The Ministerial Exception and Disability Discrimination

The First Amendment generally bars courts from resolving church employment disputes.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Clergy - Removal, Schools

Church Law & Tax Report

The Ministerial Exception and Disability Discrimination

The First Amendment generally bars courts from resolving church employment disputes.

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

Key Point 8-10.1. The civil courts have consistently ruled that the First Amendment prevents the civil courts from applying employment laws to the relationship between a church and a minister.

A federal court in Michigan ruled that it was barred by the “ministerial exception” from resolving a disability discrimination claim brought by a teacher against a church-operated school. The court began its opinion by observing that “for the ministerial exception to bar an employment discrimination claim, the employer must be a religious institution and the employee must have been a ministerial employee.” There was no dispute in this case that the school was a religious institution and so the focus shifted to the question of whether the teacher was a ministerial employee. The court concluded that she was. It noted that the exception “most clearly applies to clergy and ordained ministers,” but “it is not limited to such employees.”

To determine if other employees fall within the exception, courts consider whether “the employee’s primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship.” Accordingly, “an employee may be considered ministerial, although not ordained, depending on the function and actual role of his or her position in the religious institution.” The court concluded that the duties of the teacher in this case clearly made her a ministerial employee to whom the ministerial exception applied:

The separation of church and state in the United States has made federal courts inept when it comes to religious issues; the inquiry into the value of an employee in furthering a religious institution’s sectarian mission is no different. The lack of clarity in federal court cases regarding elementary school teachers should not hinder churches from valuing teachers as important spiritual leaders and deciding who will fill those positions as ministerial employees, subject, of course, to inappropriate uses of the title “minister” as subterfuge. For these reasons, it seems prudent in this case to trust [the school’s] characterization of its own employee in the months and years preceding the events that led to litigation. Because it considered the teacher to be a “commissioned minister” and the facts surrounding her employment in a religious school with a sectarian mission support this characterization, the court concludes that the teacher was a ministerial employee. If, on these circumstances, the Court were to conclude otherwise, it would risk infringing upon the school’s right to choose its spiritual leaders.”

Having found that the school was a religious institution, and the teacher was a ministerial employee, the court concluded that it had no alternative but to dismiss the case. E.E.O.C. v. Hosanna-Tabor Church and School, 582 F.Supp.2d 881 (E.D. 2008).

This Recent Development first appeared in Church Law & Tax Report, September/October 2009.

Legal Developments

Church Barred from Suing Insurer

Obtain legal advice before signing an insurance contract.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Insurance

Church Law & Tax Report

Church Barred from Suing Insurer

Obtain legal advice before signing an insurance contract.

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

Key Point 10-16.7. A liability insurance policy provides a church with a legal defense to lawsuits claiming that the church is responsible for an injury, and it will pay any adverse settlement or judgment up to the limit specified in the policy. Liability insurance policies exclude a number of claims. For example, some policies exclude injuries based on criminal or intentional acts and claims for punitive damages. A church has an obligation to promptly notify its insurer of any potential claim, and to cooperate with the insurer in its investigation of claims.

A Michigan court ruled that a church was barred from suing its insurer for property damage it sustained in a fire on the basis of a release agreement it signed and a two-year limitations period in the insurance contract. A fire damaged a church building and its contents. The church immediately notified its insurer, and the insurer began assessing covered losses. The parties did not entirely agree on what was damaged or what damage was caused by the fire. Among other items at issue were the building’s lead coated copper dome roof, interior iconography or murals, church bells and associated electrical wiring, and chalices and candle stands. The parties exchanged correspondence regarding plaintiff’s claims and a possible settlement. Eventually the insurer informed the church that it would not cover damage to the dome. The same letter offered the church a final opportunity to accept a compromise settlement in exchange for a release. A few weeks later, after some additional analysis of the roof, the church signed a release that covered “all claims for all damages sustained except for any possible damage to the exterior lead coated copper sheathing covering the building dome.”

Later, the church claimed that the insurer was obligated to pay the balance of the iconography and copper dome roof damage arising out of the fire. The insurer declined, noting that the damage to the iconography was barred by the release, and the damage to the dome was “time barred” since the church presented this claim beyond the deadline specified in the insurance contract. The church filed a lawsuit in which it asked the court to compel the insurer to pay both claims. The court determined that the church’s domed roof claim was time-barred, but ruled that the church’s iconography claim could proceed to trial. Both parties appealed.

A state appeals court dismissed both of the church’s claims. In dismissing the church’s claim that the insurer was obligated to pay for the damaged iconography, the court stressed that “the plain terms of the release demonstrate that the church discharged ‘all claims and causes of action’ for ‘all damages sustained’ other than possible damage to the exterior of the domed roof. We must give the words used in a contract their plain and ordinary meaning … and there is no broader classification than the word ‘all’ in a release.” The court added that since the iconography was not part of the exterior of the domed roof, “the release bars the church’s claim for damage to its iconography.”

The court then addressed the church’s claim that the insurer was obligated to pay for the damage to the domed roof. It noted that the insurance contract contained a two-year contractual limitations period, under which claims had to be submitted within two years after a physical loss. Since the church did not submit this claim for more than two years after the loss, it was barred by the contract.

Application. This case is important for two reasons. First, it demonstrates the importance of being familiar with the terms of release agreements. Given the potential significance of such agreements, they should never be signed by church leaders without first obtaining legal advice. Second, this case illustrates the importance of being aware of any limitations periods in a church’s insurance contracts. Most insurance contracts contain such provisions, which require the insured to bring any legal claims within a specified period following a loss. Unfamiliarity with such provisions can result in the denial of otherwise valid claims. Assumption Greek Orthodox Church, 2008 WL 5046311 (Mich. App. 2008).

This Recent Development first appeared in Church Law & Tax Report, July/August 2009.

Legal Developments

Land Use Regulations

A federal district court in Michigan ruled that a city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying a church the right to use its property for church purposes on the basis of a parking ordinance.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Church Property, Zoning

Church Law & Tax Report

Land Use Regulations

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

Key point. The federal Religious Land Use and Institutionalized Persons Act prohibits state and local governments from imposing a land use regulation in a manner that imposes a substantial burden on the exercise of religion unless the regulation is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest.

* A federal district court in Michigan ruled that a city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying a church the right to use its property for church purposes on the basis of a parking ordinance. A church congregation wanted to relocate because an increasing number of members lived in another part of town. The church found a two-story building in the target area and began considering its purchase for use as a church. The building was located in a zoning district in which churches were a permissible use. To operate as a church, however, a “certificate of occupancy” had to be obtained.

The church’s pastor began meeting with the city’s zoning director. The pastor claimed that the director welcomed the church’s purchase of the property and assured him that the building could be used as a church. Based on these representations, the church purchased the building. The pastor later alleged that the church would never have purchased the building if the zoning director had not represented that the building could be used as a church.

Several months later, after discovering that the building was being used for church services, the city sent a letter to the pastor indicating that the church would have to vacate the building because it did not have a certificate of occupancy permitting the use of the property as a church. A state trial court later issued an order requiring the church to cease and desist using the building.

The main reason the church was unable to obtain a certificate of occupancy was that the city required 95 parking spaces and the property only had 73.

The church filed suit in federal court, claiming that the city’s denial of the certificate of occupancy violated the Religious Land Use and Institutionalized Persons Act (RLUIPA). RLUIPA states:

No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.

This subsection applies in any case in which … the substantial burden is imposed in the implementation of a land use regulation or system of land use regulations, under which a government makes, or has in place formal or informal procedures or practices that permit the government to make, individualized assessments of the proposed uses for the property involved. 42 U.S.C. § 2000cc.

RLUIPA defines a “land use regulation” as “a zoning or landmarking law, or the application of such a law, that limits or restricts a claimant’s use or development of land (including a structure affixed to land), if the claimant has an ownership, leasehold, easement, servitude, or other property interest in the regulated land or a contract or option to acquire such an interest.”

The court noted that are three steps in evaluating the application of RLUIPA to a particular case: (1) Does it apply? (2) Is there a substantial burden to religious exercise? (3) Does the government have a compelling interest that is achieved by the least restrictive means? The court’s analysis of each of these steps is summarized below.

(1) Does RLUIPA apply?

RLUIPA applies if a plaintiff can show that a substantial burden is imposed on religious exercise “in the implementation of a land use regulation under which the government makes … individualized assessments of the proposed uses of the property involved.” An individualized assessment involves a “case-by-case evaluation of the proposed activity.” The court concluded that this requirement was met since the city’s parking ordinance was a land use regulation that involved individualized assessments. While the application of the parking ordinance’s formula for determining the minimum number of parking spaces was “mechanistic” and involved no subjective element, it nonetheless permitted “variances” from the minimum parking space requirements, and the process of granting a variance could involve subjective judgments. As a result, the process was an individualized assessment of a land use regulation, triggering the application of RLUIPA.

(2) Substantial burden

The next issue to consider in a RLUIPA claim is whether the governmental action imposes a substantial burden on religious exercise. If a plaintiff can demonstrate a substantial burden on its religious exercise, then it establishes a prima facie case of a RLUIPA violation.

The church claimed that the city’s denial of the parking variance prevented it from obtaining a certificate of occupancy for the building, which in turn prevented it from use of the building for religious worship. The city argued that the church could not prove the existence of a substantial burden on religious exercise. It claimed that the parking ordinance was “blind” to the particular use of property, and simply considered the number of people on the property. The city further argued that the parking ordinance did not prohibit the building’s use as a church, but simply prohibited use if there was an inadequate number of parking spaces for the total number of people.

