Dismissed Minister Sues Former Church

Courts are reluctant to resolve employment disputes between ministers and churches.

Church Law and Tax 1997-09-01

Clergy—Removal

Key point. The civil courts are prohibited by the first amendment’s ban on the establishment of religion from resolving lawsuits brought by dismissed clergy challenging their dismissals, especially if the resolution of such a dispute would require consideration of ecclesiastical matters.

A Minnesota court ruled that the first amendment’s “nonestablishment of religion” clause prevented it from resolving a dismissed minister’s lawsuit against his former church. A Lutheran church installed a new pastor. The “letter of call” described certain elements of the relationship between the church and pastor, including the terms of a compensation package which was subject to annual review. Financial problems and conflicts between church members and their previous pastor regarding theological and administrative matters existed at the church before the new pastor’s arrival and continued throughout his tenure as pastor. Several families left the church because of differences with the new pastor. Conflicts within the church heightened. The church council asked the pastor to leave a council meeting and to respond to a list of concerns. The church formed a task force to consider remedies for the church’s financial difficulties. At the task force meetings, church members identified various aspects of the pastor’s job performance as reasons certain members had left the church and others had quit contributing financially to the church. A few months later the pastor informed his synod that he wanted to pursue another call and interviewed with five other synods. At this same time the church council recommended a budget for the new year that reduced the pastor’s annual salary by $16,000. The church council president also drafted a report that included a request for the pastor’s resignation. The pastor claimed that he was physically and emotionally unable to continue his duties as pastor after receiving the council president’s report and that he was unable emotionally to formulate a response to the demand for his resignation. A few weeks later the congregation adopted a new budget that reduced the amount available for pastoral services to a mere $3,368. The pastor sued the church, asserting claims of breach of contract, wrongful discharge, breach of the implied covenant of good faith and fair dealing, defamation, intentional infliction of emotional distress, and negligent infliction of emotional distress. In addition, the pastor sued his synod for interference with contract, breach of the implied covenant of good faith and fair dealing, and defamation. A trial court summarily dismissed the lawsuit against both the church and synod on the ground that judicial intervention was barred by the first amendment’s nonestablishment of religion clause. The pastor appealed this decision. A state appeals court affirmed the trial court’s dismissal of the case. It began its opinion by noting that an exercise of governmental authority does not violate the first amendment’s nonestablishment of religion clause only if it (1) has a secular purpose, (2) neither inhibits nor advances religion as its primary effect, and (3) does not create excessive entanglement between church and state. The court focused on the third requirement, and observed that “if a claim involves core issues of ecclesiastical concern, the potential for excessive governmental entanglement precludes judicial review.” On the other hand, if a court “can resolve the dispute by looking only to neutral principles of law … judicial review is permissible.” The court then addressed the main legal claims made by the pastor.

breach of contract and wrongful discharge

The pastor asserted that the church breached its contract with him and wrongfully discharged him by violating provisions of the church’s constitution and the terms of his call. Specifically, he claimed that by approving the budget with the large salary decrease the church breached its contract with him and in effect discharged him without following its own procedures. He argued that the church did not properly terminate his call because it did not articulate any of the six reasons for termination described in the church’s constitution. He also claimed that the church breached its contract by removing him from the church finance committee, by holding church council and task force meetings when he was absent, by failing to publish the most recent budget three weeks prior to the congregational vote, and by failing to notify him properly of task force meetings. The court rejected the pastor’s claims:

Courts generally refrain from considering claims that require “a searching and therefore impermissible inquiry” into church governance …. [The pastor’s] claims … relate to his appointment and discharge as a pastor and are fundamentally connected to issues of church governance. Adjudication of these claims also would necessitate inquiry into the church’s motives for proposing to decrease [his] salary and for taking the other actions asserted by [him] as breaches of contract. These claims, therefore, involve strictly ecclesiastical concerns ….

The church constitution also states that the church—pastor relationship can be terminated if the pastor is disqualified on “grounds of doctrine, morality, or continued neglect of duty.” [The pastor’s] call letter discusses his spiritual obligations to the church, including to “preach and teach the Word of God; to conduct public worship; to administer the sacraments; to provide pastoral care and leadership.” Judicial review of [the pastor’s] claims, thus, would require an evaluation of scripture, doctrine, and moral principles. This is precisely the type of searching inquiry that intrudes into church doctrine and church administrative matters and engenders a prohibited relationship between the church and the judiciary.

covenant of good faith and fair dealing

Did the church and synod violate an implied “covenant of good faith and fair dealing,” as the pastor claimed. No, said the court, since Minnesota law does not recognize implied covenants of good faith and fair dealing in employment contracts. Quoting an earlier state supreme court decision, the court noted that “[t]o imply into each employment contract a duty to terminate in good faith would seem to subject each discharge to judicial incursions into the amorphous concept of bad faith. We are not persuaded that protection of employees requires such an intrusion on the employment relationship or such an imposition on the courts.”

intentional infliction of emotional distress

The pastor claimed that the church’s conduct and statements by church members caused him severe emotional distress. Specifically, he pointed to several statements regarding an intention to remove him from his position as pastor, several statements about his job performance, his removal from several church committees, submission of written “concerns” about his job performance, and the holding of church meetings without informing him or members of his family. The court noted that in order for the church to be guilty of intentional infliction of emotional distress the pastor had to prove that (1) the conduct was extreme and outrageous, (2) the conduct was intentional or reckless, (3) it caused emotional distress, and (4) the distress was severe. The court concluded that the pastor could not prove intentional infliction of emotional distress for two reasons. First, a court would have to conclude that the church “intended” to causes him distress. This would force the court to “review the motivations for the church’s actions”-a prohibited inquiry since “the first amendment prohibits judicial inquiry into motivations for a church’s pastoral employment decisions.” Second, the pastor’s claim for intentional infliction of emotional distress also failed because the church’s actions “were not extreme and outrageous.” The court observed that “conduct is extreme and outrageous if it is so atrocious that it passes the boundaries of decency and is utterly intolerable to the civilized community.” The pastor had not met this difficult standard.

interference with contract

The pastor claimed that the synod wrongfully interfered with his contract with the church by communicating certain information to members of the church council and by failing to discipline the church for violation of the synod’s constitution. The court noted that interference with contract is legally justified if the conduct is “reasonable in light of all the circumstances of the case.” It concluded that in order to determine whether or not the synod’s actions were justified, a court

would have to consider whether the bishop and his assistants acted reasonably. This analysis would require a review of the duties of the bishop and his assistants, matters of church governance within the synod, the relationship between the church and the synod, the synod’s obligation to provide pastoral care, the synod’s obligation to discipline its member churches for violations of the synod’s constitution, and the bishop’s authority to settle disputes within the synod’s member churches. These matters are ecclesiastical concerns not reviewable under the first amendment.

defamation against the church

The pastor claimed that members of the church defamed him by making the following statements about him in public meetings that harmed his reputation and his ability to obtain another call: he did not attend a wedding rehearsal; he made a false statement regarding a church member’s attendance at a retirement party; he insisted that his salary should be paid before the church’s mortgage; he failed to visit in the hospital a woman with cancer; he failed to respond to a member’s telephone call regarding an infant’s death; he breached his duty of confidentiality by telling others of a member’s abusive father and by stating that the member had a problem with authority; he charged $500 for conducting a wedding; he received eleven weeks of vacation; he had jeopardized the church’s insurance policy by taking the church bus to camp; and that while out of town he returned only for the funerals of friends. The court concluded that these statements did not defame the pastor, since they were protected by a “conditional privilege”. The court explained that “a communication is conditionally privileged … if it is made upon a proper occasion, from a proper motive, and … based upon reasonable or probable cause.” This principle rests upon the courts’ determination that “statements made in particular contexts or on certain occasions should be encouraged despite the risk that the statements might be defamatory.” The court concluded that the members’ alleged statements about the pastor qualified for this privilege since they all were communicated “at task force meetings or church council meetings and dealt with [the pastor’s] actions as a pastor.” Further, there was no evidence that the members were acting “out of the kind of malice or ill will that defeats the privilege.”

defamation against the synod

The pastor claimed that he was defamed when a bishop’s assistant told a church official that he was “paranoid.” This statement was made during a phone conversation in which the church official and the bishop’s assistant discussed conflicts in the church, the pastor’s position at the church, and the pastor’s compensation. The court found these comments to be “within the conditional privilege”. Further, there was no evidence that the bishop’s assistant made the statement out of malice or ill will.

