Key point. In some states, exemption of church property from taxation is automatic and there is nothing that a church is required to do for the exemption to apply. In other states, however, the exemption is not automatic, and churches are required to formally apply for and receive notice of exemption from a government agency.
The Virginia Supreme Court ruled that a church’s property was exempt from taxation even though the church never filed an application for exemption.
A six-figure city tax bill
In August 2018, the City of Petersburg (“the City”) brought a complaint against a church (the “Church”) and its trustees for delinquent property taxes. The City asked the court to authorize a sale of the church property to pay the delinquent taxes. The trial court found that, as of April 15, 2019, the Church owed the City $114,059 in delinquent real estate taxes due through June 30, 2015, plus penalties and interest through April 15, 2019.
On appeal to the Virginia Supreme Court, the Church argued that it was exempt from paying real estate taxes under Article X of the Constitution of Virginia because the property at issue was owned and used exclusively for religious purposes. The Church claimed that this tax exemption was self-executing and therefore the church was not required to apply for exemption.
The City claimed that the property was not “automatically exempted” from taxation. Rather, the Church was required to apply to the city assessor for a determination regarding whether it was entitled to an exemption.
The court noted that Article X of the Constitution of Virginia provides that “property owned and exclusively occupied or used by churches or religious bodies for religious worship” shall be exempt from state or local taxation. The court agreed with the Church that “any properties used for religious worship in the City that qualified for tax-exempt status under Article X . . . were automatically exempt from taxation during the years in question.”
City claims church raised challenges too late
The City argued that even if the Church property was exempt from taxation, the Church failed to challenge the tax assessment within the three-year limitations period provided by state law.
The Court disagreed:
[The Church] does not dispute that more than three years have passed since the assessments in question were issued. Under Virginia Code § 58.1-3984, the Church would be barred by the three-year statute of limitations from bringing an action against the City to challenge the validity of the assessments. However, the Church’s inability to initiate a legal challenge under this statute does not end the inquiry. Despite the City’s argument to the contrary, just because the Church can no longer initiate a lawsuit against the City does not mean it cannot raise the self-executing tax exemption as a defense to the City’s attempt to sell the property in a tax sale.
City looks to tax “learning annex” on church property
The City claimed that a “learning annex” on the Church’s property did not qualify for exemption from taxation since it was not used for worship. The court disagreed, concluding that the exemption in question extended to “property used for ancillary and accessory purposes” that “support[s] or augments the principal religious worship use . …”
What this means for churches
This case is important for two reasons.
1. Property tax exemptions. It demonstrates the importance of being familiar with any conditions that must be met in order for church property to be exempt from taxation.
In some states, exemptions of church property are automatic. But in many states a church must apply for and receive recognition of exemption—and a failure to do so can result in unexpected tax liability. Note the following important points:
Church leaders should pay special attention to property tax exemption requirements when purchasing a building or land, even from another church or charity. Here are some important tips:
Church leaders should contact the local assessor’s office to determine if property tax exemptions for churches are automatic or if formal application for exemption is required.
When purchasing property, be sure your church’s mailing address is correctly listed on the deed, since this is the address typically used by the assessor’s office. Also take the extra step of confirming the assessor’s office has the church’s correct address.
And perhaps just as importantly, be sure the assessor’s office has the correct name of the church. It is common for churches to change their name from time to time, and this can result in confusion when important notices are received at the church’s correct address, but to an addressee whose name is unfamiliar to the person opening mail in the church office.
If you do not hear from the assessor’s office within a reasonable time after acquiring property, this may indicate a problem with the property’s tax exemption that should be addressed promptly.
Find out what requirements must be met in order for newly acquired church property to become exempt from property taxes. Go to the assessor’s office and obtain the necessary forms.
Periodically contact the assessor’s office to confirm the exempt status of church property as well as the church’s name and address.
The services of an attorney can be helpful in obtaining and maintaining a church’s exemption from property taxes.
2. Ancillary uses. In most states, a church’s property tax exemption extends to “ancillary uses” of property that are necessary for a church to engage in exempt activities. As an example, church parking lots typically are exempt from taxation though little, if any, religious worship is conducted in the parking lot.
Emmanuel Worship Center v. City of Petersburg, 867 S.E.2d 291 (Va. 2022).
Key point 2-01.05. A minority of courts are willing to review the selection of ministers in limited circumstances so long as they can do so without any inquiry into religious doctrine.
Key point 6-12.01. Church membership meetings must be conducted in accordance with the procedural requirements ordinarily specified in the church’s governing documents. The most common requirements pertain to notice, quorum, and voting.
Key point 6-12.04. Most courts refuse to intervene in church disputes concerning the validity of a membership meeting that was not conducted in accordance with the procedural requirements specified in the church’s governing documents. However, some courts are willing to intervene in such disputes if they can do so without inquiring into religious doctrine or polity.
Key point 6-12.05. Some courts will supervise church elections to ensure compliance with the procedural requirements specified in the church’s governing documents if they can do so without inquiring into religious doctrine or polity.
A Virginia court ruled that it was not barred by the First Amendment guaranty of religious freedom or the ministerial exception from resolving an internal church dispute over the legality of an election.
Background
In 2017, a church’s senior pastor announced his retirement.
During a worship service on February 18, 2018, the pastoral search committee announced the name of a candidate (the “candidate”) for senior pastor.
Because two-thirds of the congregation must affirm the senior pastor, the church’s deacon board determined:
a vote would take place in March of 2018;
the church would hire a third-party vendor to count the votes; and
the deacon board would provide a list of members who were eligible to vote in the election.
The deacon board also determined that members who did not have certain membership records still would be deemed eligible to vote, and members for whom the church lacked contact information would be permitted to vote only if they appeared in person.
At the start of the election, the deacon board compiled a list of 1,302 active members eligible to vote. In reaching that number, the deacon board struck 347 members from the voter rolls because they were missing certain records. This conflicted with the deacon board’s earlier decision to deem those persons eligible to vote.
Regardless, on March 27, 2018, after the polls closed, the deacon board issued a letter to the general membership, notifying them that the candidate had not received sufficient votes to be confirmed as senior pastor.
After voting concluded and the candidate had not been confirmed, the deacon board met again to audit the church’s membership rolls. Based upon this post-election audit, the deacon board removed more members from the list of active members, which resulted in lowering the threshold for the two-thirds vote. In accordance with the new threshold, the candidate was confirmed as senior pastor.
Five members contest the election process used
On April 30, 2021, five members of the church (the “plaintiffs”) filed a lawsuit in civil court seeking the court to:
Declare that the deacon board’s alteration of the membership rolls after the election violated the church’s governing documents and, therefore, the confirmation of the candidate was invalid;
Enjoin (meaning stop) the church from holding another election without first determining appropriate rules and parameters; and
Appoint a receiver, “who can protect the interest, assets and other values . . . until such time new leadership is formally determined [by another election].”
The church asked the court to dismiss the lawsuit on the ground that the court was barred from intervening by the Free Exercise Clause and the Establishment Clause of the First Amendment to the US Constitution, as well as the judicially recognized doctrine known as the ministerial exception.
Constitutional protections
The church argued that deciding this case would require the court to violate the First Amendment because the court would need to enter the “religious thicket” and consider issues pertaining to church governance by reviewing the church’s appointment of the candidate.
The plaintiffs counterargued that the case was not barred by the First Amendment because they were merely asking the court to apply “neutral principles of law” to determine whether the church violated its own governing documents and basic democratic principles.