The Court disagreed with the city’s position:

Based on the language of RLUIPA, the land use regulation need not specifically target religious exercise. A land use regulation that is specifically blind to religious use of land can still substantially burden religious exercise …. It is undisputed that the parking ordinance prohibits the church from using its building, and that the church wants to use its building for religious exercise. The city had the power to grant a variance to the parking requirement currently barring the church from use of the building, but it did not do so. Therefore, there is an application of a land use regulation which prevents or burdens the church from using its building for religious exercise …. Here, it is undisputed that the church cannot use its building for worship purposes. Worship services are fundamental to the practice and exercise of one’s religious beliefs. Selling its current building and searching for another is not a mere inconvenience to the church. Instead, the court finds that the burden is substantial. Consequently, the court finds that the church has established a prima facie case of a RLUIPA violation by demonstrating that the application of the parking ordinance imposes a substantial burden on its religious exercise.

(3) A compelling government interest and least restrictive means

Once a church establishes a prima facie case of a RLUIPA violation by demonstrating that the land use regulation imposes a substantial burden on religious exercise, the burden shifts to the city to demonstrate that the land use regulation is the “least restrictive means” to further a “compelling government interest.”

The city insisted that regulating parking and traffic in order to protect the safety of citizens is a compelling government interest, and that the parking ordinance is the least restrictive means to achieve that interest. It also claimed that the church’s building had insufficient parking spaces for the intended use, and consequently the overflow parking would clog the surrounding streets endangering the public safety and welfare.

The court concluded that the city’s denial of a parking variance to the church was not supported by a compelling governmental interest, for two reasons. First, the city conceded that it could not explain why three worship space seats corresponded to one parking space, as opposed to four worship space seats to one parking space. As a result, the city failed to prove that “use of worship space will lead to a certain number of extra vehicles affecting parking and traffic.” Second, the city claimed that the parking ordinance was necessary to prevent off street parking along the major street on which the church property was located, thereby keeping the street free for residents’ and emergency vehicles. The court pointed out, however, that parking was already prohibited along the street in question and therefore “there is no possibility that the street will become clogged with parked vehicles.” Given the city’s “lack of evidence demonstrating that if the church used the building for worship there would be overflow parking that would hurt the local traffic situation, an outright prohibition of the use of the building for worship is simply an excessive means to accomplish the city’s stated traffic interest. Therefore … the court finds that the city has failed to show that prohibition of the use of the building for worship is the least restrictive means to accomplish its traffic and parking interests.” The court concluded that the city had failed to rebut the church’s prima facie case of a RLUIPA violation, and therefore the city’s denial of the parking variance and the application of the parking ordinance to bar the church from obtaining a certificate of occupancy violated RLUIPA.

(4) Constitutionality of RLUIPA

The city claimed that RLUIPA was an unconstitutional establishment of religion. The court rejected this claim, relying mostly on a 2005 ruling of the Supreme Court. Cutter v. Wilkinson, 544 U.S. 709 (2005). In the Cutter case, the Supreme Court upheld the constitutionality of a section in RLUIPA protecting the rights of institutionalized persons to exercise their religion. The Michigan court concluded that the Supreme Court’s reasoning in the Cutter case “can be equally applied to those provisions of RLUIPA involving land use regulations.”

Further, the court concluded that under Section V of the Fourteenth Amendment Congress has the power to enact legislation necessary to secure the First Amendment’s guarantee of religious freedom, including RLUIPA. The court noted that every federal appeals court, and almost all federal district courts which have considered this issue “have found that RLUIPA is a constitutional use of congressional power.”

(5) Equal protection claim

The church argued that the city’s denial of the certificate of occupancy was a violation of the Constitution’s guaranty of the equal protection of the laws, since there was evidence that the city had granted certificates to two other religious congregations that had used the property in the past. The court agreed: “The church has brought forward evidence showing that it has been treated differently than the two previous churches which had lawfully occupied the building and that it has been treated differently than the other city entities who did not need to go through the same administrative procedures as it did in order to receive a certificate of occupancy or site plan approval.”

Application. This case is important for three reasons. First, it represents an excellent analysis of the application of RLUIPA to a city land use regulation restricting a church’s ability to engage in worship. The three-step analysis, and the court’s rejection of each of the city’s predictable arguments, will be helpful to any other church that finds itself in a similar situation.

Second, the court upheld the constitutionality of RLUIPA. Significantly, it relied on the United States Supreme Court’s 2005 ruling upholding the constitutionality of RLUIPA’s “institutionalized persons” protections.

Third, the case demonstrates that the constitutional guaranty of the equal protection of the law bars a city from applying land use regulations to a church in a way that is inconsistent with the treatment of other churches in the community. Lighthouse Community Church of God v. City of Southfield, 2007 WL 30280 (E.D. Mich. 2007).

Legal Developments

Church Liability for Injuries on Property

A Michigan court ruled that a church was not liable for injuries a woman sustained since it was an open and obvious hazard that should have been recognized.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Personal Injuries on Church Property or During Church Activities

Church Law & Tax Report

Church Liability for Injuries on Property

A Michigan court ruled that a church was not liable for injuries a woman sustained since it was an open and obvious hazard that should have been recognized.

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

Key point 7-20.1. In most states, whether a church is liable for injuries occurring on its premises will depend on the whether the victim is an invitee, a licensee, or a trespasser. Churches, like any property owner, owe the highest degree of care to invitees, a lesser degree of care to licensees, and a very minimal degree of care to trespassers. As a result, it is more likely that churches will be liable for injuries to persons who meet the definition of an “invitee.”

* A Michigan court ruled that a church was not liable for injuries a woman sustained when she tripped on an elevated step to exit a pew, since the step was marked with yellow tape and was an open and obvious hazard that should have been recognized. A woman (the “plaintiff”) attended a benefit concert at a church. The floor of the pew row in which plaintiff sat was a step higher than the adjoining aisle, and the edge of the step was marked with yellow tape. The plaintiff stepped into the pew without incident, but at the conclusion of the concert, some two hours later, she stood to leave the church. She forgot that a step existed at the end of the pew row, stumbled into the aisle, and sustained injuries. The plaintiff sued the church, claiming that she was an “invitee” while on the church’s premises, and that the church failed to maintain the premises in a reasonably safe condition and to warn of the unsafe condition. A trial court dismissed the lawsuit, and the plaintiff appealed.

Whether a church is liable for injuries occurring on its premises depends in most states on the victim’s status as an invitee, a licensee, or a trespasser. Churches, like any landowner, owe the highest degree of care to invitees, a lesser degree of care to licensees, and a very minimal degree of care to trespassers. Invitees are persons who are invited to enter onto a landowner’s premises, and generally include church members and others who attend scheduled church services and activities. The court noted that a landowner “has a duty to exercise reasonable care to protect an invitee from an unreasonable risk of harm caused by a dangerous condition on the land.” However, the duty to protect an invitee “does not extend to a condition from which an unreasonable risk of harm cannot be anticipated, or from a condition that is so open and obvious that an invitee could be expected to discover it for himself.”

Deciding if a dangerous condition is open and obvious “depends on whether it is reasonable to expect that an average person with ordinary intelligence would have discovered the danger upon casual inspection.” The court concluded that “this danger was open and obvious, and presented no special aspects that might make it unreasonably dangerous …. Plaintiff admitted that the step was marked with yellow tape on the day the accident occurred. She contended that the tape had been darkened with wear, but admitted that the tape existed …. The marking on the step was sufficient to render any potential danger posed by the step open and obvious.” The court also stressed that the plaintiff admitted that she had stepped into the pew row without incident. The condition was therefore known to plaintiff, and “she could be expected to appreciate the danger of tripping as she approached the step after the concert concluded.”

The plaintiff’s final argument was that even if the step was an open and obvious condition, “special aspects” made it unreasonably dangerous. The court disagreed, noting that to be unreasonably dangerous “there must be something unusual about the step’s character, location, or condition that gives rise to an unreasonable risk of harm.” The plaintiff claimed that the lack of adequate lighting made the condition unreasonably dangerous. However, the court noted that despite the level of light the plaintiff was aware of the step, “having traversed it on her way into the pew.” Holman v. Church, 2007 WL 292979 (Mich. App. 2007).

Resource. We have developed a series of “checklists” that your church can use to reduce the risk of injuries on your premises or during your activities. You can order them by visiting our online bookstore (ChurchLawandTax.com). Click on the “Risk Management and Safety and Inspection Checklists” heading.