Application. This case illustrates the civil courts’ reluctance to resolve employment disputes between ministers and churches. Further, it illustrates the important protection of the qualified or conditional privilege in the event a church is sued for defamation. Of course, the conditional privilege assumes that statements are made solely to other members with an interest in the subject being discussed, and that the statements are not made with malice or ill will. Singleton v. Christ the Servant Evangelical Lutheran Church, 541 N.W.2d 606 (Minn. App. 1996). [ Termination, Defamation, Judicial Resolution of Church Disputes, The Establishment Clause]

Teacher Seduces High School Student

School found not liable on the basis of negligent supervision.

Church Law and Tax 1997-07-01

Sexual Misconduct by Clergy and Church Workers

Key Point. An employer is not liable on the basis of negligent supervision for an employees misconduct that could not have been anticipated or discovered through the normal exercise of reasonable care.

The Minnesota Supreme Court ruled that a school was not liable on the basis of negligent supervision for the sexual seduction of a high school student by a female teacher. The teacher used a counseling relationship with a male student as the basis for a sexual relationship that continued for several months. Most of the sexual encounters occurred during regular school hours on school premises. The victim later sued the school, claiming that it was responsible for his injuries on the basis of negligent supervision. In rejecting the victims claim that the school was guilty of negligent supervision, the court observed:

[The school] performed standard teacher evaluations of [the teacher]. In addition to the evaluations [school officials] made several unannounced visits to [the teachers] classrooms. Because the school had no public address system, all messages were hand—delivered by staff and students to classrooms throughout the course of the school day. Even with all of this interaction during the school day, the [secret] relationship between teacher and student was never observed.

A school cannot be held liable for actions that are not foreseeable when reasonable measures of supervision are employed to insure adequate educational duties are being performed by the teachers, and there is adequate consideration being given for the safety and welfare of all students in the school. The safety and welfare of the students in a school setting is paramount. However, in this case, closer vigilance would not have uncovered the relationship because both participants worked hard to conceal it.

We hold that in this case the [school] is not liable for the intentional [wrongs] of its employee even though the acts occurred within work—related limits of time and place, where such acts were unforeseeable and were unrelated to the duties of the employee.

Application. This case illustrates that churches and schools are not “guarantors” of the safety of minors on their premises. Some injuries cannot be avoided no matter how much supervision is exercised. This court recognized that this is particularly true in cases of sexual misconduct, which are actively concealed from others. Churches are held to a standard of reasonable care in the supervision of their programs and activities. If this standard is met, then a church ordinarily cannot be liable on the basis of negligent supervision for injuries that occur. This case will be a useful precedent to any church that is sued on the basis of negligent supervision for an injury to an adult or child, if it exercised reasonable care in supervising its facilities and programs. The decision is of special significance because it came from a state supreme court. P.L. v. Aubert, 545 N.W.2d 666 (Minn. 1966). [Seduction of Counselees and Church Members, Negligence as a Basis for Liability]

Man Sues Over Molestation by School Counselor

The lawsuit was barred by the statute of limitations.

Church Law and Tax 1997-07-01

Sexual Misconduct by Clergy and Church Workers

Key point. Minors who are sexually molested by church workers may not sue their church after the statute of limitations has expired. Generally, the statute of limitations begins to run on a minor’s 18th birthday. In some states the statute of limitations does not begin to run until an adult survivor of child sexual molestation “discovers” that he or she has experienced physical or emotional suffering as a result of the molestation. Other states do not recognize this so—called “discovery rule.”

The Minnesota Supreme Court ruled that a 33—year—old adult’s lawsuit against a school counselor who molested him when he was 11 years old was barred by the statute of limitations. The counselor expressed an interest in the victim, and visited him in his home on several occasions. He eventually asked the boy’s mother if he could take her son to a remote cabin that he owned. The mother agreed, and the counselor took the victim to the cabin several times. During these trips the counselor repeatedly raped the boy. Prior to these incidents, the victim had no childhood problems. He was a well—adjusted, active student who enjoyed school. His mother described him as having been, before the abuse, a bright, energetic child and a talented student. The victim’s behavior changed drastically after he became acquainted with the counselor. He skipped school, became involved with crime, and abused drugs and alcohol. He was transferred to a correctional institution, and never graduated from high school. He entered a chemical dependency program when he was 19, but continued to abuse alcohol until he was 28. The victim never discussed the abuse with his mother or anyone else, because he was embarrassed and ashamed and thought of himself as a “bad person.” When the victim was 22 years old he unexpectedly encountered the counselor again when the counselor and a young boy entered his place of employment. The victim became enraged and “freaked out” because he suspected that the counselor was molesting the young boy and such behavior “shouldnt happen to little kids.” He did not explain to his co—workers the reason for his reaction.

In 1991, when he was 32 years old, the victim came across a man who had attended elementary school with him. They began talking about their school days, and problems they had experienced since school. The man informed the victim that he had been molested by the counselor, and that he associated most of his problems with the molestation. This revelation was a “spark” that enabled the victim to realize that the counselor’s acts of molestation may have caused his own behavioral problems. He sued the counselor the next year (1992), along with his former school. A trial court threw the case out on the ground that it had been filed after the “statute of limitations” had expired. A state appeals court reversed this decision and ruled that the statute of limitations did not bar the victims lawsuit. The state supreme court overturned this result, and reinstated the trial court’s decision that the lawsuit was barred by the statute of limitations.

Under Minnesota law, adults may file a lawsuit for incidents of molestation occurring when they were minors if they do so within six years of the time they “knew or had reason to know that the injury was caused by the sexual abuse.” The supreme court concluded that it did not have to decide when the victim “had reason to know” that his emotional injuries were caused by the abuse, because the victims own testimony “overwhelmingly demonstrates that he knew of the sexual abuse long [ago] and that the cause of action expired prior to the commencement of this action.” The court noted that the victim refrained from sharing the incidents of abuse with counselors during his adult chemical dependency treatment because of his sense of shame over what had occurred. Further, his reaction to the surprise encounter with his former school counselor “demonstrates with utmost clarity that by that time he was fully aware of the abusive nature of their relationship because he was concerned for the welfare of the young boy accompanying [the counselor].” As a result, “a reasonable person should have known at either point in time that he had been injured by [the counselors] conduct.”

Application. This case illustrates the dilemma that adult survivors of child sexual abuse often face when they sue the offender (and his employer)-they must demonstrate that they were injured by the abuse, but doing so may result in the dismissal of their claim since it will trigger the statute of limitations. Blackowiak v. Kemp, 528 N.W.2d 247 (Minn. App. 1995). [Seduction of Counselees and Church Members, Negligence as a Basis for Liability—Defenses]

Accusing Church Employees of Financial Misconduct

Churches have limited protection if accusations prove false.

Kozar v. Church of St. John the Baptist, 1997 WL 89144 (Minn. App. 1997)

Background. Staff members who make accusations against other staff members or volunteers may be exposing themselves and their church to legal liability for defamation. This concern is especially relevant to church treasurers, since accusations often involve financial misconduct. A recent case in Minnesota involved accusations made by a church business administrator against two other staff members. The case will help church treasurers understand the legal risks of such behavior, and evaluate the possibility of legal liability.

Facts. Mary is a church business administrator. She is responsible for various administrative tasks at the church and is the only person, other than the pastor, with authority to sign checks on behalf of the church. For a two-month period in 1994 Mary was on sick leave recuperating from surgery. During part of the time that Mary was absent, the pastor was on vacation and a need arose for checks to be issued by the church. Terry, a full time receptionist and secretary at the church, signed some of these checks. Unknown to Mary, Terry had permission from the pastor to sign checks in his absence.

When Mary returned to work, she discovered that some checks issued in her absence had not been signed by the pastor. Because the pastor was on vacation, Mary expressed her concern to the chairman of the church's "finance council." The chairman asked Mary to raise the issue at the next finance council meeting. At the next meeting Mary stated that she believed Terry had signed some checks. The council and church trustees were concerned that people might be signing checks without authority. They had recently worked to tighten control of the church's accounts. Somehow, the name of another church member (Sheila) was mentioned by Mary in connection with the unauthorized signing of checks. The minutes of the meeting read as follows with respect to the check signing discussion:

It was brought to the finance council's attention that during Mary's sick leave, a large number of checks were signed by Terry and Sheila under [the pastor's] signature. Neither Terry nor Sheila have signature authority. The bank honored all of the checks. The finance council is very disturbed by these actions and recommends that a record of this be placed in each employee's personnel file with a copy to the personnel committee …. [A motion] was unanimously approved. Mary will report back at the next meeting with further details of the quantity and dollar amounts of the checks signed improperly.

