Church Property Held in New Jersey Bishop’s Name Still Tax-Exempt

Church’s constitution and bylaws played a key role in court’s decision.

Bio

State: New Jersey
Categories: Taxation - Church Property

Key point. Church property generally must be held in the name of the church for it to qualify for exemption from taxation. However, in some cases, this requirement is not applied if there are sufficient safeguards recognizing the church’s ownership of the property.

A New Jersey court ruled that a church’s property was exempt from taxation even though the title to the property was held in the name of the bishop rather than the church.

Church’s governing documents explain property ownership

A church (the “Church”) in Camden City, New Jersey, was first incorporated on June 20, 1927. In 1964, the Internal Revenue Service (the “IRS”) recognized the Church as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code.

In its articles of incorporation, the Church’s stated purpose is to “establish, maintain and perpetuate the doctrine of Christianity and the Apostolic Faith throughout the world among all people, to erect and maintain houses of prayer and worship where all people may gather for prayer and to worship the Almighty God in Spirit and in Truth, irrespective of denomination or creed, and to maintain the Apostolic Faith of the Lord and Savior, Jesus Christ.”

Tip: The 2023 Church and Clergy Tax Guide is out. If you’re an Advantage Member, there’s nothing to do – it’ll come to you. If you’re not, visit Church Law & Tax’s store to pick up your guide (available in hard copy or .pdf) today.

The Church’s constitution and bylaws were originally adopted on July 1, 1929, and were amended from time to time.

In another case out of New Jersey, timing was everything when a church was forced to pay taxes on a commercial warehouse it had bought and was converting into a sanctuary.

Article VII, Section 5, of the church’s constitution and bylaws provides that, “the Bishop shall hold the property of all of the congregations of the organization as Trustee for the use and benefit of such congregations. The Bishop may rent, lease, dispose of or retain such property, for the use and benefit of the organization.”

Further, Article XI, Section 1 provides that “property purchased by any minister or other persons belonging to this organization for the purpose of assembly of a congregation of this organization shall belong to this organization irrespective of in whose name title thereto is taken.”

The Church acquired property (the “Property”) in 1969. The deed by which title was obtained stated that the grantee was the bishop (“Bishop 1”).

In 1992, a deed for the Property was executed by another bishop (“Bishop 2”). This deed, recorded with the Clerk of Camden County, was intended to reflect the succession of Bishop 2 to the leadership of the Church.

In 1993, a deed transferring title from Bishop 2 to “his successor Trustees” was executed and recorded in the Camden County Clerk’s records. This deed was recorded to eliminate the need to record new deeds each time a new bishop was elected.

After falling into disrepair, use of the Property for church purposes was discontinued for some time. During the years of nonuse, the Property was not exempt from real property tax.

Local assessor: no exemption allowed

In 2019, the Church began renovating and rededicating the Property. It reopened in June of 2020.

Church operations have been conducted there ever since. It is used exclusively for church purposes. No one lives there and it is not rented to any third parties.

In late September of 2020, the Church submitted an application seeking exempt status for the Property.

The local assessor denied the exemption, telling the Church in January of 2021 that:

The deed [to the Property] dated 8-3-1992 lists the ownership as (Bishop 2), Successor Trustee, for (the Church). Based on the ownership listed in this 1992 deed the Property does not meet the eligibility requirement for the tax exemption. The Bishop is not permitted to have an ownership interest in the property.

The Church appealed the denial to the Camden County Board of Taxation, which affirmed the assessor’s denial.

Church turns to court for help

On August 12, 2021, the Church filed a complaint with the local circuit court appealing the judgment of the Camden County Board of Taxation. The court noted that the issue before it was “whether the manner in which title is held bars a property tax exemption for the Property.”

The court began its opinion by noting that to establish a right to an exemption a property owner “must show that: (1) it is organized exclusively for a charitable purpose; (2) its property is actually used for such a charitable purpose; and (3) its use and operation of the property is not for profit.”

From a high-profile Georgia case involving the late Ravi Zacharias’ ministry to a Florida case highlighting the IRS’ power to impose liens on ministries, our Legal Developments page keeps you in the know on court cases affecting churches and church leaders.

The court added that:

a state statute stipulates that this exemption applies only “where the association, corporation or institution claiming the exemption owns the property in question and is incorporated or organized under the laws of this State and authorized to carry out the purposes on account of which the exemption is claimed.”

The assessor conceded that the Church met the second and third elements, but claimed that ownership of the Property by “(Bishop 2), Trustee and his successor Trustees, as Trustee for (the Church)” is not ownership by an “exempt organization organized exclusively for a charitable purpose” and that Church fails to satisfy the exemption statute (quoted above) that specifies that the exemption applies only “where the association, corporation or institution claiming the exemption owns the property in question.”

The Church insisted that the Property was exempt since the Church’s constitution and bylaws specified that “property purchased by any minister or other persons belonging to this organization for the purpose of assembly of a congregation of this organization shall belong to this organization irrespective of in whose name title thereto is taken.

The court agreed with the Church and ruled that the property was exempt from taxation.

What this means for churches

Church property generally must be held in the name of the church in order for it to qualify for exemption from taxation. However, in some cases, this requirement is not applied if there are sufficient safeguards in a church’s governing documents recognizing the church as the de facto owner of the property.

United House of Prayer v. Camden City, 2022 WL 1492867 (N.J. App. 2022)

Legal Developments

Volunteer Youth Leader Sentenced to Five Years for Molesting Teen Girl

Case illustrates high-risk behaviors that should alert churches to the potential for sexual abuse.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Sexual Misconduct by Clergy, Lay Employees, and Volunteers

Key point 4-11.01. Clergy who engage in sexual contact with an adult or minor are subject to civil liability on the basis of several legal theories. They also are subject to criminal liability.

Key point 10-09.01. Some courts have found churches liable on the basis of negligent supervision for a worker’s acts of child molestation on the ground that the church failed to exercise reasonable care in the supervision of the victim or of its own programs and activities.

Key point 10-09.03. Churches can reduce the risk of liability based on negligent supervision for the sexual molestation of minors by adopting risk management policies and procedures.

A New Jersey appeals court affirmed the five-year sentence of a church’s volunteer youth worker for sexual contact with an adolescent female.

Background

When she was in fifth grade, a girl (the “victim”) began attending a church with her mother. Several years later, the victim joined the church’s youth group, which conducted activities for the church’s teenage members. At the time, a volunteer leader in the youth group (the “defendant”) would occasionally give sermons at the Bible study meetings, chaperone outings, and attend and chaperone annual retreats.

In October 2013, the victim stopped attending youth group activities. Thereafter, the defendant began calling and texting her to convince her to rejoin the group. The victim claimed that:

by November 2013, she and the defendant were speaking on the phone several times per week and regularly exchanging text messages;

she began to view defendant as a mentor whom she could speak with about her personal issues, the youth group, and her own relationship with God; and

by December 2013, she and defendant began discussing sex, and sex was a “pretty normal” part of their conversations.

By January 2014, the victim had again started to attend the youth group activities and her communications with the defendant increased. She would see the defendant often at these activities and sometimes he would drive her home.

In February 2014, the defendant asked the victim if she would be interested in babysitting his children. The defendant had a daughter who was six years old and a son who was six months old.

The victim agreed and began to babysit the defendant’s children. She did so approximately six to eight times between March 2014 and June 2014. Each time, defendant would pick her up at her home and drive her to his house. She would babysit the children from 5 p.m. until 9 p.m., after which the defendant would drive her home.

The victim testified that during her second visit to the defendant’s home, he entered the family room where she was babysitting and motioned for her to follow him into an adjacent guest bedroom.

Once they were inside the guest bedroom, the defendant told the victim that he had received visions from God indicating she “was hurting.” The defendant said he could help her “be happy” and “become closer to God” if they reenacted his “visions,” which involved various sexual positions.

The victim insisted that the defendant’s actions “definitely made her feel uncomfortable.” She stated, however, that she viewed the defendant as a leader in her church and believed he cared for her, so she trusted him when he said that engaging in this conduct would bring her closer to God. The victim testified that the defendant repeated this conduct each time she babysat for his children, which was five more times.

Police investigation

In June 2014, the victim stopped babysitting for the defendant. About a month later, she called one of her mother’s friends from church, told her what the defendant had been doing, and asked her if it was wrong. The friend immediately went to the church’s pastor to inform him what the victim had told her.

In July 2014, the pastor, his wife, and the defendant met with the victim’s mother to tell her what the defendant had disclosed. The mother immediately took her daughter to the nearest police station, arriving around 1 a.m.

The officers took an initial report and asked the victim and her mother to go home, rest, and return in the morning to give a full statement to the detectives. The victim and her mother returned to the police station later the next day and the victim gave a full statement to several detectives who would be involved in the investigation.

As part of the investigation, the victim agreed to call the defendant on August 5, 2014, while the police listened in and made a recording of the call.

In the recorded conversation, the defendant told the victim that she should not be calling him because her mother “is real strict on that.” She asked the defendant what she should tell her mother about his conduct. He responded, “I have no idea . . . I’m sorry.” During the call, the defendant did not implicate himself in any illegal conduct.

Appeals court affirms the conviction

The victim’s mother gave the police her daughter’s cellphone and consented to a forensic investigation of the phone, which identified 118 text messages and 9 video calls between the defendant and the victim.

Thereafter, the defendant was arrested and charged with criminal sexual contact and endangering the welfare of a child by engaging in sexual conduct. The defendant was found guilty and sentenced to five years of incarceration. An appeals court affirmed his sentence.

What this means for churches

This case offers three important lessons for church leaders.

1. Understand the risk associated with cellphones

This case illustrates the risks associated with cellphones. The defendant’s cellphone contained 118 text messages and 9 video calls between defendant and the victim.

Protecting Children and Youth

See this Recommended Reading page to learn how to help keep children safe, the right way to respond to allegations of abuse, and legal requirements related to reporting and screening.

As a “best practice,” churches should prohibit any private messaging on any social media platform by a youth or children’s pastor or lay volunteer with unrelated minors.

To help develop best practices, contact your local public school district and find out what restrictions they place on communications between teachers and students. Often, such communications are prohibited.

2. Enforce a two-adult rule

The defendant was able to pursue his sexual behavior with the victim in his home, the victim’s home, and his car because much of it occurred without any other adults being present.

Even though this conduct occurred off the church’s property and outside of church activities, this case still illustrates the importance of a “two-adult” rule that says no minor is ever allowed to be alone with an unrelated adult during any church activity. Such a policy reduces the risk of child molestation and also reduces the risk of false accusations of molestation.

3. Watch for high-risk behaviors

Some leaders who molest minors in churches or church activities have openly engaged in high-risk behaviors, including:

More on Grooming Behaviors

See “12 Lessons from Penn State’s Abuse Scandal” and “Keeping Children and Teens Safe While Ministering Online” for guidance on identifying grooming behaviors and creating policies and procedure to reduce opportunities for grooming to take place.

Inviting minors to spend time in their home.

Inviting minors to spend the night in their home.

Driving a vehicle with one or more unrelated minors on board, and no other adults.

Going on day trips with an unrelated minor.

Going on overnight trips with an unrelated minor.

Spending the night in a hotel with one or more unrelated minors.

Meeting one or more minors in places where minors congregate.

Sleeping in a tent or cabin with an unrelated minor during a campout.

Providing unrelated minors with gifts.

These, and similar, “grooming” behaviors are associated with many incidents of sexual abuse involving youth and children’s ministry leaders. Such behaviors should be promptly confronted and stopped.

State v. S.A.B., 02021 WL 2426613 (N.J. App. 2021).

Legal Developments

Convicted Sex Offender Sentenced to Five Years for Violating Megan’s Law

This case underscores four vulnerabilities creating risks, including the failure to consistently enforce an abuse-prevention policy.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Sexual Misconduct by Clergy, Lay Employees, and Volunteers

Key point 10-04.3. Churches can reduce the risk of liability based on negligent selection for the sexual molestation of minors by adopting risk management policies and procedures.

