, their relationship involved mainly recreational activities such as home visits, lunch and dinner dates, shopping trips, walks on the beach and trips to see movies. According to the plaintiff, the priest provided her emotional, spiritual and friendly support and that her “whole relationship” with him was one of counseling. At some point during their association, the priest became aware of her emotional problems and, nevertheless, engaged in a sexual relationship with her. The plaintiff alleged that she eventually ended the sexual aspect of their relationship after which the priest terminated all involvement with her.

The plaintiff sued the priest claiming that a fiduciary duty arose by virtue of the priest-parishioner relationship, and the priest breached this duty when, despite knowledge of her emotional problems, he engaged in “a close physical and intimate relationship” with her. The plaintiff also sued the archdiocese, claiming that it breached its duty to supervise the priest. Specifically, the plaintiff alleged that the archdiocese “knew or should have known that the priest had engaged in inappropriate behavior with the plaintiff” and, as a result, the archdiocese was liable for the priest’s breach of a fiduciary duty. A trial court dismissed the claims against the priest and archdiocese, and the plaintiff appealed.

Breach of a fiduciary duty

The appeals court defined a fiduciary or confidential relationship as “a relationship that is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other. The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him.” The court acknowledged that “various state and federal courts” have concluded that a clergy-parishioner relationship may constitute a fiduciary relationship, but in each of those cases “something more than a general clergy-parishioner relationship was present.” For example, “the existence of a formal pastoral counseling relationship between a clergy member and a parishioner has been deemed significant in determining whether a fiduciary relationship was created. The court summarized the following precedent:

  • Colorado. (1) Court found that a fiduciary relationship existed between a clergyman and plaintiff, in part, because the clergyman had served as counselor to plaintiff. Moses v. Diocese of Colorado, 863 P.2d 310 (Colo. 1993). (2) A fiduciary duty was created when a priest undertook to counsel plaintiffs. Destefano v. Grabrian, 763 P.2d 275 (Colo. 1988).
  • Federal district court in Iowa. Court dismissed plaintiff’s breach of fiduciary duty claim because plaintiff simply alleged clergy-parishioner relationship, not counseling relationship. Doe v. Hartz, 52 F. Supp.2d 1027 (N.D. Iowa 1999).
  • New Jersey. The New Jersey Supreme Court concluded that a breach of fiduciary duty claim arising out of the sexual relationship between a clergyman and a parishioner who was seeking marital counseling was permissible under New Jersey law. In so doing, the court placed considerable weight on the fact that the plaintiff was engaged in a specific pastoral counseling relationship with the clergyman. According to that court, “trust and confidence are vital to the counseling relationship between parishioner and pastor. By accepting a parishioner for counseling, a pastor also accepts the responsibility of a fiduciary.” The court explained that “establishing a fiduciary duty essentially requires proof that a parishioner trusted and sought counseling from the pastor.” F.G. v. MacDonell, 696 A.2d 697 (1997).
  • Federal appeals court. A federal appeals court permitted a breach of fiduciary duty claim to proceed against a clergyman because the fiduciary duty allegedly arose out of a counseling relationship, not simply a clergy-parishioner relationship. Sanders v. Casa View Baptist Church, 134 F.3d 331 (5th Cir. 1998).

The court concluded that “something more” than the general clergy-parishioner relationship must be present to establish a fiduciary relationship, and it declined the plaintiff’s invitation to establish a fiduciary relationship “between all clergy and their congregants.” The court concluded that the plaintiff’s relationship with the priest in this case was not fiduciary in nature because it “was not characterized by the unique degree of trust and confidence required of a fiduciary relationship.” In particular, the court noted that the plaintiff had not alleged a formal pastoral counseling relationship between herself and the priest. Rather, she claimed that her “whole association” with the priest was one of “counseling.” The court disagreed:

The plaintiff’s interactions with the priest were largely social. She did not meet him for specific counseling appointments, but, rather, the two went on lunch and dinner dates, shopping trips, walks on the beach and trips to see movies. Also, the plaintiff has admitted that many of the conversations she considered counseling took place immediately after mass with other congregants present and that the counseling primarily involved discussions about their relationship …. While the priest may have counseled the plaintiff from time to time, as a priest may for any parishioner, he was not her counselor. Moreover … the plaintiff was well over the age of majority throughout the time of their consensual interactions. While we do not condone the defendant’s behavior, we conclude that no fiduciary relationship existed between him and the plaintiff; consequently, no fiduciary duty was breached.

Archdiocese

The court also dismissed the plaintiff’s negligent supervision claim against the archdiocese on the ground that there can be no negligent supervision if an employee does not engage in wrongful behavior. Since the priest had not breached a fiduciary duty, the archdiocese could not be liable on the basis of negligent supervision for his actions.

Application. This case is important because it is one of the most extensive discussions of the liability of ministers and churches for acts of sexual misconduct on the basis of a breach of a fiduciary duty. The court refused to find that a priest who was not involved in a counseling relationship with a church member has a fiduciary duty toward that person, and therefore the priest could not be liable on the basis of a breach of such a duty for any inappropriate sexual conduct. There may be other bases of liability, but not this one. Further, since the priest was not liable, the archdiocese could not be liable since its liability (whether on the basis of negligent hiring or supervision, or breach of a fiduciary duty) required that the priest’s acts be wrongful. Ahern v. Kappalumakkel, 903 A.2d 266 (Conn. App. 2006).

Civil Liability for Failure to Report Child Abuse

Mandatory reporters who fail to report abuse can be subject to possible criminal liability and can be sued for money damages by the victims of abuse.


Key point 4-08. Every state has a child abuse reporting law that requires persons designated as mandatory reporters to report known or reasonably suspected incidents of child abuse. Ministers are mandatory reporters in many states. Some states exempt ministers from reporting child abuse if they learned of the abuse in the course of a conversation protected by the clergy-penitent privilege. Ministers may face criminal and civil liability for failing to report child abuse.

A federal court in Washington ruled that a mandatory child abuse reporter’s failure to report the abuse of a minor by a church worker could result not only in criminal liability for the reporter, but also civil liability for the reporter and his employing church. A minor (the “plaintiff”) who was sexually molested by a church worker sued the church, claiming that it was liable for the worker’s acts on the basis of its failure to comply with the state child abuse reporting statute.

The church insisted that the state child abuse reporting law imposes criminal liability on mandatory reporters who fail to report abuse, but does not explicitly impose civil liability, and therefore the plaintiff could not sue the church for monetary damages in a civil lawsuit. The court conceded that courts in other states have generally refused to allow victims of child abuse to sue mandatory reporters who fail to report, but it noted that all of those rulings were in other states.

The plaintiff acknowledged that the reporting statute did not explicitly authorize civil lawsuits for failure to report, but argued that such a right could be “implied” from the statute. It pointed to a Washington Supreme Court case that articulated three factors for the courts to consider in deciding if a statute creates a civil remedy: “First, whether the plaintiff is within the class for whose benefit the statute was enacted; second, whether legislative intent, explicitly or implicitly, supports creating or denying a remedy; and third, whether implying a remedy is consistent with the underlying purpose of the legislation.”

