Massachusetts

Legal Developments

‘Spiritual Adviser’ Limits of Clergy-Penitent Privilege Outlined by Massachusetts Court Ruling

Key point 3-07.4. In order for the clergy-penitent privilege to apply there must be a


Key point 3-07.4. In order for the clergy-penitent privilege to apply there must be a communication that is made to a minister acting in a professional capacity as a spiritual adviser.

A Massachusetts appeals court concluded that incriminating statements made to a pastor by a man who was charged with the molestation of his stepdaughter were not protected from disclosure by the clergy-penitent privilege because they were not made to the pastor while acting as a spiritual adviser. For a period of ten years an adult male (the "defendant") allegedly sexually molested his minor stepdaughter when she was between 6 and 16 years of age. The defendant later disclosed to his wife that he had sexually touched the victim on two occasions. After this disclosure, the defendant called a local pastor who previously had counseled him and his wife.

The defendant was prosecuted for two counts of aggravated rape and abuse of a child. At his trial, the pastor testified that the defendant had told him that the victim had said her accusations of sexual abuse were not a dream, and that he did not remember whether he had done it. The defendant also admitted to the pastor that he had told his wife "what he thought [she] wanted to hear so that he could have a shot of keeping the kids." A jury convicted the defendant on both counts.

The defendant appealed his conviction on several grounds, including the trial judge's alleged error in admitting incriminating statements the defendant made to his former pastor during their telephone conversation. The defendant argued that the statements were protected from disclosure by the clergy-penitent privilege since they were made in the course of seeking spiritual guidance, comfort, and counsel.

The Massachusetts clergy-penitent privilege states:

A priest … or ordained or licensed minister of any church … shall not, without the consent of the person making the confession, be allowed to disclose a confession made to him in his professional character, in the course of discipline enjoined by the rules or practice of the religious body to which he belongs; nor shall a priest … or ordained or licensed minister of any church … testify as to any communication made to him by any person in seeking religious or spiritual advice or comfort, or as to his advice given thereon in the course of his professional duties or in his professional character, without the consent of such person.

Prior to trial, the judge held a hearing to determine the applicability of the privilege. During the hearing, the pastor explained that for a time he had regularly met with the defendant and his wife and counselled them on marital and parenting matters. However, after the defendant's wife obtained a restraining order against the defendant, the pastor suggested that the defendant "seek spiritual aid and counsel at a different congregation." The defendant did so. After that date, the pastor had limited contact with the defendant, other than an occasional telephone call.

The pastor also testified that while attending a conference at a retreat center, he received a telephone call from the defendant. The defendant was "pretty distraught," and there "seemed to be a lot of remorse, a lot of sorrow, a lot of tears." During the call, the defendant admitted he had told his wife he had touched the victim. The defendant explained "he wanted to have the kids back, and he felt that if he said what his wife wanted to hear that maybe the kids would be able to come back to him." However, the defendant also told the pastor that he did not remember whether he had actually touched the victim.

The pastor did not view the defendant's statements to him during the telephone call as a pastoral confession. It appeared to the pastor that the defendant's purpose in calling him was to look for someone who could bring some influence to bear on the situation and act as a middleman between the defendant and his wife. The pastor's initial impression was that the defendant was seeking "comfort," but in the sense that he was seeking someone to show him sympathy and intervene on his behalf. But the pastor conceded that "it could be manipulation as well," on the theory that the defendant might have recognized that his statements were incriminating and that the defendant might have felt a "need to cover his tracks."

The next day, the judge ruled that the pastor's testimony was not barred by the clergy-penitent privilege. The judge's ultimate finding was "that the [defendant's telephone] call itself was not made for the sole purpose of seeking spiritual advice and counsel and not even for the main purpose of seeking spiritual advice and counseling."


The appeals court's ruling

The appeals court began its opinion by noting that "the clergy-penitent privilege is strictly construed and applies only to communications where a penitent seeks religious or spiritual advice or comfort." This standard was not met, the court concluded:

Here, the trial judge did not err in admitting the defendant's statements to the pastor. The defendant … did not communicate with the pastor to receive "religious or spiritual advice or comfort." The pastor's testimony established that the defendant feared losing his children, may have suspected that criminal charges were possible, and, according to the pastor, was looking for "anyone that could bring to bear any kind of influence on the situation" and act as a "middle man" between the defendant and his wife. It seems clear that the defendant did not call the pastor to receive spiritual comfort, as the defendant urges, but rather sought to enlist the pastor's assistance in an attempt to avoid the possible consequences of his admissions—i.e., the "train going right at [the defendant's] forehead … ."

The judge permissibly found that the defendant had "switched churches" … [and that the pastor] had asked the defendant to seek spiritual guidance elsewhere, that the defendant had done so, and that the pastor's relationship with the defendant at that point was "very ambiguous." While not dispositive, "since the statute plainly applies to 'any person … seeking religious or spiritual advice,'" the lack of an ongoing pastoral relationship between the defendant and pastor and the defendant's lack of continued attendance at [the pastor's church] were appropriate factors for the judge to consider in determining the defendant's intent in calling him.

The court cited another case in which a court ruled that a defendant's prior sporadic contact with pastors and lack of regular attendance at church was relevant to determining the defendant's purpose in meeting with a pastor.

What This Means For Churches:

There are four reasons this ruling is important. First, it is the first case involving the application of the clergy-penitent privilege to conversations between a pastor and counselee using a telephone. The court concluded the conversation was not privileged, and here is the key point: not because it was conducted by telephone, but because the defendant was not speaking to the pastor in his professional role as a spiritual adviser. The application of the privilege to telephonic conversations was not questioned. As a result, this case provides indirect support for the application of the clergy-penitent privilege to phone conversations.

Second, the court noted that the pastor's church was a Lutheran church having a formal process for confession and absolution, and that "it would be extremely unusual for him to take a confession and profess absolution over the telephone." The court noted that the clergy-penitent privilege statute applies the privilege to statements to clergy "in the course of discipline enjoined by the rules or practice of the religious body to which they belong," and it concluded that "the defendant's statements to the pastor were made outside the 'rules or practice of the religious body to which [the pastor] belonged.'" This reasoning calls into question the applicability of the privilege to statements between clergy and counselees made in a manner outside the normal context of the "rules and practice" of a church or denomination. In other words, if the "rules or practice" of a church only recognize a system of "confession" in a formal, prescribed manner, then this would suggest that conversation over the telephone would not be privileged.

Third, the court concluded that a counselee's sporadic attendance at a church suggests that conversations between the counselee and the church's pastor are not privileged: "Since the [clergy-penitent privilege] statute plainly applies to 'any person … seeking religious or spiritual advice,'" the lack of an ongoing pastoral relationship between the defendant and pastor and the defendant's lack of continued attendance at [the pastor's church] were appropriate factors for the judge to consider in determining the defendant's intent in calling him (i.e., for spiritual counsel or other reasons).

Fourth, this case illustrates the difficulty of determining whether the clergy-penitent privilege applies to a particular conversation. Attorneys for both sides in this case, as well as the trial court and appeals court, struggled with this question. This raises an important question under state child abuse reporting laws. Clergy are mandatory child abuse reporters in many states, but in some states they are not required to report evidence of child abuse obtained during a privileged conversation. Clearly, this is a legal question that in many cases will be highly technical, and for this reason clergy should not make such a decision without input from legal counsel to avoid potential civil and criminal liability for incorrectly assuming that a conversation was privileged. Commonwealth v. Nutter, 28 N.E.3d 1 (Mass. App. 2015).

Legal Developments

Church Not Liable for Molestation

Church had no prior knowledge of molestation by nursery worker.

Church Law and Tax

Church Not Liable for Molestation

Church had no prior knowledge of molestation by nursery worker.

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 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.

Key point 6-08. State and federal laws provide limited immunity to uncompensated officers and directors of churches and other charities. This means that they cannot be personally liable for their ordinary negligence. However, such laws contain some exceptions. For example, officers and directors may be personally liable for their gross negligence or their willful or wanton misconduct.

A Massachusetts court ruled that a church was not liable for the molestation of a child by a church nursery worker since it had no prior knowledge of any similar conduct. Upon learning that her minor son had been sexually molested by a volunteer babysitter during a church meeting, a parent (the “plaintiff”) sued a church and its pastor and board members (the “defendants”) on the following three grounds:

Negligence in failing to protect her son from the known dangerous propensities of the perpetrator.
Failure to report her son’s abuse to the civil authorities.

Gross negligence in failing to warn other church members of known dangerous propensities of the perpetrator.

A trial court dismissed all of the plaintiff’s claims, and she appealed. A state appeals court affirmed the dismissal of the lawsuit.

Negligence

The plaintiff insisted that the defendants breached their duty to protect her son from the criminal acts of the volunteer because such acts were “reasonably foreseeable.” The court noted that “while the possibility that criminal conduct will occur is always present in our modern society, liability for the criminal acts of third parties exists where there is a reasonable expectation that the defendant should anticipate harmful acts of third persons and take appropriate measures to protect the plaintiff from harm.” The plaintiff failed to introduce any evidence showing that the defendants were aware “of any past sexual transgressions with children” by the volunteer. The court also noted that the volunteer was not registered as a sex offender in Massachusetts.

The court rejected the plaintiff’s argument that the defendants breached a “fiduciary duty” by not doing more to investigate the volunteer. The court noted that “church membership does not establish the type of relationship to the plaintiff from which a fiduciary duty could possibly arise under civil law.” The court also ruled that a fiduciary duty did not arise on the basis of a “special duty” arising out of “existing social values and customs.” The court noted that the plaintiff had not produced any evidence of church practices regarding “screening volunteer babysitters at informal church (or other) functions,” and, that “in the absence of such evidence, no rational jury could find for the plaintiff on a theory of special duty.” The court concluded that there was no evidence “tending to show that in 2004, when these events occurred, there was a community consensus that volunteer babysitters in churches or other religious organizations would have to be screened.”

The court acknowledged that the church had adopted a “two adult” policy, which the plaintiff claimed the defendants violated. However, the court concluded that?”the record reflects only that [the volunteer], not the defendants, violated the rule by following the [victim] into the bathroom.”

The plaintiff claimed that she assumed that the church performed criminal background checks on volunteers. But even if this were true, the court concluded that “such a check would not have revealed any sexually based offense.”