Legal Developments

Civil Liability for Failure to Report Child Abuse

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

Richard R. Hammar, Attorney, CPA

Bio

State: Arkansas
Categories: Child Abuse, Child Abuse Reporting

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

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

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

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

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

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

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

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

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

Legal Developments

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

A Michigan court ruled that a church was liable on the basis of negligent supervision for injuries sustained by a small boy.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Church Property, Personal Injuries on Church Property or During Church Activities

Key point 10-11. A church may be legally responsible on the basis of negligent supervision for injuries resulting from a failure to exercise adequate supervision of its programs and activities.
Negligence as a Basis for Liability

A Michigan court ruled that a church was liable on the basis of negligent supervision for injuries sustained by a small boy who slipped and fell off of a piece of exercise equipment on the church's property. A young boy (the "victim") attended a church-based head start program. One day, when the class was outdoors, the victim wandered away from the other children to play on the monkey bars. He was not noticed by the teacher's assistant assigned to his class. While playing on the monkey bars, the victim fell and broke his arm. His mother sued the church, claiming that her son's injury was caused by the church's negligent supervision. A trial court dismissed that case, concluding that the victim's fall and injury "did not occur as a result of any negligence of any individual." A state appeals court concluded that there was enough evidence of negligence that the case should not have been dismissed. The court observed, "A teacher owes a duty to exercise reasonable care over students in his or her charge …. The evidence showed that three teachers were on the playground. The victim wandered away from the group unnoticed by the assistant assigned to his class, climbed on the monkey bars, fell and was injured. There was no evidence that the other teachers were supervising him. Such evidence was sufficient to create a question as to the issue of negligent supervision. It is plausible that the victim would not have wandered off from the group or at least not gone on the monkey bars unsupervised had there been proper supervision."

One judge dissented from the court's ruling. Calling the case a "frivolous action," he observed, "Here, three adults were supervising fifteen children at the time of the accident. The ratio required by the state Department of Consumer and Industry Services is one caregiver present for every ten children …. The child's sudden and unexpected action of losing his grasp of the monkey bars was a true accident. The child fell off the playground equipment owned by the church. There's no allegation of any defect in the equipment. This is an accident. The incident did not occur as a result of any negligence of any individual." The dissenting judge also noted that the church was not guilty of negligence since "greater supervision would not have prevented the victim from losing his grasp of the monkey bars."

Application
. This case illustrates the difficulty often encountered by the courts in applying the principle of negligent supervision. It is true that churches have a duty to exercise reasonable care with regard to the supervision of minors in their custody, and a breach of that duty constitutes negligent supervision for which the church may be liable should an injury occur. However, it is often difficult to define the term "reasonable care." This case is a good example. The evidence showed that no amount of supervision would have prevented the victim from falling from the monkey bars, and so it is difficult to disagree with the trial court's conclusion that the church was not negligent. Daniels v. New St. Paul Tabernacle Church, 2003 WL 1984453 (Mich. App. 2003).

Legal Developments

Personal Injuries on Church Property or During Church Activities

The Michigan Supreme Court ruled that nonmembers who visit churches for noncommercial reasons are “licensees” to whom churches owe a minimal duty of care.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Church Property, Personal Injuries on Church Property or During Church Activities

Key point 7-20.01 In most states, whether a church is liable for injuries occurring on its premises will depend on the whether the victim is an invitee, a licensee, or a trespasser. Churches, like any property owner, owe the highest degree of care to invitees, a lesser degree of care to licensees, and a very minimal degree of care to trespassers. As a result, it is more likely that churches will be liable for injuries to persons who meet the definition of an "invitee."

The Michigan Supreme Court ruled that nonmembers who visit churches for noncommercial reasons are "licensees" to whom churches owe a minimal duty of care making it less likely that churches will be liable for injuries occurring to such persons while on church premises. A woman ("Paula") was injured when she tripped over a concrete tire stop in a church's parking lot. She was visiting the church to attend a Bible study. Paula sued the church, alleging that it negligently placed the tire stops and failed to provide adequate lighting in the parking lot. A jury ruled in favor of the church on the ground that Paula was a "licensee" rather than an "invitee" and therefore the church owed her a minimal duty of care. The state supreme court accepted an appeal of the case "to determine the proper standard of care owed to individuals on church property for noncommercial purposes." The court began its opinion by noting that Michigan, like most states, recognizes three categories for persons who enter upon the land or premises of another: (1) trespasser, (2) licensee, or (3) invitee. Each of these categories corresponds to a different standard of care that is owed to those injured on the owner's premises. As a result, a landowner's duty to a visitor depends on that visitor's status. The court provided the following summary of the duty owed by a landowner to each category of visitor:

A "trespasser" is a person who enters upon another's land, without the landowner's consent. The landowner owes no duty to the trespasser except to refrain from injuring him by "willful and wanton" misconduct.

A "licensee" is a person who is privileged to enter the land of another by virtue of the possessor's consent. A landowner owes a licensee a duty only to warn the licensee of any hidden dangers the owner knows or has reason to know of, if the licensee does not know or have reason to know of the dangers involved. The landowner owes no duty of inspection or affirmative care to make the premises safe for the licensee's visit. Typically, social guests are licensees who assume the ordinary risks associated with their visit. The final category is invitees.

An "invitee" is "a person who enters upon the land of another upon an invitation which carries with it an implied representation, assurance, or understanding that reasonable care has been used to prepare the premises, and make [it] safe for [the invitee's] reception." The landowner has a duty of care, not only to warn the invitee of any known dangers, but the additional obligation to also make the premises safe, which requires the landowner to inspect the premises and, depending upon the circumstances, make any necessary repairs or warn of any discovered hazards. Thus, an invitee is entitled to the highest level of protection under premises liability law. A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if the owner: (a) knows of, or by the exercise of reasonable care would discover, the condition and should realize that the condition involves an unreasonable risk of harm to such invitees; (b) should expect that invitees will not discover or realize the danger, or will fail to protect themselves against it; and (c) fails to exercise reasonable care to protect invitees against the danger.

The court concluded that persons who visit churches for noncommercial purposes should be regarded as licensees to whom a church owes a lower duty of care. It observed,

We conclude that the imposition of additional expense and effort by the landowner, requiring the landowner to inspect the premises and make them safe for visitors, must be directly tied to the owner's commercial business interests. It is the owner's desire to foster a commercial advantage by inviting persons to visit the premises that justifies imposition of a higher duty. In short, we conclude that the prospect of pecuniary gain is a sort of quid pro quo for the higher duty of care owed to invitees. Thus, we hold that the owner's reason for inviting persons onto the premises is the primary consideration when determining the visitor's status: In order to establish invitee status, a plaintiff must show that the premises were held open for a commercial purpose. With regard to church visitors, we [conclude] that such persons are licensees …. The solicitation of entirely voluntary donations by a nonprofit organization is plainly not a commercial activity. Accordingly, a church providing an opportunity for voluntary donations during a religious service that are in no way required to attend the service, i.e., passing a collection plate, does not transform one who attends the church service and elects to make a donation from a licensee into an invitee. Indeed, we imagine that many religious individuals would find it offensive to have their voluntary donations to a church regarded as part of a business or commercial transaction, rather than as a gift intended to aid in various religious good works.

Application. In many cases, a church's liability for injuries occurring on its premises will depend on the victim's status. It is far more likely that a church will be found liable if the victim is an invitee, since a church owes a much greater duty of care to invitees than to either licensees or trespassers. This case makes a strong case for treating visitors to churches as licensees rather than invitees. However, the court cautioned that many states have adopted section 332 of the Restatement of Torts (a respected, but nonbonding legal text), that defines "invitee" to include "a person who is invited to enter or remain on land as a member of the public for a purpose for which the land is held open to the public." The court acknowledged that this language "creates an invitee status that does not depend on a commercial purpose." However, the court declined to adopt this definition. Stitt v. Holland Abundant Life Fellowship, 614 N.W.2d 88 (Mich. 2000).

Sexual Misconduct by Clergy

A court refused to recognize “breach of a fiduciary duty” as a basis for liability by clergy who engaged in a sexual relationship with a counselee.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Counseling, Fiduciary Duty, Sexual Misconduct by Clergy, Lay Employees, and Volunteers

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 Michigan court refused to recognize "breach of a fiduciary duty" as a basis for liability by clergy who engage in a sexual relationship with a counselee.

A male pastor visited a female church member (the "plaintiff") in her home prior to an upcoming surgery. In the months and years that followed, the pastor assumed the role of a pastoral counselor and attempted to help the woman with several personal difficulties she faced.

At some point in the counseling relationship the pastor and plaintiff engaged in a sexual relationship, which was not in any way related to or condoned under church doctrine. Plaintiff claimed that the counseling relationship continued and that the pastor used counseling in order to eventually initiate a sexual relationship with her. She also claimed that prior to initiating a sexual relationship, the pastor engaged in an inappropriate course of conduct such as appearing at her home and school, giving her personal greeting cards and inspirational messages, and discussing inappropriate subjects, including "his perceived sexual inadequacies and private parts."

The plaintiff alleged that the pastor began making sexual advances toward her and when she protested, he misled her with his "distorted views of Christian morality," which confused her because of his "superior" status as pastor of her church. She claimed that the pastor became involved in her life to the extent that his financial and emotional assistance to her was in exchange for sexual relations. Moreover, according to the plaintiff, the Synod, District, and local church had a responsibility to either prevent the pastor from abusing his ministerial role or to intervene and end the relationship in order to protect her. Plaintiff asserted that the Synod, District, and local church all were aware of the relationship and should have ended the pastor's behavior.

The pastor insisted that his relationship with the plaintiff was entirely consensual. According to him, while he initially offered counseling services to the plaintiff, their relationship developed into a friendship and eventually into a sexual relationship. He claimed that while he continued to discuss plaintiff's personal difficulties and continued to attempt to assist her with her problems during their sexual relationship, his assistance was as an individual and friend rather than as a counselor.

The relationship between the pastor and plaintiff continued for five years, at which time the pastor resigned his position and moved away. The sexual relationship ended at about that time. The plaintiff later sued the pastor for breach of fiduciary duty and emotional distress. She sued her church for negligent supervision, and retention, and two denominational agencies for vicarious liability and negligent hiring, supervision, and retention. While the lawsuit was pending, the church and denominational agencies asked the court to dismiss them from the case.