A New Jersey court affirmed a five-year prison sentence for a convicted child molester whose participation in a church’s youth ministry violated Megan’s Law.

A registered sex offender served in a church’s youth ministry

An adult male (the “defendant”) was sentenced to prison for sexually assaulting two teenagers. When he was released, he registered as a sex offender with his local law enforcement agency as required by Megan’s Law.

More on Megan’s Law

In 1996, the US Congress passed Megan’s Law mandating public disclosure of information about sex offenders. For additional details on Megan’s Law and the subsequent development of Megan’s Laws at the state level, see the “Risk Management” section of the Legal Library.

The defendant was an active member of a church and participated in its No Limits Youth Ministry (NLYM), whose mission was “to prepare students to be effective” at home and in school. Eventually, the defendant became involved in a variety of roles in the church, serving as a leader of the youth ministry and a member of the church’s executive board.

Church leaders knew the defendant had spent time in prison, but they were apparently unaware of the nature of his crimes.

New policy banned the defendant from the youth ministry

However, in 2005, after new board members were elected, the board reviewed a file that included the defendant’s criminal history, and certain board members became concerned about the defendant’s active role in the church’s youth ministry.

The board decided to adopt policies prohibiting the defendant from being involved with the church’s youth ministry and being alone with any of the youth members. The defendant was informed of the board’s decision and complied with the board’s policies from 2005 to 2008.

The pastor did not remove the defendant from the executive board because he did not believe there was any basis for doing so.

The church stopped enforcing the ban

Between 2008 and 2010, the church went through a leadership transition. During this time, the church had multiple pastors as well as new board members, and the board’s policies regarding the defendant’s involvement with the youth ministry and youth members were not enforced. The defendant again began to participate actively in the church’s youth ministry.

At that time, the youth ministry was reorganized to provide church members between the ages of 12 and 17 with spiritual education, social and recreational activities, as well as a community setting to foster personal and religious growth. NLYM organized weekly bible study meetings, social events, and recreational activities such as trips to movies, amusement parks, concerts, and overnight camp retreats.

The church’s youth director from 2006 to 2016 testified that, from 2009 to 2014, the defendant was a youth leader, chaperone, and mentor for the young participants in NLYM. He explained that, as a youth leader, the defendant was responsible for supervising the participants during weekly meetings and facilitating discussions and activities as a part of the ministry’s goal to inspire the participants’ faith.

In addition to their responsibilities at NLYM’s weekly meetings, youth leaders acted as chaperones on trips and offsite camp retreats. The youth director said that from 2008 to 2013, the defendant was a chaperone at the camp retreats. While chaperoning the camps, the defendant would sleep in the same quarters as the young male students.

The youth director specifically recalled the defendant’s participation in at least one NLYM camp in 2010. During the retreat, the defendant’s responsibilities included driving the participants to the camp, helping set up the campsites, leading activities and games, and facilitating group discussions.

In 2008, the church’s senior pastor requested that criminal background checks be performed for volunteers working in the youth ministry and, at a minimum, every two years thereafter. He testified that the background checks had been conducted regularly during the preceding four or five years.

Ruling: The defendant violated Megan’s Law

Based on the defendant’s involvement with NLYM, a grand jury charged him with participation in a “youth serving organization” in violation of Megan’s Law. A trial court agreed and sentenced him to five years in prison. His conviction and sentence were affirmed by a state appeals court. The court concluded that the defendant “knowingly participated” in a youth-serving organization prohibited for him by Megan’s Law.

What this means for churches

This case is important and instructive for church leaders because it points to risks related to the following four vulnerabilities.

Changes in church leadership

First, this case demonstrates the potential risk to church policies associated with a change in leadership. This can occur with a change in the senior pastor, youth and children’s pastors, board members, or youth and children’s volunteer leaders. Church leaders should recognize that policies are potentially imperiled through any change in leadership, and steps must be taken to be alert to such changes and to take corrective action.

Failing to consistently enforce an abuse prevention policy

Second, having a policy that is not consistently enforced exposes a church to potentially significant risk. This does not mean that a church should avoid policies. Rather, it means that appropriate policies should be adopted and steps taken to ensure compliance.

Unwise decisions exposing the church to possible liability

Third, the pastor in this case chose to leave the defendant as a member of the church’s executive board on the ground that his abuse of minors did not compromise his fitness for serving in this capacity. This was an unwise decision that exposed the church to possible liability for any future acts of abuse perpetrated either on the church premises or through a church-sponsored event or activity.

And, if the board acquiesced in the pastor’s decision, this may have exposed board members to personal liability for future cases of abuse by the defendant.

Protecting Children and Youth

Turn to this Recommended Reading page to learn how to help keep children safe, the right way to respond to allegations of abuse, and legal requirements related to reporting and screening.

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

Failing to thoroughly vet youth staff and volunteers

Fourth, the defendant was sentenced to five years in prison because his extensive youth ministry activities violated the limitations placed on sex offenders by Megan’s Law.

A church should thoroughly vet any volunteer or employee for work in youth or children’s ministries, and this should include, among other precautions, a search of the sex offender registry (Megan’s Law).

An applicant who is a registered sex offender should not be considered for any children’s or youth ministry position in the church, and they should be advised of the potential criminal liability they face for pursuing such a position.

State v. S.B, 2021 WL 1625025 (N.J. Super 2021).

Legal Developments

Unmarried Pregnant Employee Can Sue Religious School for Discrimination

Appeals court says “knowledge or mere observation” of woman’s pregnancy is not a “permissible basis” to fire her under state law.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Employment Practices

Key Point 8-12.04. Title VII of the Civil Rights Act of 1964 prohibits employers engaged in commerce and having at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, gender, or religion. The Act permits religious organizations to discriminate in employment decisions on the basis of religion. This exemption permits such organizations to discriminate on the basis of moral or scriptural standards so long as they do so consistently and not in a way that adversely impacts employees who are members of a group that is protected under an applicable state or federal discrimination law.

A New Jersey appeals court ruled that a pregnant, unmarried teacher could pursue a lawsuit under her state’s nondiscrimination law against a religious school. The reasons: The school did not possess a policy explicitly identifying extramarital sexual relations as a ground for dismissal, and the school failed to investigate the treatment of married and unmarried males and married and unmarried female employees to determine if unmarried pregnant females were being treated less favorably in violation of state law.

Background

An unmarried woman (the “plaintiff”), who held a bachelor’s degree in art education, was hired by a Catholic parochial school (the “defendant”) “in September 2011 as a teacher’s aide ‘in the toddler room.’ Two years later, [she] also began teaching art for students in kindergarten to eighth grade. Plaintiff never taught courses about religion nor did she act as a minister or any other member of the clergy,” a state appeals court stated.

When the defendant hired the plaintiff, she received a copy of the defendant’s handbook. Moreover, she was aware of the Catholic Church’s prohibition against premarital sex.

The appeals court said:

In 2014, while having a conversation about defendant wanting plaintiff to assume additional responsibilities, [plaintiff] advised the school’s principal that she was pregnant and that if she were to perform additional work, she would like to be paid more. . . .

A few weeks later, [the principal], on her own, decided to fire plaintiff for engaging in premarital sex. However, before doing so, defendant hired a replacement who was a married woman with children. When defendant finally fired plaintiff, [the school] told her she was being terminated because she was pregnant and unmarried. It was undisputed that plaintiff’s termination related only to that fact as compared to her job performance. It was also undisputed that defendant never made any “inquiry of any employee as to whether they were pregnant, unmarried, engaged in premarital sex, divorced, or otherwise violated any of the Church’s doctrines.”

The court also noted:

[D]efendant required all of its “lay faithful” teachers, “whether employed in areas of ministry or other kinds of services,” to abide by a code of conduct that was not “contrary to the discipline and teachings of the Catholic Church . . . or which may result in scandal . . . or harm to the ministry of the Catholic Church.” Additionally, defendant’s handbook contained numerous provisions aligning with the Church’s tenets, including a section labeled “Christian Witness” which required teachers to practice a “value-centered approach to living and learning in their private and professional lives.” The handbook also provided that each staff member “integrate culture, faith, and life through the teachings of all subject areas in the light of the Gospel so that the children can become ‘good Christians and honest citizens.’”

However, it was also undisputed that

[n]one of the policies or provisions of the handbook expressly identified premarital sex as a prohibited conduct. According to the school’s principal, . . . there was no specific statement in any document that would inform someone that if they became pregnant while being unmarried that they would be violating [any] policy. There was no statement in the documents that a violation of any provision would result in immediate termination from employment.

Fired teacher claims unlawful pregnancy discrimination

The plaintiff sued the defendant, claiming the religious school had engaged in sex discrimination in violation of state law because it dismissed her solely on the basis of her pregnancy. This, she argued, amounted to unlawful pregnancy discrimination because the defendant failed to investigate the disciplinary action taken by the defendant against males or nonpregnant females.

The court dismissed the case, and the plaintiff appealed. The state appeals court reversed the trial court and ruled that the plaintiff could pursue her claim of discrimination in court.

The court observed that “knowledge or mere observation of an employee’s pregnancy alone is not a permissible basis to detect violations of the school’s policy and terminate an employee.” It “acknowledged defendant’s right to terminate a teacher whose employment was conditioned upon adherence to its religious principles.”

However, the court stated, “[d]efendant cannot enforce its prohibition by only disciplining women whose premarital sexual relations are disclosed through their pregnancy.”

The court also noted:

“[A] school [cannot] use the mere observation or knowledge of pregnancy as its sole method of detecting violations of its premarital sex policy.” . . . “Women [cannot] be subject to termination for something that men would not be, [as] that is sex discrimination, regardless of the justification put forth for the disparity.”

What this means for churches

This case is important for two reasons.

First, church leaders should understand that dismissing unmarried, pregnant employees without investigating extramarital sexual relations by unmarried or married males and unmarried or married females may constitute pregnancy discrimination in violation of state and federal laws.

That is, if nonpregnant employees who engage in extramarital sexual relations are not disciplined for their behavior, then a church that dismisses pregnant females for the same conduct may be committing unlawful discrimination based on pregnancy.

Second, one of the court’s reasons for rejecting the defendant’s motion to dismiss the case was the failure of the defendant to list “pregnant out of wedlock” or “extramarital sexual relations” among the grounds for termination of employment. The vague references to moral behavior in the defendant’s policy manual were not sufficient to provide the plaintiff with notice as to what behaviors were prohibited.

The defendant’s principal acknowledged that there was no specific statement in any document that “would inform someone that if they became pregnant while being unmarried that they would be violating any policy.” The lesson is clear. Church employment policies should identify with specificity the grounds for termination. Crisitello v. Saint Theresa School, 242 A.3d 292 (N.J. App. 2020).

Legal Developments

Church Not Responsible for Hayride Injuries

But this case highlights the need for churches to set up stringent safeguards for inherently risky activities.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Personal Injuries on Church Property or During Church Activities

Key point 10-11.1. Churches can reduce the risk of liability based on negligent supervision for injuries not involving sexual misconduct by adopting risk management policies and procedures.

A federal district court in New Jersey ruled that a church was not responsible for serious injuries sustained by a parishioner while participating in a hayride organized by the church.

Background

The Fellowship Event was a free, church-sponsored outing hosted each fall at a nearby commercial farm owned by longtime parishioners of the church. In 2015, the event began at 5:30 p.m. and ended around 10 p.m. About 50 people attended, most of whom were not farmers and did not possess farming experience. The church promoted the event through mentions in the weekly bulletin and announcements by the pastor in the weeks leading up to the event. No participants were required to sign liability waivers for the event.

Multiple wagons were hitched to tractors for the hayride. Hay was spread along the floor. Haybales were used as seats on the wagons as well as for steps for getting on and off the wagons.

The farmer provided and loaded all the hay bales. The bales were not secured and could easily move if someone stepped on them. The farmer and other church parishioners set up the wagons and tractors for the hayrides, while the farmer’s wife assisted with the bonfire setup.

The plaintiff attended the Fellowship Event with her husband and three children. She rode in one of the wagons hitched to a tractor.