In fact, Sheila had never acted improperly or signed any of the checks in question. There was no proof that she was anything other than a highly respected and valuable church volunteer.

The council's secretary faxed the minutes of the meeting to Mary at the church office. Terry picked up the fax transmission before Mary could retrieve it. Believing it part to be part of her job, Terry copied the minutes and distributed them to the church staff, members of the finance council, and church trustees, and she placed a copy in a binder of finance council minutes.

Terry read the minutes after distributing them, and promptly shared a copy with Sheila. Both women were concerned about the comments in the minutes and immediately spoke with Mary, who said she believed they had written unauthorized checks. Sheila later contacted the chairman of the finance council and expressed her concern about the notes. The chairman suggested that she and Terry attend the next council meeting or write the council a letter to correct the misunderstanding. Sheila retained an attorney who wrote the pastor a letter, and a special meeting of the council was called. At this meeting the minutes were changed to reflect the fact that the council never determined that Sheila had signed any unauthorized checks.

Sheila was not satisfied with this result, and sued her church for defamation. A trial court dismissed the lawsuit on the ground that the allegedly defamatory statements made by the church were subject to a "qualified privilege," and that Sheila failed to rebut this privilege by proving "malice" on the part of the church.

The court's ruling. The court began its opinion by defining defamation. It noted that a statement is defamatory if it is communicated to other persons, is false, and harms another person's reputation. However, a person who makes a defamatory statement may be protected from legal liability by a "qualified privilege." Statements are protected by a qualified privilege if they address a matter of common concern among church members. This means that they cannot be defamatory.

The court cautioned that a qualified privilege may be lost if it is "abused," meaning that the person making defamatory statements did so with "malice." Malice exists if the statements were made out of "ill will and improper motives or … wantonly for the purpose of injuring the [victim]."

Was the church guilty of malice in this case? Were the statements made about Sheila in the council meeting, or in the council's minutes, "malicious"? Sheila argued that the following facts proved malice: (1) the tension and conflict that existed between Mary and Sheila; (2) the church's failure to mail out a retraction; and (3) the church's failure to investigate fully the facts of the case before making the allegedly defamatory statements at the council meeting and in the minutes.

The court rejected Sheila's arguments, and ruled that "there is nothing in the record to indicate that [Mary] or anyone else acted with actual malice."


Key point. The court said that the following factors may tend to establish malice: (1) exaggerated language; (2) the character of the language; (3) an extensive distribution of the defamatory statements; and (4) "other matters in excess of the privilege."

The court noted that while a retraction may have been proper under the circumstances of this case, a failure to make one did not amount to malice. Further, the church's alleged failure to fully investigate the facts of this case did not constitute malice. The court observed that Mary

felt she had reasonable grounds to make the statements she did. Upon her return from sick leave, she discovered that checking account procedures, as she understood them, had not been followed, and some of the checks issued by the church in her absence were apparently signed without authority. In [the pastor's] absence, [she] shared her concerns with … the chair of the church's finance council. The finance council has the responsibility of monitoring church funds. [The chairman] asked [Mary] to raise the issue at the next finance council meeting so it could be discussed.

Employers have legitimate interests in protecting themselves against dishonest employees. Employers are entitled to a qualified privilege if they have reasonable grounds for believing in the validity of a statement, even though hindsight might show the statement to be false. [Mary] was understandably bothered by the situation and took steps to address the apparent breach of authority. She spoke to the person who chairs the committee responsible for monitoring church funds and, on his request, to the entire finance council. We agree with the trial court that [Mary's] actions were reasonable to protect her employer.

What this means for churches

This case illustrates the legal risks associated with statements accusing church employees or volunteers with financial misconduct. Such statements can be defamatory if they are communicated to others, and if they are false and injure another person's reputation. However, the court concluded that statements made among church members (on matters of mutual concern) are protected by a qualified privilege. This means that they cannot be defamatory unless they are made with malice. The court's decision will be helpful in evaluating whether or not a statement is malicious.

When Are Statements to Clergy Confidential and Privileged?

Recent case highlights some statements that may or may not be protected by penitent privilege.

Church Law and Tax 1995-01-01 Recent Developments

Confidential and Privileged Communications

Key point: Not all statements to clergy are protected by the clergy-penitent privilege. To be privileged, a statement must be made to a minister, in confidence, while acting in his or spiritual capacity as a spiritual adviser.

Key point: A minister’s observations of a counselee’s demeanor is not protected by the clergy-penitent privilege.

Key point: The presence of a third party during an otherwise confidential counseling session between a minister and counselee may prevent the conversation from being privileged.

A Minnesota court ruled that most statements made by a murder suspect to two ministers at a public hospital were privileged. An unemployed psychologist (the “defendant”) lived with a woman and her 23-month-old son. Late one night, while the infant’s mother was at work, the defendant brought the child into a hospital emergency room. The child was not breathing and exhibited multiple bruises and other evidence of abuse. Hospital personnel revived the child and placed him in intensive care. The hospital chaplain was present in the emergency room that night, and met with the defendant in a hallway. She identified herself as the chaplain, and escorted the defendant to the hospital’s family room where they spoke. The defendant recounted to the chaplain his financial difficulties, and asked about the child. During this conversation, the child’s grandmother entered the room and the three of them remained in the room and conversed for several more minutes. Hospital personnel later called a local Baptist pastor to meet with family members. The pastor was introduced to the defendant, and he asked the defendant if he “wanted to talk.” The two went to a hospital waiting area for several minutes and spoke. The defendant explained to the pastor his financial difficulties and stress, and also explained that he was trying to teach the child to be a “polite, little boy” by withholding food until the child said “thank you.” The defendant also stated that he wanted to be a better father than his own father had been. During this conversation a hospital orderly entered the room briefly to get something to drink, and then left. A few days later the child died. A pathologist concluded that the child had died from abuse and malnutrition. The defendant was convicted of second degree murder. He appealed his conviction on the ground that the chaplain and Baptist pastor had been permitted to testify at his trial in violation of the clergy-penitent privilege. The appeals court upheld the conviction. While it agreed with the defendant that the conversations with the chaplain and pastor were privileged under state law, it concluded that this testimony was not prejudicial to the defendant since the evidence against him was overwhelming even without this testimony.

The court began its opinion by noting that the Minnesota clergy-penitent privilege states that “[a] member of the clergy or other minister of religion shall not … be examined as to any communication made to the … minister by any person seeking religious or spiritual advice, aid, or comfort or advice given thereon in the course of the … minister’s professional character, without the consent of the person.” The court observed that the purpose of this privilege “is to allow individuals freedom to unburden themselves by seeking spiritual healing without the threat of incriminating themselves.” It further noted that there are three requirements to raising the privilege: (1) the communicant spoke with a minister; (2) the communicant intended for the conversation to be private; and (3) the communicant was seeking spiritual help. The court concluded that these 3 requirements were met in this case with regard to most of the statements made by the defendant to the chaplain and pastor. First, the chaplain and pastor were both ministers. Second, the defendant’s conversations with both individuals were intended to be confidential:

After [the defendant] met [the chaplain] in the hospital hallway, the two went to a hospital reception room and talked for ten to fifteen minutes. When [the grandmother] arrived, the three of them remained in the room talking together for a while longer. The state argues that this three-way conversation indicates that the original conversation between [the defendant and the chaplain] was not private. We draw an opposite inference. The circumstances leading up to the conversation between [the two] and the fact that they retired to a room away from others, support a reasonable belief that they engaged in a confidential conversation prior to being joined by [the grandmother].

The conversation between [the Baptist pastor and the defendant] took place in the hospital waiting room. The state correctly notes that one person entered to get something to drink and then left. This, without more, however, does not undermine the private character of their conversation.

Third, the defendant was seeking spiritual help when he spoke with the chaplain and pastor. The court noted that “these clergy were called to aid a family in crisis. There was no reason for [the defendant] to speak with them about his life other than that they were religious figures, and he was in need of comfort.” Accordingly, the court concluded that most of the statements made by the defendant to the chaplain and pastor were protected from disclosure in court by the clergy-penitent privilege.