The trial court rejected the agencies' request, noting that questions remained regarding the "adequacy of the system for dealing with abuse allegations" within the denomination. The local church also asked the court to dismiss it from the case. The court agreed to dismiss the negligent hiring claim against the church, since the church had no reason to anticipate the pastor's actions when it hired him. However, the court refused to dismiss the plaintiff's negligent supervision and retention claims against the church. It found that the church may well have had a duty to further investigate the situation once a member of the board of elders raised concerns about rumors of a relationship between the pastor and plaintiff at a board of elders meeting. The plaintiff, church, and denominational agencies all appealed.

The basis of liability in this case

In this situation, liabilty was claimed against the pastor, the church, and two denominational agencies by the plaintiff. The following looks at the various liabilities reviewed in the case.

The pastor's liability for breaching a fiduciary duty

The plaintiff insisted that the pastor was liable on the basis of his breach of a fiduciary duty for the emotional and psychological injuries she suffered as a result of her sexual relationship with him. She noted that the pastor initiated and pursued a relationship with her that was at first non-sexual by doing things such as visiting her at home, in the hospital, and at school. She also alleged that the pastor began making sexual advances to her, "exposing his private parts" to her, and fondling her, all of which resulted in a sexual relationship between them. She claimed that during their sexual relationship, the pastor promised to marry her and encouraged her to divorce her husband.

The pastor insisted that in reality the plaintiff was claiming that he was liable for "seduction," a basis of liability that the Michigan legislature abolished many years before. The court defined seduction as "the act of persuading or inducing a woman of previously chaste character to depart from the path of virtue by the use of any species of acts, persuasions, or wiles which are calculated to have, and do have, that effect, and resulting in her ultimately submitting her person to the sexual embraces of the person accused."

The court conceded that the plaintiff had made allegations that seemed to be more than seduction. For example, when she initially protested the pastor's sexual advances, he misled her "with his own distorted views of Christian morality, in a way that confused and intimidated [her] given [his] superior status as pastor of her church." Moreover, she alleged that "in the guise of offering Christian guidance and counseling [the pastor] began to wrongfully manipulate [her] thought process and decision making in ways that were personally gratifying to him, yet terribly self-destructive and damaging" to her.

The court concluded that these allegations that the pastor misused his superior position as her pastor and counselor in order to achieve a sexual relationship with her suggested that clergy malpractice, rather than seduction, was the basis of her lawsuit. The court observed:

Illustrative of this conclusion is plaintiff's allegation that [the pastor] owed a duty to her … to practice his religious calling in a reasonable, legal and appropriate manner, and to refrain from any acts or omissions that would violate his ministerial trust, and to function in a legal and moral fashion as appropriate to the role of pastor. Michigan does not recognize a claim for clergy malpractice. In fact, the claim of clergy malpractice has been universally rejected by courts in the United States.

The court further rejected the plaintiff's request that it recognize her claim as one for breach of a fiduciary duty rather than clergy malpractice. It explained its reluctance to make such a distinction by referring to the conclusion of another court:

[I]n order for the plaintiff's cause of action to meet constitutional muster, the jury would have to be able to determine that a fiduciary relationship existed and premise this finding on neutral facts. The insurmountable difficulty facing plaintiff, this court holds, lies in the fact that it is impossible to show the existence of a fiduciary relationship without resort to religious facts. In order to consider the validity of [the] plaintiff's claims of dependency and vulnerability, the jury would have to weigh and evaluate … the legitimacy of [the] plaintiff's beliefs, the tenets of the faith insofar as they reflect upon a priest's ability to act as God's emissary and the nature of the healing powers of the church. To instruct a jury on such matters is to venture into forbidden ecclesiastical terrain. On the other hand, if we try to salvage [the] plaintiff's claim by stripping her narrative of all religious nuance, what is left makes out a cause of action in seduction-a tort no longer recognized in New York-but not in breach of a fiduciary duty.

The pastor's liability for emotional distress

The court noted that in order to state a claim for intentional infliction of emotional distress, a plaintiff must show "(1) extreme and outrageous conduct, (2) intent or recklessness, (3) causation, and (4) severe emotional distress. Liability for such a claim has been found only where the conduct complained of has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency and to be regarded as atrocious and utterly intolerable in a civilized community. It has been said that the case is generally one in which the recitation of facts to an average member of the community would arouse resentment against the actor, and lead the average member of the community to exclaim 'Outrageous!'"

The court concluded that the plaintiff's allegations failed this standard: "Stripped of religious overtones, plaintiff essentially alleges that a person pursued her, an adult woman, gained her trust, and eventually engaged in a consensual sexual relationship with her, albeit that her consent was given when she was in a vulnerable position. This type of activity does not rise to the level of conduct necessary to satisfy [this] standard … and could not be reasonably regarded as extreme and outrageous."

Liability of the church and denominational agencies

Since the plaintiff failed to establish that the pastor committed any conduct for which relief was available in a court of law, the appeals court ruled that her claims against the church and denominational agencies also had to be dismissed.

What this means for churches

This case demonstrates the difficulty that counselees face in suing clergy on the basis of "breach of fiduciary duty" for inappropriate sexual contacts. Very few courts have recognized this basis of liability. And, as the court pointed out, counselees ordinarily cannot sue clergy for "seduction" or clergy malpractice. Other bases of liability exist, but they were not pursued by the plaintiff in this case. The case also illustrates another important point-churches and denominational agencies cannot be liable for the misconduct of a minister unless the minister is found liable. Teadt v. St. John's Evangelical Church, 1999 WL 731383 (Mich. App. 1999).

Legal Developments

Church Retreat Exempt from Property Tax

Court makes an important ruling.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Church Law and Tax 1997-05-01

Church Membership

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

• Key point. Most courts regard a church’s membership determinations to be a purely ecclesiastical matter beyond the review of the civil courts.

• Key point. The civil courts will not resolve lawsuits brought by dismissed church members challenging the validity of their dismissal.

A Pennsylvania court ruled that it was barred by the first amendment from resolving a lawsuit by an individual who wanted to be admitted as a member of a church. Besides seeking a court order compelling him to be admitted as a church member, the plaintiff also asked the court to remove the pastor and board as a result of their failure to use appropriate texts for worship in the Episcopal Church. A state appeals court upheld a trial court’s dismissal of the case on the ground that it involved issues of ecclesiastical law and doctrine which the civil courts are powerless to resolve. It relied upon what it called the “deference rule”:

This prohibition on civil courts from deciding issues of ecclesiastical law and religious doctrine, custom, policy and practice is referred to as the “deference rule.” The deference rule provides that civil courts are bound to accept 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.

The court also ordered the plaintiff to pay the church’s attorney fees since the case was so lacking in merit. The court pointed out that the civil courts have consistently followed the deference rule, and that there was no legal precedent in support of the plaintiff’s claims.

Application. This case illustrates the nearly universal view that the civil courts are barred by the first amendment from resolving internal church disputes involving discipline, faith, internal organization, or ecclesiastical rule, custom or law. Further, the case suggests that churches should consider demanding payment of their attorney’s fees in the event they are forced to defend a lawsuit that is dismissed as a result of the deference rule. In re St. Clement’s Church, 687 A.2d 11 (Pa. Common. 1996). [Church Members]

© 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: m19 c0397

Legal Developments

Student Admission at Religious Schools

Court says it cannot get involved in dispute.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Key point. Church—operated schools are protected by the first amendment guaranty of religious freedom in making decisions regarding the admission of students.

A Michigan court ruled that it lacked jurisdiction to resolve a lawsuit brought by parents challenging the refusal by a church—operated secondary school to readmit their children. The court rejected the parents' claim that the school's actions amounted to a breach of an "implied contract" based on its "established pattern" of readmitting students. The court observed:

When [a] claim involves the provision of the very services (or here refusal to provide these services) for which the organization enjoys first amendment protection, then any claimed contract for such services likely involves its ecclesiastical policies, outside the purview of civil law. In this regard there can be no distinction between a church providing a liturgical service in its sanctuary and providing education imbued with its religious doctrine in its parochial school. A civil court should avoid foray into a [dispute] regarding admission to a church's religious or educational activities, the essence of its constitutionally protected function. To do so is to set foot in the proverbial slippery slope toward entanglement in matters of doctrine or ecclesiastical polity …. Here the pleadings demonstrate that [the parents'] claims are so entangled in questions of religious doctrine or ecclesiastical polity that the civil courts lack jurisdiction to hear them.

The court noted that there was no express written contract that the church or school had breached that could be remedied by applying civil law alone. Dlaikan v. Roodbeen, 522 N.W.2d 719 (Mich. App. 1994). [ Right to Attend Private Schools, Discharge and Discipline of Students of Private Schools, Use of Public Property for Religious Purposes]

Legal Developments

Church Liability for Acts of Child Molestation

An important ruling addresses several key issues.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Isely v. Capuchin Province, 880 F. Supp. 1138 (E.D. Mich. 1995)

Summary

A court recently addressed several potential theories of liability in a case brought against a church school and various church agencies by an adult who claimed that as a student he was molested by a priest. The court's ruling contains a helpful analysis of key issues, and addresses a novel issue – is a church legally responsible for a minister's failure to report child abuse? The ruling will be instructive to ministers and other church leaders.