The court concluded that these factors supported a finding in this case that the state child abuse reporting law created a civil remedy in favor of abused minors and against mandatory reporters who fail to report abuse:

The plaintiff, a victim of childhood sexual abuse, certainly falls within the class of persons the statute is designed to protect. Washington courts have clearly stated that the mandatory reporting statute is designed “to secure prompt protection or treatment for the victims of child abuse ….” Second, the legislative intent behind the statute supports the creation of a civil remedy. It is true that [the statute] provides a penal remedy, but not a civil remedy. [The church] asserts that such a penal remedy indicates that the legislature did not intend to imply a civil remedy also. However, this court recognizes, just as Washington state courts have recognized, that when a statute is enacted for the protection of a particular class of individuals, a violation of its terms may result in civil as well as criminal liability, even though the former remedy is not specifically mentioned therein …. The logical conclusion is that the legislative intent supports the creation of a civil remedy for victims of child sexual abuse when those mandated to report the abuse fail to do so. Likewise, the Court finds that implying a civil remedy is consistent with the underlying purpose of the statute. The declared intent of the statute is “to prevent further abuses, and to safeguard the general welfare of such children.” RCW 26.44.010. Implying a civil cause of action against those who are mandated to report child abuse, but fail to do so, will motivate those required to report to take action, and furthers the goals of the statute itself. Accordingly, the Court finds that there is an implied private cause of action stemming from the statutory requirement to report child abuse.

Application. Eight states (Arkansas, Colorado, Iowa, Michigan, Montana, New York, Ohio, and Rhode Island) have enacted laws that create civil liability for failure to report child abuse. In these states victims of child abuse can sue adults who failed to report the abuse. Not only are adults who fail to report abuse subject to possible criminal liability (if they are mandatory reporters), but they also can be sued for money damages by the victims of abuse. In each state, the statute only permits victims of child abuse to sue mandatory reporters who failed to report the abuse. No liability is created for persons who are not mandatory reporters as defined by state law.

Most state child abuse reporting laws do not specifically authorize victims of abuse to sue mandatory reporters who failed to report the abuse. Several courts have addressed the issue of whether to recognize such a civil remedy apart from any specific language in the statute creating one. Most have not. The decision of the Washington federal court reflects the minority position. As a result, mandatory reporters in Washington may be subject to both criminal and civil liability for failing to report known or reasonably suspected incidents of child abuse. Fleming v. Corporation of the President of the Church of Jesus Christ of Latter Day Saints, 2006 WL 753234 (W.D. Wash. 2006).

See a summary of the child abuse reporting laws of all 50 states.

Personal Injuries on Church Property and During Church Activities – Part 1

The Colorado Supreme Court ruled that a small business owner was not liable on the basis of negligent supervision for an employee’s sexual molestation of a 12-year-old girl.

The Colorado Supreme Court ruled that a small business owner was not liable on the basis of negligent supervision for an employee's sexual molestation of a 12-year-old girl occurring on business premises on a day when the business was closed. While this case did not involve a church, the court's conclusions will be instructive to any employer. An owner of a dry cleaning business (Josh) hired a male employee (Steve), and later promoted him to the position of manager. As manager, Steve had keys to the premises and was responsible for operating the business, which included opening and closing the store. However, Steve did not have authority to bring third parties to the business during non-working hours.

On a Sunday morning when the store was closed, Steve told a neighbor that he was going into work to provide a carpet cleaner with access to the premises, and he asked if the neighbor's 12-year-old girl (the "victim") could accompany him. The neighbor agreed, and Steve took the victim to the store. While there, he took the victim to a back office where he locked the door and sexually assaulted her. Steve was later prosecuted and convicted for felony child molestation, and was sentenced to prison. The victim's parents sued Josh, the owner of the store, claiming that he was liable for Steve's behavior on the basis of negligent supervision.

A trial court found that Josh was negligent in his supervision of Steve and awarded damages. The court cited testimony from three former women employees who told Josh that Steve had sexually harassed and fondled them during business hours. The young women related several instances where, during business hours, Steve asked them to perform sexual acts as well as touched their breasts and buttocks. All three quit their positions and told Josh of the episodes. Additionally, one of the employee's mothers called Josh and warned him of civil liability.

The state supreme court reversed the trial court's ruling, and dismissed the negligent supervision claim. The court noted that "to establish liability, the plaintiff must prove that the employer has a duty to prevent an unreasonable risk of harm to third persons to whom the employer knows or should have known that the employee would cause harm." The court conceded that an employer may be liable on the basis of negligent supervision for actions of an employee outside of the scope of employment, but it concluded that the employee's acts must be "so connected with the employment in time and place" that the employer "knows that harm may result from the employee's conduct and that the employer is given the opportunity to control such conduct." The court concluded that the victim failed to produce any evidence that Josh knew or should have known that Steve would bring a 12 year-old girl, with no connection to the dry cleaners, to the store when it was closed and then sexually assault her there. The court acknowledged that there was substantial evidence that Josh knew of Steve's proclivities to engage in lewd and sexual behavior with the female employees on the premises during business hours, but this knowledge did not suggest that he was a risk of molesting minors on store premises when the business was closed.

The court rejected the victim's claim that Josh's knowledge of Steve's lewd conduct with both employees and customers created a duty of care to all women and girls who came on the premises regardless of whether he could anticipate their presence. It noted, "The victim has undoubtedly suffered great harm from the assault in this case. However, we do not embrace a theory of negligent supervision that would be an open invitation to sue an employer for the intentional torts of an employee founded upon a generalized knowledge of that employee's prior conduct. We emphasize that an employer is not an insurer for violent acts committed by an employee against a third person."


Application
. This case is instructive for a couple of reasons. First, it illustrates that employers (including churches) have a duty to supervise any employee or volunteer whom they know to be a threat of harm to others. Church leaders should recognize that allowing a person who has engaged in sexual misconduct in the past to have unrestricted and unsupervised access to church property and activities exposes the church to possible liability in the event the person commits a similar act. Second, the case demonstrates that an employer, including a church, may be liable on the basis of negligent supervision for the sexual assaults of its employees that occur outside of the normal scope of employment if they are "so connected with the employment in time and place" that the employer "knows that harm may result from the employee's conduct and that the employer is given the opportunity to control such conduct." As this case illustrates, this liability may extend to acts committed on church property "after hours" or on days when the church is closed. Keller v. Koca, 111 P.3d 445 (Colo. 2005).

Church Records

A Colorado court ruled that a church member’s legal authority to inspect church records pursuant to state nonprofit corporation law ended when his membership was revoked.


Key point. Church members generally have no right to inspect church records unless such a right is conferred by state nonprofit corporation law, a church's charter or bylaws, state securities law (if the church has issued securities), or a subpoena. Church records enjoy no privilege against disclosure, with the exception of documents that are protected by the clergy-penitent privilege under state law.


Key point. According to the majority view, the civil courts will not resolve disputes challenging a church's discipline of a member since the first amendment guaranty of religious freedom prevents them from deciding who are members in good standing of a church.

A Colorado court ruled that a church member's legal authority to inspect church records pursuant to state nonprofit corporation law ended when his membership was revoked by the church board.