Failure to report child abuse

The plaintiff also asserted that the defendants breached a duty to report the abuse of the victim for 16 days after first learning about it. The court ruled that the defendants’ 16-day delay in reporting the victim’s abuse, while technically a violation of the statutory duty to report child abuse in a timely fashion, did not make the defendants liable for the volunteer’s acts.

Gross negligence

The court ruled that the defendants had no knowledge of any prior acts of child molestation by the volunteer, and as a result could not be liable on the basis of gross negligence for his acts.

What This Means For Churches:

This case is instructive for the following reasons:

  1. The church, pastor, and board members were not liable for the volunteer’s acts since they had no knowledge of prior acts of child molestation that he committed. It is imperative that churches screen volunteers who will work with minors, and not use anyone with a history of molesting children.
  2. The court concluded that the volunteer, rather than the church, had violated the church’s two-adult policy and so it could not be liable for the volunteer’s acts on the basis of a violation of the policy. This extraordinary conclusion should not cause any church to be lax in monitoring and enforcing a two-adult policy, since it is likely that many other courts will reject this aspect of the court’s opinion.
  3. The court ruled that the church could not be liable for failing to perform a criminal records check since even if it had done so “such a check would not have revealed any sexually based offense.”
  4. The defendants’ failure to comply with state child abuse reporting requirements did not make them liable for the volunteer’s acts. Doe v. Corporation, 964 N.E.2d 370 (Mass. App. 2012).

    5. Church Law & Tax Report is published six times a year by Christianity Today International, 465 Gundersen Dr. Carol Stream, IL 60188. (800) 222-1840. © 2013 Christianity Today International. editor@churchlawandtax.com All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. “From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.” Annual subscription: $69. Subscription correspondence: Church Law & Tax Report, PO Box 37012, Boone, IA 50037-0012.

Legal Developments

Church Not Responsible for Sexual Abuse of a Minor

Assailant fully to blame for disregarded church’s safety policies.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax

Court Rules Church Not Responsible for Sexual Abuse of a Minor

Assailant fully to blame; disregarded church’s safety policies

Sexual misconduct by clergy, lay employees, and volunteers

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

Key point 10-04.2. 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 10-13.2. 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 Massachusetts court ruled that a national and regional church were not responsible for the sexual abuse of a minor. A minor (the “victim”) was sexually molested by an adult male (the “assailant”) who was acting as a volunteer babysitter during a monthly church group meeting. The offender was convicted of two counts of assault and battery and indecent assault and battery on a child.

The victim sued a national denomination, and its regional agency (the “church defendants”), claiming that they were responsible for his injuries on the basis of negligence, gross negligence, and a failure to report child abuse to civil authorities. A trial court dismissed all claims against the church defendants, and the victim appealed.

Negligence

The court rejected the victim’s claims that the church defendants were legally responsible for his injuries on the basis of negligence. It noted that “while the possibility that criminal conduct will occur is always present in our modern society, liability for the criminal acts of third parties exists where there is a reasonable expectation that the defendant should anticipate harmful acts of third persons and take appropriate measures to protect the plaintiff from harm.”

The court noted that the church defendants were unaware of any past sexual transgressions with children by the assailant, and had “no knowledge that he had prior criminal convictions for, or a history of, sexual abuse of children.” The court acknowledged that the assailant was not registered as a sex offender in Massachusetts, although years before he had been convicted of a sexual offense in Maine (but that conviction had been vacated).

The victim claimed that someone had warned two church members, many years before, about the assailant’s dangerous propensities, but the two church members could not recall receiving these warnings and there was no independent corroboration that they were ever given.

The court noted that a local pastor was aware that the assailant had been on probation for an “altercation” with his sister ten years before, but this information was never reported to the church defendants.

Fiduciary Relationship

The victim claimed that a “fiduciary relationship” existed between him and his church by virtue of church membership that imposed upon the church defendants an affirmative duty of care that they violated. The court disagreed, noting that “church membership does not establish the type of relationship to the plaintiff from which a fiduciary duty could possibly arise under civil law.”

A Special Duty

The victim also claimed that the church defendants’ negligence was established by their violation of a community-based standard of care in the selection and supervision of babysitters. While the court conceded that a special duty may find its source in existing social values and customs, it concluded that the victim had “failed to provide evidence as to the standard customs or procedures for … screening volunteer babysitters at informal church (or other) functions. In the absence of such evidence, no rational jury could find for the plaintiff on a theory of special duty.”

The court concluded that the church defendants had not breached a “community” standard of care in the selection and screening of volunteer babysitters.

The court noted that there was “no evidence tending to show that in 2004, when these events occurred, there was a community consensus that volunteer babysitters in churches or other religious organizations would have to be screened …. In the absence of some evidence that the members of the [church] relied on the church to screen babysitters at that time, or as noted above, that screening of volunteers was so widespread that reliance could otherwise be inferred, we must conclude that this claim fails as a matter of law.”

The victim’s mother testified that she assumed that the church performed criminal offender record information checks on volunteers, but the court noted that “such a check would not have revealed any sexually based offense.”

Two-Adult Policy

The victim claimed that the assailant was able to molest her because of the local church’s violation of its “two-adult policy” which generally forbade an adult from having unsupervised access to a minor. The court acknowledged that the church had adopted a two-adult policy, but concluded that “only the assailant, not the defendants, violated the rule by following him into the bathroom.”

Intentional Infliction of Emotional Distress

The victim claimed that the church engaged in intentional infliction of emotional distress by allowing the assailant to continue attending services, albeit under direct supervision, while he continued to attend the same church. This “re-victimization of the victim” caused recurring emotional distress.

The court ruled that it was barred by the First Amendment guaranty of religious freedom from resolving this claim. It noted that the First Amendment “places beyond the court’s jurisdiction disputes involving church doctrine, canon law, polity, discipline, and ministerial relationships,” and it concluded:

The decision to allow the assailant access to the church grounds and the reasons therefore inherently involves an assessment of his relationship with the church, and involve the secular review of ecclesiastical discipline and church doctrine. As such, we are prohibited from assigning liability to such actions

The court noted that the victim had actually encountered the assailant only once on church property since he molested him, and it concluded that, even apart from the First Amendment considerations, the facts did not sufficiently make out a claim for intentional infliction of emotional distress:

While it is undisputed that the assailant returned to the church after the victim made the defendants aware of the inappropriate touching, the victim offers no evidence that defendants intended this single visual encounter … to occur, or that they should have known it likely to occur, or that it could be viewed as extreme and outrageous. While this court neither questions nor seeks to minimize the traumatizing effect of the incident on the victim, our analysis must be confined to the undisputed facts in the record in the context of the elements of this cause of action. We must conclude that the defendants’ actions do not constitute intentional infliction of emotional distress as matter of law.

What This Means For Churches:

There are several aspects to this ruling that are instructive for church leaders. Consider the following:

  1. The court stressed that churches, like any other youth-serving organization, are not liable on the basis of negligent selection for the molestation of a minor by an employee or volunteer unless they know, or in the exercise of reasonable care should have known, of prior misconduct suggesting that the person posed a risk of harm to others. In this case, none of the church defendants were aware of any previous incidents of sexual misconduct by the assailant, and this meant that they were not responsible for his actions.

    Note that the assailant’s prior record was not pristine. He had been convicted of a sexual offense in Maine years before, but this conviction had been vacated and presumably was not directly accessible by the church defendants. And, he had been on probation for an “altercation” with his sister 10 years before, but this information was never reported to the church defendants.

  2. The court noted that the assailant was not registered as a sex offender in Massachusetts. If he had been, this could easily have been discovered by the church defendants, who would likely have been found liable for his actions unless they implemented sufficient safeguards to protect other children from him.
  3. The court concluded that the church defendants had not breached a “community” standard of care in the selection and screening of volunteer babysitters at informal church functions, since the victim had failed to prove that any such duty existed at the time of his abuse in 2004. The court concluded that there was “no evidence tending to show that in 2004, when these events occurred, there was a community consensus that volunteer babysitters in churches or other religious organizations would have to be screened.”
  4. The court concluded that the failure to conduct a criminal records check on a volunteer children’s worker does not support a finding of negligence if such a check would not have revealed any “sexually based offense.”
  5. Many churches have adopted “two-adult policies” prohibiting a child from being in the custody of one adult on church premises or in the course of a church activity. The victim in this case claimed that the church violated this policy since the assailant molested the victim in a vacant bathroom. The court acknowledged that the church had adopted a two-adult policy, but concluded that “only the assailant, not the defendants, violated the rule by following him into the bathroom.”
  6. This is the first case to address the use of “conditional attendance agreements” by churches. Such agreements, which are utilized by a majority of churches in this country, allow sex offenders to attend church under strict conditions. In some cases, churches choose not to use such agreements and to exclude a sex offender from church property and activities. This is often due to the particularly heinous nature of the person’s prior crimes, or his continued inclusion on a sex-offender registry, or because one or more of the person’s victims continues to attend the church and church leaders believe that it would be inappropriate to force victims to encounter their assailant recurrently at church.

    7. In this case, the assailant was permitted to continue attending the church following the disclosure of his offense, subject to strict conditions. And, he encountered the victim on at least one occasion, which served as the basis for the victim’s emotional distress claim. The court concluded that it was barred by the First Amendment guaranty of religious freedom from resolving this claim, noting that “the decision to allow the assailant access to the church grounds and the reasons therefore inherently involves an assessment of his relationship with the church, and involve the secular review of ecclesiastical discipline and church doctrine. As such, we are prohibited from assigning liability to such actions.” Doe v. Corporation, 964 N.E.2d 370 (Mass. App. 2012).

    * See also “Employment practices,” Keen v. Miller Environmental Group, Inc., 702 F.3d 239 (5th Cir. 2012), in the Recent Developments section of this newsletter.

    Church Law & Tax Report is published six times a year by Christianity Today International, 465 Gundersen Dr. Carol Stream, IL 60188. (800) 222-1840. © 2013 Christianity Today International. editor@churchlawandtax.com All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. “From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.” Annual subscription: $69. Subscription correspondence: Church Law & Tax Report, PO Box 37012, Boone, IA 50037-0012.

Legal Developments

Confidentiality During Spiritual Counsel

Only statements made in the course of seeking spiritual counsel are protected by the privilege.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Confidentiality During Spiritual Counsel

Only statements made in the course of seeking spiritual counsel are protected by the privilege.