The court agreed with the plaintiffs and ruled that it had jurisdiction over this case. It noted that the plaintiffs sued out of a concern of whether “the Deacon Board’s decision to finalize the membership roll after the results of the 2018 election was in compliance with Bylaws, Constitution and other applicable policies.”
The court continued:
Contrary to [the church’s] claims, none of this . . . requires the Court to delve into a religious thicket by reviewing religious principles of membership. Moreover, . . . there is no allegation in Plaintiffs’ [lawsuit] of a doctrinal dispute between two factions, [the church] also lacks an internal tribunal to decide conflicts, and Plaintiffs have alleged an undemocratic proceeding. Since [the church] lacks internal tribunals to rule on such matters, civil court action is necessary to resolve this dispute. . . .
[Plaintiffs] seek judicial review of [the church’s] compliance with its own Constitution and Bylaws. . . . (“Specifically, the dispute is whether the Church complied with its own requirement [that] at least two-thirds of the entire Congregation . . . confirmed the call of [the candidate].”) . . . However, [the church] cautions that in [this] case, the Court is likely to enter the “religious thicket” because, in order to determine whether the vote was conducted fairly, [it] will need to examine [the church’s] good standing criteria, and this requires delving into what makes a good Christian.
The court disagreed with the church’s argument:
Nowhere in the [lawsuit] do Plaintiffs challenge the substantive matter of whether a member was in good standing. Rather, [they] argue that the Board of Directors manipulated the voter rolls after the election, and that [the candidate] was not confirmed by a two-thirds vote as required by the Bylaws and Constitution. Deciding this case will therefore merely involve the application of basic democratic election principles. Accordingly, the Court may decide this case.
The court concluded:
Plaintiffs seek a court declaration that the confirmation of [the candidate] and the Deacons Board’s decision to modify the membership roster after the election had concluded, violated [the church’s] governing documents and policies. Importantly, Plaintiffs do not ask the Court to inquire into [the candidate’s] “administrative pastor fitness to perform duties,” but rather Plaintiffs ask for “the protection of the court for the purpose of obtaining a fairly conducted meeting” and “in protecting civil and property rights.”
Ministerial exception
The church also claimed that the plaintiffs’ lawsuit was barred by the “ministerial exception,” which generally bars the civil courts from resolving employment disputes between churches and ministers. The court noted that the ministerial exception “protects religious institutions from secular interference with the selection of ministers.” It further noted that the Supreme Court of Virginia has recognized that the First Amendment prohibits judicial intervention when it would limit the church’s right to select its religious leaders.
The court concluded:
[D]eciding the underlying case against [the church] would not interfere with its right to select its Senior Pastor. First, the underlying case . . . is not an action being brought by a minister (or other key religious member) against the church alleging employment discrimination. Instead, this action is brought by five members of [the church’s] congregation who, on the face of the lawsuit], do not appear to hold any role in [the church] other than that of a general member. Additionally, there is no allegation that [the church] fired any of the Plaintiffs from a religious position. Here, Plaintiffs merely seek judicial review of [the church’s] compliance with its own Constitution and Bylaws pertaining to the 2018 election. Further, there is no mention of employment discrimination [in the plaintiffs’ lawsuit]. Although the language of the ministerial exception does not explicitly state it cannot be applied to other scenarios, that silence does not mean it may extend to election issues. Here, Plaintiffs only ask for democratic, neutral principles of law to be enforced. The Court is not asked to determine whether [the candidate] would make a good pastor, or if he may stay within said position. Accordingly, the ministerial exception is inapplicable to the case at hand.
The church further claimed that the plaintiffs violated the ministerial exception by asking the court to “install a receiver with ‘all powers,’ including overseeing the ‘determinat[ion]’ of ‘new leadership.’”
Again, the court disagreed, noting that the plaintiffs had merely requested the appointment of “a receiver to protect the Church’s assets until the Court fully adjudicates all issues raised herein.”
The court explained:
The “all powers” referred to in the [lawsuit] is “all powers to protect the assets of the corporation until such time as new leadership is determined.” . . . [I]t is well-within constitutional bounds for a court to appoint a commissioner “to oversee a congregational meeting, and actually to preside, if necessary.” Here, Plaintiffs ask for much less. There is no request that the receiver will lead the church in doctrinal matters, or even that they will oversee the vote.
What this means for churches
There are three points to note about this case.
First, the court concluded that the civil courts do not necessarily have to refrain from resolving internal church disputes involving the legal validity of membership meetings.
The resolution of such disputes is barred by the First Amendment only if an inquiry into church doctrine would be required. The court concluded that a civil court could resolve a lawsuit seeking to determine if a church complied with a requirement in its constitution and bylaws—that the call of a new pastor must be confirmed by a two-thirds vote of the congregation—since doing so would not implicate religious doctrine.
Second, the court rejected the church’s argument that the civil courts are barred by the First Amendment and ministerial exception from overseeing church elections to ensure compliance with the procedural requirements specified in the church’s governing documents if they can do so without inquiring into religious doctrine or polity.
And third, upon later review by a circuit judge, the election of the candidate was deemed to be “null and void,” as was the decision to modify the membership roster. The church was ordered to conduct a new election “with transparent procedures consistent with the Articles of Incorporation, Constitution and Bylaws.” However, the circuit judge rejected the appointment of a receiver because he found neither of the state’s two receivership statutes applied to the church’s situation.
Howard v. Heritage Fellowship Church, 108 Va. Cir. 260 (2021).
Key point 10-07.01. Some courts have found churches liable on the basis of negligent retention for the sexual misconduct of ministers and other church workers on the ground that the church was negligent in retaining the offender after receiving credible information indicating that he or she posed a risk of harm to others.
Key point 10-16.07. 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.
Key point 10-17.01. Punitive damages are monetary damages awarded by a jury “in addition to compensation for a loss sustained, in order to punish, and make an example of, the wrongdoer.” They are awarded when a person’s conduct is reprehensible and outrageous. Most church insurance policies exclude punitive damages. This means that a jury award of punitive damages represents an uninsured risk.
Key point. Churches that ignore allegations of wrongdoing by a pastor or lay worker face a number of risks in addition to negligent retention. These include (1) liability based on “ratification” of the minister’s actions; (2) punitive damages; and (3) possible personal liability for members of the church board if their conduct is grossly negligent.
A Virginia court ruled that nine victims of childhood sexual abuse could proceed with a lawsuit against the offender’s church and two regional denominational agencies on the basis of negligence and agency.
While it remains to be seen whether actual liability will be found for any of the claims made against the church and the regional denominational offices involved in this case, the mere fact that the Virginia court allowed the claims to proceed is of enormous significance for the following reasons.
“A sustained pattern of predatory abuse”
A church (“Church”), two regional denominational bodies (“Regional Denominational Body A” and “Regional Denominational Body B”; when appropriate here, collectively referenced as the “church defendants”), and a denomination’s national office were sued by several minor victims of sex abuse. The victims had been molested by the same lay youth worker.
The victims’ lawsuit alleged that the Church knew or should have known of the “dangerous propensity” of the perpetrator to sexually assault minor boys prior to hiring him to work with the youth group or his eventual promotion to head of the youth group.
The lawsuit was brought following “a sustained pattern of predatory abuse” by the molester against many different minor boys affiliated with the church’s youth group.
The court declined to dismiss the victims’ claims
The victims’ lawsuit claimed that the church defendants were liable for their injuries on the basis of negligent hiring, negligent retention, gross negligence, and agency. They sought both compensatory and punitive damages.