However, the court concluded that conversations between the defendant and chaplain while the grandmother was in the room “fall outside of the privilege” since the defendant “could not have intended confidentiality at that moment.” Further, the court concluded that the chaplain’s testimony in court regarding the defendant’s “general demeanor,” observable by all at the hospital, was not based on confidential information and is unprotected by the privilege.” While most of the conversations between the defendant and the chaplain and pastor were privileged, the court concluded that the defendant was not “prejudiced” by the introduction of this evidence in court since there was ample evidence to convict the defendant even without this evidence. Accordingly, it upheld the defendant’s conviction for second degree murder. State v. Orfi, 511 N.W.2d 464 (Minn. App. 1994). 3G2

See Also: Was the Communication Made in Confidence?

Former Church Member Challenges Dismissal

Civil courts cannot resolve such cases.

Church Law and Tax 1994-05-01 Recent Developments

Church Membership

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

A Minnesota appeals court ruled that a church member could not challenge his dismissal in court. In 1988, the pastor of a local church asked two church members (a husband and wife) to sign a guaranty on behalf of the church, guarantying payment of certain debts. The pastor represented to them that if the church ever defaulted on its debts the church would sell its property and use the proceeds to pay back any funds the couple advanced pursuant to the guaranty. The couple signed a guaranty agreement. A few months later, they were notified that the church had been late in making several payments on its bank loans. The couple retained an attorney and discontinued their contact with the church. They did not notify the church of any intent to terminate their membership. Their attorney did write the pastor and requested that the couple be released from their guaranty commitment. The pastor responded by sending the couple a letter dismissing them from membership in the church. The pastor cited the following reasons for terminating their membership:

1. A lack of financial stewardship with consistency and faithful tithing and offering over a given period of time.

2. A desire on your part to consistently create division, animosity and strife in the fellowship.

3. Direct fabrication of lies with the intent to hurt the reputation and the establishment of [the church] and congregation.

4. Backbiting, railing accusations, division, lying, are some of the most serious sins found in the Bible. Where, by all appearances and related conversations, you have fallen into all of the categories.

The pastor’s letter was read to the entire congregation. Several months later the pastor met with the couple, and admitted that no proceeds from the sale of church property would be shared with them. The couple then filed a lawsuit against the pastor and church, alleging fraud, defamation, and breach of contract. A trial court dismissed the lawsuit, and the couple appealed.

A state appeals court upheld the trial court’s dismissal of the lawsuit. It began its opinion by observing that the first amendment “precludes judicial review of claims involving core questions of church discipline and internal governance.” The court concluded that the couple’s claims all involved core questions of church discipline that it was not able to resolve. With regard to the couple’s defamation claim, the court pointed out that a defamatory statement must be false and that “since an examination of the truth of [the pastor’s] statements would require an impermissible inquiry into church doctrine and discipline, the [trial court] did not err in concluding that the defamation claim is precluded by the first amendment.” The court acknowledged that

while [the pastor’s] statement that [the couple] had engaged in “[d]irect fabrication of lies with the intent to hurt the reputation and the establishment of [the church] and congregation” appears unrelated to church doctrine on its face, the statement nevertheless relates to the church’s reasons and motives for terminating the [couple’s] membership. Examination of those reasons and motives would also require an impermissible inquiry into church disciplinary matters.

The court added that “the fact that the letter was disseminated only to other members of the church strengthens the conclusion that [the pastor’s] statements involved and were limited to church doctrine.” The court also refused to resolve the couple’s contention that the pastor had engaged in fraud: “The fraud claim in this case is based on [the pastor’s] representations that if the [couple] signed a guaranty and the church defaulted, then the amount of the proceeds from the sale of the church would be [given to them]. Since [the pastor’s] representations are based upon the occurrence of several future events, we agree with the [trial court] that the fraud claim is insufficient as a matter of law.” Finally, the court pointed out that the couple could not recover for fraud since they had not been damaged by the pastor’s allegedly fraudulent representations. It noted that “there is no evidence that the church has defaulted on its debt or that there has been any legal action taken against the [couple] on the guaranty.” Schoenhalls v. Main, 504 N.W.2d 233 (Minn. App. 1993).

See Also: Discipline and Dismissal | Judicial Resolution of Church Disputes

Liability for a Child’s Drowning Death

Any swimming activity involving young children present significant risks.

Church Law and Tax1994-03-01Recent Developments

Personal Injuries – On Church Property or During Church Activities

Key point: Any swimming activity involving young children presents significant risks. Churches can be legally liable for a child’s death or injury on the basis of negligent selection and training of workers or negligent supervision of the event.

A Minnesota court ruled that a school was legally responsible for the drowning death of a 7-year-old boy during a school field trip. The victim and his child care class went swimming at a pond maintained by the county. The pond is six feet deep, has a gradually sloping sand bottom, and no drop-offs or unusual currents. Although the pond water is filtered, it remains cloudy, making it possible to see only about one foot below the surface. The swimming area is not roped off based on swimming ability. On the day of the drowning there were five lifeguards on duty, supervised by a head lifeguard. Thirty-seven children went on the field trip, along with four child care employees who planned the trip and were responsible for supervising the children. Before taking the trip, the child care staff did not test the children’s swimming ability, but rather relied on the children to tell them whether or not they could swim (and how well). The staff told the children to select a buddy and stay with their buddy at all times. The children were divided into four groups for supervision. The bus arrived at the pond and the staff again cautioned the children to stay with their buddies. Staff members later testified that they had difficulty keeping track of the thirty-seven children among the three hundred other children in the pond. The victim was last seen at 1:50 p.m. by one of the child care workers who saw him in the shallow portion of the pond. The worker called out to the victim to find his buddy. At 1:55 p.m. a safety break was called and staff members took a count of the children in their groups. When the victim was not present for the count, his group leader asked the other staff members if they had seen him. When no one was able to verify the victim’s location, the lifeguards were notified. The head lifeguard organized a human chain to walk across the swimming area. The chain fragmented into several parts. About ten minutes later, another complete human chain was organized and on the first sweep the victim’s body was found submerged in about four feet of water. About twenty minutes had gone by since the victim was reported missing. The victim’s father sued the school on the basis of negligent selection and training of the workers and negligent supervision of the event. A jury awarded the father over $1 million in damages. The school appealed this decision on the basis of evidence that it argued had been improperly considered by the jury (the school did not dispute the findings of negligence). Specifically, the school argued that the trial court erred in allowing the termination letters the school had written to three of the four workers to be read to the jury, and in allowing a diary from the victim’s sister to be read to the jury. The termination letters that were issued to three of the four workers immediately following the drowning listed “employee negligence” and “unsatisfactory performance” as grounds for their termination. The appeals court ruled that it was not improper to read these letters to the jury. The court also ruled that it was not improper for portions of the diary to be read to the sister. These entries demonstrated the profound and continuing grief that the family had suffered as a result of the boy’s death. The court concluded that such excerpts were helpful to the jury in computing damages. Further, the court noted that any “prejudice arising from the letter was tempered by the trial court’s instruction to the jury not to award damages based on sympathy” alone. The court also rejected the school’s request that the verdict be reversed as a result of the behavior of the victim’s attorney, who (during the trial) characterized the school’s conduct as “despicable,” “indecent,” “almost immoral,” and “bordering on criminal.” The attorney also told the jury that if they awarded the family millions in punitive damages “perhaps there will be no more [victims]] and people might start listening to jurors who hear despicable cases like this.” The court acknowledged that the attorney’s behavior “came very close to the level of misconduct that warrants granting a new trial,” but it refused to do so.

Few accidents are as tragic as the drowning death of a young child. Churches that take young children on swimming activities must be sure that they have on hand an adequate number of trained adults, including persons trained in resuscitation techniques (particularly if lifeguards will not be present). Further, steps must be taken to adequately organize and supervise the activity. Younger children should not be allowed in water without a life preserver. Churches must also have parents or guardians sign a statement certifying whether or not their child is able to swim, consenting to the activity, and providing authorization to administer emergency medical treatment in the event they cannot be reached. Children who cannot swim should not be taken on a swimming event, unless they will remain outside of the water at all times and under constant supervision (this is a high standard that may not be achievable in some cases). For further assistance, check with your church insurance agent, and your local Red Cross and YMCA/YWCA. Johnson v. Washington County, 506 N.W.2d 632 (Minn. App. 1993). [PCL12A2, PCL12A3]

See Also: Negligent Selection | Negligent Supervision

Dismissed Minister Sues Church for Defamation

Courts are prohibited from resolving such lawsuits.

Church Law and Tax1994-01-01Recent Developments

Clergy – Removal

Key point: The civil courts are prohibited by the first amendment guaranty of religious freedom from resolving lawsuits brought by dismissed clergy challenging their dismissals, especially if the resolution of such a dispute would require consideration of ecclesiastical matters.