At approximately 6:15 p.m.—before the plaintiff’s hayride began, and while the wagon and tractor sat idle—the plaintiff attempted to get out and retrieve additional blankets. The plaintiff said she turned herself around to descend backwards from the wagon, and as she did, she said one of the hay bales used as a step moved, causing her to fall backwards and “strike the ground with her back and head.”

No one witnessed the fall, though many saw her on the ground shortly after.

She sought no medical attention at the time and returned to the wagon to participate in the hayride. She also participated in the bonfire later. The plaintiff said she lost consciousness for an unknown period of time after the fall “and vaguely remembers the hayride or events thereafter.”

The plaintiff said she left the event and went to a hospital to receive medical attention. She alleged “she sustained numerous physical injuries to her head, neck, ankle, and back, as well as mental and emotional injuries.”

The plaintiff sues the farmers

In 2017, the plaintiff sued the farmers for negligence. The lawsuit asserted that the farmers “negligently caused the plaintiff’s injuries because they failed to provide a properly secured step to board and exit the wagon; failed to provide an attendant to assist boarding and exiting the wagon; failed to warn her about stepping onto the hay bale; and failed to adhere to state, local, and industry standards for steps and hand rails.”

The farmers, on the other hand, alleged that although no specific individual was assigned to assist people on and off the wagons, other assistance was provided, including verbal safety instructions during the hayride.

The farmers filed a third-party complaint against the church

The farmers also filed a third-party complaint against the church, alleging that the plaintiff’s injuries were caused in whole or in part by the negligent acts of the church.

Specifically, the farmers asserted that the church was “a beneficiary, organizer, and planner” of the Fellowship Event, and “provided materials, goods, and services” including the hay bales that injured the plaintiff.

The court’s decision

The court concluded that the church was not responsible for the plaintiff’s injuries:

There is no dispute that the Fellowship Event was held on the . . . farm. Importantly, the [farmers] have not presented facts to suggest that [the church] supplied the wagons, tractors, hay bales, and other farm equipment used on the farm during the event and that allegedly caused Plaintiff’s injuries. Although the [farmers] assert . . . that [the church] supplied the materials, equipment, and goods for the Fellowship Event, the [farmers] fail to cite to any evidence to support their contention. In fact, [the farmer’s] deposition testimony demonstrates that it was he who provided the bales of hay for use as seats on the wagons as well as for use as steps onto and off of the wagons. . . .

Furthermore, the fact that the event was advertised in the church’s bulletin, and during church services is immaterial because Plaintiff’s injury occurred on the . . . farm through the use of the [farmers’] farming equipment. Therefore, the facts reveal that [the church] was not [responsible for the accident].

What this means for churches

Hayrides are inherently risky activities that have resulted in injuries and deaths to many people.

Many courts have found the sponsors of these events, including churches, liable for any deaths or injuries that may occur, usually on the basis of negligent selection of the driver of the truck or tractor that pulls the wagon, or negligent supervision of the event itself.

Churches should not authorize or schedule such events (for minors or adults) without stringent safeguards to protect against injury or death.

For a list of 18 precautions, see my Q&A on church hayrides, which includes guidance on selection and supervision protocols, ideal times of day for hayrides, inspections, liability waivers, and more. West v. De Block, 2020 U.S. Dist. LEXIS 180321 (D.N.J. 2020).

Legal Developments

Pastor Sentenced to Prison for “Sexting”

A New Jersey appeals court affirmed the prison sentence of a pastor who engaged in “sexting” and sexual contact with 14-year-old-girl.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Sexual Misconduct by Clergy, Lay Employees, and Volunteers

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

A New Jersey appeals court affirmed the prison sentence of a pastor who engaged in “sexting” and sexual contact with a 14-year-old girl.

A 14-year-old girl (the “victim”) and her family lived across the street from the church they attended. The victim developed a close relationship with one of the church’s three pastors (the “defendant”). The two of them began texting each other. On one occasion, he hugged her in a way that made her uncomfortable in a backroom of the church. On another occasion, she went to speak with him in the church and he led her into a room with a couch where he initiated sexual contact with her. When he tried to flip her over, he fell and she told him to stop, which he did.

That same day the victim told her uncle what had happened. She did not tell her mother until later. Her uncle confronted the defendant and told him to apologize to the victim.

The victim continued to text the defendant. She eventually told one of the other pastors what the defendant had done, but she asked that the police not become involved. This pastor promptly notified the prosecutor’s office, which called defendant in to discuss the allegation. The defendant then spoke to the victim’s mother, admitting he “went too far.” The defendant was charged with endangering the welfare of a child and criminal sexual contact for which he was sentenced to an aggregate term of six years in prison, parole supervision for life, and additional mandatory penalties.

What this means for churches

The defendant’s criminal offenses were based, in part, on his sexually oriented text messages with the victim. In many states the transmission of sexually explicit text messages (“sexting”) via a cell phone or other electronic device constitutes a crime. Such messages also can be used as evidence in civil lawsuits. For example, assume that an adolescent female in a church youth group claims that the youth pastor had nonconsensual sexual contact with her. She sues the church, claiming that it is responsible for the pastor’s acts on the basis of negligent hiring and supervision. The victim subpoenas the youth pastor’s text messages to establish the truth of her claims.

Several courts have addressed the issue of criminal liability of pastors for engaging in sexting. Here is one example:

A court used sexually explicit text messages between a youth pastor and a female member of the youth group to corroborate her account of sexual exploitation. The court sentenced the pastor to a prison sentence of four years to life. 2009 WL 1476934 (Colo. App. 2009).

For other examples, see my article “Defending Youth Ministries from 8 Critical Risks.”

Churches should adopt a written policy banning all pastors and lay volunteers engaged in youth or children’s ministries from engaging in any form of private messaging with minors. Violations of this policy must not be tolerated. Failure to consistently enforce the policy not only will expose the church to civil liability, but also will expose minors to harm.

Contact your local public school district for assistance in formulating your policy. This can have several important benefits, including:

A policy drafted by your local public school district will provide the church with helpful assistance in drafting your own policy;

The fact that your local public school district has enacted such a policy, with sanctions for violations, will underscore the need for the church to do likewise;

Churches that align their practice with the public schools reduce their exposure to civil liability based on negligence since they are emulating the practice of an agency (the public schools) of the state.

State v. Lopez-Durango, 2018 WL 4956853 (N.J. App. 2018).

Legal Developments

Churches May Fire an Employee for Violating Moral Standards If Done Consistently

The dismissal of an employee for violating a church’s moral teachings may expose a church to liability.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Employment Practices

Key Point 8-12.4 . Title VII of the Civil Rights Act of 1964 prohibits employers engaged in commerce and having at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, gender, or religion. The Act permits religious organizations to discriminate in employment decisions on the basis of religion. This exemption permits such organizations to discriminate on the basis of moral or scriptural standards so long as they do so consistently and not in a way that adversely impacts employees who are members of a group that is protected under an applicable state or federal discrimination law.

A New Jersey court ruled that churches are free to dismiss employees for violating the church’s moral standards so long as they do so consistently and, for example, do not treat male employees who engage in extramarital sexual conduct more leniently than pregnant, unmarried female employees.

A school owned and operated by a Catholic church adopted the religious policies on professional and ministerial conduct espoused by the Archdiocese, including a code of ethics. That code states: “Church personnel shall exhibit the highest Christian ethical standards and personal integrity,” and “shall conduct themselves in a manner that is consistent with the discipline, norms and the teachings of the Catholic Church.” The policies further preclude immoral conduct by employees, which is defined as “conduct that is contrary to the discipline and teachings of the Catholic Church, and which may result in scandal . . . or harm to the ministry of the Catholic Church.” They apply to clergy members and the “lay faithful,” which are defined as all “paid personnel whether employed in areas of ministry or other kinds of services.” The school’s faculty handbook also contains numerous provisions aligning with the church’s tenets, including a section labeled “Christian Witness,” which required teachers to practice a “value-centered approach to living and learning in their private and professional lives.”

None of the policies or provisions of the handbook expressly identified premarital sex as prohibited conduct. According to the school’s principal, there was no specific statement in any document that “would inform someone that if they became pregnant while being unmarried that they would be violating an official policy.” There was also no statement in the documents that a violation of any provision would result in immediate termination from employment. The only specifically identified prohibited behavior was contained in the church’s code of ethics, which included a chapter titled “Prevention of Immoral Conduct: Guidelines for Ethical Behavior.” Under that chapter, in a section titled “Standards for the Archdiocese as to Prevention of Immoral Conduct,” specific prohibited conduct was defined as:

a. Immoral conduct.

b. Procurement or participation in the procurement of abortion, or committing homicide or euthanasia.

c. Possession or distribution of pornographic material.

d. Adultery, flagrant promiscuity or illicit co-habitation.

e. Abuse of alcohol, drugs, or gambling.

f. Theft, fraud, or any other form of misappropriation or misuse of Church funds or property.

g. Sexual exploitation or abuse.

h. Physical assault and fighting.

i. Conduct which is illegal under the laws of our country, state or local government.

In September 2011, the school hired a lay teacher for toddlers (the plaintiff). The plaintiff signed an acknowledgement that she understood and agreed with the school’s ethics code and faculty employment handbook. She was already familiar with the church’s teachings, including its prohibition against premarital sex. In 2014, during a meeting with the school principal, the plaintiff stated that she was pregnant, and if she were given additional work, she would like to be paid more than her current salary.

The principal subsequently told the plaintiff to either resign or she would be terminated because she was pregnant and unmarried. The principal later explained:

Plaintiff was terminated . . . after I became aware that she was carrying a child in an unmarried state, which necessarily meant that she had engaged in sex outside of marriage. Sex outside of marriage is not permitted in the Catholic Church. Sex outside of marriage violates the tenets of the Catholic Church. Thus, plaintiff violated her obligations under the policies, including the code of ethics. She has not exhibited the highest Christian ethical standards and personal integrity, which were required of her. Furthermore, she has not conducted herself in a manner that is consistent with the discipline, norms and teachings of the Roman Catholic Church.

The principal stressed that the school “has nothing against pregnant teachers” as long as they were “married at the time of being with child.”

The plaintiff sued the school, alleging that its articulated reason for terminating her employment was a mere pretext for discrimination on the basis of her pregnancy and marital status of being “unmarried.” The trial court dismissed the plaintiff’s claims on the ground that they were barred by the First Amendment guaranty of religious freedom. The plaintiff appealed.

A state appeals court began its opinion by noting that civil courts cannot decide purely religious issues, and that “we also acknowledge a Catholic school’s right to terminate a teacher who has publicly engaged in conduct regarded by the school as inconsistent with its religious principles.” However, the limitation on a civil court’s involvement in religious disputes over doctrine or conduct “does not apply to civil adjudication of purely secular legal questions that do not entail theological or doctrinal valuations, even if they involve some background issues of religious doctrine. . . . Religious organizations are not entitled to a blanket exemption from all secular regulations because of their status as a religious institution.”

The plaintiff claimed that she was a victim of sex and marital status discrimination because male teachers who engaged in extramarital sexual relations were not dismissed. The court concluded that such a claim, if proven, could be resolved by the civil courts because it would not involve any inquiry into church doctrine or teachings. The court sent the case back to the trial court for further consideration.

What this means for churches

This case demonstrates that the dismissal of an employee for violating a church’s moral teachings may expose a church to liability. There are steps that a church can take to mitigate this risk. Before dismissing an employee for violating the church’s moral teachings, church leaders should ask the following questions:

Is there sufficient evidence to support our decision?

Did we inform the employee, in an employee handbook or other document that he or she would be subject to dismissal for engaging in behavior in violation of our moral teachings?

How will we describe the basis for our decision? The best description will refer to the church’s doctrinal tenets and scriptural citations. Stay away from words such as “pregnancy” that can have a “secular” meaning, and that diminish the “religious exemption” available to churches under most federal and state civil rights and employment laws.