The church defendants immediately asked the court to dismiss these claims. The claims against the national denominational office were dismissed for lack of personal jurisdiction, a procedural matter in litigation regarding whether a court has jurisdiction over a party named in a suit. However, the court declined to dismiss the claims against the Church and the regional denominational offices for the reasons summarized below.
Negligent hiring, negligent retention, and gross negligence
The court noted that to proceed on a claim of negligent hiring, “the plaintiff must show that an employee’s propensity to cause injury to others was either known or should have been discovered by reasonable investigation.” Similarly, to proceed on a claim of negligent retention, the plaintiffs must show that “both the nature and the gravity of the risk render unreasonable any mitigating response short of termination.”
The victims alleged that:
Allegations of sexual misconduct by the molester predated his involvement with the Church’s youth group and were known to Church leadership. For example, in or around January 2005, two of the Church’s deacons learned of sexual abuse allegations against the molester.
The deacons were members of the “Executive Group” of the Church, which holds the power to hire and fire for the Church.
In 2007, the Church voted in favor of a denominational resolution “On Protecting Children from Abuse,” which identified and aimed to assist churches in preventing sexual abuse of minors.
The Church knew or should have known of a series of allegations against the molester that preceded his hiring. After his hiring, the Church was aware of a series of allegations against the molester stemming from his time with the youth group.
The plaintiffs argued that these and other allegations demonstrated that the Church knew or should have known of the dangerous propensity of the molester to sexually assault minor boys prior to hiring him to work with the youth group or his eventual hiring as the leader of the youth group. The court noted:
The allegations that dogged [the molester] after being hired should have led [the Church] to know or reasonably investigate to find out about his activities with members of the Youth Group. Indeed, [the pastor and youth pastor] did just that. However [the molester] was retained in his position with the Youth Group, and [the pastor and youth pastor] left the [C]hurch.
Punitive damages for “willful and wanton misconduct”
The court noted that “to justify an award of punitive damages, a litigant . . . must present evidence that the defendant’s acts were so willful or wanton as to evince a conscious disregard of the rights of others, as well as malicious conduct.”
The church defendants insisted “there are no facts alleged showing [the Church] acted with the culpability required for an award of direct punitive damages.”
The court responded:
On the contrary, when [the Church] was confronted with allegations against [the molester] by pastors within the Church, [it] threw its support behind [the molester]. . . . The Church voted to support [the molester], and [the Church] accepted the forthcoming schism in its ministry due to the decision.
The court concluded:
[The Church], aware of allegations against [the molester], retained him, promoted him, supported him, and allowed him to continue in his role as Youth Group leader. This intentional act led to further harm, not just against [the victim] but against the eight other minor boys who are represented in this lawsuit. . . . There are substantial and certain factual allegations that would allow a reasonable [jury] to determine there had been willful and wanton misconduct, as there were substantial and certain allegations that led to a significant portion of [the Church’s] congregation leaving the Church.
Agency
The victims claimed that the regional denominational defendants were liable on the basis of agency for the injuries caused by the molester’s wrongful acts since as a minister he was their agent. Regional Denominational Body A argued that there was no agency relationship between it and the Church. Regional Denominational Body A referred to its organizational documents, and said that, in its opinion, it recognizes the “autonomy of each member church . . . to act on and carry out its own affairs and conduct its own business without interference from [it]. [These statements] make it clear that they were not attempting to establish an agency relationship.”
The court responded:
However, “[w]hether a relationship is characterized as agency in an agreement between parties . . . is not controlling. . . . Labels do not govern the presence of an agency relationship. . . . [T]he power of control . . . is determinative. . . .
Agency relationships are created when two parties consent that one party will act on behalf of another party and subject to the second party’s control. . . . In determining an agency relationship, “[a]ctual control . . . is not the test; it is the right to control which is determinative.”
The victims asserted that the Regional Denominational Body A had the power to “hire, assign, and fire pastors, administrators, and other employees at its local churches.” The victims further stated:
[Regional Denominational Body A] exercised its power and control over its member churches, including [the Church] regularly and routinely. [Its bylaws] also dictate the discipline of member churches, encourage and determine the use [of its campgrounds], and establish Youth Group risk-management teams.
The court concluded that the victims had alleged facts demonstrating that Regional Denominational Body A exercised control over the Church as one of its member churches, and that the Church was responsive to the demands of Regional Denominational Body A.
The victims also argued that an agency relationship existed between the Church and Regional Denominational Body B. Regional Denominational Body B countered by pointing out that its constitution and bylaws “are explicit that individual churches retain autonomy and independence.”
Once again, the court stressed that
labels are not dispositive in determining an agency relationship. . . . Agency relationships are created when two parties consent that one party will act on behalf of another party and subject to the second party’s control. . . . In determining an agency relationship, “[a]ctual control . . . is not the test; it is the right to control which is determinative.”
The Regional Denominational Body B’s constitution and bylaws describe the function of its Executive Board:
[T]he Executive Board shall have entire management of the matters committed to its trust and shall carry out such plans as may seem judicious. . . . [T]he Executive Board shall not have authority to control and direct the agencies, institutions, and shared ministries of the general Association. . . . [I]t is instructed and commissioned to maintain liaison with and study the affairs of these agencies, institutions and shared ministries in search of acceptable solutions to problems which may arise.
The court noted:
[This provision] purports to offer [the Regional Denominational Body B] and its Executive Board only certain, limited powers over member churches. However [the victims] have alleged they have the power and prerogative to address problems with the churches. . . . Indeed, [the Regional Denominational Body B] is alleged to have controlled churches . . . while acting as a ”voluntary organization.” In one example . . . [the Regional Denominational Body B expelled a church] due to violations of [its] rules.
The court pointed out that the Church “chose to participate and cooperate with [the Regional Denominational Body B] instead of maintaining itself as an independent church. . . . [It] also acted on behalf of [the Regional Denominational Body B] by paying the membership dues required of a participating church.”
The court noted that the Regional Denominational Body B had obtained “group exemption” from the Internal Revenue Service (IRS) for all of its churches, including the Church. To qualify for the group exemption, the subordinate organizations must be “subject to the central organization’s general supervision and control.”
The court then stated:
Those subordinate organizations must also provide the central organization with “written authorization . . . [that the subordinate organization] will be subject to [the central organization’s] supervision and control.” During the time period at issue in this case, [the Church] was a subordinate organization to the Regional Denominational Body B [and] remains a subordinate organization. It is reasonable to infer the requisite paperwork granting the power to supervise and control [the Church] was executed in order for [it] to enjoy the group tax exempt status.
The Constitution of [the Regional Denominational Body B] and the tax-exempt status of the churches offers the Executive Board . . . the power to insert itself into the business of local churches. Indeed, it is alleged to have done so in the past. Plaintiffs claim that this power includes the power “to hire, assign, and fire pastors, administrators, and other employees at its local churches and entities.” [Regional Denominational Body B] also has the power to disassociate member churches, as it did in 2012 when it unilaterally dismissed [a church]. Finally, if a church fails to pay its dues for a five-year period, it can be removed from the list of churches on the group IRS exemption for churches submitted by [Regional Denominational Body B]. Discharge of an agent is one of the remedies specifically reserved to a principal.
The court concluded:
[The victims] have alleged facts that would demonstrate an agency relationship between [the Church] and [the Regional Denominational Body B]. Therefore, [they] are entitled to the presumption that actions taken in a specific job-related service for [the Regional Denominational Body B] are made within the scope of the agency relationship. . . . [I]t is premature to cut off the victims’ cause of action against the Regional Denominational Body B.