Richard R. Hammar, J.D., LL.M., CPA

Key point 3-07.4. In order for the clergy-penitent privilege to apply there must be a communication that is made to a minister acting in a professional capacity as a spiritual adviser.

Key point 3-08.01. The courts have not required that a counselee be a church member in order for communications to a minister to qualify for the clergy-penitent privilege. However, church membership is a factor that the courts have considered in deciding if the privilege applies to a particular communication.

The Massachusetts Supreme Judicial Court ruled that the clergy-penitent privilege did not apply to incriminating statements made by a father to a pastor concerning allegations of child abuse since the statements were not made in the course of seeking spiritual counsel. A man (the “defendant”) sexually abused his two minor daughters for several years. When the older daughter was in college, she returned home for Thanksgiving. The defendant again attempted to molest her, but she resisted and threatened to call the police. He became angry, showed her a nine millimeter handgun, and said, “I could kill you if you ever open your mouth.” Although the defendant did not touch this daughter after this incident, she continued to fear for her safety and for that of her mother.

When the defendant’s younger daughter was a senior in high school, she disclosed the abuse to one of the pastors at her church (“Pastor Ron”). She told Pastor Ron that she had not disclosed the abuse previously because she did not think that anyone would believe her and because the defendant had threatened her if she did so. Pastor Ron suggested alternative actions that the daughter could take, including contacting the police or confronting her father, but she decided that the best option would be to leave home to attend college. However, after a long weekend home from college, she informed Pastor Ron that she wanted to confront the defendant.

A family meeting was held at the church. The defendant’s two daughters, their mother, Pastor Ron and two other pastors, and the defendant attended the meeting. During the meeting, the defendant made incriminating statements to Pastor Ron and the other pastors. He apologized to his daughters for “what he did” and asked for forgiveness. The meeting ended without agreement concerning any future action.

The defendant was asked to leave the family home. He initially agreed to do so, but then refused to move. He became angry and verbally abusive. His wife and one of the daughters went to the police to report the defendant’s actions, and he was arrested a few days later. The defendant was charged with two counts of rape of a child, four counts of indecent assault and battery on a child under 14, and one count each of assault and battery and threatening to commit a crime. At his trial the prosecutor sought to have Pastor Ron testify concerning the incriminating statements made by the defendant during the church meeting. The defendant objected to Pastor Ron’s testimony. He insisted that the statements he made during the church meeting were in the context of seeking spiritual advice, and therefore they were protected by the clergy-penitent privilege.

The prosecutor countered that the statements made during the church meeting were not privileged since they were not in the course of seeking spiritual advice, and in addition, that the presence of the defendant’s daughters at the meeting precluded it from being “confidential” and therefore the clergy-privilege did not apply.

The trial court ruled that the defendant’s statements to Pastor Ron at the church meeting were not made in the process of seeking “spiritual advice or comfort,” and were not “motivated by a religious or spiritual purpose.” Based on this conclusion, the judge declined to address the prosecutor’s argument that any privilege was waived due to the presence of the defendant’s daughters when some of the statements were made. Partly due to Pastor Ron’s testimony, the defendant was found guilty and sentenced to prison. He appealed to the state supreme court.

The Massachusetts clergy-penitent privilege statute states:

A priest, rabbi or ordained or licensed minister of any church or an accredited Christian Science practitioner shall not … testify as to any communication made to him by any person in seeking religious or spiritual advice or comfort, or as to his advice given thereon in the course of his professional duties or in his professional character, without the consent of such person.

The state supreme court agreed with the trial judge that the defendant’s statements to Pastor Ron at the church meeting were not protected by the clergy-penitent privilege:

The evidence clearly supports the judge’s conclusion that the defendant did not attend the meeting for a spiritual or religious purpose, but rather attended at the urging of his wife and his wife’s pastor to discuss a “family issue.”

That the defendant was not a member of the church, and did not attend services regularly, is not dispositive, since the statute plainly applies to “any person … seeking religious or spiritual advice.” Nonetheless, the defendant’s prior sporadic contact with the pastors and lack of regular attendance at church services is relevant to his purpose in attending the family meeting. The defendant’s angry demeanor and denials of the allegations, as well as his repeated statements that he wanted to leave the meeting, further support this conclusion …. The defendant’s question to Pastor Ron about what he should do to make things “better,” and Pastor Ron’s suggestion that the defendant follow his “conscience,” are not inconsistent with the judge’s conclusion that the defendant was seeking pragmatic advice rather than spiritual guidance.

Since the defendant’s statements were not made in the course of seeking spiritual guidance or support, the court did not address “whether any privilege was waived by the presence of third parties not covered by the statute.”

Application. This case illustrates that not all conversations with clergy are protected by the clergy-penitent privilege. Such conversations are protected only when clergy are sought out in their professional capacity as spiritual advisers. The court cited the following factors in concluding that the defendant’s statements to Pastor Ron were not privileged: (1) the defendant’s sporadic church attendance (which, while not precluding the application of the privilege, made it less plausible that his comments to Pastor Ron were in the course of seeking spiritual advice); (2) the defendant’s angry demeanor at the church meeting, and his initial denials of the allegations of abuse; (3) the defendant’s repeated requests to leave the meeting. The court declined to address the question of whether the privilege applies when third persons are present. Commonwealth v. Kebreau, 909 N.E.2d 1146 (Mass. 2009).

This Recent Development first appeared in Church Law & Tax Report, March/April 2010.

Legal Developments

Can a Denominational Office Be Held Liable for a Pastor’s Sexual Misconduct?

The answer depends on several factors.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Can a Denominational Office Be Held Liable for a Pastor’s Sexual Misconduct?

The answer depends on several factors.

Richard R. Hammar, J.D., LL.M., CPA

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

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

Key point 10-13.2. 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.

The Massachusetts Supreme Judicial Court ruled that a denominational agency was not liable on the basis of breach of a fiduciary duty, or negligent hiring or supervision, for a sexual relationship initiated by a pastor in the course of a counseling relationship with an adult member of his congregation. A married woman (the “plaintiff”) went to her pastor for counseling regarding concerns she had about a relative. During their initial counseling session the pastor indicated that he could “easily fall in love” with the plaintiff. The following day, the plaintiff began regular meetings with the pastor concerning her own marital problems. She left her husband a few weeks later and began a sexual relationship with the pastor. A few months later she filed for divorce.

A church member informed the denominational office (the “regional church”) of her concern that the pastor was “getting involved with a woman in the parish.” The member stated that she wished to remain anonymous and that she did not want to identify the woman she suspected as involved with the pastor. She did not disclose that the pastor was counseling the unidentified woman. An officer of the regional church informed the member that he could not “respond to hearsay and rumors of suspicions from anonymous people,” noting that there was no suggestion “that anything illegal was occurring.” He asked the member to have someone with first-hand knowledge of any sexual relationship contact him. A few months later the member again contacted the regional church, and informed an officer that the pastor was inappropriately involved with an unidentified female parishioner, adding that “there were perhaps two or three other people that may be involved” who all insisted on anonymity. The officer again asked whether she could “get somebody to come forward,” emphasizing that she “bend every effort” to encourage an informant to come directly to him. Again, no one did so.

The plaintiff eventually ended her relationship with the pastor, prompting him to appear at her home and threaten to commit suicide. The plaintiff telephoned the police, and the pastor was admitted to a psychiatric facility. The regional church thereafter learned of the pastor’s hospitalization, and the affair, and initiated its process of ecclesiastical discipline. Rather than defend against the charge, the pastor confessed. Consistent with church disciplinary requirements, the congregation was informed that the pastor had been involved in a sexual relationship with an unidentified parishioner and had been hospitalized, and that he had renounced his ministerial status.

The plaintiff sued the regional church for negligent hiring, supervision, and retention of the pastor, and breach of fiduciary duty. A trial court dismissed all the plaintiff’s claims, and she appealed to the state supreme judicial court.

The court began its opinion by noting that:

The First Amendment places beyond our jurisdiction disputes involving church doctrine, canon law, polity, discipline, and ministerial relationships. The First Amendment does not grant religious organizations absolute immunity from tort liability. We nevertheless proceed cautiously lest we become embroiled in disputes involving a religious organization that would require us to interpret or weigh church doctrine.

Breach of fiduciary duty

The plaintiff claimed that the regional church committed a breach of a duty of care that it owed her, as a parishioner, to protect her from sexual exploitation by a minister to whom she turned for counseling. The court disagreed:

The undisputed facts, when viewed in the light most favorable to the plaintiff, do not establish that the diocese stood in the type of relationship to the plaintiff from which a fiduciary duty could possibly arise under civil law …. The only relationship she had with the diocese was that of a parishioner …. Any alleged relationship between the plaintiff and the [regional church] … was based on no more than their shared religious affiliation and her role as a parishioner …. However consequential that may be in a religious context, it provides no basis to support liability in a civil context.

The court acknowledged that a counseling relationship might give rise to a fiduciary duty, but no such relationship existed between the regional church and the plaintiff.

Negligent hiring

At the time of the pastor’s employment the regional church, pursuant to its internal policies, arranged for the Oxford Document Management Company to conduct a background investigation, which was accomplished by sending detailed questionnaires to all employers, schools, and church agencies with which the pastor had any prior contact. This investigation did not result in any responses suggesting that he had engaged in any inappropriate sexual conduct. An officer of the regional church telephoned an officer of another regional church where the pastor was previously employed and was told that the pastor had experienced “some sort of breakdown” in connection with the failure of his marriage, but had recovered fully.

In rejecting the plaintiff’s negligent hiring claim against the regional church, the court noted that it was the local church, and not the regional church, that hired the pastor and entered into an employment contract with him. The court concluded:

Even assuming that the regional church’s role in commissioning or conducting a background check on the pastor was sufficient to show that it ‘hired’ him, no rational jury could conclude that it overlooked or ignored any evidence suggesting that he would engage in a sexual relationship with an adult parishioner. The background check, conducted as required by church policy, revealed no such facts. Also in accordance with church policy, the regional church confirmed that the pastor had attended training designed to prevent sexual misconduct, provided by his previous employer. In short, the plaintiff presented no facts even suggesting that, at the time he was hired by the parish, the pastor had a history of sexual misconduct that the regional church could have discovered through reasonable investigation.