How have we treated other employees in the past who were guilty of the same kind of misconduct? Have we treated all employees equally? Or, have we treated some employees less favorably than others? For example, have we dismissed female employees who were guilty of extramarital sexual relations but only warned or reprimanded male employees guilty of the same behavior? Before dismissing an employee for misconduct, church leaders should review all other known cases involving similar misconduct by other employees. Be sure that an employee who is protected against discrimination by state or federal law is not treated less favorably than other employees in previous cases.

Have we consulted with an attorney before taking final action?

Crisitello v. St. Theresa School, 2018 WL 3542871 (N.J. App. 2018).

Legal Developments

Church Forced to Pay Taxes for Converted Building Due to Assessment Date

The tax-exempt status of church property generally is determined by the actual use of the property on the “tax assessment” date.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Taxation - Church Property

Key point. The tax-exempt status of church property generally is determined by the actual use of the property on the “tax assessment” date.

A New Jersey court ruled that a commercial building purchased by a church as the site of a new sanctuary was not entitled to exemption from property taxation since the property was in the process of being renovated on the tax assessment date.

A church and parking lot were exempt from local property tax. However, as the congregation grew, it sought opportunities to expand its facilities. In September 2009, the church purchased property (the “adjoining property”). Prior to the sale, the adjoining property was improved with a commercial warehouse.

Sometime between 2009 and 2012, the church filed an application for local property tax exemption for the adjoining property. The city denied the application, and the church did not appeal the denial.

The church claimed that from 2009 through 2011, it used the property in furtherance of its work, including an “extension of its regular religious activities,” including for “ceremonial activities, religious services during mild weather months, youth rallies, women’s rallies, fundraising activities, fairs and storage of various items associated with church functions.”

Beginning in late 2011, the church began a series of significant renovations and improvements to the property to convert it from a commercial warehouse into a large sanctuary, offices, and meeting space. Building permits were issued for the interior construction and renovation, including building, framing, electrical, plumbing, mechanical (installation of heating, ventilation, and air conditioning systems), and installation of fire protection apparatus. Soon thereafter, construction of the renovations and improvements to the subject property began.

In 2012, the church applied for local property tax exemption for the adjacent property for the 2013 tax year. The city denied the application. The plaintiff appealed the denial, as well as the reasonableness of the 2013 tax year assessment of $213,000.

The church asked a court to rule that the property was exempt from local property tax for 2013. The New Jersey Tax Court began its opinion by noting that “in addressing a tax exemption based on construction of a new building for a property not previously tax-exempt, the courts have principally focused on whether as of the assessing date, the property was in actual use, or was a fully functional establishment prepared to offer its charitable services to the public … . Stated differently, the inquiry is whether the property was, as of the assessing date, a fully operating institution, ready and waiting to expend its charitable endeavors on those who might apply for them.” The court noted:

As of the October 1, 2012 assessing date, plaintiff was making limited use of the partially renovated structure on the subject property by conducting daily 20-minute morning prayer services. However, these prayer services were incidental to the prayer services, offered by the church, in its adjacent building, and were limited to church members, who were part of the construction team, offering inspirational blessings as they began their workday to renovate the subject property. These prayer services were not available to the public and do not constitute actual use, as contemplated under [the exemption] … .

Moreover, the church’s minister readily acknowledged that “formal religious services commenced around the time of Thanksgiving 2012,” some six to seven weeks after the October 1, 2012 assessing date. Significantly, a temporary certificate of occupancy, lawfully permitting the subject property to be occupied and used by the public for its intended religious purpose, was not issued until April 15, 2013, some six months after the assessing date. The record before the court further discloses that construction on the subject property continued after the October 1, 2012 assessing date, with interior finish work being performed, and building construction code inspections for the fire alarm system, interior building finishes, mechanical systems, building, and electrical systems, being conducted on November 30, 2012, December 30, 2012, January 3, 2013, July 1, 2013, and July 23, 2013.

The court concluded that the church was not in a position to provide its services or benefits to the public, as of the October 1, 2012, assessment date. As a result of ongoing construction and renovations, the structure was not available, nor was it ready to be occupied and used by the public for religious or charitable activities until sometime following the October 1, 2012, assessment date. Thus, as of the assessing date, the only recipients of the plaintiff’s religious services on the subject property were the parishioners and their spouses, who were part of the construction team, dedicated to renovating the structure. Neither the public, nor the vast majority of the plaintiff’s congregation derived any benefit from the partially completed structure as of the October 1, 2012, assessing date. Thus, no quid pro quo was offered by the plaintiff thereby entitling it to tax exemption for the subject property.

What this means for churches

The tax-exempt status of church property generally is determined by the actual use of the property on the “tax assessment” date. This often creates confusion as to the tax status of property purchased by a church and in the process of renovation on the assessment date. The exempt status of church property that is under significant renovation on the assessment date, and not fully functioning as a church, is in doubt. Christian Mission v. Passaic City, 30 N.J.Tax 357 (2018).

Legal Developments

Church Member Injured in Tug of War Assumed Risk of “Common” Consequences

Competent adults who voluntarily expose themselves to a known risk have assumed that risk and cannot seek monetary damages for injuries due to that risk.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Personal Injuries on Church Property or During Church Activities

Key point 10-16.2. Adults who voluntarily expose themselves to a known risk created by a church program or activity generally cannot sue the church if they are injured as a result of that risk.

A New Jersey court ruled that a church was not liable for injuries sustained by a member while engaged in a game of tug of war during a church-sponsored picnic, because the member assumed the risk of injuries that were “common, frequent, expected and inherent in the activity itself.”

A church member (the “plaintiff”) was injured when he voluntarily engaged in a game of tug of war during a church picnic at a public park. The plaintiff claimed that he sustained injuries as a result of the opposing tug-of-war team pulling and releasing the rope too early, which caused team members to collide. The plaintiff claimed that the church’s pastor, who was watching the contest, “changed the rules” of tug of war by telling the teams to pull and let go causing the other team to fall to the ground.

The plaintiff claimed that he suffered serious and permanent injuries including a torn right ACL requiring surgical intervention, as well as injuries to his head, neck, back, as well as to the bones, tissues, and ligaments. This was the second game of tug of war that the plaintiff participated in that day.

The plaintiff insisted that the church was responsible for his injuries on the basis of its negligence in supervising the event. A trial court disagreed and dismissed the case on the ground that the plaintiff had assumed the risk of the harm that caused his injuries.

The plaintiff appealed, claiming that he had a reasonable expectation of how the tug of war game was to be played, and he could not have appreciated the risks associated with altering the rules of the game, as he alleges was done. He also argued that the trial court erred in granting summary judgment based on the assumption of the risk doctrine. A state appellate court affirmed the trial court’s dismissal of the lawsuit:

By voluntarily proceeding to encounter a known or obvious danger, the invitee is deemed to have agreed to accept the risk and to undertake to look out for himself. It is precisely because the invitee assumes the risk of injury from obvious and avoidable dangers that the possessor owes the invitee no duty to take measures to alleviate those dangers… . In the present case, the trial court recognized that the assumption of the risk doctrine arises in cases involving sporting events when the player or spectator knows that an accident or injury may occur and that by playing or watching he voluntarily assumes the risk of injury… .

In the present case the plaintiff voluntarily participated in the tug-of-war game at the church event. He knew the risks associated with the game of tug of war because he played the game twice. A risk which is common in tug of war is falling down amongst your team members. The plaintiff assumed the risk of the tug-of-war game.

The court acknowledged that the plaintiff’s wife had testified that she saw the pastor hold his hand to his mouth and tell the other team to “pull it and drop.” This testimony the court concluded

does not change the fact that the plaintiff assumed the risks that are inherent in the game of tug of war; falling, and that to establish negligence there must exist a duty. Persons conducting activities have no duty to warn or protect participants against risks which are common, frequent, expected and inherent in the activity itself. No duty was owed to the plaintiff while he was participating in the game. The rules and risks of the game were not altered in a way where the duty to the plaintiff changed at any time.

In support of its ruling, the court referred to a prior case in which a Pennsylvania court addressed the liability of a baseball league for injuries to persons participating in tryouts. Bowser v. Hershey Baseball Assoc., 516 A.2d 61 (Pa. Super. 1986). The Pennsylvania court, in dismissing the victim’s lawsuit for monetary damages, noted that the victim had agreed to participate in baseball tryouts, and voluntarily exposed himself to the risks inherent in baseball. The court reasoned that having exposed himself to the risks associated with baseball such as being hit by a batted ball, the victim could not recover from the sponsor of the baseball event for injuries caused by this very risk. The court concluded:

Persons conducting activities have no duty to warn or protect participants against risks which are common, frequent, expected and inherent in the activity itself. Thus, persons conducting the event are not negligent for failing to warn or protect a participant against risk which are inherent in the activity.

What This Means For Churches

This case illustrates that competent adults who voluntarily expose themselves to a known risk have assumed that risk and cannot seek monetary damages for injuries due to that risk. John v. St. Thomas Church, 2017 WL 1049654 (N.J. Super 2017).

Legal Developments

Mosque Members’ Lawsuit Concerning Financial Improprieties Must Be Resolved By Binding Arbitration Due to Mosque Bylaws’ Arbitration Clause

Court concluded that the mosque’s bylaws constitute a contract between it and plaintiffs.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Arbitration, Charters, Constitutions, and Bylaws

Key point 10-16.8. Churches have various defenses available to them if they are sued as a result of a personal injury. One such defense is an arbitration policy. By adopting an arbitration policy, a church can compel members to arbitrate specified disputes with their church rather than pursue their claim in the civil courts.

A New Jersey court ruled that a lawsuit that members of a mosque brought against other members as a result of alleged financial improprieties had to be resolved by binding arbitration as a result of an arbitration clause in the mosque's bylaws.

In 1989, a mosque was incorporated under the New Jersey Nonprofit Corporation Act. The mosque is a nonprofit charitable, religious, and educational organization. Its certificate of incorporation asserts its purpose is, among other things, to serve members of the Islamic faith by providing a house of worship, and its bylaws provide the different types of membership one may have in the mosque. One type is to be a member of the general assembly. The general assembly is composed of all "active members," defined as those who attend prayers regularly, participate "actively" in mosque "activities," abide by the bylaws, pay dues, and practice Islam daily. The general assembly is the highest authority in the mosque, although the Board of Trustees (board), which represents the general assembly, is the highest policy-making authority.

Several members of the mosque's general assembly sued the mosque and other members (the "defendants") alleging mishandling of mosque funds. Specifically, the lawsuit alleged that one defendant used the mosque's credit cards to pay for some of his personal expenses and the legal expenses of the mosque's imam. The plaintiffs also claim that the mosque retained a member as an insured on its health insurance plan after he ceased working for the mosque, and arranged to have the mosque pay for his children's school tuition.

The defendants asked the court to dismiss the complaint on the ground an arbitration clause in the bylaws compelled the claims in the complaint be submitted to arbitration. This arbitration clause provides as follows:

The board shall create an Islamic Arbitration Committee of 3-5 members in case of disagreement among board members or general assembly members of matters related to the center, such committee shall consist of a Lawyer, an Imam, and Community Leaders. All disputes arising hereunder shall be resolved by arbitration by the aforementioned committee pursuant to policies and procedures established by such committee from time-to-time. All parties involved shall approve of the members of the Arbitration Committee. Decisions of the committee shall be binding on all parties and may be entered in a court of competent jurisdiction.

The trial court declined to dismiss the plaintiffs' complaint, finding the allegations were "cognizable claims in a court. They deal with misuse of a corporate fund. They address those types of concerns that are standard in a corporation type dispute with regard to the conduct of the board. And those are things that clearly belong in a court to be adjudicated."

The defendants appealed, claiming that the arbitration clause required the lawsuit's claims to be submitted to arbitration.

A state appeals court began its opinion by noting that "arbitration is a favored method of resolving disputes," and that "the New Jersey Arbitration Act provides, in part, that an agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract."

Because of their favored status, arbitration agreements "should be read liberally to find arbitrability if reasonably possible … . If there is a valid and enforceable agreement to arbitrate disputes and the particular dispute between the parties falls within the scope of the agreement, the agreement must be enforced."