A federal district court in Minnesota dismissed a minister’s lawsuit alleging that church officials had defamed him. A denomination decided not to elevate a congregation to mission status, thereby cutting off all subsidies and in effect terminating the minister who served the congregation. The minister sued his denomination for defamation, alleging that denominational officials published both oral and written defamatory statements about him that damaged his reputation and professional status. The denomination claimed that the civil courts lacked jurisdiction to resolve religious disputes such as this. The court agreed with the denomination and dismissed the lawsuit. It noted that “the United States Supreme Court has determined that civil courts generally may not inquire into a religious organization’s activities on matters of religious doctrine or authority and that courts lack subject matter jurisdiction over most disputes stemming from a religious organization’s actions.” It quoted from the Supreme Court’s decision in Serbian Eastern Orthodox Diocese v. Milivojevich, 423 U.S. 696 (1976):

In short, the first and fourteenth amendments permit hierarchical religious organizations to establish their own rules and regulations for internal discipline and government, and to create tribunals for adjudicating disputes over these matters. When this choice is exercised and ecclesiastical tribunals are created to decide disputes over the government and direction of subordinate bodies, the Constitution requires that civil courts accept their decisions as binding upon them.

The court quoted from a number of federal court rulings refusing to resolve lawsuits brought by dismissed ministers, including Scharon v. St. Luke’s Episcopal Presbyterian Hospitals, 929 F.2d 360 (8th Cir. 1991):

Personnel decisions by church-affiliated institutions affecting clergy are per se religious matters and cannot be reviewed by civil courts, for to review such decisions would require the courts to determine the meaning of religious doctrine and canonical law and to impose a secular court’s view of whether in the context of the particular case religious doctrine and canonical law support the decision the church authorities have made. This is precisely the kind of judicial second-guessing of decision-making by religious organizations that the free exercise [of religion] clause forbids.

The court rejected the minister’s claim that resolving only a defamation claim would be permissible:

Although factual scenarios might exist where resolution of a defamation action against a religious organization would not require the court to undertake an inquiry in violation of the first amendment, this case does not present such a situation. [The minister’s] defamation claim challenges [the denomination’s] authority … to comment on [the minister’s] actions and abilities as a … minister. Resolution of … the defamation claim would require the court to review the [denomination’s] bases for terminating him, an ecclesiastical concern, and the veracity of the [denomination’s] statements. The court determines that such an inquiry would implicate the concerns expressed in the first amendment. Based on that determination, the court concludes that it has no jurisdiction over this matter. Farley v. Wisconsin Evangelical Lutheran Synod, 821 F. Supp. 1286 (D. Minn. 1993).

See Also: Termination | Judicial Resolution of Church Disputes

Minnesota Prohibits Discrimination Based on Sexual Orientation

Exemption provided for religious organizations.

Church Law and Tax 1993-07-01 Recent Developments

Legislation

Key point: A number of states have enacted civil rights laws prohibiting discrimination in employment on account of sexual orientation. Most of these laws contain some form of exemption for religious organizations.

The Minnesota legislature has amended a state civil rights law to prohibit discrimination in employment or housing on the basis of sexual orientation. Sexual orientation is defined as “having or being perceived as having an emotional, physical, or sexual attachment to another person without regard to the sex of that person or having or being perceived as having an orientation for such attachment, or having or being perceived as having a self-image or identity not traditionally associated with one’s biological maleness or femaleness.” The term “does not include a physical or sexual attachment to children by an adult.” The prohibition of discrimination by employers based on sexual orientation does not apply to “a religious or fraternal corporation, association, or society, with respect to qualifications based on religion or sexual orientation, when religion or sexual orientation shall be a bona fide occupational qualification for employment.” Further, the ban on employment discrimination based on sexual orientation does not apply to “a nonpublic service organization whose primary function is providing occasional services to minors, such as youth sports organizations, scouting organizations, boys’ or girls’ clubs, programs providing friends, counselors, or role models for minors, youth theater, dance, music or artistic organizations, agricultural organizations for minors, and other youth organizations, with respect to qualifications of employees or volunteers based on sexual orientation.” The statute prohibits covered employers from requesting that applicants for employment (or current employees) “furnish information that pertains to race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation, or age ….” The statute further provides:

Nothing in this chapter prohibits any religious association, religious corporation, or religious society that is not organized for private profit, or any institution organized for educational purposes that is operated, supervised, or controlled by a religious association, religious corporation, or religious society that is not organized for private profit, from: (1) limiting admission to or giving preference to persons of the same religion or denomination; or (2) in matters relating to sexual orientation, taking any action with respect to education, employment, housing and real property, or use of facilities. This clause shall not apply to secular business activities engaged in by the religious association, religious corporation, or religious society, the conduct of which is unrelated to the religious and educational purposes for which it is organized.

Finally, the statute provides that it should not be interpreted to mean that the state of Minnesota (1) condones homosexuality or bisexuality; (2) authorizes or permits the promotion of homosexuality or bisexuality in educational institutions; (3) requires the teaching in educational institutions of homosexuality or bisexuality as an acceptable lifestyle; (4) authorizes the use of numerical goals or quotas, or other types of affirmative action programs, with respect to homosexuality or bisexuality; or (5) authorizes the recognition of or the right of marriage between persons of the same sex. Amendments to Minnesota Statutes Chapter 363.

Pastor’s Sexual Misconduct Case Not Covered by Insurance Policy

Court decision sets important precedent.

Houg v. State Farm Fire and Casualty Company, 481 N.W.2d 393 (Minn. App. 1992)

Key point: Church insurance policies may not provide a legal defense of lawsuits brought against pastors by victims of sexual seduction. Further, any money damages awarded by a court against a pastor may not be covered under the church's policy.

In an important decision, a Minnesota appeals court concluded that a church insurance policy did not require the insurance company to defend a pastor who was sued by a women he had seduced.

The court also ruled that the insurance company would not have to pay any portion of a jury verdict against the pastor. This case began in 1984, when a woman (the "victim") became a member of a Lutheran church. She soon became an active member, teaching a Sunday School class and attending church-sponsored events. In 1985, she sought "marriage, family, emotional, and spiritual counseling" from the church's pastor. The victim later sued her church, denomination, and pastor. Her lawsuit contained the following allegations:

Beginning in approximately February 1985 [the pastor], as [the victim's] minister, therapist, and counselor, set out on a course of conduct designed to entice and seduce [the victim] into sexual relations. Ultimately, because of the disparity of the relationship, [the victim's] emotional vulnerability, the emotional dependence of [the victim] upon her [pastor] and through the use of psychotherapeutic deception, [the pastor] succeeded in seducing and coercing [the victim] to engage in sexual relations.

From February 1985 through March 1986, while continuing in his role as minister and counselor, [the pastor] regularly and repeatedly sexually abused and sexually exploited [the victim].

As a direct result of the sexual exploitation, sexual abuse and negligent and malicious counseling [the victim] has suffered and will continue to suffer great pain of mind and body, shock, emotional distress, embarrassment, loss of self-esteem, disgrace, humiliation, and loss of enjoyment of life.

The pastor admitted to having sexual relations with the victim on at least 30 occasions. However, he insisted that the victim had freely consented to the relationship. The victim vigorously denied that she consented to the relationship. Rather, as noted above, she insisted that she was incapable of giving consent to the sexual relationship because of her vulnerable psychological state and the pastor's position of authority over her.

The pastor turned the lawsuit over to the church's insurance company, assuming that the insurer would defend him and pay any verdict against him up to the policy limits. The insurer rejected the pastor's request, and informed him that it would neither defend him against the claims of the lawsuit or pay any portion of a verdict attributable to his misconduct.

The pastor sued the insurance company in an attempt to force it to defend him. A trial court agreed with the insurance company that it had no duty to defend the pastor, and the pastor appealed. The appeals court also agreed with the pastor. It noted that the church's insurance policy specified that the insurer was liable for any personal injury "caused by an occurrence to which this insurance applies." The policy defined the term occurrence as an act that "results in bodily injury . . . neither expected nor intended."

The court concluded that the pastor's repeated sexual exploitation of the victim resulted in personal injuries that were both "expected and intended," and accordingly they did not constitute an "occurrence" for which insurance coverage was available. The court observed: "We conclude [that the victim's] allegations that [the pastor] used his authority as a pastor and counselor to facilitate his sexual abuse of a psychologically vulnerable person creates an inference of an intent to injure and relieves [the insurance company] of its duty to defend."