A church conducted a series of fundraising campaigns in the 1970s and 1980s that resulted in massive financial failures, multiple lawsuits, and enormous debt. A 1986 capital fundraising campaign that was launched to pay off the church's unpaid creditors resulted in a class action lawsuit. In 1991, this lawsuit was settled by agreement of a majority of the class members in exchange for the church's payment of $700,000. Despite this settlement, many of the church's original debts remained unpaid. In 1999 the church membership voted not to attempt to pay any remaining unpaid creditors.

Joel had been a member of the church since 1987. In 1998 Joel sought to inspect and copy portions of the church's financial records pursuant to a state nonprofit corporation law giving members the right to inspect corporate records at a reasonable time for a proper purpose. Over the course of several months Joel inspected and copied approximately 2,400 pages of records. He provided the church with various reasons for his many requests to inspect records, including: (1) to determine the financial abilities of the church to pay creditors; (2) to determine whether the church could be operated more efficiently so that additional funds could be made available to pay creditors; and (3) to enable him to communicate with other church members about the church's ability to pay its debts.

In 1999 Joel presented the church with yet another request for inspection of documents, but this time the church refused his request. Joel immediately sued the church, seeking a court order compelling the church to turn over the requested records. Upon learning of this lawsuit, the church board unanimously voted to revoke Joel's membership in the church. During the trial of Joel's lawsuit the church argued that its decision to revoke Joel's membership deprived him of any legal authority to inspect church records, since the right of inspection (under the nonprofit corporation law) is only given to members.

The trial court disagreed, noting that Joel had been a member at the time he made his request to inspect additional records. However, it concluded that Joel lacked a "proper purpose" to inspect additional records, as required by the nonprofit corporation law. In reaching this conclusion, the court referred to Joel's "unreasonable requests" and his dissatisfaction with the church board's decision not to launch another fundraising campaign to pay creditors. Joel appealed.

On appeal, the church claimed that a nonmember, such as Joel, could not have the required "proper purpose" to inspect corporate records. In the church's view, Joel's membership in the church was a prerequisite to a request to inspect corporate records, and so the church's decision to revoke Joel's membership deprived him of any legal authority to inspect records. Therefore, even if Joel had a "proper purpose" in seeking to inspect additional records, he was still not legally entitled to inspect additional church records. The court agreed. It observed,

To obtain records … such as those at issue here, the member's request [must be based on] good faith and a proper purpose. "Proper purpose" means a "purpose reasonably related to the demanding member's interest as a member." Thus, to obtain records, a person must be a member with a present ability to promote the welfare of the association …. [When Joel lost his membership] he could not, by definition, have any "interest as a member" sufficient to afford him a proper purpose to inspect records. Specifically, as a nonmember, [he] no longer had a member's stake in what had been done with church resources, nor any member's interest in determining church economies, nor any member's voice with which to persuade voting church members to adopt his policies …. Thus, [his] good intentions aside, he is now an outsider to the church, and any attempts to use the information contained in the church's records for his stated purposes would be futile. Accordingly, the provisions of the [nonprofit corporation statute] upon which his claim is based give him no right to judicial relief.

Joel insisted that if the expulsion of members from a nonprofit corporation cuts off their ability to inspect corporate records, then the right of inspection is meaningless. The court disagreed. The court conceded that "ordinarily, judicial recourse is available to a member of a nonprofit corporation seeking records who is subsequently expelled from membership." However, it noted that "when the nonprofit corporation is a church … the situation is different.. It concluded, "Here, the board of elders elected by the congregation is the highest church judicature and … a civil court simply has no authority to reverse its decision, no matter how arbitrary or unfair, to expel [Joel] or any other member."

The court concluded, "The church's decision to expel [Joel] is nonreviewable, and reinstatement of [his] membership would be exclusively the church's decision. Without membership in the church [he] can no longer have a proper purpose reasonably related to his interest as a member. Thus, he no longer has standing to inspect the church's financial records."

What this means for churches

This case illustrates three important points. First, members of churches incorporated under state nonprofit corporation law often are given a limited right to inspect specified church records. Second, a person whose membership in the church has been revoked may no longer have any legal right to inspect church records, even if the revocation of membership occurred after the member's initial request to inspect records. Very few courts have addressed this second point, and so it should not be assumed that courts in other states will agree with this conclusion. However, at a minimum, this case will serve as legal support for such a position. Third, the church board revoked Joel's membership in part because of his decision to sue the church.

Many churches have enacted bylaws calling for the discipline or dismissal of members who sue the church. This case suggests that such provisions will be enforced by the civil courts.

Levitt v. Calvary Temple, 2001 WL 423040 (Colo. App. 2001).

Recent Developments in Colorado Regarding the Taxation of Church Property

A Colorado court ruled that two vacant lots owned by a church were exempt from property tax because they were used one day each year for religious purposes.

Church Law and Tax1999-07-01

Taxation-Church Property

Key point. Church-owned vacant land may be exempt from taxation if it is used at least occasionally for religious purposes.

A Colorado court ruled that two vacant lots owned by a church were exempt from property tax because they were used one day each year for religious purposes. This ruling will be of relevance to any church that is paying property taxes on vacant land. The church in question owned two vacant lots-one near the church, and the second some distance away. The church was the only user of the two lots, and used each lot one day each year for activities that it claimed were in furtherance of its religious mission. The church hoped to construct structures on each lot for church use, but it lacked the funds to do so. A local tax assessor ruled that the lots did not qualify for exemption because the quantity and extent of the church’s use was insufficient. A board of tax appeals reversed the assessor’s ruling, noting that the church actually used the lots “on a limited basis” and was “the only user” of the properties, and that the limited funding available to the church to improve the properties should not “keep the properties from being tax exempt.” The tax assessor appealed, and a state appeals court upheld the exemption of the two lots.

The court began its opinion by quoting the Colorado property tax exemption statute, which grants a property tax exemption to property “which is owned and used solely and exclusively for religious purposes.” The court concluded:

Under [the exemption statute] the test for exemption depends upon the character of the use to which the property is put …. Further, property tax exemptions based on religious use should not be narrowly construed …. We note that property tax exemptions are determined on an annual basis … based on the use of the property in each tax year. Implicit in this scheme is the requirement that, in order for the property to qualify for tax exemption for that tax year, there be at least some actual use of the property for tax exempt purposes in that tax year. Apart from this minimal implicit requirement, however, we decline to hold … that any particular frequency or quantity of use religious in character is required to satisfy the foregoing … standards for exemption based on religious use.

The court noted that while the tax assessor considered the church’s use of the lots just one day each year to be insufficient for exemption, he “was unable to quantify the frequency or amount of such use that would be considered sufficient.”

Application. Does your church own one or more vacant lots? If so, are you paying property taxes? If you are, you should consider the potential application of this case. By conducting religious or educational activities on the property, at least occasionally, you may be able to qualify the property for exemption from tax. Obviously, the success of such efforts will depend upon the wording of your state property tax exemption statute, and the nature and frequency of your use of the property. The more frequent the use, the more probable the exemption. Consider the following kinds of uses-softball games and other sports activities for both children and adults; outdoor religious services; camping; and astronomy and other “nature study” activities. Pilgrim Rest Baptist Church v. PTA, 971 P.2d 270 (Colo. App. 1998). [State Taxes]

Recent Developments in Colorado Regarding Sexual Misconduct and Fiduciary Duty

A Colorado court addressed the liability of a church and denominational agency for a sexual relationship between a youth pastor and a girl in his youth group.