The court noted that "nonprofit corporate associations are given the utmost latitude in their regulation and management of intra-corporate affairs," and that "a voluntary association may, without direction or interference by the courts, draw up for its government and adopt rules, regulations and bylaws which will be controlling as to all questions of doctrine or internal policy." The court continued:

A non-profit organization's private law generally is binding on those who wish to remain members. Typically, a court will not intervene in the affairs of a non-profit association unless the complaining parties have suffered an invasion of their civil rights, of person or of property. Only the most abusive and obnoxious bylaw provision could properly invite a court's intrusion into what is essentially a … thicket. Ordinarily, the contracting parties, not the courts, must weigh and evaluate the wisdom of their corporate agreements and regulations. Having voluntarily submitted to the rule of the corporate majority, all members are thereby bound and are barred from seeking judicial redress unless the corporate rule or action complained of contravenes the certificate of incorporation, [state] law or a strong public policy of that state.

In the present case, the plaintiffs claimed that the arbitration provision was not contained in a contract but merely in the mosque's bylaws to which, they contend, they are not parties and thus not bound. However, the court noted, "as a matter of law, bylaws of a voluntary association become a part of the contract entered into by a member who joins the association … . Thus, the mosque's bylaws constitute a contract between it and plaintiffs."

The court ordered the plaintiffs' claims to be resolved by arbitration.

What this means for churches

This case is important because it illustrates that arbitration is a potential means of resolving internal church disputes without having to go to the civil courts. It is imperative that any arbitration provision be drafted by an attorney, since several courts have refused to enforce arbitration provisions in the governing documents of churches and religious denominations on the basis of technical defects not understood by the laypersons who drafted the provision. An attorney also will be able to apprise church leaders of the advantages and potential pitfalls of this form of dispute resolution. Matahen, et al. v. Sehwail, et al., 2016 WL 1136602 (N.J. App. 2016).

Legal Developments

Victims of Alleged Defamation Can Compel Internet Service Provider to Disclose Anonymous Poster’s Identity

A state appeals court applied a four-part test for an order compelling an Internet Service Provider (ISP) to disclose the identity of anonymous Internet posters.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Defamation

Key point 4-02. Defamation consists of (1) oral or written statements about another person; (2) that are false; (3) that are "published" (that is, communicated to other persons); and (4) that injure the other person's reputation.

A New Jersey court ruled that a religious organization's leaders who allegedly were defamed by anonymous posts on a website could compel the poster's internet service provider (ISP) to disclose his identity so that he could be sued.

Four leaders of a religious organization (the "plaintiffs") filed a lawsuit that claimed they were being defamed by an anonymous person (the "defendant") who made frequent and malicious postings about them and their organization on social media. The plaintiffs alleged that the defendant had defamed them, cast them in a false light, and intentionally and negligently caused them emotional distress through postings that appeared on a website.

The lawsuit cited postings claiming that two of the plaintiffs were engaged in an extramarital affair. The lawsuit named the ISP as an additional defendant. The plaintiffs asked the court to compel the disclosure of the defendant's identity so that the lawsuit against him could proceed. The defendant responded by asking the court for a protective order barring the disclosure of his identity. The court refused to issue a protective order, and the defendant appealed.

A state appeals court applied a four-part test that is applicable whenever "trial courts are faced with an application by a plaintiff for an order compelling an Internet Service Provider (ISP) to honor a subpoena and disclose the identity of anonymous Internet posters who are sued for allegedly violating the rights of individuals, corporations or businesses." Under this test, a trial court must "first require the plaintiff to undertake efforts to notify the anonymous posters that they are the subject of a subpoena or application for an order of disclosure." Thereafter, a plaintiff must:

Identify the fictitious defendant with "sufficient specificity" to allow for a determination as to whether the defendant is a real person or entity who may be sued;
Demonstrate a good-faith effort to comply with the requirements of service of process;
Present sufficient facts from which it may be concluded that the suit can withstand a motion to dismiss; and
Provide a request for discovery with the court, along with a statement of reasons justifying the specific discovery requested as well as identification of a limited number of persons or entities on whom discovery process might be served and for which there is a reasonable likelihood that the discovery process will lead to identifying information about defendant that would make service of process possible.

If these four steps are satisfied, then a trial court "must balance the defendant's First Amendment right of anonymous speech against the strength of the case presented and the necessity for the disclosure of the anonymous defendant's identity to allow the plaintiff to properly proceed."

The anonymous defendant argued that the third requirement was not met since the plaintiffs' defamation claim would not survive a motion to dismiss. The court disagreed. It noted that defamation consists of a false and defamatory statement concerning another, and the publication of that statement to others. There was no question, the court concluded, that the plaintiffs' defamation claim would survive a motion to dismiss.

The defendant argued that the plaintiffs were public figures who had to prove malice in order to prevail in a defamation claim, and this high standard was not met. Malice in this context means that a person making a defamatory statement did so knowing that it was false, or with a "reckless disregard" as to its truthfulness. This elevated standard is based on the fact that persons who seek positions of public notoriety do so with an understanding that they will be the targets of more criticism than ordinary individuals. The court noted that the plaintiffs denied being public figures, and there was sufficient evidence that they were not for their defamation claim to survive a motion to dismiss.

The court rejected the defendant's defense that his postings were protected by the First Amendment:

The court must balance the defendant's First Amendment right of anonymous free speech against the strength of the case presented and the necessity for the disclosure of the anonymous defendant's identity to allow the plaintiff to properly proceed. The defendant seeks to couch the posts on the website as legitimate comments on the governance of a religious entity … thereby invoking a cherished First Amendment right. However, accusing individuals of adultery in a public forum is not the kind of robust, publicly-spirited debate entitled to the protections of the First Amendment. Individuals choosing to harm another … through speech on the Internet cannot hope to shield their identity and avoid punishment through invocation of the First Amendment.

The court concluded that the plaintiffs "have presented a valid claim and should be given the opportunity to pursue it."

What this means for churches

What recourse do church leaders have when they are potentially defamed by comments posted by anonymous persons on the internet? This case demonstrates that in some cases they may be able to assert defamation claims, and compel the poster's ISP to disclose a poster's identity. However, this court concluded that the identity of anonymous posters in defamation lawsuits can be revealed only if the lawsuit would survive a motion to dismiss. This is an easy requirement to meet, since it only requires a court to determine "if the allegations of the complaint, when construed in the light most favorable to the plaintiff, state sufficient facts to establish a cause of action upon which relief may be granted." 2015 WL 10372230 (N.J. App. 2016).

Legal Developments

The Limits of Liability Insurance

Key point 10-16.7. A liability insurance policy provides a church with a legal defense to

State: New Jersey
Categories: Insurance

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 New Jersey federal court ruled that a church's insurance policy did not provide payment of defense costs or any settlement or judgment in a lawsuit brought against a minister for a sexual affair with a female member of his church. A minister became acquainted with a married couple in his church. He engaged in an extra-marital affair with the wife, and after several months, she raised thoughts about ending her ten-year marriage. Thereafter, the husband, who knew nothing of the affair, met with the minister for guidance regarding his marriage problems. During the meeting, the minister failed to disclose the affair to the husband, and directed him not to make any further effort to save his marriage and to accept his wife's decision to seek a divorce.

A few weeks after this meeting, the husband discovered the affair, confronted his wife, and informed the minister of his discovery via text message. A year later the husband sued the minister for breach of fiduciary duty and negligent infliction of emotional distress. Specifically, the husband argued that (1) the minister had an irreconcilable conflict of interest in providing marriage counseling to him due to the affair; (2) the minister used the counseling relationship with the wife as a vehicle to "cover up" the affair; and (3) the minister failed to refer the husband to another minister for counseling.

The minister submitted the husband's lawsuit to the church's insurance company with a request that it provide a defense and indemnification for the claims made against him. The insurance company later sent the minister a "no coverage" letter in which it expressed its conclusion that the underlying insurance policy provided no coverage to the husband's claims against the minister. The minister then sought a "declaratory judgment" from a federal district court addressing the issue of coverage.

The relevant "Counseling Professional Liability Coverage" provision in the church's insurance policy provided coverage for injuries (other than sexual misconduct) caused by a "counseling incident" occurring during the policy period (emphasis added). The church purchased a "prior acts" endorsement to its policy that covered a counseling incident prior to the policy period so long as the church was without knowledge of the incident. The court concluded that the sexual affair predated the coverage period of the church's underlying insurance policy, and so there was no coverage for the claims against the minister. Further, the endorsement did not provide for coverage since the affair was known prior to the date the coverage was obtained.

What This Means For Churches:

Church leaders should be familiar with the terms, conditions, and exclusions in their insurance policies to ensure that they provide adequate coverage and any deficiencies can be addressed. Drew v. Insurance Company, 2014 WL 2436273 (D.N.J. 2014).

Legal Developments

Special Immigrant Status for Pastor Upheld

Federal regulation conditioning issuance of special immigration status ruled invalid.

State: New Jersey

Church Law and Tax Report

Special Immigrant Status for Pastor Upheld

Federal regulation conditioning issuance of special immigration status ruled invalid.

Key point 3-10. Religious workers are eligible for special status under immigration law if several conditions are satisfied.

A federal district court in New Jersey ruled that a federal regulation conditioning the issuance of special immigrant status on persons who have worked in the United States for the previous two years under lawful immigrant status was invalid because the immigration statute did not require that the work be performed under lawful status. In 1995, a Brazilian couple and their two children entered the United States on a B-2 nonimmigrant visitor’s visa for pleasure. The visa allowed the family to stay in the United States for six months. However, the family could not lawfully engage in employment under the B-2 visa in the United States. A United States Citizenship and Immigration Services (USCIS) regulation prohibiting employment for B-2 nonimmigrant visitor visa holders specifies:

(e) Employment. A nonimmigrant in the United States in a class defined in section 101(a)(15)(B) of the Act as a temporary visitor for pleasure … may not engage in any employment. Any other nonimmigrant in the United States may not engage in any employment unless he has been accorded a nonimmigrant classification which authorizes employment or he has been granted permission to engage in employment in accordance with the provisions of this chapter. A nonimmigrant who is permitted to engage in employment may engage only in such employment as has been authorized. Any unauthorized employment by a nonimmigrant constitutes a failure to maintain status. (emphasis added)

Despite the family’s authorized status expiring in 1995, and a lack of work authorization, the father (the “plaintiff”) remained in unlawful status in the United States and served, beginning in 1998, as a minister of a church in New Jersey.

In 2009, the church filed an I-360 petition, on the plaintiff’s behalf, for him to obtain classification as a “special immigrant.” Immigration law authorizes the issuance of visas to “special immigrants.” Form I-360 is the petition for classification as a special immigrant religious worker. Approval of the I-360 petition and classification as a “special immigrant” is the first step in obtaining a “special immigrant” visa. An immigrant whose special immigrant visa petition has been approved is then eligible, if other conditions are met, for permanent resident status.

In the plaintiff’s case, the church asserted that he qualified for “special immigrant” status as a religious worker. Immigration law specifies that the term “special immigrant” includes:

(i) for at least 2 years immediately preceding the time of application for admission, has been a member of a religious denomination having a bona fide nonprofit, religious organization in the United States;

(ii) seeks to enter the United States—

(I) solely for the purpose of carrying on the vocation of a minister of that religious denomination,

(II) before September 30, 2015, in order to work for the organization at the request of the organization in a professional capacity in a religious vocation or occupation, or

(III) before September 30, 2015, in order to work for the organization (or for a bona fide organization which is affiliated with the religious denomination and is exempt from taxation as an organization described in section 501(c)(3) of Title 26) at the request of the organization in a religious vocation or occupation; and

(iii) has been carrying on such vocation, professional work, or other work continuously for at least the 2-year period described in clause (i).

The United States Department of Homeland Security (DHS) has promulgated an additional regulatory requirement (the “Regulation”) for the religious worker special immigrant visa petition—any qualifying religious work performed in the United States must be performed under lawful immigration status in the United States.

In support of its I-360 petition, the church submitted evidence that it was a bona fide, nonprofit religious organization and that the plaintiff had been employed by the church for over two years prior to the application. However, the church admitted in the I-360 petition that the plaintiff was not in lawful immigration status, nor authorized to engage in employment within the United States.