Facts Pointing to “Agency”
Facts in this case indicating local churches are agents of their parent denomination:
-The denomination has the authority to hire, assign, and fire pastors, administrators, and other employees of local churches.
– Denominational bylaws describe discipline of member churches, including the authority to expel.
– The denomination encourages churches to use its campgrounds.
– The denomination has established youth group risk-management teams.
– The denomination has the power and prerogative to address problems with the churches.
– The denomination has obtained a group exemption with the IRS requiring it to certify that it exercises “general supervision and control” over its affiliated churches.
What this means for churches
This case is important to denominational agencies and to churches affiliated with denominations for the following reasons.
1. The risk of punitive damages and civil suits
Allowing a sex offender to work as a volunteer or employee in a church’s youth or children’s ministry may result in two significant legal risks: punitive damages, and personal liability of church board members.
The court in this case noted that the Church, though aware of numerous allegations of child sexual abuse by the molester, “retained him, promoted him, supported him, and allowed him to continue in his role as Youth Group leader.”
Such behavior, the court concluded, exposed the church to punitive damages because it was “so willful or wanton as to evince a conscious disregard of the rights of others.” This is extremely serious since punitive damages are not covered by a church’s insurance policy, and so the assets of the church (such as its building, vehicles, general fund, and so on) would all be exposed.
The bottom line is that the public will no longer tolerate such behavior. What’s more, the public is outraged by it, and members of the public often express that outrage in the form of their judgments (including punitive damages) as members of juries.
The following common scenarios potentially could result in punitive damages, meaning that the church may face substantial, unbudgeted, and uninsured liability:
refusing to implement a program for screening youth and children’s workers (both employees and volunteers)
failure to implement and monitor a policy prohibiting the use of cell phones (for calls and texting) while driving a vehicle on church business
continuing to use 15-passenger vans
using cribs in the church nursery that fail to comply with the guidelines mandated by the Consumer Product Safety Commission
In addition to punitive damages, allowing a sex offender to resume normal activities within a church exposes the church and church board members to substantial monetary damages in a civil lawsuit. If the person should ever have sexual contact with a minor on church premises or in the course of church activities, the church would face a jury that would be incredulous to the reality that such a person was allowed to return to the church.
This would be especially true if the person was allowed to have any involvement with children in the church, but it could apply even if the person was not officially involved in youth or children’s programs.
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.
Limited immunity is not ordinarily available to compensated officers and directors of churches and other charities. “Compensation” ordinarily is defined to exclude reimbursement of travel expenses incurred while serving as a director or officer.
Churches that compensate their directors and officers over and above the reimbursement of travel expenses should reconsider such a policy if they are located in a state that grants limited immunity to uncompensated officers and directors. Obviously, these statutes will not protect ministers who receive compensation from their church.
2. Understand the potential scope and limits of agency
The most significant aspect of the court’s opinion was its conclusion that ministers (such as the molester) are agents of their church and its regional denominational offices, and that local churches are “agents” of their parent denomination’s regional offices.
The significance of this ruling is the fact that the claims were allowed to proceed, making it possible for a jury to find two regional denominational offices liable for the acts of a local church. In general, agency makes the principal responsible for the agent’s acts (such as sexual misconduct, negligent driving, and so on) no matter how careful the principal was.
To illustrate, consider a denomination with 25,000 ministers. If the ministers are agents of the denomination’s regional offices, then their wrongful conduct is imputed to the denomination’s regional offices, and no amount of care on the part of the denomination’s regional offices changes that.
Since it would be impossible for the denomination’s regional offices to directly police all 25,000 ministers day to day, it is absolutely liable with no defense. This makes a finding that ministers are agents of a denomination’s regional offices an existential threat jeopardizing the denomination’s very existence. But note four potential defenses available to denominations and their regional offices.
First, the principal is only liable for the actions of agents committed while acting in the scope of the agency. Are sexual misconduct, reckless driving, and other injuries caused by an agent done in the scope of the agency? It is difficult to conceive how this would be the case, since criminal acts of this nature are not considered to be within “the scope of the agency.”
Second, several denominations ordain, commission, or license ministers; require ministerial credentials to be renewed annually; require ministers to pay annual dues; and reserve the authority to discipline or dismiss clergy whose conduct violates standards enumerated in the denomination’s governing documents.
However, the denomination typically has been given no authority to independently monitor or supervise the day-to-day conduct of ministers. The authority of a denomination to ordain, license, or commission ministers requires annual renewals of ministerial credentials, and discipline or dismiss clergy found guilty of specified misconduct is precisely the same authority that is exercised by state professional accrediting organizations (such as state bar associations, medical associations, and boards of accountancy).
Like many religious denominations, a state bar association has the authority to license attorneys, require dues and annual renewals, and discipline or dismiss attorneys for proven misconduct in violation of professional standards.
However, this limited authority does not give the bar association any right to control or supervise the day-to-day activities of attorneys. No state bar association has ever been sued or found liable for the numerous incidents of attorney misconduct and malpractice that occur each year, and no one has ever suggested that attorneys are “agents” of their state bar associations. The US Constitution bars religious organizations from being treated less favorably.
An identical analogy could be made to any professional licensing organization (such as physicians, CPAs, veterinarians, dentists, nurses, and morticians), since they all exercise about the same degree of control: They license and retain the right to discipline or dismiss for violations of a professional code of conduct, but they have no authority to supervise the day-to-day activities of licensees. For this reason, none have been found liable for the malpractice of their licensees and no court has ruled that licensees are “agents” of their professional accrediting organizations.
A federal appeals court recognized this “bar association analogy” in a significant case involving the Assemblies of God denomination. In Alford v. Commissioner, 116 F.3d 334 (8th Cir. 1997), the court observed:
The General Council’s and District Council’s right to control [Rev.] Alford during the relevant years extended primarily to their function in awarding credentials to ministers like himself. Generally, the church has established certain criteria that must be met for an individual such as Alford to obtain credentials initially and to renew that status annually. There are standards for the education a minister must acquire (which he must obtain and pay for himself) and for his performance on certain tests. Other requirements include subscribing to the doctrinal statement of the Assemblies of God, which sets forth the religious beliefs of the church, its ministers, and its members, and to the form of church government. Ordained ministers must preach thirteen times a year, but topics are not decreed by the regional or national organizations. Ministers holding credentials cannot preach in churches other than Assemblies of God churches without permission of the District Council. Ministers may be disciplined for what the church considers failure to follow church doctrine and for lapses in personal conduct, and may, in fact, have their credentials revoked. With some exceptions not relevant here, a minister must tithe to both the regional and national organizations. Attendance at certain meetings is expected, but not required. Thus it is apparent that, while the regional and national churches had doctrinal authority to exercise considerable control over Alford as regards his beliefs and his personal conduct as a minister of the church, they did not have “the right to control the manner and means by which the product [was] accomplished.”
The [trial court] and the United States make much of the fact that Alford, as a minister holding credentials, was “amenable” to the General Council and to the District Council in matters of doctrine and conduct. But this is not unusual in such a profession, and actually is merely a shorthand way of describing the parent church’s doctrinal and disciplinary control discussed above. The control exercised by the regional and national organizations, and their right to control Alford, was no more nor less than most professions require of individuals licensed or otherwise authorized to work in the profession. State bar associations, for example, have certain education requirements and demand a certain level of performance on a bar examination before an individual can be licensed to practice law. On an annual basis, such associations require the payment of dues and often the completion of continuing legal education in order for an attorney to retain his license. State bar associations are empowered to monitor attorneys’ behavior and to discipline them as they see fit, including the revocation of an attorney’s license to practice law (disbarment). Yet no one would suggest that, by virtue of this right to control an attorney’s working life, the bar association is his employer, or even one of his employers (emphasis added).