Church Law and Tax1998-07-01

Sexual Misconduct and Fiduciary Duty

Sexual misconduct by clergy and church workers

Key point. A minor’s “consent” to a sexual relationship with a youth pastor is no defense to liability.

Key point. Churches may be liable for a pastor’s sexual misconduct on the basis of a breach of a fiduciary duty, but only if a fiduciary relationship exists between the victim and church.

Key point. Churches and denominational agencies cannot be sued by victims of sexual misconduct as a result their alleged failure to abide by their internal rules and policies with respect to the discipline of ministers.

A Colorado court addressed the liability of a church and denominational agency for a sexual relationship between a youth pastor and a girl in his youth group. A 12—year—old girl (the “victim”) was encouraged by her youth pastor to discuss with him any problems she had. Though reluctant at first, she eventually began counseling with him and confided in him about her abusive father, her distant mother, and her thoughts of suicide. The youth pastor, then 28 years old and married, told the victim about his own personal problems, including his marital difficulties. Over the next two years, hugs during counseling sessions led to other increasingly intimate physical touching. Shortly after the victim turned 14, the youth pastor convinced her to submit to a sexual relationship with him. According to the victim, the youth pastor told her that she was as bad as she believed when she came to him for counseling but that he loved her despite her faults; that their sexual relationship was God’s will; and that the relationship was proper in the eyes of God because they were “spiritually husband and wife.” The sexual relationship lasted 4 years. Sexual encounters occurred on church youth trips, in the youth pastor’s car, in the church building, and in the victim’s home when her parents were out of town. The youth pastor warned the victim that if she ever revealed their relationship, she would “go to hell,” that she would be punished for having seduced a minister, and that he would divulge everything she had ever told him about her personal life. Most of the sexual conduct, which was frequent and increasingly degrading for the victim, occurred before she turned 18. The victim finally managed to end the relationship the summer before she left for college. The emotional and physical repercussions she had been experiencing nevertheless continued. After 2 years of therapy, she confronted the youth pastor, hoping he would acknowledge the harm he had caused her. He instead told her he saw nothing wrong with what they had done. She then called and wrote to denominational officials about the relationship, stating she felt she had a moral obligation to see that the same thing did not happen to others. She asked that the denomination keep the information as confidential as possible because she had not yet revealed the relationship to her parents or other members of the congregation.

The following month, denominational officials confronted the youth pastor with the allegations. While he denied any sexual relationship, he agreed to surrender his credentials “under complaint.” The denomination accepted the surrender of his credentials and determined that no further investigation or hearings were needed.

The victim also contacted local authorities, which led to criminal charges being filed against the youth pastor. The charges resulted in a conviction and sentence pursuant to a plea bargain that involved work release on one charge and probation on another. Dissatisfied with the actions taken, the victim sued the youth pastor, her church, and a denominational agency. The jury awarded her $187,500 compensatory damages against the youth pastor on claims of breach of fiduciary duty and outrageous conduct and another $187,500 in punitive damages. It awarded her $37,500 compensatory damages against the church on claims of negligent hiring and supervision and breach of fiduciary duty. Finally, the jury awarded $150,000 compensatory damages against the denominational agency on claims of negligent hiring and supervision and breach of fiduciary duty, and an additional $150,000 in punitive damages.

Consent

The church and denominational agency insisted that the trial court erred when it refused to submit the defense of “consent” to the jury. The court disagreed, noting that this argument was “premised on the assumption that a child is capable of giving the kind of consent the law should recognize to a sexual relationship with an adult religious counselor.” The court insisted that “a child is in no position to exercise independent judgment and evaluate on an equal basis the consequences of such a relationship.” The court also rejected the argument that the victim became capable of consenting to the relationship as she matured, since this “ignores that dependence, transference, and the resulting vulnerability do not cease merely because a child physically matures while sexual abuse in secrecy by an adult in a position of trust continues unabated.”

Breach of a fiduciary duty

The church and denominational agency claimed that they could not be responsible for the victim’s injuries on the basis of a breach of a fiduciary duty. The court agreed. It observed:

Critical here is the distinction between a claim for clergy malpractice, which because of the constraints of the first amendment the courts may not entertain, and a claim for breach of fiduciary duty, which may properly be brought to the extent that the alleged wrongdoing falls outside the beliefs and doctrine of the religion. An unequal relationship does not automatically create a fiduciary duty. In order to be liable the superior party must assume a duty to act with utmost good faith and solely or primarily for the benefit of the dependent party.

In this case [the victim] has directed us to no evidence, and we can find none, suggesting that the [denominational agency] ever assumed a duty to act solely or primarily in the best interests of [the victim] in its investigation and resolution of her complaint. Unlike the church officials in [a prior case], no bishop or other representative of the [agency] ever asked [the victim] to refrain from discussing the matter with anyone or asked [her] to let [it] alone supervise whatever needed to happen on her behalf.

failure to respond adequately to the victim’s complaint

The victim insisted that a representative of the denominational agency lied in telling her that once the youth pastor surrendered his credentials under protest nothing further remained to be done to terminate his ministry and the agency had no authority to conduct any further investigation. She claimed that she suffered substantial harm because the denominational agency, in violation of its own Book of Discipline, failed to take further action to investigate her complaint and fulfill its responsibilities to her. The court disagreed, noting that “the alleged wrongdoing results from expectations created by the beliefs and doctrine of the religion. Resolution of the claim would require that the courts become embroiled in a religious dispute requiring the interpretation and weighing of that doctrine. The first amendment requires that we abstain from doing so and thus precludes an award of damages on such a basis.”

duplicate verdicts

The church and denominational agency argued that the jury’s various awards of damages were inconsistent. In particular, they argued that it was illogical to award damages against both the youth pastor and church defendants on the basis of the same theories of liability. The court agreed, noting that the jury’s award of damages against the youth pastor and church defendants for the same alleged wrongs resulted in “duplication of damages” since the actions of the church defendants did not result in any additional harm to the victim beyond what had been caused by the youth pastor.

Application. This case illustrates a point that has been made repeatedly in this newsletter-whether or not victims of sexual misconduct will sue their church often depends on their perception of how the church responded to their allegations. In this case, the victim was ultimately prompted to sue because of her perception that the church and denominational agency had not responded adequately to her charges. Bohrer v. DeHart, 943 P.2d 1220 (Colo. App. 1996).
[Seduction of Counselees and Church Members, Denominational Liability]

Insurance Coverage of Sexual Misconduct

Be sure to know what your policy covers.

Church Law and Tax 1997-09-01

Insurance

Key point. Church insurance policies may provide no coverage to clergy and other church staff who engage in sexual misconduct.