In 2009 the USCIS denied plaintiff’s I-360 petition, saying he had not performed qualifying full-time work in lawful immigration status. In 2010, a USCIS appeals office dismissed the appeal taken by the church, upholding the denial of the petition because the plaintiff was not in lawful status while working for the church as required by the Regulation.

The plaintiff appealed to a federal district court, arguing that the denial of the I-360 petition was improper because the Regulation, which was the basis for the denial, was itself illegal. In particular, the plaintiff claimed that the Regulation improperly imposes an additional requirement beyond those mandated by the immigration statute. Specifically, while the statute merely requires that the immigrant be an individual who has been “carrying on” work for the past two years, the Regulation requires that any qualifying work performed in the United States be work that was performed under lawful immigration status.

The court agreed with the plaintiff’s argument: “The text of the statute is inconsistent with the Regulation because the plain text of the statute solely requires that the alien have carried on work without regard to the legal status of that work.” Under these circumstances, the court concluded, the Regulation is invalid. The court rejected the government’s request to dismiss the case, and ordered the case to proceed to trial. Shalom Pentecostal Church v. Napolitano, 2013 WL 162986 (D.N.J. 2013).

Legal Developments

Conversations Shouldn’t Have Been Used for Prosecution

Man’s confession of child abuse to pastor shouldn’t have been used as evidence in court, under clergy-penitent privilege.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Confidential and Privileged Communications

Church Law and Tax Report

Court Rules Conversations Shouldn’t Have Been Used in Case

Man’s confession of child abuse to pastor shouldn’t have been used as evidence in court, under clergy-penitent privilege.

Richard R. Hammar

* The New Jersey Supreme Court ruled that a criminal defendant’s conversations with a pastor were protected by the clergy-penitent privilege and therefore should not have been introduced as evidence by a trial court in the defendant’s prosecution for child abuse. Two minor girls reported to their mother that their father (the “defendant”) had sexually abused them. The mother then contacted her pastor and reported the children’s allegations. Believing he had a duty to protect the defendant’s wife and children, the pastor called the defendant at work to tell him he should not go back to his home. The defendant met with the pastor outside the pastor’s home. The pastor later recounted that “without directly saying [he] sexually molested them … he acknowledged what he did.” The defendant asked for counseling, but the pastor refused because he was “too angry” and the defendant needed psychological help which he was not qualified to give. A few weeks later, the defendant went to the pastor’s church where he again “acknowledged what he did.” The defendant asked the pastor to baptize him, but the pastor declined. The pastor urged him to turn himself into the police.

The defendant was later charged with criminal sexual abuse of his daughters. At a pretrial hearing the pastor testified about his conversations with the defendant, including the defendant’s confession. A trial judge ruled that the pastor’s testimony was covered by the clergy-penitent privilege and could not be used at trial. A state appeals court reversed the trial court’s ruling, and concluded that the clergy-penitent privilege did not apply in this case because the circumstances surrounding the communications did not demonstrate that they were made in confidence to the pastor in his role as a spiritual advisor.

On appeal, the state supreme court reversed the appellate court’s decision, and ruled that the clergy-penitent privilege did apply.

The supreme court began its opinion by noting that “this case involves what has been described as the most privileged of all communications: private conversations between a penitent and a cleric. Specifically, we are called on to clarify the standard for deciding when the cleric-penitent privilege may be invoked.” It added, “The privilege recognizes the human need to disclose to a spiritual counselor, in total and absolute confidence, what are believed to be flawed acts or thoughts and to receive priestly consolation and guidance in return. Thus, the underlying rationale for the privilege is the public interest in fostering the cleric-penitent relationship.”

The New Jersey clergy-penitent privilege statute provides:

Any communication made in confidence to a cleric in the cleric’s professional character, or as a spiritual advisor in the course of the discipline or practice of the religious body to which the cleric belongs or of the religion which the cleric professes, shall be privileged. Privileged communications shall include confessions and other communications made in confidence between and among the cleric and individuals, couples, families or groups in the exercise of the cleric’s professional or spiritual counseling role.

The privilege belongs to both the cleric and the person making the communication, and either can invoke it. N.J.S.A. 2A:84A-23; N.J.R.E. 511.

The court noted that this language could be summarized in a three-part test. A communication is privileged if “an objectively reasonable penitent, under the totality of the circumstances,” would conclude that a communication was made: (1) in confidence; (2) to a cleric; and (3) to the cleric in his or her professional character or role as a spiritual advisor. The court concluded that all three elements were met in this case, and therefore the defendant’s conversations with the pastor were protected by the clergy-penitent privilege.

Application. This ruling demonstrates that the availability of the clergy-penitent privilege will depend on whether or not the minister was being sought out in a professional capacity as a spiritual advisor. The answer to this question is often unclear. Clergy can help to ensure the availability of the privilege by asking counselees at some point during a conversation the following question, “Are you seeking me out in my professional capacity as a spiritual advisor, or for some other purpose?” If a counselee responds that he or she sought out the minister as a spiritual advisor, then this will be relevant, if not compelling, evidence in demonstrating that the conversation was privileged despite the presence of conflicting or ambiguous evidence. State v. J.G., 990 A.2d 1122 (N.J. 2010).

Church Law & Tax Report is published six times a year by Christianity Today International, 465 Gundersen Dr. Carol Stream, IL 60188. (800) 222-1840. © 2011 Christianity Today International. editor@churchlawandtax.com All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. “From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.” Annual subscription: $69. Subscription correspondence: Church Law & Tax Report, PO Box 37012, Boone, IA 50037-0012.

Legal Developments

Ensuring Release Forms Don’t Violate Public Policy

Woman sues exercise club for injuries sustained there.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey

Church Law & Tax Report

Ensuring Release Forms Don’t Violate Public Policy

Woman sues exercise club for injuries sustained there.

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

Churches should not allow a minor child to participate in any church activity (such as camping, boating, swimming, hiking, or some sporting events) unless the child’s parents or legal guardians sign a form that (1) consents to their child participating in the specified activity; (2) certifies that the child is able to participate in the event (e.g., if the activity involves boating or swimming, the parents or guardians should certify that the child is able to swim); (3) lists any allergies or medical conditions that may be relevant to a physician in the event of an emergency; (4) lists any activities that the parents or guardians do not want the child to engage in; and (5) authorizes a designated individual to make emergency medical decisions for their child in the event that they cannot be reached.

Ideally, the form should be signed by both parents or guardians (if there are two), and the signatures should be notarized. If only one parent or guardian signs, or the signatures are not notarized, the legal effectiveness of the form is diminished. Having persons sign as witnesses to a parent’s signature is not as good as a notary’s acknowledgment, but it is better than a signature without a witness. The form should require the parent or guardian to inform the church immediately of any change in the information presented, and it should state that it is valid until revoked by the person who signed it. The parent or guardian should sign both in his or her own capacity as parent or guardian, and in a representative capacity on behalf of the minor child.

A New Jersey court ruled that a fitness club member who was injured when she fell off a piece of exercise equipment was not barred from suing the club as a result of a release form that she signed, since the form was not legally enforceable. A woman (the “plaintiff”) joined a fitness club. In addition to signing a membership agreement, she signed a “waiver and release” form that stated, in part:

WAIVER & RELEASE FORM
Because physical exercise can be strenuous and subject to risk of serious injury, the club urges you to obtain a physical examination from a doctor before using any exercise equipment or participating in any exercise activity. You (each member, guest, and all participating family members) agree that if you engage in any physical exercise or activity, or use any club amenity on the premises or off premises including any sponsored club event, you do so entirely at your own risk …. You agree that you are voluntarily participating in these activities and use of these facilities and premises and assume all risks of injury, illness, or death. We are also not responsible for any loss of your personal property.

This waiver and release of liability includes, without limitation, all injuries which may occur as a result of, (a) your use of all amenities and equipment in the facility and your participation in any activity, class, program, personal training or instruction, (b) the sudden and unforeseen malfunctioning of any equipment, (c) our instruction, training, supervision, or dietary recommendations, and (d) your slipping and/or falling while in the club, or on the club premises, including adjacent sidewalks and parking areas.

You acknowledge that you have carefully read this “waiver and release” and fully understand that it is a release of liability. You expressly agree to release and discharge the health club, and all affiliates, employees, agents, representatives, successors, or assigns, from any and all claims or causes of action and you agree to voluntarily give up or waive any right that you may otherwise have to bring a legal action against the club for personal injury or property damage.
To the extent that statute or case law does not prohibit releases for negligence, this release is also for negligence on the part of the Club, its agent, and employees ….

By signing this release, I acknowledge that I understand its content and that this release cannot be modified orally.

One of the exercise rooms at the club is equipped with several stationary bicycles. The bicycles are regularly used in what are commonly known as “spinning classes,” in which a fitness instructor in front of the room leads participants in a simulated ride. The instructor periodically issues verbal commands to the riders to change their position on the bike or to adjust the tension on the spinning wheel.

The plaintiff arrived at the club at approximately 8:30 a.m. After enrolling as a member of the club for a monthly fee of $149.00 and signing the necessary paperwork, she informed the instructor that she had never had a class like this before. The instructor strapped the plaintiff’s feet into the bike and adjusted the seat. The instructor then advised the plaintiff to watch her during the class.

As the spinning class began, the plaintiff started pedaling in a seated position. Shortly thereafter, the instructor apparently told the class to assume a standing position. Then, as the plaintiff later testified: “The handle bars to the spin bike came off the bike while I was spinning on the bike. I fell forward and onto the floor of the gym while my feet were still strapped into the pedals of the bike.” The plaintiff suffered injuries to her neck and lower back in the spinning accident. She reported persisting pain, numbness and tingling, even three years after her fall.

The plaintiff sued the fitness club, as well as the manufacturer of the exercise bike, claiming that their negligence caused her injuries. The club claimed that by signing the waiver agreement, the plaintiff waived any right to sue for personal injuries arising out of her accident on the spinning bike.

The plaintiff disagreed. She maintained that she “did not really read” the waiver agreement before she signed it. She insisted that “the person giving me the papers to fill out and sign most certainly did not verbally tell me that I was signing a release form.” At her deposition, the plaintiff asserted that “they gave me a bunch of papers, and I signed them,” denying that she understood at the time what they signified. She also claimed that the waiver agreement was an “adhesion” contract that was unenforceable.

A trial court dismissed the plaintiff’s claims on the ground that the waiver agreement that she signed was “unambiguous and enforceable.” The trial judge found inconsequential the plaintiff’s claim that she did not read or understand the agreement when it was presented to her for signature as her membership was processed.

A state appeals court affirmed the trial court’s dismissal of the case.

Adhesion contract

The court defined a contract of adhesion as follows: “The essential nature of a contract of adhesion is that it is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the ‘adhering’ party to negotiate except perhaps on a few particulars. More succinctly, a contract of adhesion is an instrument that one party ‘must accept or reject as is.'”

The court concluded that the fitness club’s waiver agreement was a contract of adhesion, since patrons who declined to sign it would not be permitted to use the facility. However, the court clarified that “not all contracts of adhesion are unenforceable.” Only those that are “unconscionable” are adhesive. The court concluded that the fitness club’s waiver agreement was not unconscionable:

We reject plaintiff’s contention that the formation of the agreement was unconscionable. We do not regard this as a scenario of manifestly unequal bargaining power. Plaintiff could have walked away and taken her membership business to a rival fitness center, perhaps one that did not require an onerous exculpatory waiver. She also could have found other venues to exercise, such as working out at home or outdoors. She could have gone to a public park or recreation facility in lieu of a private gym. The club apparently did not put plaintiff under time pressure to review or sign the agreement. Nothing indicates that she was prevented from leaving the premises and thinking over whether or not to join, or taking the unsigned waiver form to a legal adviser.