Other courts have recognized the bar association analogy in cases involving attempts to hold religious denominations liable on the basis of negligent supervision for the misconduct of ordained clergy. To illustrate, a Minnesota appeals court applied the bar association analogy in concluding that a regional and national church were not liable for the sexual misconduct of a pastor since the relationship between the church entities and credentialed clergy (which resembled the relationship between state bar associations and licensed attorneys) was too attenuated to justify the imposition of liability on the church entities for clergy misconduct. C.B. ex rel. L.B. v.Lutheran Church in America, 726 N.W.2d 127 (Minn. App. 2007).
The court drew an analogy to the relationship between attorneys and the state supreme court. In Minnesota, the supreme court “through the Rules of Professional Conduct, sets forth the rules and standards by which lawyers must adhere. If these rules are violated, the court may discipline the responsible attorney. But this relationship between the supreme court and the disciplined attorney is not an employment relationship. There has to be something more.” Similarly, the regional and national churches in this case had “limited control over the pastor.” But, “the congregation, not the umbrella entity, has the responsibility for hiring and firing the pastor, setting forth the terms and conditions of employment, supplying the pastor with parsonage, vacation and supplies, and paying the pastor. [It] is the congregation, not the [regional or national churches], which employs the minister.”
Third, judicial recognition of a duty on the part of a denomination to supervise the activities of affiliated clergy and churches, where no such authority exists, would violate the First Amendment religion clauses since it would amount to governmental manipulation of the polity of a sovereign religious organization.
The essential question in this case is: Can a civil court, consistently with the First Amendment’s establishment and free exercise of religion clauses, impose a duty on a denomination to supervise and control affiliated churches and clergy when the theology, history, practice, and organizational documents of the denomination forbid such control? Stated simply: Can a court compel a religious denomination to alter its polity? Obviously, the answer is no.
The United States Supreme Court has often stated that the civil courts may not affect ecclesiastical doctrine or polity. For summaries of five US Supreme Court rulings showing that civil courts may not affect ecclesiastical doctrine or polity, see the “Defenses of Liability” section in the Legal Library.
The implication of US Supreme Courts precedents I’ve linked to above is unequivocal: Government action that seeks to manipulate or distort the internal organization and government of a religious denomination violates the constitutional guarantee of free exercise of religion.
A civil court is therefore without power to impose a duty of supervision and control upon a religious denomination over its affiliated entities contrary to the doctrine, history, and organizational documents of the denomination in order to redress injuries allegedly caused by the activities of a minister or church.
Some “hierarchical” denominations do exercise sufficient control over clergy and churches to create an agency relationship. For an example, see the second case study in “The Requirement of Employee Status” section of the Legal Library.
3. Definition of agency
Section 1.01 of the Restatement of Agency3d specifies that “agency is the fiduciary relationship that arises when one person (a principal) manifests assent to another person (an agent) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consent to so act.” It can be argued that in many denominations ministers are not agents under this definition since they are not “subject to the principal’s control.” In many denominations, ministers remain free of any control by their denomination in virtually every aspect of their lives and ministry. To illustrate, ministers:
Compose and deliver sermons (their quintessential duty) and perform all of their pastoral responsibilities (i.e., counseling, hospital visitations, managing staff, conducting board meetings) free from any “control” by the denomination.
Perform sacerdotal functions (i.e., baptisms, weddings, communion) free from any “control” by the denomination.
Choose their place of employment.
Along with the governing board of their church, enter into loans, purchase and sell property, admit and expel members, hire employees, and initiate and pursue church construction projects without any involvement, approval, or control by the denomination.
In many denominations, it is difficult to identify a single aspect of a minister’s life and ministry that is subject to the “control” of his or her denomination. Indeed, how could it be otherwise with a population of thousands of ministers.
Meaningful control would require thousands of “inspectors” or “religious police” to monitor ministers continuously. Such a prospect would be intolerable to any denomination and its ministers. This is a far cry from the relationship contemplated by the Restatement of Agency.
4. Group exemptions and denominational liability
The court referenced group exemption rulings in support of its decision. Regional Denominational Body A had obtained a group exemption ruling from the IRS in the past that covered its affiliated churches including the Church.
Group exemptions are an administrative convenience for both the IRS and organizations with many affiliated organizations. Subordinates in a group exemption do not have to file, and the IRS does not have to process, separate applications for exemption. Consequently, subordinates do not receive individual exemption letters.
Exempt organizations that have, or plan to have, related organizations that are very similar to each other may apply for a group exemption. Groups of organizations with group exemption letters have a “head” or main organization, referred to as a central organization.
The central organization generally supervises or controls many affiliates, called subordinate organizations. The subordinate organizations typically have similar structures, purposes, and activities. To qualify for a group exemption, the central organization and its subordinates must have a defined relationship. Subordinates must be:
affiliated with the central organization;
subject to the central organization’s general supervision or control; and
exempt under the same paragraph of IRC 501(c), though not necessarily the paragraph under which the central organization is exempt.
Several lawsuits brought against denominational agencies for the liabilities and obligations of affiliated churches have cited their group exemption as evidence of sufficient control to support liability. After all, a group exemption ruling requires that the central organization have general supervision or control over its subordinate units (i.e., affiliated churches).
Although not addressed by the court, any attempt to use a group exemption ruling as evidence of denominational liability for the obligations of affiliated churches faces formidable obstacles, including the following:
No court has found a denominational agency liable on the basis of a group exemption ruling for the acts or obligations of affiliated churches.
In only one reported case was a group exemption ruling cited as evidence in support of a denomination’s liability for the conduct of an affiliated church covered by its group exemption. Kersh v. The General Council of the Assemblies of God, 804 F.2d 546 (9th Cir. 1986).
In this case a federal appeals court upheld a district court’s summary judgment in favor of the national Assemblies of God church (the General Council of the Assemblies of God) in a case claiming that the national church was legally responsible for the alleged securities fraud of an affiliated church.
In addition, some state trial courts have dismissed denominational agencies as defendants from civil lawsuits and rejected plaintiffs’ claims that they were liable on the basis of a group exemption ruling.
Key point 10-04. A church may be liable on the basis of negligent selection for a worker’s molestation of a minor if the church was negligent in the selection of the worker. Negligence means a failure to exercise reasonable care, and so negligent selection refers to a failure to exercise reasonable care in the selection of the worker. Liability based on negligent selection may be imposed upon a church for the acts of employees and volunteers.
Key point 10-07. A church may exercise reasonable care in selecting ministers or other church workers but still be responsible for their misconduct if it “retained” them after receiving information indicating that they posed a risk of harm to others.
The Virginia Supreme Court ruled that a church could be liable for a retired pastor’s acts of sexual abuse on the basis of negligent hiring and retention if his performance of miscellaneous tasks for the church made him an agent or employee of the church, exposing it to liability for his acts based on negligent hiring and retention.
Background
An ordained minister (the “defendant”) was hired as lead pastor of a Virginia church (“Church A”) in 1995. Prior to this assignment, the defendant had been involved in “an inappropriate relationship with a young girl” when he was a pastor of Church B. He was terminated from his position in Church B because of this relationship.