Negligent supervision and retention

The plaintiff claimed that the regional church was liable for the pastor’s conduct on the basis of negligent supervision and retention based on its “inadequate” response to the reports of an improper counseling relationship that had been submitted to him by an unnamed informant. The court disagreed:

Assuming, without deciding, that the [regional church] had any duty of supervision, no rational jury could find that [it] was negligent in supervising or retaining the pastor. While the pastor and the plaintiff were involved in a sexual relationship, a relationship they sought to keep secret, a [church member] twice informed [a regional church officer] of an anonymous report that the pastor was involved in a sexual relationship with an unidentified parishioner. The member did not report that the unidentified parishioner was being counseled by the pastor. On each occasion, the officer urged her to encourage any person (including the source of the anonymous report) to come forward. His actions were in accordance with the regional church’s sexual misconduct policy manual, which provides:

“Anyone who believes that he or she has been subject to sexual misconduct by a minister or church employee may make a complaint to [the regional church]. If the complainant is willing to make a charge of sexual misconduct, that charge must be in writing [and the regional church] will then begin the process of investigating and adjudicating the charge. Charges will not be processed unless they are in writing.”

The court concluded:

The delicate balance between the freedom to exercise religion and the demands placed on all persons (clerical and others) by civil law requires us to proceed cautiously in a controversy where we are asked to hold that a religious institution’s reliance on its own written policy governing the response to reports of a clergy’s sexual misconduct with an adult parishioner gives rise to liability under civil law. On the facts presented here, where the regional church adhered to its articulated policy; where there is no claim that its policy was unreasonable; where the plaintiff was an adult; and where she argues only that the sexual conduct in which she and her pastor engaged was proscribed by ecclesiastical law, we conclude that the plaintiff has not met her burden to show a genuine issue of material fact that the regional church negligently supervised or retained the pastor.

Application. This case is significant for several reasons, including the following:

1. The court concluded that a fiduciary relationship does not automatically arise between a church, or denominational agency, and its parishioners. There must be something more, such as a formal counseling relationship, for a fiduciary relationship to occur. As a result, the court rejected the plaintiff’s breach of fiduciary duty claim.

2. The court ruled that the regional church could not be liable on the basis of negligent hiring or the pastor’s conduct since it was not his employer and it conducted a thorough background investigation of the pastor at the time he was hired which revealed no information suggesting that he had ever engaged in an inappropriate physical relationship with a church member.

3. The court rejected the plaintiff’s negligent supervision and retention claims on the ground that the regional church had an established and reasonable procedure for investigating charges of pastoral misconduct that was triggered by the filing of a written complaint by a victim or other interested person. In this case, the regional church’s procedure had not been implemented since written charges had not been submitted by an identifiable person. The court suggested that the First Amendment guaranty of religious freedom would bar it from evaluating the adequacy of the regional church’s disciplinary and investigatory procedures. The court concluded: “The delicate balance between the freedom to exercise religion and the demands placed on all persons (clerical and others) by civil law requires us to proceed cautiously in a controversy where we are asked to hold that a religious institution’s reliance on its own written policy governing the response to reports of a clergy’s sexual misconduct with an adult parishioner gives rise to liability under civil law.” Petrell v. Shaw, 902 N.E.2d 401 (Mass. 2009).

This Recent Development first appeared in Church Law & Tax Report, January/February 2010.

Legal Developments

The First Amendment and Church Employment Disputes

Courts are generally barred from resolving ministers’ employment claims.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

The First Amendment and Church Employment Disputes

Courts are generally barred from resolving ministers’ employment claims.

Richard R. Hammar, J.D., LL.M., CPA

Key Point 2-04.1 Most courts have concluded that they are barred by the First Amendment guarantees of religious freedom and nonestablishment of religion from resolving challenges by dismissed clergy to the legal validity of their dismissals.

A Massachusetts court ruled that it was barred by the First Amendment from resolving a minister’s claim that his dismissal was unlawful. An Episcopal priest (the “plaintiff”) served as an interim priest until a new bishop was appointed for the diocese. The new bishop considered the plaintiff’s criminal record, information revealed in a background check, information the plaintiff volunteered about his previous employment, and knowledge of the plaintiff’s conduct as a priest to determine that the plaintiff could serve only as a supply, substitute, or assistant priest but not as an interim priest, priest-in-charge, or rector within the diocese. The plaintiff thereafter served various parishes in the diocese as a supply or assistant priest. The bishop later withdrew the plaintiff’s license to serve as a priest on the basis of complaints about the plaintiff’s conduct and performance; improper attempts by the plaintiff to obtain additional compensation from a church; inappropriate email communications from the plaintiff that were intercepted by the diocese; and other unspecified information obtained about the plaintiff’s behavior.

The plaintiff sued the diocese, claiming that he had been removed from his position as an interim priest, and denied any administrative or interim positions in the diocese since that time. He further claimed that he had been removed as a priest because of his efforts to pursue an audit of the church’s finances, and his filing of a written complaint with the Internal Revenue Service. He also claimed that his dismissal as a minister was due in part to unlawful “retaliation” against him for reporting child abuse. Specifically, he argued that he observed a church member transporting boy scouts in his motor vehicle though his driver’s license had been revoked or suspended for a conviction involving the member’s drunk driving and killing of a child with his vehicle. The plaintiff claimed that after reporting to the vestry and the diocese and being “rebuked,” he made a report to the local police pursuant to the state child abuse reporting law. He argued that the reporting law protects mandatory reporters of child abuse from retaliation by their employer for making a report of child abuse, and that the diocese violated this prohibition by revoking his ministerial status.

The court rejected this argument for three reasons. First, the plaintiff reported the alleged abuse to the police rather than to the Department of Social Services as required by the reporting statute. As a result, the anti-retaliation provision in the reporting law was not triggered. Second, the plaintiff reported the alleged abuse to the police in 2000, two years before clergy were added to the list of mandatory reporters in Massachusetts. As a result, the antiretaliation provision, which only protects mandatory reporters, did not apply. Third, the court considered it “doubtful” that the plaintiff had “reasonable cause to believe” that, as a result of the transportation arrangement, any of the boy scouts was a victim of child abuse, and therefore no report was required.

Application. This case is important for two reasons. First, the court concluded that the constitutional limitation on judicial intervention in clergy employment disputes applies to “whistleblowers.” Second, the court’s analysis of the anti-retaliation provision in the Massachusetts child abuse reporting law is instructive. Such provisions are common in child abuse reporting laws, but, as this court concluded, they may not protect clergy if (1) they report child abuse to the wrong person or agency; (2) they are not mandatory reporters under state law; or (3) they lacked reasonable cause to believe that child abuse had occurred. Gallagher v. Episcopal Diocese of Massachusetts, 864 N.E.2d 1260 (Mass. App. 2007).

This Recent Development first appeared in Church Law & Tax Report, January/February 2008.

Legal Developments

Fundraising and Designated Gifts

Church board members may be personally liable for diverting designated funds or trust funds to some other purpose.

Richard R. Hammar, Attorney, CPA
Bio


Key point 6-07.05. Church board members may be personally liable for diverting designated funds or trust funds to some other purpose.

* The Massachusetts Supreme Judicial Court ruled that the First Amendment guarantee of religious freedom prevented it from resolving the claims of a donor that her gift to her church should be rescinded due to misrepresentations made by the pastor at the time of the gift. An Italian immigrant (James) established a successful gravel business and owned several tracts of land. Upon the death of James and his wife, most of their property passed to their six children. The pastor of a Catholic church was interested in acquiring an 8-acre tract from the family as the site of a new sanctuary. Two of the six siblings agreed to donate their interest in the land to the church, but the other four siblings were reluctant to transfer their interests until the pastor assured them that the new church would be named "St. James" in honor of their father, and that the church would remain a tribute to James "forever." During the negotiations for the property the pastor did not inform any members of the family that canon law permitted the closure of the church in the future. A church was constructed on the land in 1958. By the 1990s, however, question arose concerning the continuing viability of the church. A local newspaper story listed the church among those that the archdiocese planned to close. The current pastor of the church assured the congregation that the story was false. The church launched a capital fundraising campaign. A retiree in her 80s (Eileen) contributed $35,000 to the campaign. She later testified, "If I had known that the archdiocese … was giving any consideration to closing St. James, I would not have made the gift of $35,000." In 2004, the archdiocese ordered the closure of St. James. During one of the last worship services before the church closed, Eileen asked the pastor, "Why didn't you tell us the church was closing?" He replied, "I didn't know it."

Eileen, as well as the sole surviving sibling to have transferred the land to the church, sued the archbishop. The lawsuit claimed that the oral assurance by church officials that the church would be named "St. James" forever was a binding and enforceable commitment that was breached by the church's closure. The lawsuit also alleged negligent misrepresentation, breach of a fiduciary duty, and asked the court to order a reversion of the property to the surviving sibling.

The Supreme Judicial Court noted that the First Amendment guaranty of religious freedom "places beyond our jurisdiction disputes involving church doctrine, canon law, polity, discipline, and ministerial relationships," and that "among the religious controversies off limits to our courts are promises by members of the clergy to keep a church open." The court concluded that it had jurisdiction over church property disputes "if and to the extent, and only to the extent, that they are capable of resolution under neutral principles of law" involving no inquiry into church doctrine or polity.

The court concluded that the sole surviving sibling who conveyed property to the church had standing, since she gave up her rights in the property in reliance on the pastor's assurance that the property would always be used as a church in memory of James. In other words, her rights were different from members of the congregation generally. Similarly, the court concluded that Eileen had standing to sue:

It is clear that Eileen has alleged an individual stake in this dispute that makes her, and not the state attorney general, the party to bring suit …. A gift to a church generally creates a public charity. It is the exclusive function of the attorney general to correct abuses in the administration of a public charity by the institution of proper proceedings. It is his duty to see that the public interests are protected … or to decline so to proceed as those interests may require. However, a plaintiff who asserts an individual interest in the charitable organization distinct from that of the general public has standing to pursue her individual claims. In this case, Eileen's claims are readily distinguishable from those of the general class of parishioner-beneficiaries …. She claims that she lost substantial personal funds as the result of the archbishop's negligent misrepresentation to her. This claim is personal, specific, and exists apart from any broader community interest in keeping the church open. She has alleged a personal right that would, in the ordinary course, entitle her to standing.