The court also relied on a provision in the church's insurance policy denying any coverage "to liability resulting from any actual or alleged conduct of a sexual nature, [or] to any dishonest, fraudulent or criminal act or omission of any insured."

This case is an important development. First, it demonstrates that "consent" may not be an available defense to a minister (or any other church worker) who seduces a counselee—even if the sexual relationship is of a long duration. Second, it illustrates that clergy (or other church workers) who are sued by victims of their sexual misconduct may not have a legal defense provided by the church insurance company.

Further, the insurance company may have no legal obligation to pay any portion of a jury verdict rendered against a pastor in such a case. This is a very serious matter, since legal defense costs can be substantial, as can jury verdicts in cases of sexual seduction. Finally, note that this case only addressed the duty of a church insurance company to provide a defense to a pastor guilty of sexual misconduct. There was no dispute concerning the insurer's defense of the church.

In many of these cases, pastors are sued individually in addition to the church and in some cases (such as this one) a parent denomination. While the insurer may agree to defend (and indemnify) a church or denomination, it may have the right to refuse to defend or indemnify the pastor.

Church Not Responsible for Injuries from Fall

Decision overturns earlier jury verdict.

Key point: Church members injured on church premises are not necessarily entitled to money damages, even if the injury was due to the church's failure to comply with a safety code.

A Minnesota appeals court concluded that a church was not responsible for injuries sustained by a member who tripped on a dark stairway. A member left a Sunday morning worship service to use the restroom, which was located in the church basement. To reach the restroom, the member had to go the church basement, cross the fellowship hall, ascend three uneven stairs, and walk down a hall. When the member went to the basement, the lights were on and she had no difficulty reaching the restroom. However, when she left the restroom, all the basement lights were off and the basement was completely dark. The member attempted to find her way back upstairs. Although there was a light switch in the hall leading to the restroom, the member could not find it because of the darkness. When she reached the three uneven stairs that led to the fellowship hall, she tripped and sustained serious injuries.

The member later sued the church, alleging that her injuries were caused by the church's negligence. She relied on a state fire code requiring all exits to be illuminated when a building is occupied. A jury agreed that the church was responsible for the woman's injuries, and the church appealed.

A state appeals court reversed the trial court's decision, and ordered a new trial. The court agreed that the state fire code requires exits to be illuminated when a building is occupied, but it concluded that this could not be a basis for finding the church negligent. It observed:

"It is well-settled law that in an action for neglect of duty, it is not enough for the [victim] to show that the defendant neglected a duty imposed by statute, and that he would not have been injured if the duty had been performed, but that he must also show that the duty was imposed for his benefit, or was one which the defendant owed to him for his security."

The court concluded that the church's violation of the state fire code could not establish its responsibility for the member's injuries, since the member's injuries were not "a hazard against which the fire code was designed to protect."

The court emphasized that the fire code was designed to prevent fires rather than to prevent falls, and accordingly it could not be used to establish the church's negligence. Further, the court noted that "evidence of the church's negligence was minimal. [The member] did not establish that the lights were turned off by a person for whose negligence the church could be held vicariously liable." As a result, the court reversed the trial court's decision, and ordered a new trial. Thies v. St. Paul's Evangelical Lutheran Church, 489 N.W.2d 277 (Minn. App. 1992). [PCL12B]

See Also: Premises Liability

Employee Personnel Files

A Minnesota law requires certain employers to make copies of these files upon request.

Church Law and Tax 1992-07-01 Recent Developments

Legislation

The Minnesota legislature enacted a law requiring certain employers to make copies of an employee’s personnel files upon request. The law applies to any employer having 20 or more employees. The new law provides that “upon written request by an employee, the employer shall provide the employee with an opportunity to review the employee’s personnel record. An employer is not required to provide an employee with an opportunity to review the employee’s personnel record if the employee has reviewed the personnel record during the previous six months.” The law further provides that “with respect to current employees, the personnel record or an accurate copy must be made available for review by the employee during the employer’s normal hours of operation at the employee’s place of employment or other reasonably nearby location, but need not be made available during the employee’s working hours. The employer may require that the review be made in the presence of the employer or the employer’s designee. After the review and upon the employee’s written request, the employer shall provide a copy of the record to the employee.” The law defines the term personnel record to include “any application for employment; wage or salary history; notices of commendation, warning, discipline, or termination; authorization for a deduction or withholding of pay; fringe benefit information; leave records; and employment history with the employer, including salary and compensation history, job titles, dates of promotions, transfers, and other changes, attendance records, performance evaluations, and retirement record.” The term does not include several items, including “written references respecting the employee, including letters of reference supplied to an employer by another person,” and, in some cases, “information relating to the investigation of a violation of a criminal or civil statute by an employee.” Section 181.961 of the Minnesota Statutes.

See also Clergy—personal liability (new section 709.15 of the Iowa Statutes).

Property Tax Exemption and Rental of Parsonages

Court concluded that the temporary rental of a church-owned parsonage affected the tax-exempt status of the property.

An Episcopal church owned a parsonage that was occupied by its priest. The priest resigned in 1988, and a temporary replacement priest was appointed. However, the temporary replacement priest chose to live in a neighboring metropolitan area so as to qualify for the special educational needs of his son. Accordingly, the church rented the parsonage, and used the rental income to pay a housing allowance to its temporary priest.

The church intended to hire a permanent priest in the near future who would live in the parsonage. A local tax assessor claimed that the parsonage lost its tax exemption when it ceased to be used as a parsonage and was rented. The church disagreed, claiming that the parsonage should remain exempt so long as it was rented temporarily while the church sought a permanent priest.

The Minnesota appeals court noted that there were two issues: "(1) whether the property qualifies for exemption on the basis that the rent proceeds are utilized for church purposes; and (2) whether the temporary rental of a parsonage pending arrival of a new pastor destroys the tax exemption." The court rejected the view that the parsonage could retain its exemption on the ground that the rental income was used for church purposes.

It quoted from a 1927 decision of the state supreme court: "When it ceased to be occupied or used as a residence for the pastor of the society and was rented to others for dwelling purposes it ceased to be a parsonage or to be used in any way for church or religious purposes. It then ceased to be `church property' just as a house of worship ceases to be such if it is abandoned for that purpose and rented and used for business purposes."

The court further concluded that the temporary rental of the parsonage in this case pending arrival of the new priest destroyed the tax exemption of the property. It again relied on the earlier decision of the state supreme court:

No hard and fast rule can properly be laid down to govern all cases. Generally speaking, it may be said that the rule governing exemption from taxation as to the real property of [charitable] institutions is that all property reasonably necessary for and primarily used and devoted to the proper purposes of the institution and so located with reference to the main buildings or activities of the institution so as to be reasonably suitable for such purposes is exempt from taxation.

A reasonable amount of property intended and reasonably necessary for such use in the near future, and suitably located, may also be exempt. [Accordingly] a lot and dwelling house rented to others and not used in any way for religious or church purposes, and not shown to be intended or necessary for such use in the future, are not exempt.

The court concluded that priests were not required to live in the parsonage (the temporary priest had not done so), and accordingly the parsonage was not "reasonable necessary" for church use. On the other hand, the court acknowledged that "if a requirement existed that the priest must live in the parsonage, and the property was rented for a few months during a transition period between one priest and another priest, the exemption would continue. However, that is not the case here." Trinity Episcopal Church v. County of Sherburne, 1991 WL 95745 (Minn. Tax 1991 unpublished).

Discrimination on the Basis of Sexual Orientation

Can religious organizations discriminate on this basis?

Church Law and Tax 1992-03-01 Recent Developments

Clergy – Removal

A federal appeals court ruled that a hospital chaplain could not sue the hospital for alleged age and sex discrimination following her dismissal. The former chaplain was an ordained Episcopal priest who had served as chaplain of a church affiliated hospital for 10 years. Following her dismissal, the former chaplain sued the hospital on the grounds that her dismissal (1) violated the federal Civil Rights Act of 1964, which prohibits certain employers from dismissing employees on the basis of their sex, and (2) violated the federal Age Discrimination in Employment Act, which bans discrimination in employment against persons 40 years of age and older—on account of age. A federal district court rejected the former chaplain’s claims. In reaching its decisions, the district court emphasized that the hospital was “a church-affiliated institution with substantial religious character,” and that the former chaplain’s position was “inherently religious.” The court observed that the former chaplain had acted as a minister “by visiting hospital patients, reading the Bible to them, praying with them, performing baptisms, presiding at funerals, administering communion, performing chapel services, etc.” These activities, concluded the court, “are inherently religious and so confer on [the] chaplain position its inherently religious nature.” The court also rejected the former chaplain’s claim that since her lawsuit alleged only age and sex discrimination, any consideration of the ecclesiastical nature of her duties was inappropriate. It noted that the hospital had asserted that the dismissal was based in part on the former chaplain’s failure to follow “liturgical requirements,” and accordingly any review of her dismissal would inevitably involve the court in ecclesiastical considerations.