He also served as pastor of Church C and engaged in “inappropriate behavior toward women” in that congregation. He allegedly was hired by Church A, despite the fact his prior history of inappropriate behavior toward women was known to Church A and a regional denominational office in Virginia (the “denominational office”).
Not long after he was hired by Church A, a number of persons made allegations about the defendant behaving inappropriately toward some women. For example, in December 1996, a church member wrote to the denominational office that the defendant’s soul was “lost to sin.” The writer forwarded an inappropriate letter that the defendant had sent to two other female church members.
Later, in January 1997, another person wrote the denominational office asking it to prevent the defendant from continuing to contact her and stating that he “needs help.”
Also in January 1997, yet another person wrote to Church A, forwarding a letter the defendant’s daughter had written. The letter referenced multiple incidents of the defendant’s sexual misconduct and predatory behavior, including an instance when he inappropriately touched another person. The letter referenced the defendant’s “unwanted and inappropriate advances on many women over the years.”
In January 2001, yet another person wrote to the denominational office informing it that the defendant had been writing inappropriate letters to her young niece. The writer enclosed letters to her niece and asked the denominational office to intervene to hold the defendant accountable. In the enclosed letters, the defendant confessed his love for the niece, told her that it was hard not being able to touch her, and asked her to send him pictures of herself.
In 2002, the denominational office arranged for the defendant and his wife to attend a Christian counseling and mental health facility. The defendant and his wife attended in July 2002.
Following this visit, a counselor from the facility sent a written report to the denominational office stating that the defendant needed “to set healthy boundaries with women” and that the defendant “needed someone to hold him accountable” for his inappropriate actions. The report suggested that the defendant “should meet with that person regularly for a while.”
This report indicated that the defendant was told to attend the counseling “because of inappropriate communications with a young girl who was a member of the congregation at a church where he pastored prior to his tenure at [Church A].”
The report was placed in the defendant’s file at the denominational office.
In February 2005, two women wrote yet another letter to the denominational office stating that the defendant had been making sexual advances for years toward one of the authors of the letter.
The letter described one instance in which the defendant offered this woman $500 if she would send him pictures of herself “in various states of undress.”
The letter further stated that the defendant arranged a meeting with this woman at the church parking lot where he sexually assaulted her. He “warned her not to tell anyone about his forceful and predatory advances.”
The letter writers asked the denominational office to “make the right decision” and warned it that if it did not “a lot of other young women would be affected by [the defendant’s] ‘perverted sexual conduct in the future.’”
In April 2005, another of the defendant’s daughters wrote to the denominational office stating she could “no longer ‘cover’” for her father and that the allegations made by the writers of the February 2005 letter were true.
This daughter further stated that the defendant had been terminated from at least one position before becoming pastor at Church A and that this termination occurred because of his “inappropriate conduct with young girls.”
Also in April 2005, a grandson of the defendant wrote a letter to the denominational office that corroborated the statements in the February 2005 letter. The grandson asked persons in a position of authority to “quit overlooking” his grandfather’s inappropriate behavior.
In March 2011, the defendant announced his intention to retire, and stepped down as pastor in April 2011. But he continued to maintain a close relationship and serve as a spiritual leader to certain former congregation members from Church A, and he performed miscellaneous duties for the church.
In 2016, the defendant developed a relationship with a 13-year-old girl (the “victim”) in Church A. He often invited the victim and her parents to his home for meals, spiritual advising, and fellowship.
On one occasion the victim and her mother went to the defendant’s home to bring him and his wife tomatoes from a farmer’s market.
The victim’s mother spoke with the defendant’s wife in the kitchen. This left the defendant alone with the victim in the living room. He sexually touched the victim after initiating contact under the guise of offering nonsexual comfort and support. Several days later she told her parents what had happened.
The victim: A church and several denominational officials were negligent
The victim sued the defendant, Church A, and state and national denominational offices, claiming that they were all responsible for her injuries on several grounds, including:
negligent hiring
negligent retention
negligence in failing to investigate reports of the defendant’s behavior, failing to remove him from ministry or work that would allow him to be around young women and underage girls, failing to warn members of the church of the danger he posed, and failing to protect minor female members of the church from the defendant
negligent infliction of emotional distress
intentional infliction of emotional distress
fraud by omission or concealment
vicarious liability against the state and national denominational agencies based on the scope of the defendant’s duties as an agent, volunteer, or employee
vicarious liability based on apparent authority
The trial court dismissed all of the plaintiff’s claims, and the plaintiff appealed to the state supreme court. The court’s analysis of the main claims is summarized below.
Negligent hiring and retention
The Supreme Court of Virginia upheld the trial court’s dismissal of the negligent hiring and retention claims. It noted that negligent hiring focuses on the employer’s negligence “in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which, because of the circumstances . . . it should have been foreseeable that the hired individual posed a threat of injury to others.”
The court further stated:
A claim for negligent retention exists “for harm resulting from the employer’s negligence in retaining a dangerous employee who the employer knew or should have known was dangerous and likely to harm [others] . . . (emphasis added).
The negligent retention tort . . . requires a showing that the risk of future harm was so grave that discharging the dangerous employee would have been the only reasonable response . . .
(emphasis added).
The Virginia Supreme Court further explained its reasons for upholding the trial court’s decision:
A claim for negligent hiring or retention is not viable for persons who are no longer employed by the defendant employer at the time of the commission of the tort. . . .
[W]e hold that a negligent hiring or a negligent retention claim ceases to be viable for conduct committed after the employee is no longer retained by the employer. . . .
The termination of employment is a logical and practical boundary for employer liability for claims of negligent hiring or retention. The rationale for holding an employer liable for hiring an unfit or dangerous employee is that a victim might be exposed to risk or danger during the course of the employment—not at some other time in the possibly distant future when the employer has no control over the employee. In addition, an employer cannot be liable for “retaining” an employee who is no longer retained. To hold otherwise would impose a duty of care on employers that is unmanageable, utterly unpredictable, and conceptually limitless. The same concept of duty applies to agents. When the agent has ceased working for the principal, the duty of the principal ceases.
The plaintiff insisted that the plaintiff’s negligent hiring and negligent retention claims were viable since the defendant’s miscellaneous duties on behalf of Church A following his retirement made him an agent or employee of the church at the time of the plaintiff’s abuse.
The court responded:
The question then becomes whether the allegations establish that [the defendant] was no longer employed by the defendants at the time he committed the tort. . . . The [plaintiff’s lawsuit] expressly and repeatedly states that [the defendant] was an “agent, volunteer, and/or employee” at the time he improperly touched [the plaintiff]. It additionally states that [the defendant] maintained responsibilities with the church after he retired as the pastor. The [plaintiff’s lawsuit] expressly alleges that [the defendant] was an “agent, volunteer, and/or employee” at the time he committed the tort. A reasonable inference from the allegations in the complaint is that [the defendant] retired as pastor but remained an agent of the church. Another possibility is that [he] was rehired as an employee or agent. If [he] was an employee or agent at the time the sexual battery occurred, the claims for negligent hiring or negligent retention should not have been dismissed on the basis that he retired as a pastor.
If, as a matter of fact, [the defendant] was not an employee or agent at the time he committed the conduct alleged in the pending case, the negligent hiring or retention claims fail as a matter of law and should be dismissed. If [he] was still employed, albeit not as the pastor, or if he was selected or retained to serve in some capacity as an agent at the time the tort was committed, the trial court will need to address on remand from a factual standpoint what his role was as an agent. Further evidentiary development, however, is required to determine [the defendant’s] status as an employee or agent at the time of the tort.