A Colorado court ruled that a church insurance policy could not be tapped to pay a judgment rendered against a minister in a sexual misconduct case. A woman sued her former minister and her church on the basis of injuries she suffered as a result of the minister’s sexual misconduct. A jury ruled that the minister was liable for the woman’s injuries and awarded a monetary judgment in her favor. The minister insisted that the judgment against him was covered under a church insurance policy. A trial court disagreed, concluding that the policy clearly excluded any coverage for such acts. A state appeals court agreed with the trial court. The court noted that “if the meaning of the insurance policy is expressed in plain, certain, and readily understandable language, it must be enforced as written.” The church’s insurance policy provides: “The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to any person arising out of sexual misconduct or sexual molestation which occurs during the policy period.” Exclusions to the policy, however, specifically provide that the insurance does not apply “[t]o any person who personally participated in any act of sexual misconduct or sexual molestation.” The minister claimed that by denying coverage to the perpetrator of the sexual misconduct, the exclusion renders any coverage under the policy for sexual misconduct “illusory”. The court disagreed, noting that coverage exists under the policy for the church.

The court also rejected the minister’s claim that the insurance company had “waived” its right to deny coverage by providing a defense to the minister under a “reservation of rights.” Under such a reservation, an insurance company agrees to defend an insured, but reserves the right to deny any obligation to pay an adverse verdict or judgment as a result of an exclusion in the policy. This is a common arrangement, and the court concluded that an insurance company’s decision to provide a legal defense to an insured under a reservation of rights does not amount to a waiver of any exclusions under the policy.

Application. This case illustrates an important principle. While church insurance policies provide coverage for churches that are sued as a result of an incident of sexual misconduct, they often exclude any coverage for the perpetrator. Further, such an exclusion is not affected or “waived” by the fact that the insurance company provides a legal defense for the perpetrator. This exclusion can result in substantial personal liability for perpetrators of sexual misconduct. In some cases insurance companies refuse to provide a legal defense for the perpetrator, meaning that the perpetrator will be responsible for hiring and paying his or her own attorney. Church Mutual Insurance Company v. Klein, 1996 WL 544193 (Colo. App. 1996). [Seduction of Counselees and Church Members, Negligence as a Basis for Liability—Defenses]

Related Topics:

Church and Pastor Sued Over Child Molestation

Don’t ignore accusations of sexual misconduct.

Church Law and Tax 1997-09-01

Sexual Misconduct by Clergy and Church Workers

Key point. A church may be legally responsible for a pastor’s acts of child molestation on the basis of a breach of a “fiduciary duty,” negligent hiring and supervision, and “ratification” of the pastor’s conduct as a result of its failure to investigate and address known irregularities.

Key point. Church leaders that ignore credible evidence of misconduct by a minister or lay worker may be deemed to have “ratified” future similar acts of misconduct by the same person. As a result, it is imperative that church leaders not ignore such incidents.

The Colorado Supreme Court ruled that a church whose pastor molested a young boy could be sued on the basis of a breach of a fiduciary duty, outrageous conduct, negligent hiring and supervision of the pastor, and ratification of the pastor’s conduct. The court’s ruling addressed a number of issues that will be helpful to church leaders in reducing the risk of such incidents, and in reducing the potential for church liability. The circumstances of this case are tragic and unusual. A 7—year—old boy (the “victim”), who was experiencing emotional trauma, was encouraged by his pastor to enter into a counseling relationship with him. The boy’s mother approved, and the counseling sessions lasted for a number of years. From the very first counseling session the victim claimed that the pastor engaged in sexual contact with him, including having him sit on the pastor’s lap while the pastor massaged his thighs and genitals. While these “massages” were occurring the pastor would tell the victim that “your father loves you, your mother loves you, God loves you, and I love you.” Two other adult males claimed that the pastor had engaged in similar behavior with them when they were minors, including a physical inspection of their genitals to see if they had been “properly circumcised.” The parents of two other boys complained to the church board about the pastor’s counseling methods, and in particular his practice of inspecting genitals to check for proper circumcision. Nearly a year later the board responded by directing the pastor to discontinue his counseling of minors. A few months later the pastor was dismissed.

The victim and his mother sued the church and pastor. He claimed that the church board were made aware of the pastor’s massaging techniques and his alleged improprieties with other counselees, but made no investigation and took no steps to put a stop to his activities. A jury ruled in favor of the victim, finding that (1) both the pastor and church breached a fiduciary to the victim; (2) both the pastor and church were guilty of “outrageous conduct”; (3) the church was guilty of negligent hiring of the pastor; and (4) the church was guilty of negligent supervision of the pastor. The jury awarded damages totaling nearly $500,000. The pastor and church appealed, and a state appeals court overturned the jury’s verdict in favor of the victim. The victim appealed to the state supreme court. The supreme court concluded that the pastor and church could be sued. The key portions of the court’s decision are reviewed below.

freedom of religion defense of the pastor

The court began its opinion by rejecting the argument of the pastor that the first amendment guaranty of religious freedom prevented him from being found liable. The pastor had argued that any touching of the victim that might have occurred was not designed to satisfy any sexual desires, but was intended to facilitate the minor’s communication with God. The court concluded that the pastor’s massage technique was not entitled to constitutional protection as an exercise of religion: “Although his ultimate goal … was for counselees to receive help from God in resolving their problems … his choice to use massage with children had no biblical, doctrinal, or spiritual basis …. Despite the religious setting, the described massage technique simply reflects [the pastor’s] choice of a relaxation and communication method between himself and his counselees.”

freedom of religion defense of the church

The church, like the pastor, claimed that the first amendment prevented it from being found liable for the pastor’s conduct. It did not rely upon the “religious basis” for the pastor’s actions. Rather, it asserted that allowing civil judgments against pastoral counselors and their churches based upon conduct occurring during counseling sessions could so “entangle” the government with religious practices as to violate the first amendment’s prohibition of an “establishment” of religion. The court disagreed. It acknowledged that “the decision to hire or discharge a minister is itself inextricable from religious doctrine.” However, a court must “distinguish internal hiring disputes within religious organizations from general negligence claims filed by injured third parties.” It quoted from one of its prior decisions:

[w]hile claims for illegal hiring or discharge of a minister inevitably involve religious doctrine, that is not the case for a claim of negligent hiring of a minister. The claim of negligent hiring is brought after an employee has harmed a third party through his or her office of employment. An employer is found liable for negligent hiring if, at the time of hiring, the employer had reason to believe that hiring this person would create an undue risk of harm to others. Hence, the court does not inquire into the employer’s broad reasons for choosing this particular employee for the position, but instead looks to whether the specific danger which ultimately manifested itself could have reasonably been foreseen at the time of hiring. This inquiry, even when applied to a minister employee, is so limited and factually based that it can be accomplished with no inquiry into religious beliefs. Van Osdol v. Vogt, 908 P.2d 402 (Colo. 1996).

the church’s liability for “ratifying” the pastor’s behavior

The jury found the church liable for the pastor’s misconduct on the ground that it “ratified” his actions by inadequately responding to the parents’ complaints of misbehavior. The church insisted that (1) intentional misconduct by a pastor cannot be ratified; (2) it could not ratify actions of the pastor that were outside the scope of his employment; and (3) there was insufficient evidence that it ratified the pastor’s actions. The court disagreed with all three objections.