A federal district court in Michigan ruled that a church school and various church agencies were not liable on the basis of negligent hiring, supervision, or retention, for the sexual molestation of a minor student by a priest. The court's ruling addresses a number of key issues that will be directly relevant to all churches. This article will briefly review the facts of the case, summarize the court's decision, and address the significance of the case to other churches.

Facts

An adult male claimed that he had been sexually molested by two priests when he was a student at a church school some twenty years before. The victim claimed that he had repressed his memories of most of the incidents for several years until he engaged in counseling, and that as a result his lawsuit was not barred by the statute of limitations. The victim alleged that the school and various church agencies that supervised the school were responsible for his injuries on the basis of the following theories of liability:

negligent failure to report suspected abuse by the priests to civil authorities

negligent hiring of the offending priests

negligent supervision of the offending priests

failure to adopt a sexual abuse policy

failure to warn the victim or his parents that the offending priests were sex abusers, or prevent the acts of sexual molestation, and

agency

The court's ruling

The court rejected most of these theories of liability, as noted below.

(1) negligent failure to report suspected abuse

The court rejected the victim's claim that school and church officials were responsible for his injuries on the ground that they negligently failed to report their reasonable suspicions of the priests' misconduct to civil authorities. The court based this conclusion on the following grounds:

Rejection by other courts. It noted that "several courts have been called upon to decide this issue in the context of child abuse reporting statutes" and "[a]ll of these courts have concluded that no private right of action can lie for failure to report."

Going after the wrong person. It quoted from another decision finding that "there is no apparent intent to authorize a civil action for failure of an individual to make the oral report …. Furthermore, such an action is not authorized at common law and its maintenance would raise substantial questions of causation since the failure would not in the direct sense, be a proximate cause of the injury to the child. It would, we believe, misdirect judicial time and attention from the very real problems of children in need of services in favor of pursuing collateral individuals, who are presumably capable of responding in money damages, on the ground that they knowingly failed to make an oral report. We conclude that was not within the legislative purpose of the act."

No reasonable cause to believe abuse occurred. It quoted from another decision noting that a child abuse reporting statute "does not require [mandatory reporters] to report every suspicion of abuse. Rather, the statute specifically requires reporting only when there is a reasonable cause to suspect abuse. This requirement calls for the exercise of a [mandatory reporter's] professional judgment." The court then noted that the only evidence of personal reports of molestation to school or church officials were (1) the victim's alleged report to the school's athletic director that one of the priests had massaged his shoulders and ran his hand down his chest to his belt line; and (2) another student's report to an administrator that one of the offending priests had "hurt him, yelled at him, called him stupid, made him feel bad, and made him feel ashamed." The court noted that a school official who allegedly knew of the molestation claimed that he had only "heard rumors."

No "vicarious liability." Finally, the court noted that "[e]ven if the [child abuse reporting] statute were deemed to support a private cause of action, and even if the statute were found to have been violated, dismissal of the statutory negligence claims against [the school and church agencies] would still be required because there can be no vicarious liability for an individual's violation of a statute which mandates actions only on the part of the individual."

(2) negligent hiring

The court, in summarily rejecting the victim's claim that the school and church agencies had been guilty of "negligent hiring," observed:

Questions of hiring and retention of clergy necessarily will require interpretation of church canons, and internal church policies and practices. It is well—settled that when a court is required to interpret canon law or internal church policies and practices, the first amendment is violated because such judicial inquiry would constitute excessive government entanglement with religion …. [An] inquiry into the decision of who should be permitted to become or remain a priest necessarily would involve prohibited excessive entanglement with religion. Therefore [the victim's] claims of negligence predicated upon a negligent hiring theory will be dismissed.

The court further observed that even if there was not a constitutional bar to recognizing a negligent hiring claim in this case, this claim would still have to be dismissed since "there was absolutely not a shred of evidence in the record that either the [school or any church agency] had any notice of the abuse proclivities of [the offending priests] prior to their `hiring' of them as priests or teachers …."

(3) negligent supervision

The court found that there was no constitutional prohibition to the recognition of a negligent supervision claim against a church school or agency, since such claims "can be decided without determining questions of church law and policies." However, the court refused to find the school or church agencies liable on this basis for the following reasons:

The court noted that "only a few jurisdictions" recognize "negligent supervision" as a basis of liability.

No court in Wisconsin (where the molestation occurred) has ever recognized negligent supervision as a basis of liability.

Significantly, the court made the following additional observation:

The precise issue, as this court sees it in this "delayed discovery" tort action, is not whether now-20 years after the occurrences upon which plaintiff's claims are predicated-the Wisconsin Supreme Court would adopt the tort of negligent supervision, but rather whether, had the claim been presented to the Wisconsin Court in 1974—78 [when the acts of molestation occurred] would the court have recognized it then? This is consistent with the generally accepted principle that a tort action is to be determined by application of the law which existed at the time of the occurrence of the events upon which the action is predicated …. This reflects this court's concern … that it would be unfair to juxtapose contemporary mores and contemporary causes of action upon parties for events which occurred in a different era with a different level of social awareness of problems. It is certainly not that this court believes that Wisconsin courts would have tolerated or accepted without providing redress the type of conduct alleged by the plaintiff to have been perpetrated upon him by the alleged abuser priests in question. (Indeed, both criminal and civil actions were clearly available to victims directly against those individuals.) Rather, the concern here is that the law did not then recognize a duty upon the employer to be responsible automatically for such ultra vires conduct of its employees.

(4) failure to have a sexual abuse policy

In rejecting this theory of liability the court observed:

As for the "failure to have a sex abuse policy in place", plaintiff has presented no evidence, nor cited any law, that there existed at the time in question, any duty (either statutory or under common law) to have such a policy in place, and the court has found no cases which might support an allegation of such a duty.

This, perhaps, reflects one of the problems, or challenges, presented to plaintiffs in repressed memory cases. At the time of the sexual abuse incidents in question, the problem of child sexual abuse was not as much in the public conscience as it is today and, consequently, the decisional precedent from courts from that time which might create a duty to have a sex abuse policy simply does not exist, nor had the policy branches of government addressed this problem. Thus, courts sitting today in cases of repressed memory are without statutory or decisional guidance as to the source or nature of any duty that might be alleged relating to past incidents of sexual abuse. However, it is clear to this court that it would be unfair to apply contemporary standards of duty and care to create a cause of action that did not exist at the time of the incidents. Such bootstrapping of past incidents into contemporary mores would place an undue burden on defendants attempting to defend such cases. Unfortunately, in cases of repressed memory, it may be, as here, that the law at the time simply did not provide a cause of action with an attendant remedy.

(5) failure to warn

The court agreed with the victim that a school may have a legal duty to warn students or their parents of the potentially dangerous propensities of a teacher if it has actual knowledge of prior incidents of misconduct by that teacher. The court concluded that school officials had prior knowledge of only two incidents: (1) a student informed a school official that one of the offending priests had "hurt him, yelled at him, called him stupid, made him feel bad, and made him feel ashamed"; and (2) the victim informed the school's athletic director that one of the offending priests massaged his neck and then ran his hand down his chest to his belt line while the two were together in a movie projection booth. The court found that the first incident did not provide the school with adequate prior notice of misconduct to impose a duty to warn students or their parents of the potential propensity of the priest to molest students. It found that these remarks indicated inappropriate disciplinary techniques rather than inappropriate sexual contact. However, the court found that the second incident may have imposed sufficient notice on the school to create a duty to warn. It acknowledged that the athletic director had no recollection of the victim's alleged conversation with him (some 20 years earlier), but decided that a jury would have to determine whether or not the conversation occurred. However, the court did note that neither the school nor any church agency could be liable as a result of the alleged incident that occurred in the movie projection booth, since "[t]his claim is time—barred as plaintiff has admitted all along that he always remembered this incident."

(6) agency

The victim alleged that the school and church agencies were directly responsible for the actions of the offending priests on the basis of agency law. That is, they were responsible for the acts of their "agents." The victim based this theory of liability on section 219(d) of the Restatement (Second) of Agency, a respected but not universally followed legal treatise. Section 219(d) permits the imposition of liability upon an employer for the misconduct of an employee acting outside the scope of employment when it is established that the employee "was aided in accomplishing the tort by the existence of the agency relationship." The court, in summarily rejecting this basis of liability, observed: "[A]s plaintiff admits … the doctrine of section 219(d) has never been applied to priestparishioner relationships, and this court declines to do so in this case."

(7) punitive damages

The court held that neither the school nor any of the church agencies was liable for punitive damages. It noted that under Wisconsin law punitive damages can be awarded in only two situations: (1) "a defendant desires to cause the harm sustained by the plaintiff, or believes that the harm is substantially certain to follow his conduct"; or (2) the defendant knows, or should have reason to know, not only that his conduct creates an unreasonable risk or harm, but also that there is a strong probability, although not a substantial certainty, that the harm will result, but, nevertheless, he proceeds with his conduct in reckless or conscious disregard of the consequences." The court continued:

Wisconsin courts often use the short—hand term "outrageous" for the type of conduct which justifies the imposition of punitive damages. This "outrageous" conduct must be proven by clear and convincing evidence. However, the fact that the conduct on which the suit is based is unlawful and would subject the defendant to criminal prosecution is not itself sufficient to impose punitive damages. Given the "clear and convincing" evidentiary standard which governs the punitive damages, the court finds that the evidence presented is not sufficient to warrant submitting the punitive damages claims to the jury. As indicated above, although there is some evidence of "notice" having been provided to [the school] prior to plaintiff's alleged abuse by [one of the priests] that evidence is far from clear and convincing. The best that can be said is that the evidence presented is contradictory. Without clear and convincing evidence of prior notice there can be no inference that [the school] acted in reckless disregard of plaintiff's rights in failing to prevent his abuse …. Accordingly, plaintiff's claims for punitive damages against the [school and church agencies] will not be submitted to the jury.