Personal liability of denominational officials
The plaintiff’s lawsuit sought to hold personally liable several officers of the state and national denomination on the basis of negligent hiring and retention. In rejecting this claim, the Virginia Supreme Court observed:
The [lawsuit] seeks to personally hold liable a number of individuals for negligent hiring or retention. These individuals were state or district Overseers. . . . The tort of negligent hiring or retention is available against an employer, not individuals who played a role in hiring or retaining an employee. It is the employer who selects and retains employees and who, therefore, bears responsibility for those decisions. . . . There is no allegation that any of these individual defendants were [the defendant’s] employer. Consequently, we affirm the trial court’s dismissal of the individual defendants with respect to the negligent hiring or retention counts.
Vicarious liability
Employers are vicariously liable for the acts of their employees committed within the course and scope of their employment. The plaintiff acknowledged that the defendant had retired in 2011 and that he stepped down from his role as pastor, but the plaintiff insisted that the miscellaneous duties the defendant performed for the church following his retirement were sufficient to make him an agent or employee whose acts were attributable to his employer under the principle of vicarious liability.
The court agreed that “[i]t is certainly possible to retire from full time ministry as a pastor and, nevertheless, retain a role within the church as an employee, volunteer, or agent.” As a result, the trial court was in error and dismissing the plaintiff’s claim of vicarious liability against Church A.
The court added:
“It simply is not enough . . . that the claim arose out of an activity which was within the employee’s scope of employment.” . . . The [wrongful] act must occur “while the employee was in fact performing a specific job-related service for the employer.” . . . “[Liability] cannot extend to an employer for an unauthorized tortious act by an employee arising ‘wholly from some external, independent, and personal motive on the part of the [employee] to do the act upon his own account.’”
The denominational defendants argued that the misconduct by the defendant was such a significant and unusual deviation from the scope of any conceivable agency or employee relationship that they cannot be liable for the alleged sexual assault of the plaintiff. They noted that
“[an employer] is not liable for every wrong which [an employee] may commit during the continuance of an employment. . . . If the [employee] steps aside from his [employer’s] business and is engaged in an independent venture of his own, the relation of [employer] and [employee] is for the time suspended.”
The court noted that the sexual molestation of the plaintiff occurred on a visit by the defendant and his wife to the plaintiff’s home to deliver tomatoes purchased from a local farmer’s market. While in the home, the defendant and plaintiff remained in a room apart from others, and it was at this time that the molestation occurred in the course of the defendant providing spiritual comfort and counsel.
The court concluded that if an employee’s “acts of molestation occurred simultaneously with his performance of job-related services, a reasonable jury could infer that [the employee] acted from a mixed motive and not ‘wholly from some external, independent, and personal motive.’”
The court found it difficult to imagine that allegations of sexual misconduct could fall within the scope of employment. However, it declined to make this determination and remanded the case back to the trial court for further consideration.
Apparent authority
The plaintiff alleged that the defendant “was cloaked with apparent authority” to act for the church. The court noted that “[a] ‘principal is bound, under the doctrine of apparent authority, to the extent he holds out another as having the authority to act for him.’”
Quoting itself from a previous case, the Virginia Supreme Court added:
An act is within the apparent scope of an agent’s authority if, in view of the character of his actual and known duties, an ordinarily prudent person, having a reasonable knowledge of the usages of the business in which the agent is engaged, would be justified in believing that he is authorized to perform the act in question.
However, the court stated in this case, “the act in question is a sexual battery.” It continued:
No reasonable person would believe that the church vested [the defendant] with the authority to engage in such an act. Therefore, the [trial] court properly rejected [the plaintiff’s] claim that [the defendant] possessed apparent authority for his acts.
Willful and wanton negligence
The plaintiff’s lawsuit alleged that the church defendants’ failure to investigate the reports of the defendant’s behavior, their failure to remove him, their failure to warn members of the congregation about his behavior, and their failure to protect minor female members of the church constituted willful and wanton negligence, and the trial court erred in dismissing her claims that the defendants were grossly negligent.
The court noted that Virginia, like many states, recognizes three levels of negligence:
“The first level, simple negligence, involves the failure to use the degree of care that an ordinarily prudent person would exercise under similar circumstances to avoid injury to another.
“The second level, gross negligence, is a degree of negligence showing indifference to another and an utter disregard of prudence that amounts to a complete neglect of the safety of such other person. This requires a degree of negligence that would shock fair-minded persons, although demonstrating something less than willful recklessness.”
The third level of negligent conduct is willful and wanton negligence. Willful and wanton negligence “is defined as ‘acting consciously in disregard of another person’s rights or acting with reckless indifference to the consequences, with the defendant aware, from his knowledge of existing circumstances and conditions, that his conduct probably would cause injury to another.’” . . . We also have stated that “gross negligence involves conduct that ‘shocks fair-minded people,’ and willful and wanton negligence involves such recklessness that the actor is aware that his conduct probably would cause injury to another.”
The court concluded that the plaintiff’s allegations did not rise to the level of gross or willful and wanton negligence because: (1) it was acknowledged that the church defendants manifested some degree of care by requiring the defendant to attend counseling; (2) even if the allegations from one incident in 2005 showed that the defendant presented a particular risk, and therefore sufficed for a claim of negligent hiring or retention, those allegations did not rise to the level of indifference to another and an utter disregard of prudence that would shock the conscience; and (3) some of the plaintiff’s allegations depict conduct directed at women that is wholly inappropriate but did signal that his conduct “probably would cause injury to another.”
Intentional infliction of emotional distress
The court noted:
To recover for intentional infliction of emotional distress, a plaintiff must establish that “(1) the wrongdoer’s conduct was intentional or reckless; (2) the conduct was outrageous and intolerable; (3) there was a causal connection between the wrongdoer’s conduct and the emotional distress; and (4) the emotional distress was severe.” . . .
Liability is present only when the conduct has been so “outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.”
The court concluded that the plaintiff’s allegations, even if true, “do not clear the high bar necessary to sustain a claim for intentional infliction of emotional distress.” The court explained:
[The defendant] served as a pastor for over forty years, from 1967 to 2011. There are broad and nonspecific allegations about [his] inappropriate conduct as well as specific allegations of disturbing conduct toward women over the course of those decades. None of the specific allegations prior to the sexual battery of [the plaintiff] involved the sexual battery of a minor. [The defendant] was made to attend and did attend counseling. The [church] defendants’ failure to take measures stronger than ordering counseling does not on these facts rise to the level of being outrageous and intolerable. Therefore, we affirm the dismissal of this claim.
Fraud by nondisclosure
The plaintiff claimed that the church defendants’ failure to warn the congregation of the risk posed by the defendant amounted to fraud by nondisclosure or concealment. The court disagreed:
The [plaintiff] fails to state a claim for fraud by omission for at least two reasons. First, no factual allegations support a conclusion that the [church] defendants intentionally concealed operative facts, as opposed to negligently or recklessly failing to disclose them. Second, the defendants did not owe a duty to warn [the plaintiff] or the other congregants about the complaints against [the defendant], so their silence cannot constitute concealment. . . . There was no special relationship between the defendants and [the plaintiff], and, therefore, there was no duty to disclose [the defendant’s] inappropriate behavior. Consequently, we affirm the . . . [trial] court’s dismissal of this claim.
What this means for churches
There are several important lessons to be learned from this case. Consider the following.
1. Negligent hiring
Most importantly, the court concluded that while a church cannot be liable on the basis of negligent hiring for sexual or other injuries committed by former employees, it may be liable if the former employee performs sufficient duties to be an employee or agent of the church.