However, the court ruled that the First Amendment prevented it from resolving the sibling's claims. For example, the sibling claimed that the pastor breached a fiduciary duty to her by not informing her at the time she conveyed her interests in the property to the archbishop that the church could be closed according to canon law. In rejecting this argument, the court observed:

A ruling that a Roman Catholic priest, or a member of the clergy of any (or indeed every) religion, owes a fiduciary-confidential relationship to a parishioner that inheres in their shared faith and nothing more is impossible as a matter of law. Such a conclusion would require a civil court to affirm questions of purely spiritual and doctrinal obligation. The ecclesiastical authority of the archbishop and [the pastor] over the parishioners, the ecclesiastical authority of the archbishop over the pastor, the state of canon law at the date of the property transfer … the canonical obligation of the pastor, if any, to inform parishioners of canonical law—all of these inquiries bearing on resolution of the fiduciary claims would take us far afield of neutral principles of law. We decline to hold that, as a matter of civil law, the relationship of a member of the clergy to his or her congregants, without more, creates a fiduciary or confidential relationship grounded in their shared religious affiliation for which redress is available in our courts.

The court also rejected Eileen's claim that the archbishop acted negligently in failing to inform the local pastor of the plans to close the church when he knew he would be soliciting funds to sustain the church "now and for the future." The court noted that Eileen's gift was made in 2002, nearly two years before the archbishop decided to close the church. As a result, the pastor's efforts to raise funds for the maintenance of the church, both now and in the future, was not negligent or a misrepresentation. Maffei v. Roman Catholic Archbishop, 867 N.E.2d 300 (Mass. 2007).

Legal Developments

Clergy—Removal

A Massachusetts court ruled that the civil courts are barred by the first amendment from resolving clergy employment disputes.

Richard R. Hammar, Attorney, CPA
Bio

Callahan v. First Congregational Church, 808 N.E.2d 301 (Mass. Sup. 2004)

Key point 2-04.1. Most courts have concluded that they are barred by the first amendment guarantees of religious freedom and nonestablishment of religion from resolving challenges by dismissed clergy to the legal validity of their dismissals.

Key point 4-02.03. A number of defenses are available to one accused of defamation. These include truth, statements made in the course of judicial proceedings, consent, and self-defense. In addition, statements made to church members about a matter of common interest to members are protected by a "qualified privilege," meaning that they cannot be defamatory unless they are made with malice. In this context, malice means that the person making the statements knew that they were false or made them with a reckless disregard as to their truth or falsity. This privilege will not apply if the statements are made to nonmembers.

Key point 8-23. A reference letter is a letter that evaluates the qualifications and suitability of a person for a particular position. Churches, like other employers, often use reference letters to screen new employees and volunteers. Churches often are asked to provide reference letters on current or former workers. The law generally provides employers with important protections when responding to a reference letter request. However, liability may still arise in some cases, such as if the employer acts with malice in drafting a reference letter.

A Massachusetts court ruled that the civil courts are barred by the first amendment from resolving clergy employment disputes regardless of whether the church is congregational or hierarchical in polity.

A pastor (Pastor Ted) contracted with a local church to serve as its "interim pastor" until the church hired a permanent pastor. Pastor Ted previously had served as an interim pastor at a number of churches throughout New England during much of his thirty-five year career. His first year in his new interim post passed successfully. In the second year, however, a series of events occurred that led to his resignation. He claimed that his problems started after he expressed concerns about the church's alleged "financial recordkeeping, lack of a recent audit, and apparent discrepancies and conflicts of interest." The church council, he claimed, responded to his concerns with hostility. This hostility escalated when he expressed concerns about certain actions taken by the search committee that was reviewing candidates for the permanent pastor's position.

Specifically, he complained to the committee that it had failed to interview a white candidate who was married to an African-American woman, and that it had interviewed but failed to hire a woman that the committee allegedly "perceived to be a lesbian." Throughout his interim ministry Pastor Ted had advocated adopting an "open and affirming" policy toward gay and lesbian candidates for the ministry, and against "homophobia." Due to this perceived hostility, and a health problem, Pastor Ted resigned his position.

Church officers submitted a complaint against Pastor Ted to a regional denominational agency ("regional church") from which he derived the authority to practice ministry. The complaint accused him of "horrible" and "irrational" behavior at council meetings; of breaching an unspecified confidence; and of "flying into a rage"; of misconduct with respect to the church's pledge cards; of mailing a stuffed rat to the church treasurer; and of calling the congregation "evil." A regional church officer allegedly contacted prospective employers that "charges" had been filed against Pastor Ted.

A committee of the regional church investigated the charges, and concluded that Pastor Ted had violated his duty "to work cooperatively with those whom he had been called to serve" by improperly disparaging the leaders and other members of the church, and by failing to keep confidential an administrative discussion with a lay leader after having agreed to do so. The committee also found that he had interfered with the pastoral search process of the church. The committee suspended Pastor Ted's standing as a minister indefinitely.

Pastor Ted sued the church and church council for employment discrimination based on "perceived sexual orientation" and disability, breach of contract, infliction of emotional distress, violation of the right to privacy, interference with contract, and defamation. His lawsuit alleged that a church officer (Robert) informed a church member that he would "do everything he could to ensure that Pastor Ted never practiced ministry again." During that same conversation, the officer accused Pastor Ted of having an "inappropriate relationship" with a seminarian, which the member interpreted to mean a homosexual relationship with a person who was under his supervision. A trial court rejected the church defendants' motion to dismiss on the ground that the church was "congregational" rather than "hierarchical" in polity, and that only clergy employment disputes involving hierarchical churches are barred by the first amendment.

An appeals court conceded that some courts have recognized a distinction between clergy employment disputes involving congregational churches and those involving hierarchical churches, but it concluded that the first amendment barred the civil courts from resolving all clergy employment disputes regardless of church polity. It concluded, "We do not read United States Supreme Court cases as supporting judicial intrusion into matters of religious doctrine involving congregational churches." It quoted from a landmark Supreme Court case from over a century ago that "eloquently explains why this court should not interfere in the disciplinary process" administered by the regional church in this case:

The right to organize voluntary religious associations to assist in the expression and dissemination of any religious doctrine, and to create tribunals for the decision of controverted questions of faith within the association, and for the ecclesiastical government of all the individual members, congregations, and officers within the general association, is unquestioned. All who unite themselves to such a body do so with an implied consent to this government, and are bound to submit to it. But it would be a vain consent and would lead to the total subversion of such religious bodies, if any one aggrieved by one of their decisions could appeal to the secular courts and have them reversed. It is of the essence of these religious unions, and of their right to establish tribunals for the decision of questions arising among themselves, that those decisions should be binding in all cases of ecclesiastical cognizance, subject only to such appeals as the organism itself provides for.

The court stressed that "other courts have declined to distinguish between congregational and hierarchical churches when determining whether they may exercise subject matter jurisdiction over disputes arising from the termination or discipline of a minister or church member" (referring to three cases discussed fully in prior editions of this newsletter). It concluded, "Today we hold that congregational as well as hierarchical churches are entitled to autonomy over church disputes touching on matters of doctrine, canon law, polity, discipline, and ministerial relationships. To conclude otherwise would violate fundamental precepts of the first amendment … guaranteeing free exercise of religion."

However, the court did allow Pastor Ted to pursue his defamation claim against the church officer who insinuated that he was engaged in a homosexual relationship with a seminarian, and that he engaged in violent and bizarre behavior. The court noted that this statement was made a month before the church council submitted its list of charges to the regional church, and so it "fell outside the church disciplinary process. The absolute first amendment protection for statements made by a church member in an internal church disciplinary proceeding would not apply to statements made or repeated outside that context."


Application
. This case illustrates the following important points.

1. In 1976 the United States Supreme Court ruled that the first amendment guaranty of religious freedom prevents the civil courts from resolving employment disputes between churches and ministers. Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 696 (1976). Since this ruling involved an "hierarchical" church, some other federal and state courts have concluded that the case must be limited to hierarchical churches and therefore cannot be applied to congregational churches. The Massachusetts court's decision summarized in this recent development persuasively holds that the general principle announced by the Supreme Court is broad enough to apply to all churches, regardless of polity.

2. The court concluded that the first amendment does more than bar "wrongful termination" claims brought by ministers against their employing church. It also bars the courts from resolving any collateral claims that arise because of the employment relationship, including breach of contract, defamation, emotional distress, and "interference with contract."

3. According to the principle of "interference with contract," a former employer may be liable if it intentionally interferes with an existing employment relationship. To illustrate, assume that a church dismisses an employee (Jill) because of embezzlement, and Jill is later hired by another church. The pastor of the former employer discovers that Jill is now working for another employer, and he calls the employer and shares details about Jill's embezzlement. Based on this unsolicited communication Jill is dismissed by her new employer. She later sues her former church and pastor for "interference with contract." To prove interference with contract, Jill had to demonstrate the existence of a contract (an employment relationship), and some intentional act by her former church or pastor that interfered with that contract. This basis of liability requires the existence of a contract. If Jill's new employer had asked her former employer for a letter of reference prior to the date she was hired, there would have been no interference with contract.

In the Massachusetts case, Pastor Ted claimed that the regional church committed interference with contract by publishing the charges against him in materials sent to affiliated churches. The court concluded that "publication of the ecclesiastical complaint against Pastor Ted [to affiliated churches] was inextricably part of the … disciplinary process," and as such was protected by the first amendment.

4. The court recognized "absolute first amendment protection" for statements made by a church member in the course of an internal church disciplinary proceeding. Courts in many states have recognized this same principle. However, this principle assumes an ongoing disciplinary proceeding. In this case, statements made by a church member regarding Pastor Ted a month before any disciplinary proceeding was initiated were not protected.

Legal Developments

Recent Developments in Massachusetts Regarding Sexual Misconduct by Clergy and Church Workers

A Massachusetts court ruled that a diocese probably was not liable for the sexual molestation of a child by a priest more than twenty years ago.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax1999-03-01

Sexual Misconduct by Clergy and Church Workers

Richard R. Hammar, J.D., LL.M., CPA

• Key point. A church ordinarily will not be legally responsible for the sexual molestation of a child on church property or during a church activity unless it was negligent in hiring or supervising the molester.