(8) statute of limitations

The victim argued that his lawsuit was not barred by the statute of limitations since he filed it shortly after recovering his "repressed memories" of the abuse. The court ruled that "the issue of whether such incidents were truly repressed and, if so, when plaintiff had sufficient recollection of the incidents for purposes of commencing the running of the statutes of limitations were issues for the jury."

Relevance of the case to other churches

What is the relevance of this ruling to other churches? Obviously, a decision of a federal district court in Michigan is of limited significance since it has no direct or binding effect in any other state. Nevertheless, there a number of aspects to the ruling that will be instructive to church leaders in every state. Consider the following:

1. Failure to report child abuse. The court rejected the argument that individuals who fail to report child abuse can be liable for injuries resulting from a continuation of that abuse. This is an important conclusion. Few persons in our society are more likely to know of child abuse than ministers. Ministers may receive information during counseling sessions or from staff members and volunteer workers indicating that a minor is being abused. Ministers who are not "mandatory reporters" of child abuse under state law sometimes choose not to report this information to civil authorities. This case suggests that such a decision may not lead to civil liability if the minor later claims that his or her injuries were aggravated by the minister's failure to report.

The court stressed that no other court had found a person legally responsible for a minor's abuse as a result of a failure to report that abuse to civil authorities. However, a few courts have at least suggested this possibility.

Persons who are mandatory reporters of child abuse under state law may be prosecuted criminally for failing to report known or reasonably suspected cases of abuse.

2. No "vicarious liability" for failure to report child abuse. The court concluded that a church cannot be responsible for a minister's failure to report child abuse, since "[e]ven if the [child abuse reporting] statute were deemed to support a private cause of action, and even if the statute were found to have been violated, dismissal of the statutory negligence claims against [the school and church agencies] would still be required because there can be no vicarious liability for an individual's violation of a statute which mandates actions only on the part of the individual."

This is another very important aspect of the court's decision. Lawsuits against ministers for failing to report child abuse will almost always name the minister's church as an additional defendant in order to have a "deep pocket" out of which to satisfy a verdict or settlement. This case will be a very useful precedent to churches who are named as defendants in such lawsuits.

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

Key point. While the federal court that decided this case was in Michigan, it was applying Wisconsin law since the abuse occurred in Wisconsin. As a result, the court did not address the application of the Michigan statute (discussed below) to the facts of this case.

Key point. Person who are "mandatory" child abuse reporters in Arkansas, Colorado, Iowa, Michigan, Montana, New York, Ohio, and Rhode Island can be sued by victims of child abuse for failure to comply with state child abuse reporting requirements. These lawsuits may be brought in some states many years after the failure to report. It is possible that other state legislatures will enact laws giving victims of child abuse the legal right to sue mandatory reporters who failed to comply with their reporting obligations. It is also possible that the courts in some states will allow victims to sue mandatory reporters (and perhaps those who are not mandatory reporters) for failing to report child abuse even if no state law grants them the specific right to do so. These potential risks must be considered when evaluating whether or not to report known or suspected incidents of child abuse.

Caution. Any reference to a specific state law should not be relied upon without the advice of a local attorney. These laws were current as of date this newsletter went to the printer, but they are subject to change. Also, it is critical to understand the definition of child abuse under state law. A mandatory reporter has a duty to report only those activities (or suspected activities) that meet the definition of abuse under state law. The definition of child abuse varies widely from state to state. For example, in some states child abuse is limited to abuse inflicted by a parent or caretaker. Other states define abuse without regard to the status of the perpetrator.

4. Religious organizations cannot be sued for negligent hiring. This case represents another in a small but growing number of decisions concluding that religious organizations cannot be legally responsible for "negligence" in the hiring or selection of clergy. The court observed:

Questions of hiring and retention of clergy necessarily will require interpretation of church canons, and internal church policies and practices. It is well—settled that when a court is required to interpret canon law or internal church policies and practices, the first amendment is violated because such judicial inquiry would constitute excessive government entanglement with religion …. [An] inquiry into the decision of who should be permitted to become or remain a priest necessarily would involve prohibited excessive entanglement with religion. Therefore [the victim's] claims of negligence predicated upon a negligent hiring theory will be dismissed.

A number of other cases reaching the same conclusion have been reported in this newsletter.

The court also pointed out that even without this limitation the church agencies could not be sued, because "there was absolutely not a shred of evidence in the record that either the [school or any church agency] had any notice of the abuse proclivities of [the offending priests] prior to their `hiring' of them as priests or teachers …."

This illustrates an important point-religious organizations ordinarily cannot be responsible on the basis of negligent hiring for the sexual misconduct of a minister without prior knowledge of information indicating that the minister posed a risk of such misconduct.

5. Negligent supervision of ministers. Another significant aspect of the court's decision was its conclusion that a claim of "negligent supervision" must be evaluated on the basis of what was acceptable supervision when the misconduct occurred rather than when the lawsuit was filed. The court stressed that "[t]his reflects this court's concern … that it would be unfair to juxtapose contemporary mores and contemporary causes of action upon parties for events which occurred in a different era with a different level of social awareness of problems." The point is this-the longer ago an incident of sexual misconduct occurred, the less likely that a church can be legally responsible for that misconduct on the basis of negligent supervision.

Legal Developments

Fiduciary Duties of Pension Plans

Do pension plans have a duty to warn of the tax consequences of withdrawing funds?

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Fiduciary Duty, Retirement Plans

Church Law and Tax 1994-05-01 Recent Developments

Retirement Plans

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

• Key point: Pension plans should carefully review the representations and assurances set forth in their plan documents and informational brochures, since they may be legally accountable to employees if such representations are not honored.

• Do pension plans have a fiduciary duty to warn participants of the tax consequences of a decision to withdraw their funds? That was the question addressed by a federal court in Michigan. An employee received a lump sum distribution from his pension plan in the amount of nearly $120,000 and promptly rolled it over into an individual retirement account (IRA). By investing in an IRA within 60 days of the distribution, the employee avoided income taxes on the funds. However, the employee later removed the funds from his IRA and used them to buy real estate, assuming that he would still not need to pay income taxes on the funds since they had been properly rolled over into his IRA. The employee was wrong in assuming that the funds did not become taxable when he withdrew them from his IRA to buy real estate. The IRS determined that he owed taxes of $33,000 on the transaction. The employee sued his pension fund, claiming that it had breached a “fiduciary duty” to him by not warning him of the tax consequences of withdrawing his funds from the IRA. A federal court rejected the employee’s position and dismissed the lawsuit. The court acknowledged that federal law requires some types of pension plans to inform employees of the tax treatment of distributions they request from their retirement account. However, the court pointed out that the pension plan in this case had provided the employee with a brochure at the time he received the lump sum distribution of his account. The brochure explained that lump sum distributions are taxable unless they are rolled over into an IRA (or other eligible plan) within 60 days. The employee admitted that he received this brochure, but complained that the pension fund did not inform him that once the lump sum distribution was invested in an IRA it could not be removed to buy real estate without becoming taxable. The court disagreed, noting that federal law “does not require that a plan administrator inform a distribution recipient of every possible investment option and tax consequence.” It added that the employee’s tax liability “arose not from the fact that he did not know that he must invest in an IRA within two months of receiving the distribution, but rather because he did not know the consequences of thereafter removing that money from the IRA and investing it in real estate.” The court cautioned that a pension plan may be liable for failing to provide information promised in its promotional or informational literature. However, there were no promises in the pension plan or in any of its promotional materials to provide participants with “information regarding the tax consequences of the various types of distributions.” The lesson of this case is clear—church and denominational pension plans should carefully review the assurances they make in their plan documents and informational brochures, and be certain that they are honoring such assurances. One final point—the court in this case rejected the employee’s argument that he was not bound by the pension plan’s informational brochure because he had not read it. The court observed that the pension plan did “not have a duty to ensure that beneficiaries actually read the material and act upon it. It appears [that the employee] simply did not take the time to read over the material because he was eager to receive the money …. {his] assertion that he did not have ample time to read the material is irrelevant.” Bouteiller v. Vulcan Iron Works, Inc., 94-1 USTC 50,157 (S.D. Mich. 1994).

© 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. c0394

Legal Developments

Release Forms and High-Risk Activities

In some states, release forms signed by competent adults may be recognized in court.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Church Law and Tax 1994-03-01 Recent Developments

Releases from Liability

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

• Key point: “Release forms” signed by competent adults will be recognized by the courts in some states so long as the content of such a form is not misrepresented in any way to the person who signs it.

• A Michigan appeals court ruled that a release form signed by a competent adult prior to participating in a dangerous activity prevented him from suing as a result of injuries he sustained. As part of an annual historic festival a city sponsored a “rope climb” contest. A rope was stretched across a river and participants would hang onto the rope with their hands and attempt to cross the river. The winner was the participant who crossed the river in the shortest period of time. Various cash prizes were awarded to the winner and runners-up, and there was a one dollar entry fee paid by all participants. One participant lost his grasp of the rope and fell head first into the river, sustaining permanent and disabling injuries. He sued the city and the individuals who organized the festival. The city and festival organizers claimed that the victim could not sue because he signed a liability release form. Before participating in the rope climb, each participant was required to sign a form entitled “WAIVER OF LIABILITY” that stated:

In consideration of the possibility injuries which could occur in this event, i hereby release all participating groups and persons officially connected with this event from any and all liability for any injury or damages whatsoever arising from any participation in this event.