Waiver agreements

The court acknowledged that “the law does not favor exculpatory agreements because they encourage a lack of care,” and that courts “closely scrutinize liability releases and invalidate them if they violate public policy.” One way that a waiver form may violate public policy is by attempting to avoid liability for conduct that “rises to a degree of fault beyond ordinary negligence, such as “intentional or willful acts or gross negligence.” A release form “should not insulate dangerous conduct that is more culpable than ordinary negligence or carelessness …. If [the fitness club] so sharply deviated from the ordinary standards of reasonable care, public policy dictates that the exculpatory agreement should not protect it from liability. We further conclude that it would be substantively unconscionable for a disclaimer to insulate a health club from the harm caused by such egregious behavior.”

The court noted that the club’s waiver agreement “anticipated the prospect that a court might find its disclaimers from liability unenforceable, at least in part.” The agreement “says nothing about conduct more egregious than ordinary negligence, such as recklessness or palpably unreasonable conduct.” The court concluded that “the exculpatory agreement’s disclaimer of liability for ordinary negligence is reasonable and not offensive to public policy.” Stelluti v. Casapenn Enterprises, LLC, 975 A.2d 494 (N.J. 2009).

A release form is a document signed by a competent adult that purports to relieve a church from liability for its negligence. The courts look with disfavor on release forms, and this has led to several limitations, including the following:

(1) Release forms will be strictly and narrowly construed against the church.

(2) Release forms will not be enforced if they are ambiguous.

(3) Release forms cannot relieve a church of liability for injuries to minors, since minors have no legal capacity to sign such forms and their parents’ signature does not prevent minors from bringing their own personal injury claim after they reach age 18.

(4) Some courts refuse to enforce any release form that attempts to avoid liability for personal injuries on the ground that such forms violate public policy.

(5) Some courts refuse to enforce release forms that attempt to avoid liability for intentional acts, gross negligence, or willful or wanton conduct. If a release form does not explicitly exclude such conduct from its terms, the form may be invalidated by a court.

(6) Release forms will not be enforced unless they clearly communicate that they are releasing the church from liability for its negligence.

(7) Some courts refuse to enforce release forms if they are “contracts of adhesion” based on a gross disparity in bargaining power between the releasor and releasee. To illustrate, if the person signing a release form has no ability to change it, this may suggest an unenforceable adhesion contract. On the other hand, some courts have ruled that a release form is not an unenforceable contract of adhesion if the party signing the form could walk away from the transaction and do business elsewhere. This exception may or may not apply to a church, depending on the circumstances. After all, is it realistic to say that a church member has the right to walk away and attend another church, and therefore a release form is not a contract of adhesion?

(8) Some courts refuse to enforce a release form that is inconspicuous. To illustrate, if the language of release is buried in another, larger document, without a bold heading and other devices to draw attention to it, it may be unenforceable.

(9) Some courts have ruled that release forms that do not contain a signature by the releasor are unenforceable. To illustrate, if the language of release is contained in a larger document, a signature line should appear directly after the language of release as well as at the end of the document.

Besides being of dubious legal value, release forms primarily protect the church’s insurance company. If injuries are caused by the negligence of a church worker, then the liability insurer will pay for such damages up to the policy limits. If the church is not negligent, then it ordinarily will not be assessed any damages. A release form, even if deemed legally valid by a court, would have the effect of excusing the church’s liability insurer from paying damages to a victim of the church’s negligence.

Churches should not use releases without discussing them with their insurance agent and a local attorney.

Tip. Churches that send groups of adults to other locations for short-term missions projects should consider having each participating adult sign an assumption of risk form. So long as these forms clearly explain the risks involved, and leave no doubt that the signer is assuming all risks associated with the trip, they may be enforced by the courts. This assumes that the signer is a competent adult. Churches should consult with an attorney about the validity of such forms under state law.

This Recent Development first appeared in Church Law & Tax Report, July/August 2010.

Legal Developments

Invasion of Privacy

Court rules that school’s sale of a recorded school play does not invade students’ privacy.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Copyright, Invasion of Privacy, Schools

Key point 4-04. Many states recognize "invasion of privacy" as a basis for liability. Invasion of privacy may consist of any one or more the following: (1) public disclosure of private facts; (2) use of another person's name or likeness; (3) placing someone in a "false light" in the public eye; or (4) intruding upon another's seclusion.

A New Jersey court ruled that a school that sold videos of a student play did not invade the privacy of the students.

A private school provided education for students in kindergarten through eighth grade. At the beginning of each school year, the parents executed and submitted forms to the school consenting to the videotaping, photographing or sound recording of their children "in classroom, playground, auditorium activities and productions." The form provided in part that "this consent is given with the knowledge that these might appear in the media or be used in conjunction with exhibits, publicity and public relations."

The school sponsored a play in which 80 students participated. The play lasted one hour. On the night of the play, an announcement was made that individuals could purchase copies of the videotape through the PTA. One of the student actors ("Emily") saw the videotape of the performance, but did not want a copy because she had tripped during the performance.

Emily's mother sued the school for invasion of privacy as a result of the use of her daughter's performance for commercial gain and the "mental anguish" that she and Emily had suffered as a result of the sale of the videos. She also claimed that the school had "exploited" the students, and that it was her obligation as a parent to protect students from what could happen in the future. She also noted that she did not want the tape "out there" in case Emily "became older and got a name for herself" because it was not one of her best performances.

The trial court dismissed the invasion of privacy claim on the ground that the school acted with "a charitable, rather than commercial purpose." The mother appealed.

A state appeals court noted that invasion of privacy "encompasses four distinct kinds of invasion of four different interests of the plaintiff." These include:

Intrusion on another's physical solitude or seclusion, as by invading his or her home, illegally searching, eavesdropping or prying into personal affairs.
Public disclosure of private facts, such as by making public private information about another.
Placing another in a false light in the public eye in a manner that would be objectionable to the ordinary reasonable person.
Appropriation of another's name or likeness for commercial gain.

These four separate kinds of invasion of privacy "have almost nothing in common except that each represents an interference with the right of the plaintiff to be left alone."

Appropriation of another's likeness for commercial gain

In this case, the mother asserted that the school had committed the fourth kind of invasion of privacy—the appropriation of her daughter's likeness for commercial gain as a result of the sale of the videotapes of the school play. The court described this kind of invasion of privacy as follows:

One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his [or her] privacy." Restatement (Second) of Torts § 652C. Accordingly, to establish a case for invasion of privacy by appropriation of likeness, a plaintiff must establish: (1) the defendant appropriated the plaintiff's likeness, (2) without the plaintiff's consent, (3) for the defendant's use or benefit, and (4) damage … [The courts] have consistently required plaintiffs to show that defendants received a commercial benefit through the unauthorized use of plaintiff's likeness.

The court rejected the mother's claim that all she had to establish to prevail on her invasion of privacy claim was mental anguish over the videotaping of her daughter's play. Instead, she was required to show that the school used Emily's likeness for a commercial purpose. The mere act of recording the school play was not enough to establish an appropriation of likeness claim.

"Incidental" use of another's image

The court noted that "there is no appropriation of likeness when the use of an individual's image is merely 'incidental' to the total presentation." In other words, the school's sale of recordings of the play could not amount to an appropriation of Emily's likeness for commercial gain unless that gain was directly associated with Emily's likeness. The fact that she was one of 80 students depicted on the recording, and that few if any persons purchased the video because of her likeness, defeated any invasion of privacy claim.

The court rejected the mother's claim that every unauthorized recording amounts to an unlawful appropriation of another's likeness. The court concluded:

The record is devoid of any evidence that the school used Emily's likeness to obtain a commercial or trade benefit, or that her personal appearance in the play was used to any greater degree than other students in the performance. Nor did the mother produce any evidence to show how she or Emily was damaged as a result of the videotaping. The mother alluded to the possibility that the tape could hurt Emily in the future. However, she cites no legal authority to support her apparent position that the damage element can be satisfied on such contingent grounds.

Because the mother failed to establish that the school used Emily's image in a manner that furthered a commercial or trade purpose, that Emily's likeness was used in anything more than in an incidental manner, and that she was damaged by the school's conduct, we affirm the trial court's dismissal of this case.

What this means for churches

This case is of special relevance to churches, since so many churches publish images of members in pictorial directories, brochures, slides, or on web sites. As this case illustrates, such photos may expose a church to invasion of privacy claims. The use of someone's likeness without permission has been deemed to be an invasion of privacy by some courts. This risk goes way up if (1) the image is used for commercial purposes (in a money making venture, even if by a nonprofit entity), or (2) you use the image in connection with demeaning text (for example, an image of an adolescent in an article on victims of child abuse).

If neither of these two factors is present, then the risk of invasion of privacy is reduced significantly, but not eliminated. A church can easily address this by obtaining express or implied consent. Express consent is written consent by a parent. Implied consent may occur if a church, for example, inserts notices in the church bulletin or newsletter a few times each year advising members that the church will use candid photos of various church activities on its website from time to time, and members not wanting their photos depicted (or those of their children) should so inform the church office. The church office can then create a list of persons whose photos are not to be displayed. However, any photo of children should contain no personally identifiable information.

Another legal risk associated with the use of images of church members is the posting of images of minors on a church's website with personally identifiable information. This becomes globally circulated among the pedophile community, and allows child molesters to solicit and seduce these children. Jeffries v. Whitney E. Houston Academy 2009 WL 2136174 (N.J. Super.A.D. 2009).

Legal Developments

Workers Compensation Benefits

A New Jersey court denied workers compensation benefits to an employee of a church-operated charity on the ground that she left her job voluntarily without good cause.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Employment Practices, Workers Compensation

Church Law & Tax Report

Workers Compensation Benefits

A New Jersey court denied workers compensation benefits to an employee of a church-operated charity on the ground that she left her job voluntarily without good cause.

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

Key point 8-02. All states have enacted workers compensation laws to provide benefits to employees who are injured or become ill in the course of their employment. Benefits generally are financed through insurance premiums paid by employers. Churches are subject to workers compensation laws in most states.

* A New Jersey court denied workers compensation benefits to an employee of a church-operated charity on the ground that she left her job voluntarily without good cause. An employee (the plaintiff) of a church-operated charity took a medical leave of absence as a result of the effects of hypertension and diabetes. The plaintiff later had her doctor send a letter to her supervisor indicating that she could return to work for up to 30 hours per week. When the charity responded that the plaintiff’s position was a full-time position, requiring more time on the job than thirty hours per week, she agreed to obtain a note from her doctor indicating that she could return to work on a full-time basis. When no such doctor’s note was submitted, her employment was terminated. The plaintiff sued for workers compensation benefits. The New Jersey workers compensation law mandates the payment of benefits to employees who are injured, or who become ill, in the course of their employment. However, the workers compensation law denies benefits to an employee “for the week in which the individual has left work voluntarily without good cause attributable to such work, and for each week thereafter until the individual becomes reemployed and works four weeks in employment.”

The charity asserted that the plaintiff had “left work voluntarily without good cause” and therefore was barred from receiving workers compensation benefits. A state court agreed:

In scrutinizing an employee’s reason for leaving, the test is one of ordinary common sense and prudence. Mere dissatisfaction with working conditions which are not shown to be abnormal or do not affect health, does not constitute good cause for leaving work voluntarily. The decision to leave employment must be compelled by real, substantial and reasonable circumstances not imaginary trifling and whimsical ones …. It is the employee’s responsibility to do what is necessary and reasonable in order to remain employed.

The court noted that the plaintiff was hired to work full-time; that medically she could not continue to do so; and that, by advising her employer that “she could only remain part-time with no date to resume working full-time,” she “severed the employment relationship, voluntarily leaving the job without good cause attributable to the work.” Covington v. Board Of Review, 2007 WL 249251 (N.J. Super. 2006).

Legal Developments

Breach of Fiduciary Duty

Several courts have refused to hold churches and denominational agencies liable on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister.

Richard R. Hammar, Attorney, CPA

Bio

State: Colorado
Categories: Denominations - Legal Liability, Fiduciary Duty, Sexual Misconduct by Clergy, Lay Employees, and Volunteers

Church Law & Tax Report

Breach of Fiduciary Duty

Several courts have refused to hold churches and denominational agencies liable on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister.