The former chaplain appealed the case to a federal appeals court, which also rejected all of her claims. The court emphasized that the hospital was “without question a religious organization,” and that the chaplain position “is primarily a ministerial position.” The court concluded: “[W]e believe that the free exercise [of religion] clause of the first amendment also prohibits the courts from deciding cases such as this one. Personnel decisions by church-affiliated institutions affecting clergy are per se religious matters and cannot be reviewed by civil courts, for to review such decisions would require the courts to determine the meaning of religious doctrine and canonical law and to impose a secular court’s view of whether in the context of the particular case religious doctrine and canonical law support the decision the church authorities have made. This is precisely the kind of judicial second-guessing of decision-making by religious organizations that the free exercise [of religion] clause forbids.” Scharon v. St. Luke’s Episcopal Presbyterian Hospitals, 929 F.2d 360 (8th Cir. 1991).

See Also: Termination

Denominations’ Liability for Ministers’ Sexual Misconduct

A Minnesota court ruled that a denomination could be sued.

Church Law and Tax 1991-03-01 Recent Developments

Denominations – Legal Liability

A Minnesota state appeals court ruled that a religious denomination incorporated in Illinois could be sued in Minnesota for the alleged sexual misconduct of one of its ministers. The Evangelical Covenant Church (ECC) is a body of evangelical churches, administratively organized into regional conferences. The ECC bylaws specify that its “board of ministry” exercises “general supervision over Covenant ministers, including ordination, license, discipline, and the maintenance of high ministerial standards.” The ECC is responsible for investigating claims of misconduct lodged against its ministers, and for administering such discipline as it deems appropriate. Such discipline may include counseling, training, temporary removal from ministry, or permanent dismissal from the ministry. A minister who had served an ECC church in Minnesota for 25 years was accused of sexually molesting boys in the church. This information was shared with the superintendent of the Northwest Conference of the ECC, who relayed it directly to the ECC. The ECC suspended the minister pending the outcome of an investigation into the charges. While the investigation was in process, the minister tendered his resignation to the ECC. Shortly thereafter, the parents of six boys filed lawsuits in a Minnesota state court against the minister and the ECC. The lawsuits alleged that the boys had been sexually molested by the minister, and that their injuries had been caused by ECC’s negligent supervision of the minister. The ECC asked the court to dismiss the lawsuit against it on the ground that a Minnesota court had no “personal jurisdiction” over an Illinois corporation. The trial court rejected the ECC’s request, and the ECC immediately appealed this decision to a state appeals court. The appeals court acknowledged that the United States Constitution protects a corporation from being sued unless the court has personal jurisdiction over it. This means that an organization that is incorporated and operated in one state cannot be sued in another state unless it has sufficient contacts with the other state so that compelling it to defend itself there would not “offend traditional notions of fair play and substantial justice.” But how many “contacts” must a corporation have in another state to subject it to the jurisdiction of that state’s courts? The United States Supreme Court recently observed that the out-of-state corporation must have “purposefully directed its activities at residents” of the other state. The Minnesota appeals court concluded that “a local church’s membership in a national religious organization does not, by itself, automatically establish sufficient minimum contacts by the national organization to support jurisdiction in the local church’s home forum. However, the court observed that this case involved much more than mere passive membership by local churches in a national religious organization: “Rules and regulations governing the legal relationship between ECC and [local churches] establish that ECC assumed responsibility for the discipline of … ministers. ECC contemplated that in the event a minister … was charged with sexual abuse, it would become involved in the subsequent investigation and would regulate the minister’s privilege to carry out pastoral duties.” The court noted that after the ECC was apprised of the Minnesota minister’s misconduct, it “was in complete charge of the ensuing investigation and disciplinary action.” These acts, plus meetings the ECC had with the minister, convinced the court that the ECC had sufficient contacts with Minnesota to subject it to the jurisdiction of Minnesota courts. It concluded that “in our view, its contacts with Minnesota were sufficiently significant so that ECC had fair warning that it would be made subject to Minnesota jurisdiction for litigation arising out of its alleged failure to adequately investigate and discipline a minister.” This significant case now proceeds to trial. Developments will be reported in future editions of this newsletter. Olson v. Magnuson, 457 N.W.2d 394 (Minn. App. 1990).

Churches and Zoning Law

A court ruled that a law prohibiting churches from meeting in commercial zones does not violate the Constitution.

Church Law and Tax 1991-03-01 Recent Developments

Zoning

A federal district court in Minnesota ruled that a city’s refusal to allow a church to operate in a commercial zone did not violate the church’s constitutional rights. A city zoning ordinance permitted churches in residential zones, but not in commercial or industrial zones. A new church congregation began meeting in a pastor’s home. As the congregation grew, it began meeting in a public school building, and then in a commercial building. Eventually, the city notified the church that use of the commercial building violated city zoning law. The church unsuccessfully sought to amend the zoning ordinance to permit churches in commercial zones, and then it sought to locate other sites for church services. The church was not able to find suitable accommodations in a residential zone, and continued to meet in the commercial building. When the city ordered the church to vacate the building, the church filed a lawsuit alleging that the city’s actions violated the constitutional guaranty of religious freedom. The court rejected the church’s position. It noted the constitutional guaranty of religious freedom is not violated unless “something is prohibited because of its religious affiliation or its display of religious belief.” This was not the case here, the court concluded, since the city had not barred churches from commercial zones because of their religious character: “The zoning ordinance neither excludes only churches from the commercial and industrial zones nor reveals an anti-religious intent.” The court also rejected the church’s claim that the city’s actions violated the constitutional guaranty of the “equal protection of the laws.” This guaranty ensures that “all persons similarly situated should be treated alike.” The church pointed out that a number of other charitable organizations (including Alcoholics Anonymous and the Masonic Lodge) were permitted to operate in commercial zones, and thus the exclusion of churches was unconstitutional. The court observed that “what the church cannot deny, however, is that the church describes itself precisely as a ‘church’ while Alcoholics Anonymous and the Masonic Lodge cannot be so defined.” This ruling is clearly erroneous, and hopefully will be reversed on appeal. The court’s rejection of the church’s “equal protection” argument on the ground that Alcoholics Anonymous and the Masonic Lodge are not “churches” defies belief. Such an interpretation would virtually write this protection out of the constitution. The court’s cavalier treatment of religious liberty is equally disturbing. What would violate the constitutional guaranty of religious liberty according to this court? It gave two examples—a state law “banning the casting of statues that are to be used for worship purposes,” or “prohibiting bowing down before a golden calf.” Any further developments will be reported in future issues of this newsletter. Cornerstone Bible Church v. City of Hastings, 740 F. Supp. 654 (D. Minn. 1990).