Below this statement were several lines for the participants to sign (each participant signed the same form). A trial court ruled that the victim’s signing of this release prevented him from suing anyone on account of his injuries. The victim appealed, and an appeals court agreed with the trial court that the release prevented the victim from suing. The court rejected the victim’s claim that the release was invalid since it did not specifically name every person or organization that was being released from liability. It observed simply that “[i]t was not necessary for the release to individually name each person or entity to be released from liability. The scope of the applicability of the waiver is clear: it waived liability with respect to any person or group responsible for the rope climb event.” The court also rejected the victim’s claim that the release was unenforceable because there had been a mutual mistake. Specifically, the victim alleged that he had failed to read the release before signing it and therefore he could not be bound by it. The court observed:

[O]ne who signs a contract cannot seek to invalidate it on the basis that he or she did not read it or thought that its terms were different, absent a showing of fraud or mutual mistake …. [F]ailing to read a contract document provides a ground for [unenforceability] only where the failure was not induced by carelessness alone, but instead was induced by some stratagem, trick, or artifice by the parties seeking to enforce the contract. This principle is directly applicable to the facts of this case, where [the victim] admits to signing the release contract, but claims that he was not aware of the terms of the document.

The court suggested that had a worker handed the release form to the victim stating that it was merely a sign-up form and of no consequence, then the release might have been unenforceable. The court emphasized that the release statement was in capital letters, and had the words “WAIVER OF LIABILITY” at the top, and thus was written with sufficient clarity “to put a layman on notice that any right to bring a claim of liability for injury or damages arising out of participation in the event was being waived.” The court also rejected the victim’s argument that a separate release must be signed by each participant—”we are aware of not requirement that individual waivers of liability must be executed by each participant in an event rather than all participants signing the same waiver.”

In summary, this case suggests that release forms signed by a competent adult will be given effect unless the nature of the release was misrepresented. As we have pointed out before, it is our position that in some cases it is appropriate for competent adults to sign assumption of risk forms releasing a church from liability for specified risks. An example would be short-term overseas missions assignments by laypersons. If such an assignment involves travel to dangerous parts of the world, then the adult volunteers may be asked to assume the risks of such service as a condition of being accepted for a project. This is much different, however, from churches seeking to exempt themselves from liability for injuries to children occurring because of the negligence of church workers. Churches purchase liability insurance to cover such risks, and so the only real beneficiary of such release forms is the church’s insurance company. Some view a church’s attempt to exempt itself from liability under such circumstances as unethical. Also note that it is much less likely that the civil courts will enforce releases that purport to exempt a church from liability for injuries to minors. It is also our position that churches should not allow a minor child to participate in any church activity (such as camping, boating, swimming, hiking, or some sporting events) unless the child’s parents or legal guardians sign a form that: (1) consents to their child participating in the specified activity; (2) certifies that the child is able to participate in the event (e.g., if the activity involves boating or swimming, the parents or guardians should certify that the child is able to swim); (3) lists any allergies or medical conditions that may be relevant to a physician in the event of an emergency; (4) lists any activities that the parents or guardians do not want the child to engage in; and (5) authorizes a designated individual to make emergency medical decisions for their child in the event that they cannot be reached. Dombrowski v. City of Omer, 502 N.W.2d 707 (Mich. App. 1993).

Legal Developments

Duty to Warn Future Employers

Should a church disclose negative information about a former employee?

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Employment Practices

Church Law and Tax 1991-03-01 Recent Developments

Employee Relations

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

• Does an employer have a legal duty to warn future employers of a former employee’s dangerous propensities? That was the issue before a Michigan appeals court in a recent case. A maintenance worker who worked for a nursing home received 24 disciplinary warnings from his employer for conduct ranging from violence to alcohol abuse. Eventually, the worker was dismissed. The worker was hired by another company, and soon after beginning work he savagely beat and murdered another employee. The victim’s estate sued the nursing home, alleging that it had been negligent in failing to disclose to the new employer the employee’s history of violent behavior. The nursing home in fact was never contacted by the new employer, but it acknowledged that it would not have provided any information other than the employee’s dates of employment even if it had been contacted. The victim’s estate asserted that as a matter of law a former employer should have a duty to disclose a former employee’s dangerous proclivities to a new employer—without fear of being sued for defamation. A trial court granted the nursing home’s motion to dismiss the lawsuit against it, and the victim’s estate appealed. A state appeals court agreed with the trial court’s dismissal of the lawsuit. The court observed that “a party cannot be said to owe a duty to protect another party who is endangered by a third person unless there exists some special relationship between the first employer and either the dangerous person or the potential victim. In determining whether there exists a relationship sufficient to impose a duty to act, the societal interests involved, the severity of the risks, the burden upon the defendant, and the likelihood of occurrence must be balanced.” The court rejected the estate’s claim that a “special relationship” exists between an employer and its former employees. It accordingly refused to impose an absolute duty on employers to disclose information about violent former employers to new or prospective employers. On the contrary, “there is a great societal interest in insuring that employment records are kept confidential. It is all too easy to envision a career destroyed by malefic information released by a disgruntled former employer …. [T]o require the release of deleterious information without fear of a defamation suit represents a major change in the law … which is best left to the legislature.” The court further observed that “in today’s society, with increased instances of child abuse and other types of violence directed towards readily identifiable classes of people, we may have reached a point where people should make this type of information known.” This case suggests that an employer has no duty to disclose to future or prospective employers any inappropriate behavior of a former employee, and that it cannot be legally accountable for failing to do so. On the contrary, the court emphasized the “societal interest in insuring that employment records are kept confidential.” But there will be times when church leaders may feel that they have a moral obligation to inform a prospective employer of the misconduct of a former employee. Should they do so? The Michigan court concluded that this would be a “moral or social” duty, not a legal duty. Further, a church that discloses negative information without authorization risks being sued for defamation of character (among other torts). Church leaders who feel that they have a moral duty to disclose harmful information about a former employee to a prospective employer should (1) not do so without a signed release from the former employee consenting to the disclosure of information and releasing the church from liability for disclosing information, (2) communicate only such information as is relevant, and that can be established as fact in a court of law (i.e., no opinions), and (3) consult with a local attorney before disclosing the information. Moore v. St. Joseph Nursing Home, Inc., 459 N.W.2d 100 (Mich. 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: m42 m61 c0291

Legal Developments

Child Care Licensing

A court ruled that requirements do not violate the First Amendment.

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Church Law and Tax 1991-01-01 Recent Developments

Schools

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

• The Michigan Supreme Court ruled that a state law requiring church-operated child care facilities to be licensed by the state did not violate the constitutional guaranty of religious freedom. A child care facility operated by a Baptist church applied for state licenses from 1974 through 1978. However, in 1979, the church informed the state that it no longer wanted its preschool licensed. The church claimed that the licensing requirement violated its religious beliefs. The church also objected to administrative rules adopted by the state that (1) required preschool directors to be accredited by the state, (2) required preschools to teach specified courses that conflicted with the church’s religious beliefs, and (3) prohibited corporal punishment. When the church continued operating the preschool without a license, the state sought a court order prohibiting the preschool from operating. The church countered by claiming that the licensing requirement violated its constitutional rights. A trial court ruled that the church preschool was subject to the licensing requirement, and the church appealed. The state supreme court agreed that the state had the authority to require church-operated preschools to be licenses. It also upheld the state rule prohibiting corporal punishment. However, the court agreed with the church that the program curriculum requirements and director-accreditation rules were invalid. In rejecting the church’s constitutional arguments with respect to state licensure and corporal punishment, the court acknowledged that the church was opposed to licensure on the basis of fundamental religious doctrine. The court noted that the church viewed state licensure of its preschool as akin to “Moloch or Baal worship,” and that this aversion to state control “also stems from the experience of Baptists in colonial America who faced religious repression for failing to submit to licensing of their religious ministers.” Nevertheless, the court concluded that the state’s interest in licensing preschools was an interest of the highest order that outweighed the church’s constitutional rights. State of Michigan v. Emmanuel Baptist Preschool, 455 N.W.2d 1 (Mich. 1990).