Application. What is the relevance of this ruling to other churches and ministers? First, the case illustrates some of the theories of liability that may be asserted against a church and pastor in the event the pastor molests a minor. These include (1) outrageous conduct; (2) breach of fiduciary duty by the pastor and church; (3) negligent hiring; (4) negligent supervision; (5) ratification; and (6) punitive damages. Perhaps the most significant aspect of the court’s ruling was its conclusion that the church was liable for the minor’s injuries on the ground that it “ratified” the pastor’s acts of molestation by not responding adequately to parents’ complaints of misconduct. Ignoring such complaints can expose the church to significant liability. Bear Valley Church of Christ v. DeBose, 928 P.2d 1315 (Colo. 1996). [Clergy Malpractice, Seduction of Counselees and Church Members, Negligent Selection as a Basis for Liability, Negligent Supervision as a Basis for Liability]

Ministers’ and Churches’ Liability for Sexual Misconduct

Who can be found liable for a minister’s misconduct?

Church Law and Tax 1997-03-01

Sexual Misconduct by Clergy and Church Workers

Key point. Ministers who engage in sexual contacts with adults may be legally responsible for their behavior on a number of grounds, including breach of a fiduciary duty and outrageous conduct. In addition, their employing church may be responsible for their behavior on the basis of negligent hiring, negligent supervision, outrageous conduct, and ratification. The courts can resolve such claims so long as they can do so without inquiring into religious doctrine.

A Colorado court ruled that a minister, his church, and a denominational agency could be sued by a woman with whom the minister had sexual contacts. A woman (the victim) attended a church for a few years, and began to volunteer her services for a variety of activities including the remodeling of a classroom. She engaged in these volunteer services on the recommendation of a therapist who suggested that she work in a “safe environment” to overcome her fears of the workplace. The victim’s volunteer work caused her to come in contact with her minister after normal working hours. On one occasion the minister approached her while she was remodeling a classroom, began caressing her back, and told her “I love you Dianne, you mean so much to me.” Following this incident the victim became physically ill and cried. A few days later, the minister called the victim into his office where the two of them sat next to each other on a small couch. The minister again caressed her and expressed his love for her. Following a third incident, the victim informed two other women in the church about the minister’s behavior, and one responded, “Oh my God, not you too.” A few months later a denominational agency with which the church was affiliated held a meeting in response to a formal complaint it had received regarding the minister’s conduct. Six women attended this meeting, and all described similar incidents of unwelcome verbal comments and physical contact involving the minister. As a result of this meeting, the minister was suspended. The victim later sued the minister, her church, and the denominational agency. She claimed that the minister breached his fiduciary duty toward her, and committed outrageous conduct. She claimed that the church and denominational agency breached their fiduciary duty toward her, and also engaged in negligent hiring, negligent supervision, outrageous conduct, and ratification of the minister’s actions. In particular, the victim alleged that the agency had been made aware of at least one prior act of sexual misconduct involving the minister, and was aware that he had a problem with alcohol abuse. The church and the victim reached an out of court settlement, and a trial court returned a verdict against the minister and denominational agency. The case was appealed, and a state appeals court affirmed the trial court’s decision.

The court began its opinion by rejecting the denominational agency’s assertion that the first amendment’s nonestablishment of religion clause barred the victim’s claims against it. The agency insisted that the ordination and discipline of ministers was an ecclesiastical matter involving theological concerns over which the civil courts cannot exercise jurisdiction. The court noted simply that neither the minister nor the agency claimed that the minister’s “method of communicating with parishioners by touching, hugging, and expressing affection was based on any religious tenet or belief.”

The court also rejected the claim that no fiduciary relationship existed between the victim and either the minister of the agency. The court noted that the minister had counseled the victim on personal and intimate matters, and that such counseling was enough to establish a fiduciary relationship. The court further noted that the following facts supported the existence of a fiduciary relationship between the victim and the denominational agency: the agency conducted a meeting with six women regarding the minister’s behavior; the agency provided a therapist to help the women; the agency sent a letter to the church’s membership stating in part that “we are equally concerned for the healing of any persons who have been hurt. They will continue to receive appropriate help for their healing and restoration.”

The victim claimed that the denominational agency breached its fiduciary duty by failing to provide adequate counseling to the six women; undermining the credibility of the women by informing the congregation that there was nothing in the minister’s personnel file indicating he had problems; failing to protect the women who brought complaints against the minister from verbal attacks; and not informing the congregation that it found the women’s complaints credible. The court concluded that sufficient evidence existed for the jury to conclude that the agency breached its fiduciary duty.

Finally, the court rejected the denominational agency’s argument that it was protected from liability as a result of a Colorado statute that provides: “No member of the board of directors of a nonprofit corporation or nonprofit organization shall be held liable for actions taken or omissions made in the performance of his duties as a board member except for wanton and willful acts or omissions .” Colo. Rev. Stat. § 13—21—116. Many states have enacted similar statutes to protect board members of nonprofit corporations. In most cases, the protections of the statute do not apply to compensated directors, or to wanton or willful acts or omissions. The court noted that this provision did not apply in this case, since there was no evidence that the agency “accomplished its work through unpaid volunteers.”

What is the significance of this ruling? Consider the following points: First, it illustrates the risks churches face in not establishing appropriate boundaries. The church never should allowed the victim to work after hours when the minister was present. Second, the case illustrates the risk that churches and denominational agencies face when they employ a minister with a record of prior misconduct. The court concluded that the denominational agency was guilty of negligent hiring because it appointed the minister to the church despite knowledge of prior acts of sexual misconduct. Third, the case illustrates how easily a denominational agency can become involved in a “fiduciary relationship” with church members. Such a relationship exposes the agency to liability if its fiduciary duty to church members is violated. Fourth, the court’s discussion of how the agency breached its fiduciary duty is instructive. Winkler v. Rocky Mouton Conference, 923 P.2d 152 (Colo. App. 1995). [ Seduction of Counselees and Church Members, Negligent Selection as a Basis for Liability]

Church Employee Dismissed After Making Accusations of Sexual Misconduct

Woman sues church for dismissing her after she complained against another minister.

Church Law and Tax 1997-01-01

Sexual Misconduct by Clergy and Other Church Workers

Key point. The civil courts are compelled by the first amendment guaranty of religious freedom to refrain from interfering with the internal decisions of hierarchical churches, including decisions regarding the discipline or dismissal of clergy.

Key point. Some courts have concluded that the first amendment guaranty of religious freedom prevents them from interfering with the relationship between a church and its ministers, and this rule bars church liability on the basis of negligence for inadequately screening or supervising clergy.

The Colorado Supreme Court threw out a lawsuit brought by a woman alleging that her church acted improperly and unlawfully when it dismissed her after she made complaints of sexual harassment and child molestation against another minister. The woman alleged that between 1968 and 1975, when she was a minor, her stepfather committed various acts of sexual assault against her when they resided together. Her stepfather was a minister at the time, and later became president of his denomination. The woman pursued ministerial studies and was licensed as a minister. After serving as a minister in the State of Washington she moved to the Denver area to start a new church. She later learned that her stepfather, with whom she had severed all ties, was also pastoring a church in the Denver area. She learned that her stepfather was allegedly sexually harassing women church employees and a woman parishioner in his Denver church. She reported this alleged harassment, as well as the sexual abuse she had suffered from her stepfather as a minor, to denominational officers. In response, the stepfather filed charges with the denomination against the woman, claiming that her allegations were false and demanding a full investigation. After an investigation, denominational officers revoked the woman’s license and denied her the opportunity to open a new church. The woman responded by filing a lawsuit against her stepfather, and her denomination, alleging several theories of liability including (1) illegal retaliation by denominational officials in response to her charges of sexual harassment, in violation of Title VII of the Civil Rights Act of 1964; (2) breach of fiduciary duty by denominational officials; (3) breach of contract; and (4) intentional interference with contract. A trial court dismissed most of these claims on the ground that it lacked jurisdiction to resolve an ecclesiastical dispute. A state appeals court concurred with this result, and the woman appealed to the state supreme court.