• Key point. Church leaders who allow a person to work with children despite evidence of previous misconduct are subjecting the church to possible civil liability on the basis of negligence. Liability will depend on a number of factors, including the age, nature, and credibility of the evidence.

1. A Massachusetts court ruled that a diocese probably was not liable for the sexual molestation of a child by a priest more than twenty years ago. An adult woman sued a diocese, claiming that it was responsible for injuries she sustained when she was molested by a priest more than twenty years ago when she was four or five years old. The court noted that “the only shred of evidence” that the diocese had notice of the priest’s pedophiliac propensities before the time of the victim’s molestation was a response to a question in a 1963 confidential investigation of the priest. The question asked “has he conducted himself with persons of the other sex in such a way as to cause scandal, criticism or suspicion?” The answer to this question was “yes.” The court concluded that “it is doubtful that the questionnaire’s answer to this question alone would be sufficient to permit a jury to reasonably infer that the diocese had notice of [the priest’s] proclivities in regard to possible molestation of a young female child prior to the incidents alleged in this case” and that it “would be inclined” to dismiss the case against the diocese if this were the “only evidence bearing on notice to the diocese of [the priest’s] misconduct.” However, the court refused to dismiss the case (and allowed it to proceed to trial) because the diocese had wrongfully withheld this document in response to a court order to turn over all evidence pertaining to the priest. The court concluded that the diocese’s failure to turn over this document “constituted serious and culpable non-compliance with the Massachusetts Rules of Civil Procedure and with this court’s express order where, as here, the production of the 1963 Report could lead to the discovery of other evidence concerning the diocese’s knowledge about [the priest’s] sexual activities.”

The court cautioned that the woman “has many obstacles to overcome in order to prevail in this case (including, in addition to proof that the diocese had notice of [the priest’s] alleged activities, the immunity and statute of limitation defenses, and the difficulty of proving the veracity and accuracy of her memory of events at a time when she was only four or five years old).” Nevertheless, “she should certainly not be deprived of a fair opportunity to do so by the wrongful non-disclosure of relevant documents.”

Application. This case illustrates an important point. While churches and denominational agencies generally are liable for a worker’s acts of child molestation if they had knowledge of previous misconduct of a similar nature, this will not always be the case. Courts may consider the age and nature of the evidence in deciding whether or not a church was “on notice” of a worker’s propensity to molest children. In this case, the only evidence that the priest posed a risk of molesting children was an ambiguous response to a question in a 1963 confidential investigation of the priest. The question asked “has he conducted himself with persons of the other sex in such a way as to cause scandal, criticism or suspicion?” The answer to this question was “yes.” The court suggested that the age and nature of this evidence was insufficient to place the diocese on notice more than 30 years later that the priest posed a risk of molesting children. This case will be helpful to any church that is sued on the basis of negligence for a worker’s acts of child molestation, if the evidence of previous misconduct was both many years old and not directly associated with child abuse or similar crimes. On the other hand, church leaders should recognize that some courts may be more aggressive in holding churches responsible for acts of child molestation though the evidence available to church leaders was old or ambiguous. For example, assume that church leaders allow a convicted pedophile to work with children. They dismiss the relevance of the prior conviction because it occurred 20 years ago. This would be a very dangerous decision, since there is no known case of a pedophile being “cured.” As a result, the fact that the conviction occurred 20 years ago would not lessen the risk that the person poses to children in the church. If he molests a child on church premises or during a church activity, a court might conclude that the church was negligent in hiring him because of its knowledge of the 20-year-old incident of pedophilia. Yerrick v. Kelley, 1998 WL 374941 (Mass. Super. 1998). [Seduction of Counselees and Church Members, Negligence as a Basis for Liability, Denominational Liability]

© Copyright 1999 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m67 m40 c0299

Legal Developments

Defamatory Statements

Expressions of opinion cannot be considered defamation.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1997-09-01

Libel and Slander

Richard R. Hammar, J.D., LL.M., CPA

• Key point. To be defamatory, an utterance must contain a false statement of fact rather than an expression of an opinion.

A Massachusetts court ruled that statements made by a pastor about a member of a church committee could not be defamatory since they were mere expressions of opinion. A member of a church was elected to the Christian Education Committee of the church for three consecutive three—year terms. During the course of her service on the committee, the member and the church’s pastor developed a personality conflict and clashed on several occasions on a variety of church—related issues. The pastor communicated her opinion on the member’s job performance to the church congregation, and distributed a book entitled “Antagonists of the Church” to members of the church’s nominating committee for their consideration in evaluating the member’s suitability for renomination at the end of her current term on the committee. The church’s nominating council did not renominate the member for another term on the Christian Education Committee and, as a result, she filed a lawsuit against her pastor alleging defamation. She claimed that the pastor had defamed her by giving a copy of the book “Antagonists in the Church” to the nominating committee and by telling them that the book “might be helpful … in their decision making” regarding her reappointment to the education committee. A trial court dismissed the case, and the member appealed. A state appeals court upheld the trial court’s dismissal of the case. The court noted that “to recover for defamation the plaintiff must establish (a) a false and defamatory statement of fact concerning another; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) … harm caused by the publication.” The court concluded that the pastor’s communications were not defamatory since they were mere expressions of opinion rather than statements of fact as required to support a defamation claim.

Application. This case illustrates an important point-most courts have limited defamation to false statements of fact as opposed to expressions of opinion. Therefore, in deciding whether or not communications made by church leaders to members of the congregation are defamatory, most courts will first determine if the communications contained statements of fact as opposed to expressions of opinion. Of course, even if the communications contained statements of fact, they cannot be defamatory unless they were “published” or communicated publicly, they were false, and they injured someone’s reputation. DeLong v. Giles, 1996 WL 224477 (Mass. App. 1996). [Officer of the Church Corporation]

© Copyright 1997, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m53 m29 c0597

Legal Developments

11,000 Nonprofits Lose Status

Organizations failed to file proper paperwork.

Richard R. Hammar, Attorney, CPA
Bio

Brattman v. Secretary of the Commonwealth, 658 N.E.2d 159 (Mass. 1995)

Key point: In many states, incorporated churches can lose their corporate status by failing to submit an annual corporate report to the secretary of state.

The Supreme Judicial Court of Massachusetts upheld an action by the secretary of state revoking the corporate status of 11,000 nonprofit corporations that failed to file their annual corporate reports as required by state law!

Massachusetts nonprofit corporation law specifies:

If the corporation fails to submit its [annual report] for two successive years, the state secretary shall give notice thereof by mail, postage prepaid, to such corporation in default. Failure of such corporation to submit the required [report] within ninety days after the notice of default has been given shall be sufficient cause for the revocation of its charter by the state secretary.

Pursuant to this statute, the secretary of state revoked the corporate status of 11,000 nonprofit corporations in Massachusetts that failed to file their annual reports for two consecutive years. These revocations were all preceded by the required notice to the lapsed corporations. The president of a nonprofit corporation whose charter had been revoked filed a lawsuit challenging the actions of the secretary of state. The court ruled in favor of the secretary of state, noting that "it is undisputed that there was sufficient cause to revoke the charters of the corporations since they did not file acceptable annual reports for two consecutive years."

Several articles and recent developments in this newsletter have demonstrated the potential legal advantages of church incorporation. Most importantly, incorporation protects individual church members from personal liability for the negligence or misconduct of other members. Unfortunately, there are many churches that incorporated in the past but that have lost their corporate status.

As this case illustrates, in some states this can occur through a failure to file an annual corporate report with the secretary of state. It is a good practice to periodically check to see if your church is a corporation in good standing. You can do this in most states by contacting the office of secretary of state in your state capital. However, in a few states churches are permitted to incorporate by applying to a local court, and this type of incorporation may not be communicated to the secretary of state. As a result, your church may be incorporated though the secretary of state has no record of it. Fortunately, this is not a common occurrence. In most cases you can be assured that your church is not incorporated if the secretary of state has no record of incorporation.

Legal Developments

Disaffiliated Church Allowed to Retain Property

Although the denomination was hierarchical, court ruled that no trust was created.

Richard R. Hammar, Attorney, CPA
Bio

Key point: A church affiliated with a hierarchical denomination may be able to retain its property if it disaffiliates from the parent denomination, despite a provision to the contrary in denominational bylaws.

A Massachusetts appeals court ruled that a local church could retain its property after disaffiliating from a parent denomination.

The members of a local church voted to amend the church's bylaws to remove all reference to a parent denomination. The executive board of the denomination asked a court to declare the congregational meeting illegal and to rule that all of the church's properties were subject to the control of the denomination.

A trial court ruled that while the denomination was hierarchical in terms of "internal administration, discipline, and matters of faith," it was congregational as far as the control and use of local church property. Accordingly, the court ruled that the congregational meeting was valid and that the local church was the sole owner of its properties. The denomination appealed, claiming that the church was not "congregational" with regard to the ownership of property, and that the church's bylaws were not legally amended.

A state appeals court rejected the denomination's claims and upheld the ruling of the trial court in favor of the local church. First, the court rejected the denomination's claim that the local church was congregational for purposes of property ownership. The court quoted from a Supreme Court ruling defining the terms congregational and hierarchical:

The courts, in answering this question have recognized two broad categories of church government. One is congregational, in which authority over questions of church doctrine, practice, and administration rests entirely in the local congregation or some body within it. In disputes over the control and use of the property of such a church, the civil courts enforce the authoritative resolution of the controversy within the local church itself. The second is hierarchical, in which the local church is but an integral and subordinate part of a larger church and is under the authority of the general church. Jones v. Wolf, 443 U.S. 595 (1979).

The court observed that "[c]ivil courts must accept as binding the decisions of the highest judicatories of a religious organization of hierarchical polity on matters of discipline, faith, internal organization or ecclesiastical rule, custom, or law." However, the court concluded that the denomination was congregational with respect to the ownership of local church property. The court conceded that denominational documents "provide considerable force" to the denomination's claim that it is hierarchical in terms of the control of local church property.

For example, among the matters coming within the jurisdiction of the denomination, according to denominational rules, are "[m]atters concerning church property." Denominational bylaws also specify that the "diocesan bishop, having the overall care of his diocese and its prosperity … supervises all church property in the diocese …." The court continued:

In assessing the [trial judge's] findings, the documents are but part of the evidence. When the testimony at trial is considered, the judge's finding that the parish is congregational in terms of the ownership and management of its property and is not subject to the [denomination] in such matters is not clearly erroneous. The parish, as the judge found, was always a separate legal entity and not a subdivision of any other entity. It had paid for the real estate and its other property with its own funds and always had held title in its own name.