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

Key point 10-13.2. Several courts have refused to hold churches and denominational agencies liable on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister. In some cases, this result is based on First Amendment considerations.

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

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

Breach of a fiduciary duty

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

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

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

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

Archdiocese

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

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

Legal Developments

First Amendment Bars the Civil Courts from Intervening in Church Elections

A New Jersey court ruled that a trial court acted improperly in overseeing a church business meeting and the election of a pastor.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
Categories: Charters, Constitutions, and Bylaws, First Amendment, Officers, Directors, and Trustees

Key point 6-06.1 . Churches select their officers and directors in various ways. For example, it is common for members of a church board to be elected by the church's membership, while officers are elected by the board. The civil courts generally refrain from resolving disputes involving the selection of church officers and directors on the ground that the first amendment guaranty of religious freedom prevents them from becoming involved in ecclesiastical disputes.

Key point 6-09.2. Church members have such legal authority as is vested in them by their church's governing documents, and in some cases by state nonprofit corporation law.

A New Jersey court ruled that a trial court acted improperly in overseeing a church business meeting and the election of a pastor in a church that was beset with internal strife over doctrinal issues.

A Baptist church was organized in 1980. The church's bylaws describe church governance and administration. The bylaws establish three bodies to govern the affairs of the church—an executive board, a board of trustees, and a board of deacons. The executive board consists of the pastor, the board of trustees, and the board of deacons; it meets monthly and discusses all matters of the church, spiritual and financial. The trustee board consists of nine to eleven members elected annually and holds in trust all property belonging to the church, and designates the bank where the funds of the church shall be deposited. The deacon board assists the pastor in his spiritual work and consists of deacons appointed by a "free vote of the church, after recommendation by the pastor and deacons who possess the qualifications as recorded in 1 Timothy 3:8-13." In addition, there is an advisory council, consisting of the elected officers of the church and the chairs of all standing committees. The council is authorized to review and amend all agenda items before presentation to the church. Other officers include a treasurer, a financial secretary, and a clerk.

The bylaws specify that election of church officers is to be held during annual meetings of the church in the third week of November. The bylaws prescribe the process for nominating persons for church office. The advisory council appoints a nominating committee who prepares a list of members qualified to hold the various church offices, interviews the candidates to ascertain their willingness to serve, nominates one or more persons from the list for each office, and reports the nominees to the congregation. In addition, any member present at the annual meeting and qualified to vote has the privilege of nominating "any eligible person for any office not so nominated."

The church hired a senior pastor in 1989 and entered into a "pastoral agreement" obligating him to be cooperative, act in agreement with the deacons, remain in accord with the executive board, abide by the church constitution and bylaws, and espouse Baptist doctrines. In 1994, the pastor began efforts to implement a "full gospel" ministry at the church, a doctrinal teaching at odds with church theology before his arrival on the scene. Despite the executive board's disapproval, in 1997 and 1998 the pastor took several steps to advance the full gospel ministry at the church, including bringing a full gospel bishop to the church to instruct the executive board on full gospel theology, taking church members to a full gospel Baptist conference, and petitioning the deacon board for spiritual and financial support for the full gospel ministry. Based on the recommendation of the deacon board, the executive board voted to call on the pastor to honor all aspects of his pastor agreement and, if he could not, to inform him that steps would be taken to remove him from office. In addition, the executive board voted to forbid Carlton from introducing any full gospel teachings at the church's worship services. Carlton, apparently, agreed to abide by these recommendations. However, he later attacked the executive board and told the congregation that "I am going to do what I have to do." The executive board and the advisory council voted to terminate the pastor.

The decision to remove the pastor created such a tumult within the church that the executive board padlocked church doors and suspended church services. The pastor's supporters held an outdoor meeting at which time they retained the pastor, abolished the church's executive board and advisory council, abolished the church bylaws, and appointed a new 5-member committee to draft new bylaws. A civil lawsuit was filed to determine which group controlled the church. A trial court appointed an attorney as "moderator" to assist the court in resolving the underlying dispute between the parties. Specifically, the moderator was empowered to (1) establish the criteria for membership and the eligibility of members of the church to participate and vote at the annual meeting; (2) determine the issues to be presented at the meeting; (3) determine the voting procedures at the meeting; (4) determine the ballot questions to be presented at that meeting; (5) establish the form and manner of notice to be given; (6) resolve any other matters that would permit a fair and reasonable membership meeting to occur.

The moderator designated seven members of the church to serve as the nominating committee and directed that the committee propose a slate of candidates for the following positions: board of trustees, treasurer, financial secretary, clerk, and superintendent of Sunday school. After determining voter qualifications, the moderator supervised the annual meeting in which the pastor's supporters prevailed by a vote of 180 to 153. As a result, ecclesiastical control of the church passed from the church's executive board to a board comprised of the pastor's supporters. In a subsequent meeting, the congregation voted to retain the pastor by a vote of 152 to 125.

Several of the ousted church leaders appealed the court's ruling. The ousted leaders claimed that the church elections were void because they were contrary to the church's bylaws that vested ecclesiastical authority to determine the eligibility of nominees for church office exclusively in internal church governing bodies. By holding that nominations could be made by the membership without prequalification by the nominating committee the trial court impermissibly intruded into matters of church governance, practice, and polity. The pastor and his supporters argued that the trial court correctly interpreted church law to mean that the only rule is that the majority rules and that their faction represented the majority.

A state appeals court concluded that "in the absence of clear and unambiguous direction in church law, an intrachurch dispute over eligibility for nomination to church office, implicating as it does the more fundamental question of church governance and congregational structure, does not present a proper issue for judicial consideration." It concluded,

Irrespective of the approach used, courts are admonished to scrupulously avoid incursions into questions of ecclesiastical polity or doctrine that would be constitutionally impermissible. To be sure, the task of reconciling respect for the autonomy of religious organizations with the responsibility of courts to resolve conflicts involving civil matters is a difficult one. Admittedly, in some instances there is a gray zone between express secular terms and religious doctrine, and the distinction between the court's duty to abstain from religious questions and to decide legal disputes is blurred. Complicating the matter is the fact that the once simple dichotomy between hierarchical and congregational polities does not reflect the diversity of contemporary denominational structures ….

In the present case, the trial court adjudicated no simple property or contract dispute but rather an essential issue of church governance, polity, and administration—namely whether the church is a true democracy controlled by its membership or a more republican, representative structure governed by internal ecclesiastical bodies. Purporting to apply so-called "neutral principles" of law, the trial court opted for the former based on an interpretation of church bylaws that vested nominating authority in any church member without prior screening and recommendation by the nominating committee …. We conclude that the trial court's ruling in this regard was an inappropriate application of "neutral principles" jurisprudence. First and foremost, the method of neutral principles does not allow for construction of church documents if their interpretation is the focus of dispute and if such documents are not so clear, provable, and express that the civil courts could enforce them without engaging in a searching, and therefore impermissible, inquiry into church polity. Here, the issue of eligibility for office was a highly controverted question of faith within the congregation. Despite the obvious division of opinion, the basis for the trial court's resolution allowing for floor nominations is unclear, as are the rules of common law it relied upon to structure the church-member relationship implicated in this matter. In essence, the trial judge interpreted the term "eligible" to be without any religious significance despite plaintiff's contrary contention that the nominating committee pre-screens candidates for spirituality and religiosity. We emphasize that the application of neutral principles does not require courts to "neutralize" ecclesiastical words.

In the absence of clear direction in church law, judicial inquiry into church procedures is precluded. Although courts may intervene to determine whether established procedures of a religious organization, as proven, have been followed, courts should not intervene where such procedures are … less than clearly defined, or ambiguous. Because of such uncertainty, resolution of intrachurch disputes cannot be made without extensive, and therefore impermissible, inquiry into religious law and polity …. In this case, inquiring whether the nominating committee has exclusive ecclesiastical authority to determine eligibility necessitates interpretation of ambiguous religious law, the resolution of which would require a deeper probe into the congregational structure and allocation of power within the church. For instance, in the absence of an express procedure in the church bylaws, inquiry need be made as to where within the church the rules of polity, accepted by its members before the schism, had placed ultimate authority over the eligibility question …. Simply stated, neutral principles of civil law do not include standards for judging appropriate qualities for church leadership ….

Application of these principles compels judicial abstention in this case. The trial court's opposite conclusion … unwittingly entrenched itself in church affairs …. The court below became entangled in election procedures, appointing a monitor with broad powers to determine not only qualifications of voters, but in essence qualifications for office. Unfortunately, the court's involvement did not end there. After approving the results of the election for church officers, the court, through its appointed representative, continued to monitor and supervise the pastoral election after first designating those members responsible for recommending candidates to the church for consideration and vote, a task that the bylaws clearly and expressly assign elsewhere.

What this means for churches

This case presented the difficult question of the appropriate role the civil courts should play in overseeing church elections. The court concluded that the first amendment bars the civil courts from intervening in church elections involving questions of ecclesiastical polity or doctrine. Such was the case here, since the basic questions involved the selection of the church's pastor and lay leaders. The opposite conclusion would entangle the civil courts in church affairs. The court concluded that it could intervene in an internal church dispute to see if a church had followed its own procedures, but only if those procedures were clear and "proven" and a decision could be made without "extensive, and therefore impermissible, inquiry into religious law and polity." Solid Rock Baptist Church v. Carlton, 789 A.2d 149 (N.J. Super. 2002).

Legal Developments

Child Abuse Reporting

A New Jersey court ruled that a woman could not sue her pastor and church for failing to report to civil authorities her sexual abuse that she had disclosed to them when she was a minor.

Richard R. Hammar, Attorney, CPA

Bio

State: New Jersey
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 New Jersey court ruled that a woman could not sue her pastor and church for failing to report to civil authorities her sexual abuse that she had disclosed to them when she was a minor.

A 13-year-old girl ("Amy") was sexually abused by her father over a one-year period. She did not disclose the abuse to anyone at the time because she was afraid of him. She later testified that her father "absolutely petrified me, I was scared to death of him." She also claimed that her father "threatened my life to maintain my silence of his sexual abuse of me." When she was 16, Amy began to disclose the abuse to various people in her life. She disclosed the abuse to the principal of the church-operated school she attended, who was also an ordained minister. The principal told Amy that the abuse had happened too far in the past for anyone to do anything about it and "sometimes it's just best to leave things in the past." Amy understood this to mean she was to stop talking about the abuse. Several years later Amy met with an attorney to discuss her prior abuse, and the attorney urged her to meet with the local prosecutor, which she did. This led to the prosecution and conviction of her father for child molestation. He was sentenced to ten years in prison. It was not until her father had been convicted and sentenced to prison that Amy felt free of his threats. She again met with her attorney, and decided to sue her church and pastor for failing to report the abuse to civil authorities. Specifically, she alleged that her church and pastor refrained from reporting the abuse due to "fear of scandal to the church" and because the church protected child abusers who were respected members of the church family. A trial court dismissed all of Amy's claims against her church and pastor, and Amy appealed. An appeals court ruled that Amy's lawsuit had to be dismissed because it was filed after the deadline imposed by the statute of limitations. Amy argued that the statute of limitations should be "extended" because of what she called "religious duress." By this she meant that her church taught that it was wrong to criticize or take action against members of the clergy or the church, and that sexual abuse victims should remain silent, refrain from making any public accusations, and avoid any contact with civil authorities in search of justice. The court rejected Amy's "religious duress" theory and refused to extend the statute of limitations. It noted that "duress may take the form of moral compulsion or psychological pressure," yet "even moral compulsion or psychological pressure are not wrongful unless they are so oppressive under given circumstances as to constrain one to do what his free will would refuse." This test was not met.

Application. While Amy was not allowed to sue her pastor or church for failing to report her child abuse, this was because of her failure to file a lawsuit by the deadline specified by the statute of limitations. In other words, the court dismissed Amy's claims on technical grounds. It is possible that the court would have accepted Amy's claims had she filed her lawsuit on time. The potential civil liability of ministers for failing to report child abuse is an issue with which church leaders should be familiar. Smith v. Estate of Kelly, 778 A.2d 1162 (N.J. 2001).