The court began its opinion by noting that all four of the woman’s claims arose from the denomination’s decision to revoke her minister’s license and to cancel the decision to allow her to open a new church. As a result, “each claim arises out of [the denomination’s] choice of whether or not to employ [her] as a minister of its church.” The court concluded that it was barred from resolving the woman’s lawsuit on the basis of the first amendment’s free exercise and nonestablishment of religion clauses.

Free exercise of religion

In concluding that allowing the woman to sue her denomination would violate the first amendment’s free exercise of religion clause, the court observed:

However, by challenging [the denomination’s] decision not to hire her as a minister [the woman] inevitably leads the court into analysis of [the denomination’s] choice of a minister, even for purposes of a pretextual inquiry. The decision to hire or discharge a minister is itself inextricable from religious doctrine. The great majority of cases find that a minister holds a special and unique position as the leader of the church and the embodiment of the church’s religious beliefs. Thus, the church’s decision of who to hire as a minister necessarily involves religious doctrine. The decision may involve non—religious reasons as well, but those reasons cannot be separated from the basic belief that a particular person embodies or does not embody the religious beliefs of the church.

The court found support in the decisions of several other courts. For example, it referred to a federal appeals court decision holding that the mere maintenance of a lawsuit concerning matters related to a pastoral appointment violates the free exercise clause: “We cannot imagine an area of inquiry less suited to a temporal court for decision; evaluation of the `gifts and graces’ of a minister must be left to ecclesiastical institutions.” Minker v. Annual Conference, 894 F.2d 1354 (D.C. Cir. 1990).

The court cautioned that its ruling did not “bar the large number of non—clergy employees from suing the church on discrimination claims. It does not even bar ministers from bringing employment discrimination claims that do not stem directly from a hiring or discharge decision. Instead, our holding recognizes a small, inviolable area in which the decision of a church is not subject to governmental scrutiny.” Similarly, the court noted that

[w]hile claims for illegal hiring or discharge of a minister inevitably involve religious doctrine, that is not the case for a claim of negligent hiring of a minister. The claim of negligent hiring is brought after an employee has harmed a third party through his or her office of employment. An employer is found liable for negligent hiring if, at the time of hiring, the employer had reason to believe that hiring this person would create an undue risk of harm to others. Hence, the court does not inquire into the employer’s broad reasons for choosing this particular employee for the position, but instead looks to whether the specific danger which ultimately manifested itself could have reasonably been foreseen at the time of hiring. This inquiry, even when applied to a minister employee, is so limited and factually based that it can be accomplished with no inquiry into religious beliefs.

The court rejected the woman’s claim that most of the prior court rulings refusing to resolve disputes concerning the relationship between a church and its ministers occurred prior to the Supreme Court’s 1990 decision in Employment Division v. Smith, 494 U.S. 872 (1990). In the Smith case the Supreme Court said that a neutral, generally applicable law prevails over claims of religious exemption. The woman claimed that Title VII of the Civil Rights Act of 1964 was such a neutral law and therefore her claim of retaliation could not be rejected on the basis of the first amendment. The court disagreed, noting that the Supreme Court surely did not intend in the Smith case to allow the courts to intrude into ecclesiastical decisions regarding the tenure of ministers.

Nonestablishment of religion

The court also concluded that any resolution of the woman’s claims would violate the first amendment’s nonestablishment of religion clause, since it would create excessive government entanglement with religion.

Conclusion

The court also rejected the woman’s claim that the civil courts could resolve her lawsuit if she could demonstrate that the denomination acted with “fraud” or “collusion.” The court acknowledged that the United States Supreme Court had suggested, in earlier cases, that the civil courts may be able to resolve disputes concerning the status or tenure of ministers when churches act with fraud or collusion. The Colorado Supreme Court rejected this exception to the general rule of judicial nonintervention: “In order to determine whether a church employed fraudulent or collusive tactics in choosing a minister, a court would necessarily be forced to inquire into the church’s ecclesiastical requirements for a minister. The first amendment makes such inquiry into religious beliefs impermissible.” Van Osdol v. Vogt, 908 P.2d 402 (Colo. 1996). [ Termination, The Civil Rights Act of 1964, Judicial Resolution of Church Disputes, The Establishment Clause, The Free Exercise Clause]

Colorado Church Wins Zoning Dispute

Church wanted to operate a school on its premises, despite zoning laws prohibiting it.

Key point. Some courts have ruled that the first amendment guaranty of religious freedom permits churches to operate private schools on their premises even though those premises are not zoned for school use.

A federal court in Colorado ruled that a city violated the constitutional rights of a church by refusing to allow it to conduct a school on its premises. The church is located in an area that is zoned for residential and church uses, but not for school uses. The church began operating a school on its premises and was later ordered to close the school by county zoning authorities on the ground that the church's property was not zoned for school use. The school later sued the county, claiming that its first amendment right to freely exercise its religion was violated by the county's actions. A federal court agreed. The court began its opinion by observing that the question here is whether the county has impermissibly burdened the religious activities of the church by prohibiting the use of the church building for daily religious education by the use of a zoning code which restricts the location of secular private schools. The court emphasized that it was not dealing with the construction of a new building to be used by the church for school purposes, but rather with a desire by the church to use its present facilities for school purposes. The court concluded that the county's action could be upheld only if it was supported by a compelling government interest, and it ruled that such an interest was not present in this case. It rejected the county's claim that a compelling government interest was demonstrated by neighbors' complaints about the increased noise and traffic congestion, and the reduction in water pressure, that a school would create. The court noted that property owners can engage in accessory uses that are customarily incidental to the principal building or use. It concluded that the

conduct of a school within the church building is integrally related to the religious belief of the church membership. The [church] is nt arguing for a right to be free from zoning or to build a church where it pleases. It purchased an existing church building in a district where a church is a use by right. The restriction now is on religious conduct …. The restriction on the educational use of the building is not different, in principle, from a governmental imposed restriction on the religious ceremonial practices in the church. In sum … the denial of [the church's] special use application for the operation of a school within the church building is a substantial burden on the free exercise of religion by the membership of the church and is prohibited by the [first amendment].

It is important to note that the court ordered the county to pay the church's attorney's fees, and it also suggested that the church was entitled to money damages under federal law as a result of the county's violation of its constitutional rights. Title 42, section 1983 of the United States Code allows persons and organizations whose constitutional rights are violated to sue the offender for money damages—even if the offender is a city or other government unit. This case is very significant since it illustrates the availability of money damages under "section 1983" for a city's violation of a church's constitutional rights. The importance of such rulings cannot be overstated—for they represent a recognition of an extremely potent weapon that is available to churches when confronted by overzealous local officials who are unsympathetic and indifferent to the religious beliefs and practices of the church. Alpine Christian Fellowship v. Pitkin County, 870 F. Supp. 991 (D. Colo. 1994). [ Zoning Law for Churches, Zoning Law and Churches, Zoning Laws and Private Schools]

Can Parents Claim “Educational Malpractice” Against a School?