The court also noted that there had been "considerable movement in and out of the [denomination] by individual parishes who took with them their own property without claim by the [denomination]." Based on this evidence, the court concluded that the trial court's finding that the local church was congregational as far as the control and use of its property was concerned was correct.

Next, the court addressed the denomination's claim that the church had not legally amended its bylaws. The denomination argued first that there was not a two-thirds vote as required by the bylaws, since two members were not permitted to vote. In rejecting this argument, court observed: "Under the bylaws … parish members who have failed for twelve months to pay their membership dues are excluded from parish membership. The [denomination's] claim that the vote lacked a two-thirds majority because two members were entitled, but not permitted, to vote is without merit as there was evidence that those two members had not paid dues for twelve months."

Next, the denomination argued that bishop had not approved the church's bylaw amendments as required by denominational rules. In rejecting this position, the court quoted from an earlier court ruling:

Such a regulation, putting it out of the power of the corporation to amend its constitution except with the approval of [a denominational official] is unreasonable and inconsistent with the legal right of control of the affairs of the corporation existing in its membership, and in such form it is utterly subversive of the right of control of a corporation which belongs to its members. Saltman v. Nesson, 88 N.E. 3 (1909).

The court acknowledged that "[t]he articles of organization establish the purposes and governance of a corporation … and where bylaws are in conflict with the articles, the bylaws being subordinate, the articles of organization control." However, the court insisted that the

original articles of organization gave no rights to the [denomination] and under [state nonprofit corporation law] the members were authorized to make any amendment … which they could have included in the original articles. Nothing precluded the … amendment which provided that "the bylaws of the corporation may be amended by a two-thirds vote of the members of the corporation without the consent or approval of any other person." Not only was the amendment authorized, but the original bylaw requiring approval by non-members of the corporation was, itself, of questionable validity.

Finally, the court rejected the church's claim that since the church is hierarchical in terms of internal administration, discipline, and matters of faith, the church's property is held in trust for the denomination. The court noted simply that this position "is refuted by the evidence" since the "original articles of organization did not mention the [denomination]" and "neither the documents nor the testimony suggests that a trust was created." Primate Synod v. Russian Orthodox Church Outside Russia, 617 N.E.2d 1031 (Mass. App. 1993).

Legal Developments

Limited Liability of Charitable Organizations

Does this limitation extend to officers and directors?

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax1994-03-01Recent Developments

Personal Injuries – On Church Property or During Church Activities

Richard R. Hammar, J.D., LL.M., CPA

• Key point: A few states limit the amount of money damages that can be collected against a church or other charity. However, these laws do not necessarily protect officers or directors who are sued personally.

• The Supreme Judicial Court of Massachusetts ruled that a state law limiting the liability of charitable organizations to $20,000 does not apply to officers and directors of a charitable organization who are sued personally. A fire occurring on the premises of a nonprofit center for battered women and children killed two women. A lawsuit was filed against the charity that owned and operated the center. The lawsuit also named the four officers of the charity. Massachusetts law contains the following provision limiting the liability of charities to $20,000 in most cases:

It shall not constitute a defense to any cause of action based on tort brought against a corporation, trustees of a trust, or members of an association that said corporation, trust, or association is or at the time the cause of action arose was a charity; provided, that if the tort was committed in the course of any activity carried on to accomplish directly the charitable purposes of such corporation, trust, or association, liability in any such cause of action shall not exceed the sum of twenty thousand dollars exclusive of interest and cost. Notwithstanding any other provision of this section, the liability of charitable corporations, the trustees of charitable trusts, and the members of charitable associations shall not be subject to the limitations set forth in this section if the tort was committed in the course of activities primarily commercial in character even though carried on to obtain revenue to be used for charitable purposes. General Laws c. 231, sec. 85K.

On the basis of this provision, the court ruled that the charity that owned the center could not be liable for more than $20,000. The court observed:

Section 85K shields charitable organizations from tort liability in excess of $20,000 for torts committed in the course of any activity carried on to accomplish directly the charitable purpose of the organization. The purpose of the statutory limitation on damages is to protect the funds and other assets of charitable institutions so they may be devoted to charitable purposes. While we have expressed concerns about the paltriness of the $20,000 cap, we have sustained [it] against a variety of challenges. The statute must be given the scope intended for it by the legislature.

However, the court ruled that the charity’s officers could be sued personally. It observed: “[I]n our opinion, it is obvious that the provisions of [the statute] do not shield a trustee of a charitable organization from unlimited personal liability …. [The statute] which limits the liability of charitable corporations, as well as the liability of trustees of charitable trusts, does not purport to limit the individual liability of a charitable corporation’s officers of board members.” Morrison v. Lennett, 616 N.E.2d 92 (Mass. 1993).

See Also: Personal Liability of Officers, Directors, and Trustees | Negligence as a Basis of Liability – Defenses

© Copyright 1994, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m58 m56 c0294

Legal Developments

Medical Procedures and Freedom of Religion

Court rules that child must undergo medical procedure in violation of parents’ religious beliefs.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1992-01-01 Recent Developments

Freedom of Religion

Richard R. Hammar, J.D., LL.M., CPA

• The Massachusetts Supreme Judicial Court ordered an 8-year-old girl suffering from leukemia to receive blood transfusions despite her parents’ claim that such procedures violated their religious beliefs. The parents were Jehovah’s Witnesses, a religion that prohibits blood transfusions. A doctor testified that the girl faced certain death without the transfusion. A trial judge ordered the girl to receive transfusions and such other medical treatment as may be required. The judge based his ruling on the following factors: (1) the child’s age; (2) the risk to the child’s life if treatment was not begun; and (3) the substantial chance of a cure and a normal life if the child received treatment. The parents appealed, and the supreme judicial court agreed with the trial judge. It observed: “The state has three interests in having a dangerously sick child receive medical treatment over her parents’ religious objections. First, the state has an interest in protecting the welfare of children within its borders. Second, the state has an interest in the preservation of life, especially when the affliction is curable. Finally, the medical profession is trained to preserve life, and to care for those under its control. The state has an interest in maintaining the ethical integrity of the medical profession.” These interests outweighed the parents’ religious rights, concluded the court. Matter of McCauley, 565 N.E.2d 411 (Mass. 1991).

See Also: The Right to Refuse Medical Treatment

© Copyright 1992, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m47 c0192

Legal Developments

Churches’ Interiors as Landmarks

Designation as a historical landmark may violate a church’s rights.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1992-01-01 Recent Developments

Church Property

Richard R. Hammar, J.D., LL.M., CPA

• The Massachusetts Supreme Judicial Court ruled that the City of Boston could not declare a church’s interior as a “landmark.” Faced with an aging, oversized building, the leaders of a Catholic church adopted a plan to renovate the facility into office, counseling, and residential space. When work began, ten citizens promptly asked the city to designate the interior of the church as a landmark. The city approved the citizens’ request, and prohibited permanent alteration of “the nave, chancel, vestibule and organ loft on the main floor—the volume, window glazing, architectural detail, finishes, painting, the organ, and organ case.” Church leaders filed a lawsuit, claiming that their constitutional right to freely exercise their religion was violated by the city’ action. The court agreed. It relied entirely on a provision in the state constitution specifying that “no subject shall be hurt, molested, or restrained, in his person, liberty, or estate, for worshiping God in the manner and season most agreeable to the dictates of his own conscience; or for his religious profession or sentiments; provided he doth not disturb the public peace, or obstruct others in their religious worship.” This provision, noted the court, “plainly contemplates broad protection for religious worship” that was violated by the city declaring the interior of the church as a landmark. In rejecting the city’s claim that it was merely addressing a “secular question of interior design,” the court observed that “the configuration of the church interior is so freighted with religious meaning that it must be considered part and parcel of [Catholic] religious worship.” Accordingly, the court concluded that the state constitution “protects the right freely to design interior space for religious worship, thus barring the government from regulating changes in such places, provided that no public safety question is presented.” Society of Jesus v. Boston Landmarks Commission, 564 N.E.2d 571 (Mass. 1991).

See Also: Landmarking

© Copyright 1992, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m21 m47 c0192

Legal Developments

Court Refused to Order a Church to Honor the Real Estate Contract

Church treasurer was without legal authority to sign a real estate sales contract for the sale of church property.

Richard R. Hammar, Attorney, CPA
Bio

A Massachusetts appeals court ruled that a church treasurer was without legal authority to sign a real estate sales contract for the sale of church property.

The treasurer (who also was a member of the church board) was the only person to sign the contract on behalf of the church. She signed her name without any reference to her official or representative capacity. The church constitution specified that sales of church property had to be authorized by the church board. However, the board never authorized the sale in question. The church refused to honor the contract, and the buyer filed a lawsuit seeking a court order compelling the church to comply.

A trial court ruled in favor of the church, and the buyer appealed. The appeals court affirmed the trial court's decision on the basis of two considerations. First, the buyer had been negligent in not making a sufficient inquiry into the authority of the treasurer to unilaterally sign contracts. The court observed: "[T]he purchaser made inquiry only of the [real estate] broker and accepted his assurance of authority. Customary evidence of authority to act on behalf of a corporation, such as a clerk's certificate of vote, was never sought, and had the [purchaser] done so, he would have found, as the [trial] judge found, that no other officer or director of the corporation was ever aware of the transaction. The [trial] judge was correct in concluding that [the treasurer] had not been granted authority to sign the agreement."

Second, the court concluded that a treasurer has no legal authority to sign contracts unilaterally on behalf of a church corporation. The court noted that the treasurer "was not authorized to sign the agreement by virtue of her office as treasurer. The power of an officer of a charitable corporation to bind the corporation is narrowly construed in Massachusetts, and it most certainly does not extend to agreements to dispose of real estate owned by the corporation …." The court also rejected the buyer's argument that the treasurer had "apparent authority" to sign the contract on behalf of the church.

Apparent authority exists whenever a corporation leads others to believe that a particular individual is authorized to execute contracts on behalf of the corporation when in fact no such authority exists. The court, in rejecting the application of the apparent authority doctrine in this case, noted that "where the sale of corporate real estate is outside the scope of the corporation's usual activity, the doctrine of apparent authority does not apply.