Legal Developments

Schools – Part 2

Church Law and Tax 1990-05-01 Recent Developments Schools Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Freedom of Religion, Schools

Church Law and Tax 1990-05-01 Recent Developments

Schools

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

• A Michigan state appeals court ruled that the state could require parents wanting to “homeschool” their children to use state-certified teachers. A couple who homeschooled their children for two years was convicted for violating the state compulsory attendance law requiring parents to send their children to public schools or state-approved private schools. In order to be state-certified, a private “homeschool” must use a state certified teacher and teach prescribed courses. The parents admitted that they were not certified teachers, but they argued that the teacher certification requirement was unconstitutional since it infringed on their right to freely exercise their religion. The court acknowledged that the parents’ religious beliefs were affected by the state law, but it concluded that the impact on their religious beliefs was minimal and was clearly outweighed by the state’s “compelling interest” in quality education. The court noted that “religious school teachers may have to receive more training in order to become certified, but the regulations do not require anyone to attend courses taught from a perspective contrary to their beliefs. The teachers can fulfill all the state certification requirements while attending either a religious or a nonreligious institution. For these reasons, we find the infringement on free exercise rights is minimal and is outweighed by the state’s interest.” The court admitted that “state licensure does not guarantee quality teachers. But one cannot ignore the high likelihood that a person who meets the qualifications for certification has absorbed the knowledge a competent teacher should have.” The court also rejected the parents’ claim that the teacher certification requirement violated “the fundamental right of parents to direct the education of their children.” People v. De Jonge, 449 N.W.2d 899 (Mich. App. 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 c0390

Legal Developments

Schools – Part 2

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

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Schools

Church Law and Tax 1990-03-01 Recent Developments

Schools

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

• A Michigan state appeals court upheld the conviction of two families for violating the state compulsory education law for “homeschooling” their children without the use of a state-certified teacher. The parents claimed that they had a God-given mandate to educate their children at home, and that allowing the state to certify their children’s teachers amounts to an interference with God’s authority. Submitting to the state’s authority would “constitute a sin.” The court rejected the parents’ claim that the teacher-certification requirement violated their constitutional right to religious freedom. It concluded that any burden imposed on the parents’ religious beliefs was “minimal,” and that it was clearly outweighed by a “compelling state interest.” The court observed that the parents’ pastor testified that the church did not oppose teacher-certification and did allow “delegation of the parents’ education responsibility.” Accordingly, the court characterized the parents’ belief as “personal rather than religious,” and as such not entitled to constitutional protection under the first amendment. The court further noted that the parents were free to hire a certified teacher “who meets their qualifications,” and that “teachers can fulfill all the state certification requirements while attending … a religious institution.” For all of these reasons, “the infringement on free exercise [or religion] rights is minimal and is outweighed by the state’s interest.” The court acknowledged that “state licensure does not guaranty quality teachers, but one cannot ignore the high likelihood that a person who meets the qualifications for certification has absorbed the knowledge a competent teacher should have.” People v. DeJone, 445 N.W.2d 503 (Mich. App. 1989).

Legal Developments

Personal Injuries – Part 2

On Church Property or During Church Activities

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan

Church Law and Tax 1990-03-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

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

• Can a church be sued for injuries sustained by a child while on a “carnival ride” at a church fund-raising event? That was the issue before a Michigan state appeals court. The church conducted an annual “Applefest” which involved a number of rides and games designed to raise funds. A young girl was injured while on one of the rides that was owned and operated by an outside company. The girl’s parents sued the church as well as the ride operator, and the church sought to avoid liability by claiming that “the ride was neither owned, operated, maintained, nor repaired by the church.” The court agreed that the ride was owned and operated by an outside company, but it concluded that this did not relieve the church of responsibility for the girl’s injuries. The court observed: “[When a landowner] employs independent contractors to provide entertainment … or food or other conveniences … [the landowner] has a duty to exercise reasonable care to see that the equipment, methods and activities of the concessionaire involve no unreasonable risk of physical harm to those whom he invites to enter.” It makes no difference that the landowner retains no control over the activity. The landowner (in this case the church) “must exercise reasonable care for the protection of the business invitee by supervising the activity of a contractor or concessionaire, including the installation and operation of their instrumentalities.” Further, this duty “cannot be delegated.” The court observed, however, that if the church conferred a duty of reasonable care upon the ride owner and operator by a contract provision, then the church “might be entitled to indemnification” from that person. In other words, the church would still be liable to the injured victim, but could sue the ride owner and operator for its failure to adequately maintain or supervise the ride. Many churches and church schools conduct fund-raisers that utilize carnival-type rides. This case provides a warning to these churches and schools that they cannot assume that they will not be liable for injuries occurring to participants. Churches and schools utilizing such activities should (1) monitor the rides to ensure that they are being operated safely, and (2) impose a duty of reasonable care upon the ride owner and operator by a contract provision. Kendzorek v. Guardian Angel Catholic Parish, 444 N.W.2d 213 (Mich. App. 1989).

Legal Developments

Employee Relations

Church Law and Tax 1989-07-01 Recent Developments Employee Relations Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Contracts

Church Law and Tax 1989-07-01 Recent Developments

Employee Relations

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

• Can an organist dismissed by his employing church sue the church for discrimination? No, concluded a Michigan state appeals court. The organist, a 61-year-old white male, had been employed by a Catholic church for several years as organist. When hired in 1968 by his last parish, he allegedly was informed by the priest that he would have “life-time employment” as long as he did his job properly. The organist also served as the church’s music director, and was responsible for selecting congregational and choral music, directing the parish choir, and providing music for weddings and funerals. The church hired a new pastor in 1980, who was very critical of the organist. The new pastor was critical of the organist’s abilities (“less than mediocre”), his playing style, his choir leadership, and failure to effectively lead the congregation during worship services. In 1981, the pastor informed the organist that his contract would not be renewed. The organist testified that the pastor told him that he was too old, and that the parish was becoming black and that it “was time for a black organist.” Congregational opposition forced the pastor to renew the employment contract for an additional year, but at a reduced salary and with reduced responsibilities. When this contract expired, it was not renewed and the church employed a black male to serve as its organist and music director. The organist sued the church, alleging that its activities violated state and federal civil rights laws banning discrimination in employment. A trial court granted summary judgment in favor of the church, and the organist appealed. The state appeals court affirmed the trial court’s ruling in favor of the church. The court relied primarily upon a 1972 federal appeals court decision that concluded that the constitutional guaranty of religious freedom prohibits civil court review of decisions by religious bodies concerning discipline or employment of ministers, and accordingly that the courts are without authority to resolve complaints by clergy alleging discrimination in employment. The court also referred to a 1985 federal appeals court decision that concluded that the “ministerial exception” to discrimination laws “does not depend upon ordination, but upon the function of the position.” The federal court observed: “As a general rule, if the employee’s primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship, he or she should be considered ‘clergy.'” The Michigan court concluded that the organist was “more than just an organist. He was the head of the musical branch of the Catholic liturgy [at his church and] was intimately involved in the propagation of Catholic doctrine and the observance and conduct of Catholic liturgy by the congregation. On the basis of ‘the function of his position’ [he] was, thus, ‘clergy’ … [and his] discrimination claim is therefore barred” by the constitutional guaranty of religious freedom. The court rejected the organist’s claim that he was merely “a secular employee who supported [the church’s] religious activities but did not engage in the propagation of religious doctrine or faith.” The court did acknowledge, however, that in cases involving “church employees who are not involved in the propagation of religious faith or religious doctrine, courts have held that [discrimination] actions against religious employers are not barred by the free exercise clause notwithstanding the employers’ arguments that their employment decisions were founded on religious beliefs.” It cited cases involving a lay teacher at a church-operated school, an editorial secretary for a religious publisher, a professor of psychology at a church-operated college, and administrative staff at a seminary. In summary, attempts by clergy (a term that is interpreted broadly and does “not depend upon ordination”) to sue churches or religious employers for discrimination will almost invariably fail. But, non-clergy employees of churches and religious organizations are not necessarily barred from suing their employers for discrimination. Assemany v. Archdiocese of Detroit, 434 N.W.2d 233 (Mich. App. 1988).

© Copyright 1989, 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: m42 m86 c0489

Legal Developments

Wills, Trusts and Estates – Part 1

Church Law and Tax 1989-05-01 Recent Developments Wills, Trusts, and Estates Richard R. Hammar, J.D.,

Richard R. Hammar, Attorney, CPA

Bio

State: Michigan
Categories: Wills, Trusts, and Estates

Church Law and Tax 1989-05-01 Recent Developments

Wills, Trusts, and Estates

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

• Can a church that is named as a beneficiary under a charitable trust challenge the sale of trust property on the basis of inadequacy of sales price? Yes, concluded a Michigan state appeals court. A decedent had established a charitable trust, naming an Episcopalian diocese and a local church among the beneficiaries. The major asset of the trust was a 315-acre estate that included a large residence. The trustees sold the estate (for $3.25 million) in order to obtain cash to pay trust expenses. The diocese and church challenged the sale on the following grounds: (1) the trustees breached their duty to notify the beneficiaries regarding this important aspect of trust administration; (2) the trustees failed to obtain an appraisal; (3) the trustees failed to adequately market the property; and (4) the sales price was inadequate. A probate court agreed with these contentions, removed the trustees from office, and awarded monetary damages to the beneficiaries. The trustees appealed, and a state appeals court affirmed the ruling of the probate court. The court began its opinion by emphasizing that trustees have certain “fiduciary duties” toward trust beneficiaries, which include acting with care, diligence, integrity, fidelity, and sound business judgment. The court concluded that the trustees had violated these duties by failing to keep the church and diocese “reasonably informed of the trust and its administration,” failing to obtain a “sound appraisal,” inadequately marketing the property by failing “to bring the property’s availability to the attention of a wide spectrum of potential purchasers,” and “selling the property for less than its fair value.” The court upheld the dismissal of the trustees, and the award of $1.9 million in damages. This case will be of interest to any church or denominational agency that is named as a beneficiary under a trust or will. Remember this—as a beneficiary under a will or trust, a church or denominational agency has the right to be informed regarding the administration of the estate or trust, and to receive a fair value for any sale of estate or trust assets following a reasonable marketing effort. Don’t be reluctant to ask questions. Matter of Green Charitable Trust, 431 N.W.2d 492 (Mich. App. 1988).