Usually not, Colorado court says.

Church Law and Tax 1995-01-01 Recent Developments

Schools

Key point: Church-operated schools ordinarily cannot be sued for “educational malpractice.”

A federal court in Colorado dismissed a parent’s lawsuit alleging that a church-operated high school and several affiliated denominational agencies were guilty of educational malpractice. The parent was opposed to certain teachings and activities at the school that he claimed were in violation of church teachings. The court dismissed these claims on the ground that “Colorado does not recognize a claim for educational malpractice” and that courts in other states have “consistently refused to recognize educational malpractice” claims. Further, the court insisted that the parent’s claim that his child received a “substandard Biblical Christian education” because of various alleged teachings and practices could not be resolved by the civil courts. It observed that any resolution of whether the child “was provided an adequate Biblical Christian education in accordance with the tenets of [her church] is barred by the first amendment [guaranty of religious freedom].” Finally, the court rejected the parent’s claim that his daughter had been subjected to an “atmosphere of sexual harassment” at the school in violation of Title VII of the Civil Rights Act of 1964. The court observed that Title VII only applies to the employer-employee relationship, and not to teachers and students. Houston v. Mile High Adventist Academy, 846 F. Supp. 1449 (D. Colo. 1994).

See Also: Incorporation and Tax Exemption

Criminal Liability for Reliance on Prayer to Cure a Child

The Colorado Supreme Court addressed this difficult question.

Church Law and Tax 1991-09-01 Recent Developments

Child Abuse and Molestation

The Colorado Supreme Court addressed the difficult question of the criminal liability of a parent who relies on prayer rather than medical technology for the cure of a sick child. A father (the “defendant”) lived with his wife and nine children in a small cabin in the mountains. For many years, the defendant had been on “a walk of faith,” which he described as a total reliance on God for all needs and for healing in times of illness or injury. He was a recognized minister in a small fundamentalist Christian organization, and conducted weekly services in his cabin. The tenets of the defendant’s church included healing of the sick by prayer, which was based on its interpretation of the Bible. One winter, the defendant’s infant daughter began exhibiting cold symptoms. Other members of the family had come down with similar symptoms earlier in the year, and defendant attributed their recovery to prayer. Accordingly, he was not particularly concerned about his baby’s condition. When the baby’s symptoms worsened, the defendant called two other church members to come to the cabin to pray for the child. The defendant, and these two other members, anointed the baby’s head with oil, laid their hands on her head, and prayed for her healing. By the following morning, the baby’s condition had worsened further. The defendant concluded that this was due to the wood burning stove drying the cabin air. To get the baby out of the dry cabin air, and to relieve the defendant’s wife who was exhausted from caring for the other eight children, the baby was taken to a neighbor’s home. The neighbor was a nurse, and she immediately suspected that the baby was suffering from pneumonia. She urged the defendant to take the baby to a hospital immediately. The defendant responded, “We can’t. This is our walk and this is our life.” The next day, the neighbor again urged the defendant to take the baby to a hospital. The defendant again declined, noting that the baby “looks 100 percent better.” Later that day, however, the baby began having difficulty breathing. The nurse became concerned that the baby was taking its last breaths. Shortly thereafter, the baby died. An autopsy revealed that the baby had died from respiratory failure due to “acute bronchial pneumonia.” The defendant was charged with child abuse resulting in death. At the trial, a physician testified that the baby would have survived had she been taken to the hospital. A jury found the defendant guilty as charged under a state law making it a felony to cause the death of a child through reckless conduct or criminal negligence. The defendant appealed his conviction, claiming that state law contained an exception to criminal child abuse in the case of “treatment by spiritual means.”

On appeal, the Colorado Supreme Court reversed the defendant’s conviction on the basis of a technicality (the trial judge had required the defendant to prove the availability of the spiritual treatment defense rather than requiring the prosecutor to prove that it was not available). The court ordered a new trial. In part because of this case, the Colorado state legislature has amended its child abuse law to restrict, and in some cases eliminate, the availability of the “spiritual treatment” defense if a child’s life is threatened.

This case is significant for a couple of reasons. First, it demonstrates that church members and clergy assume a legal risk in relying entirely on prayer for the cure of a seriously ill child. Of course, the court did not discourage the use of prayer. Rather, it said that prayer must be accompanied by appropriate medical assistance in the case of life-threatening conditions. In fact, the court acknowledged that parents can rely solely on prayer so long for illnesses and conditions that are not life-threatening. Second, the court rejected the view that the first amendment guaranty of religious freedom permits a parent to treat a seriously ill child solely through prayer. It observed that “while the state bears a heavy burden to justify any infringement on a person’s right to freely practice religious beliefs, the family itself is not beyond regulation in the public interest as against a claim of religious liberty and, therefore, the right to practice religion freely does not include the right or liberty to expose the child to ill health or death.” Lybarger v. People, 807 P.2d 570 (Colo. 1991).

The Right to Refuse Medical Treatment

Ministers’ Failure to Pay Taxes

What are the consequences?

Church Law and Tax 1991-05-01 Recent Developments

Clergy – Income Tax

What are the legal consequences if a minister fails to pay taxes, file tax returns, and keep any records as to his income and expenses? This was the issue before a federal district court in Colorado. A minister did not pay taxes, file returns, or maintain records for four years because of his convictions that only federal employees are subject to the income tax, and ministers are exempt from paying taxes on the basis of the first amendment guaranty of religious freedom. The IRS audited the minister, and “reconstructed” his income and expenses on the basis of Department of Labor statistics. It then assessed income taxes and self-employment taxes for the years in question, as well as a delinquency penalty of 25%, a negligence penalty of 5%, and a penalty for underpayment of estimated taxes. The IRS rejected the minister’s claims that he was not subject to tax. The minister appealed the IRS assessments, and the federal court upheld the IRS position. It categorically rejected the minister’s claims that only federal employees are subject to tax, or that clergy are exempt from paying taxes. The court observed that “imposing income taxes on individuals whose religious tenets forbid the payment of those taxes does not violate the first amendment.” The court stressed that “all taxpayers have a duty to maintain adequate and accurate tax records,” and that if a taxpayer attempts to evade taxes by not keeping records “the federal government is entitled to reconstruct his gross receipts and costs to arrive at an assessment for the unreported income.” The court approved of the use of Department of Labor statistics to reconstruct the minister’s income. It acknowledged that this method “may result in some inaccuracies, such imperfections are permissible.” The court also rejected the minister’s claim that the IRS could not impose a lien against his residence. The minister claimed that he had “given” his home to his church several years before. The court rejected this claim since the alleged gift had never been “memorialized” in any written document or deed. The court also noted that the minister and his family continued to live in the residence, and pay property taxes, for several years after the alleged gift. United States v. Gonzalez, 91-1 U.S.T.C. ¶ 50,100 (D. Colo. 1991).

Tax Withholding and Estimated Tax Reporting

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