The constitution of this corporation recites the 'nature and end of the congregation' to be 'the perfection of the love of God and man,' and that the congregation is to minister 'to the needs of contemporary society in domestic and foreign missions through Christian education, health care services, spiritual and corporal works of mercy.' These purposes and activities are obviously unrelated to the sale of real estate."

As a result, the court refused to order the church to honor the real estate contract. Of course, a church treasurer who signs a legal document without authorization may be personally liable for the debt or obligation if the church does not agree to honor the transaction.

What this means for churches

Church officers and directors should never sign contracts or other legal documents on behalf of a church unless (1) they clearly are authorized to do so by the church charter, bylaws, or a resolution of the church board or membership, and (2) they sign in a "representative" capacity (i.e., indicating that they are signing on behalf of the church). Biscegelia v. Bernadine Sisters, 560 N.E.2d 567 (Mass. App. 1990). [PCL8G3]

Legal Developments

Counseling Center’s Request for Building Permit Denied

The services offered would not have been for “religious purposes” as required by zoning law.

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1991-01-01 Recent Developments

Zoning

Richard R. Hammar, J.D., LL.M., CPA

• A Massachusetts appeals court upheld a city’s denial of a pastoral counseling center’s application for a building permit to convert space in a church building into a counseling center. A Congregational church opened a pastoral counseling center in 1976. To extend its reach beyond the immediate congregation to the broader community, the center relocated to the Andover-Newton Theological School and became an ecumenical practice. To emphasize the continuity between pastoral counseling and church activity, the center later decided to relocate in a local church. It made arrangements with a Baptist church to rent a portion of its facilities for a ten-year term. The counseling center planned to use 6 pastoral counselors who would see about 120 clients per week. Counseling sessions would last about fifty minutes, for which a fee of $35 to $50 would be charged. The counselors were prepared to treat a variety of problems, including depression, grief, marital difficulties, substance abuse, job stress, and loneliness. The counseling center is open to the general public, and its clientele is not limited to Baptists, Christians, or even believers in God. Further, the counselors do not proselytize. The city denied the center’s application for a permit to remodel a portion of the church into a counseling center, since this activity would not be for “religious purposes” as required by the zoning law. The court noted that “the services offered by the center, and its method of delivering them are not significantly different from what a neutral observer coming upon the scene would size up as a mental health center applying standard psychological and psychiatric techniques.” The court acknowledged that “religious activity, to be sure, may involve more than prayer and worship.” However, on the other hand, “some theological, inspirational or spiritual content does not automatically imbue an activity with a religious purpose.” The court emphasized that the center would be operated by a tenant rather than by the church itself, and “is not designed primarily for parishioners of that church. Specific religious doctrine is subordinated, and the doctrinal faith of the counselors is to play no role in the counseling sessions. The readiness to give psychological counseling to nonbelievers illustrates that, depending on the reaction of the particular client, religion may be absent from certain counseling sessions altogether.” Under these circumstances, the court agreed with the city’s conclusion that the center would not be operated for a “religious purpose” as required by law. The court did acknowledge that a pastoral counseling center located in a church building and operated by the church primarily for its own members would be a religious purpose. Such was not the case here. Needham Pastoral Counseling Center, Inc. v. Board of Appeals, 557 N.E.2d 43 (Mass. App. 1990).

© Copyright 1991, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m82 m37 m21 c0191

Legal Developments

Audits

Churches

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1990-09-01 Recent Developments

Audits – churches

Richard R. Hammar, J.D., LL.M., CPA

• A federal district court in Massachusetts addressed the issue of IRS audits of churches, and ruled that the IRS had exceeded its authority in seeking to subpoena a church’s records. In 1988, an IRS regional commissioner sent a “notice of tax inquiry” to the Church of Scientology of Boston, stating that he had reason to believe that the church might have lost its tax-exempt status because of substantial commercial activities and distribution of funds to private individuals. After receiving written responses from the church to several questions, the IRS determined that an examination of the church’s books, records, and activities was necessary. Accordingly, the IRS sent the church a “notice of church examination.” Following a conference with church officials, the IRS issued a subpoena ordering the church to produce some 200,000 pages of materials. When the church refused to respond to the subpoena, the IRS sought a court order compelling the church to respond. The court began its opinion by noting that “the IRS has broad authority with respect to tax inquiries.” However, this authority is limited in at least three ways. First, Congress “scaled back” this authority when it enacted the Church Audit Procedures Act in 1985. This legislation was enacted “to insure that the IRS does not embark on an impermissibly intrusive inquiry into church affairs.” The Act provides churches with several protections. For example, a “church tax inquiry” can only begin if “a high-level [IRS] official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church may not be exempt, by reason of its status as a church … or may be carrying on an unrelated trade or business … or otherwise is engaged in activities subject to taxation.” Proper notice, including an explanation of the concerns which gave rise to the inquiry, and a statement of the general subject matter of the inquiry, must be given to the subject church. The church also must be apprised of its constitutional and legal protections. Both church records and activities may be examined, but only to the extent necessary to determine either liability for tax or whether the organization in fact qualifies as a church. Examinations must be completed within two years. Second, in addition to the requirements of the Church Audit Procedures Act, several federal court rulings have required that an IRS subpoena of church records must satisfy the following three tests (in addition to satisfying the provisions of the Act): (1) the investigation is being conducted pursuant to a valid purpose, (2) the requested information is necessary to that purpose, and (3) the requested information is not already in the possession of the IRS. Third, federal law provides that if the IRS wants to retroactively revoke the tax-exempt status of a church, then it must show either that the church “omitted or misstated a material fact” in its original exemption application, or that the church has been “operated in a manner materially different from that originally represented.” The court in this case emphasized that the IRS violated both the second and third protections. The second protection was violated since the IRS failed to establish that its massive document request was “necessary” to accomplish its intended purpose. The third protection was violated since the IRS had attempted to retroactively revoke the church’s tax-exempt status without alleging that the church had “omitted or misstated a material fact” in its original exemption application, or that the church has been “operated in a manner materially different from that originally represented.” Accordingly, the court refused to enforce the IRS subpoena. It stressed that “the unique status afforded churches by Congress requires that the IRS strictly adhere to its own procedures when delving into church activities.” The safeguards afforded churches under federal law prevent the IRS from “going on a fishing expedition into church books and records.” United States v. Church of Scientology of Boston, 90-2 U.S.T.C. para. 50,349 (D. Mass. 1990).

© Copyright 1990, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m04 m71 c0690

Legal Developments

Schools – Part 1

Church Law and Tax 1990-03-01 Recent Developments Schools Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1990-03-01 Recent Developments

Schools

Richard R. Hammar, J.D., LL.M., CPA

• A federal appeals court ruled that the constitutional guaranty of religious freedom did not exempt a fundamentalist Christian school from state approval. The Massachusetts compulsory attendance law requires children to attend schools (public or private) that have been “approved” by the state. Private schools are approved if their educational program is comparable (in thoroughness and efficiency) to public education. A Baptist church claimed that it was a sin to “submit” its private school to secular authority for approval, and accordingly that the law subjecting the school to state approval violated the constitutional guaranty of religious freedom. Specifically, the church’s religion taught that “God is the sovereign and the final authority in all human conduct [and that] to submit [the church’s] educational ministry for the prior or continued approval of secular authorities would violate the sovereignty of Christ over his church and would, therefore, be a sin.” To help resolve the controversy, the church proposed that its students voluntarily take standardized tests to assure the competency of the school’s educational program, and the test results be shared with the state. A federal trial court agreed with the church, and found that requiring state “approval” of the school violated the church’s constitutional rights. The state of Massachusetts appealed, and a federal appeals court reversed the trial court’s decision and ruled in favor of the state. The court conceded that the state’s “approval” requirement violated the sincerely-held religious beliefs of the church. However, it concluded that the state law was supported by a “compelling” governmental interest that outweighed the church’s religious convictions. It observed that “it is settled beyond dispute that the state has a compelling interest in insuring that all its citizens are being adequately educated.” The court cited with approval an earlier pronouncement of the United States Supreme Court: “A substantial body of case law has confirmed the power of the states to insist that attendance at private schools, if it is to satisfy state compulsory-attendance laws, be at institutions which provide minimum hours of instruction, employ teachers of specified training, and cover prescribed subjects of instruction …. If the state must satisfy its interest in secular education through the instrument of private schools, it has a proper interest in the manner in which those schools perform their secular educational function.” Finally, the court rejected the church’s claim that the state’s interest in competent education could be satisfied through voluntary standardized testing. It noted that “tests, at best, reveal what has occurred.” Further, can the state be certain that “good results reflect good teaching … rather than simply teaching the answers to questions the teachers believe will appear on tests?” The court acknowledged that some states allow mandatory standardized testing to monitor the quality of private education (it cited Alaska, North Carolina, South Dakota, and West Virginia). However, the court could find no state that uses voluntary testing to insure the adequacy of private education. New Life Baptist Church Academy v. East Longmeadow, 885 F.2d 940 (1st Cir. 1989).

© Copyright 1990, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m65 m47 c0290

Legal Developments

Building Projects

Church Law and Tax 1990-01-01 Recent Developments Building Projects Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1990-01-01 Recent Developments

Building Projects

Richard R. Hammar, J.D., LL.M., CPA

• A Massachusetts court ordered a Jewish synagogue to install a sprinkler system during a remodeling project. The 20-year-old building was undergoing a $500,000 renovation that included installation of new “hung ceilings.” The remodeling plans (which were approved by the city) did not call for the installation of a sprinkler system. After the remodeling was completed, town officials notified the congregation that the project violated a state law requiring sprinkler systems to be installed during any “substantial alteration” of a building. The congregation asked a court to determine whether or not it violated the state law, and the court agreed with town officials that the law had been violated. The court reasoned that the remodeling affected a substantial portion of the building, with extensive work being done on the ceilings (which would have made the installation of the sprinkler system relatively simple during the construction phase). The congregation was ordered to install a system at a cost nearly double what would have been charged had the system been installed during construction. Congregation Beth Sholom v. Building Commissioner, 537 N.E.2d 605 (Mass. 1989).

© Copyright 1990, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m35 m21 c0190

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