Clergy – Part 1

Legal Liability

Church Law and Tax 1990-05-01 Recent Developments

Clergy – Legal Liability

A Minnesota minister was convicted on four felony counts of “psychotherapist-patient criminal sexual conduct” for engaging in sexual relations with a female counselee. The minister served as senior pastor of a Christian Missionary Alliance Church. In 1985, he was approached by a married female member who desired counseling for low self-esteem, suicidal thoughts, grief, compulsions, an eating disorder, and premenstrual syndrome (PMS). The first several counseling sessions consisted of a discussion of Bible passages. In time, the pastor began discussing sexual issues although the woman insisted that she had not sought counseling for such matters. The pastor persisted in discussing sex, saying that sex was a “gift from God” and that he was “working” with her on her sexuality. After several sessions, the woman’s husband and a close friend advised her to seek other help since she did not appear to be improving. The pastor insisted that terminating the counseling relationship had to be a mutual decision, and that it was “nobody else’s business”. At the conclusion of one counseling session that explored the subject of grief, the pastor gave the woman a brief hug, which she thought was appropriate but did not want to continue. The following week she asked the pastor if they were engaged in “normal counseling,” and he replied that he loved her. The session ended with the two engaged in hugging and passionate kissing. Two days later, the woman went back to clarify that their relationship would remain “platonic” and non-sexual. At that meeting, the two engaged in hugging and kissing. The pastor gave the woman a rose as a symbol that their relationship would forever remain “pure and chaste from afar” and that he would “maintain her virginity”. A couple of weeks later, the woman returned to the pastor’s office one evening and again the following morning. The two engaged in sexual fondling. This conduct was during her menstrual period, and the pastor assured her that their behavior would “help her work through negative issues about her menstrual period.” A month later, the two went to a motel and engaged in sexual intercourse for the first time. The woman testified that the pastor assured her that it was a “good” sexual encounter because he was unselfish. He also informed her that sex between a counselor and counselee was a felony in Minnesota. Shortly after this incident, the woman gave the pastor a signed letter stating “I, the undersigned, have given [my pastor] control of my life—my future—out of my abiding love for him.” The two engaged in sexual intercourse on at least two other occasions over the next few months. The woman testified that the pastor assured her that sexual contact and intercourse was consistent with her “treatment” because it would remove her inhibitions about sex “set her free” from her sexual “hang-ups”. A short time later, the two left town at the pastor’s request. At his request, the woman issued him checks amounting to $11,000. The pastor was later prosecuted for four felony counts of criminal sexual contact. Minnesota law imposes a penalty of up to 15 years in prison for either (1) “sexual contact” by a “psychotherapist” with an “emotionally dependent” patient, or (2) sexual contact by a psychotherapist with a patient occurring by means of “therapeutic deception”. Minnesota law imposes a penalty of up to 20 years for either (1) sexual intercourse by a “psychotherapist” with an “emotionally dependent” patient, or (2) sexual intercourse by a psychotherapist with a patient occurring by means of “therapeutic deception”. A jury convicted the pastor on all four felony counts, and he appealed. In upholding the conviction, a state appeals court concluded that the pastor was a psychotherapist since he had assumed the role of a counselor, and that he had in fact committed both sexual contact and sexual intercourse with an “emotionally dependent” patient, and that the sexual contact and intercourse occurred because of “therapeutic deception”. In concluding that the woman was “emotionally dependent” on the pastor, the court relied on the testimony of expert witnesses who stated that “there is a power imbalance in a pastoral counseling setting because the client idealizes the pastor.” The court also referred to (1) 32 notes and cards the woman had sent the pastor, (2) the fact that the woman had “signed over her life” to the pastor, (3) the fact that the woman had violated her strongly held religious beliefs and instincts to engage in what she felt was a very sinful relationship, and (4) the $11,000 she gave the pastor at his request. The court also concluded that the sexual contact and sexual intercourse had occurred “because of therapeutic deception”. In reaching this conclusion, the court referred to the pastor’s frequent assurances that sexual contact and intercourse were part of the woman’s “ongoing treatment” and were necessary to remove her inhibitions and hang-ups. In rejecting the pastor’s claim that he had a constitutional right to engage in consensual sexual relations with whomever he chose, the court ruled that no constitutional right protects a pastor who engages in sexual activity as part of religious counseling. The court observed: “These statutes are meant to protect vulnerable persons and allow them to reposit trust in those who can help them. The legislature has recognized the emotional devastation that can result when a psychotherapist takes advantage of a patient.” State v. Dutton, 450 N.W.2d 189 (Minn. App. 1990).

Related Topics:

Construction Projects – Part 1

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

Church Law and Tax 1990-05-01 Recent Developments

Construction Projects

The Minnesota Tax Court ruled that a Lutheran church had to pay sales taxes on the purchase of construction materials by its contractor. The church entered into a written contract with a contractor calling for the construction of a 10,000 square foot addition to the church for a fixed price of $522,000. The state assessed sales taxes on purchases of construction materials made by the contractor, citing the state sales tax law which exempts sales made directly to churches but which does not exempt “building, construction or reconstruction materials purchased by a contractor as a part of a lump-sum contract … with a guaranteed maximum price covering both labor and materials.” The church argued that the contractor was the “agent” of the church in making purchases of building materials and that the exemption of sales made to churches should apply. The state tax court rejected the church’s claim, and upheld the imposition of sales taxes on all sales of construction materials to the contractor. It noted that tax exemptions “should be strictly construed,” and that the sales clearly were to a contractor as part of a lump-sum contract (rather than to a church) and accordingly were taxable. This case illustrates the significance of addressing the question of sales taxes in church construction contracts. Are sales of construction materials exempt from sales tax in your state? If so, what conditions must be satisfied? Are there any exceptions that may apply (as in Minnesota)? If sales taxes are assessed, who is required to pay them (the church or the contractor)? Addressing such issues in the contract will help to avoid misunderstandings, and may avoid unexpected costs. Easter Lutheran Church v. Commissioner of Revenue (Minn. T.C. unpublished opinion 1989).

Child Abuse – Part 2

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

Church Law and Tax 1990-01-01 Recent Developments

Child Abuse

The Minnesota Supreme Court ruled that a state law requiring the reporting of known or reasonably suspected incidents of child abuse to state authorities was unconstitutionally vague. Here are the facts. An elementary school principal received reports from two mothers that their boys had been sexually contacted by a particular teacher in the school. The principal failed to report such incidents to the authorities, and he later was prosecuted for violating a state law requiring any “professional engaged in the practice of education who knows or has reason to believe a child is being neglected or physically or sexually abused” to report the incident to the state. The principal claimed that the child abuse reporting law was unconstitutional since it was too “vague.” The court acknowledged the “fundamental principle that a [criminal] statute must define the criminal offense with such definiteness that ordinary people can understand what conduct is prohibited … in a manner that does not encourage arbitrary or discriminatory enforcement.” The principal argued that the phrases “reason to believe” and “physically or sexually abused” are so uncertain that reasonable persons cannot determine their actual meaning. A trial court agreed with the principal’s position, but the state supreme court reversed. It ruled that state law did sufficiently define the term “physically or sexually abused” (sexual abuse was defined as any contact that violates the state criminal sexual contact law), and that the term “reason to believe” also had a definite meaning under Minnesota law. The court also rejected the principal’s argument that his right of “free speech” was violated by his prosecution for violating the child abuse reporting law. All the law required, observed the court, was the reporting of information—”a requirement not altogether dissimilar from that imposed by the Internal Revenue Code.” Finally, the court observed that “a professional is free to include in a report that although the report is mandated because the reporter has reason to believe that a child has been abused, the reporter does not hold a personal belief that the child has been physically or sexually abused.” This case illustrates a number of important principles: (1) Every state has a child abuse reporting law requiring certain persons to report known or reasonably suspected cases of child abuse. It is imperative for you to determine which persons are required to report under your state law, since a failure to report (by a person having a legal duty to report) may result in criminal prosecution. (2) Child abuse reporting laws may not be as clear as we would like, but they have been upheld by a number of courts, including the Minnesota Supreme Court. (3) Church leaders should not only determine which employees and volunteers have a legal duty to report, but they also must familiarize themselves with the definition of “sexual” and “physical” abuse under state law. Contact that may seem too trivial to report may well satisfy the definition of sexual abuse under state law. (4) The court specifically acknowledged that “a professional is free to include in a report that although the report is mandated because the reporter has reason to believe that a child has been abused, the reporter does not hold a personal belief that the child has been physically or sexually abused.” State v. Grover, 437 N.W.2d 60 (Minn. 1989).

Insurance – Part 3

Church Law and Tax 1989-11-01 Recent Developments Insurance Richard R. Hammar, J.D., LL.M., CPA •

Church Law and Tax 1989-11-01 Recent Developments

Insurance

A federal district court in Minnesota resolved a dispute between a church-operated school and its liability insurance company regarding payment of a claim. The school had purchased a policy insuring against wrongful acts of its employees. While the insurance was in force, a female employee notified the school principal that she intended to resign. The principal informed her that her husband (who also was an employee of the school) would be fired if she quit. Soon after this conversation, the wife resigned and the husband was fired. The husband filed a “marital discrimination” claim against the school under a Minnesota human rights law, and the school eventually settled the claim with the husband for $15,000. The insurance company refused to reimburse the school for the amount of the settlement on the grounds that (1) the settlement did not constitute an insurable loss under the policy, (2) the school should not able to insure itself against unlawful actions by its employees, and (3) employers should not be permitted to “shift” their labor costs onto their insurers. The court rejected all of these claims. It concluded that the school’s settlement of the discrimination claim was a “loss” under the insurance policy since it was a liability resulting from an employee’s wrongful act. It further noted that insurance company had “failed to show that unlawful acts relating to termination of employment are uninsurable.” Convent of the Visitation School v. Continental Casualty Co., 707 F. Supp. 412 (D. Minn. 1989).

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