This conclusion is significant since the primary basis of liability in most sexual abuse cases involving churches is negligent hiring. That is, the church was negligent or careless in failing to adequately assess an employee’s fitness and suitability prior to the time he or she was hired.
Church leaders should understand that allowing a former church employee to perform miscellaneous tasks on behalf of the church may expose the church to liability on the basis of negligent hiring, if those tasks are sufficient to make the person an employee or agent of the church.
Employee status is defined broadly by the courts, and rather minimal tasks performed by a former employee may suffice for a continuation of employee status.
Often, tasks performed by former employees are sporadic, off-site, and unsupervised, which greatly increases a church’s potential liability. This must be considered before a former employee is allowed to perform tasks for the church.
Also, note that allowing a former employee to perform miscellaneous tasks on behalf of the church may raise additional issues in addition to increased liability, including the following:
If a former employee who continues to perform miscellaneous services on behalf of the church is not a minister, then the church may be responsible for withholding Social Security and Medicare taxes from the person’s compensation and may itself be liable for the payment of these taxes if it fails to withhold them. Ministers are exempt from the tax withholding requirement and pay their federal taxes using the estimated quarterly tax procedure.
The church may be responsible to comply with the payroll tax deposit requirement if the former employee is not a minister or is a minister who has elected voluntary tax withholding.
The church may be required to issue Form W-2 to the former employee.
The church may be required to comply with the minimum wage and overtime requirements of the Fair Labor Standards Act.
The church may be obligated to pay for workers’ compensation insurance.
The church may be subject to the nondiscrimination provisions of Title VII of the Civil Rights Act of 1964 and other federal and state nondiscrimination requirements that pertain to employees.
2. Negligent retention
A church may use reasonable care in selecting ministers or other church workers but still be responsible for their misconduct if it “retained” them after receiving information indicating that they posed a risk of harm to others. The court explained:
A claim for negligent retention exists “for harm resulting from the employer’s negligence in retaining a dangerous employee who the employer knew or should have known was dangerous and likely to harm [others]. . . (emphasis added).
The negligent retention tort . . . requires a showing that the risk of future harm was so grave that discharging the dangerous employee would have been the only reasonable response . . .
(emphasis added).
The court concluded:
[A]n employer cannot be liable for “retaining” an employee who is no longer retained. To hold otherwise would impose a duty of care on employers that is unmanageable, utterly unpredictable, and conceptually limitless. The same concept of duty applies to agents. When the agent has ceased working for the principal, the duty of the principal ceases.
3. Apparent authority
Many victims of childhood sexual abuse have relied on the doctrine of apparent authority to hold churches and denominational agencies legally responsible for their injuries. Apparent authority derives from agency law, and basically holds that a principal (i.e., a church or denominational agency) is responsible for the acts of its agents that it holds out as having authority to act for it if the agent’s acts are within the apparent scope of an agent’s authority.
The court concluded that this requirement was not met since “the act in question is a sexual battery. No reasonable person would believe that the church vested [the defendant] with the authority to engage in such an act. Therefore, the [trial] court properly rejected [the plaintiff’s] claim that [the defendant] possessed apparent authority for his acts.”
This sensible conclusion will be a useful precedent to any church or denominational agency that is sued on the basis of the apparent authority of an agent.
4. Willful and wanton negligence, and gross negligence
In most states, uncompensated members of nonprofit boards are granted limited immunity from liability by state and federal law for their acts of ordinary negligence. Limited immunity means the board members cannot be personally liable for the ordinary negligence, but they may be personally liable for their grossly negligent acts, or in some states, for their willful and wanton negligence. It is important for church leaders to be familiar with these terms under applicable state law. The court in this case defined both types of negligence as follows:
Willful and wanton negligence “is defined as ‘acting consciously in disregard of another person’s rights or acting with reckless indifference to the consequences, with the defendant aware, from his knowledge of existing circumstances and conditions, that his conduct probably would cause injury to another.’” . . . We also have stated that “gross negligence involves conduct that ‘shocks fair-minded people,’ and willful and wanton negligence involves such recklessness that the actor is aware that his conduct probably would cause injury to another.”
The distinction between willful and wanton negligence and gross negligence is significant since it will define the types of negligence for which uncompensated board members are not personally liable.
In addition, one or possibly both of these terms are used to define a church’s liability for punitive damages. These are damages that are designed to punish the defendants for reprehensible conduct. Since they generally are exempted from coverage under church liability insurance policies, it is important for church leaders to understand which term applies and the meaning of the term.
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 Virginia court affirmed a six-year prison sentence for a youth pastor who had engaged in “sexting” with a member of his youth group.
A 14-year-old girl (the “victim”) sought out the youth pastor (the “defendant”) of her church for counseling. The two began to communicate via text message and later through Snapchat, an image messaging mobile phone application in which a user can send a photograph or text message with a set time to expire. The receiving user can only view the text message or photograph for one to ten seconds before the image or text message expires and is automatically deleted from the mobile phone. Via Snapchat, the victim sent the defendant a nude picture of her upper body, and in return, the defendant sent her a nude picture of himself. They also sent each other videos in which the defendant was nude and the victim’s upper body was nude, and engaged in numerous email conversations.
The relationship eventually came to light and the defendant was prosecuted and convicted, after a jury trial, for using a computer to solicit a minor and taking indecent liberties with a child. He received a sentence of six years of incarceration. The defendant appealed his conviction claiming that there was no physical evidence of guilt. The victim testified that she had received the photographs via Snapchat, and that at the time she and the defendant were exchanging Snapchat messages, the application deleted photographs shortly after they were sent and they could not be saved. As a result, because the pictures were sent with Snapchat, the photographs she saw in court were not actually the pictures that were sent, but were just “similar.” She further testified that the pictures introduced in evidence at the defendant’s trial were a fair and accurate representation of the pictures sent to her. The trial court admitted the photographs, noting that the victim had affirmed that the pictures were a fair and accurate representation of the photographs sent to her by the defendant. A state appeals court affirmed the defendant’s conviction.
What this Means for churches
In many states the transmission of sexually explicit text messages (“sexting”) via a cellphone or other electronic device constitutes a crime. Several courts have addressed the issue of criminal liability of pastors for engaging in sexting. Consider the following examples:
EXAMPLE A pastor was convicted of several sexual offenses involving his sexual solicitation and molestation of a minor, and sentenced to a minimum prison term of 186 years. One of his offenses was “contributing to delinquency of a minor,” which was based in part on several sexually explicit text messages (“sexting”) that the pastor sent to the minor on his cellphone. 2010 WL 10409 (N.C. App. 2010).
EXAMPLEA youth pastor (the “defendant”) was sentenced to five years in a state prison as a result of various sexual offenses with a minor female (the “victim”). The victim had sought out the defendant for counseling as a result of her depression and suicidal thoughts that stemmed from an incident of sexual abuse which occurred when she was 9 or 10 years old. A sheriff came upon the defendant and victim parked off a gravel road in a rural area at night. The defendant claimed he was parked in a remote area because he was trying to get a signal on his cellphone. The sheriff told him “it wasn’t smart to be out on a gravel road parked like that with a youth in his vehicle,” and he told him to “use his head.”
The sheriff later informed the victim’s father about what he had seen, and the father instructed the defendant to have no further contact with his daughter by cellphone or text message. A few weeks later the sheriff again came across the defendant and the victim in a car parked along a secluded farm road. The defendant claimed that he was counseling the victim regarding an incident of sexual abuse that had occurred several years earlier. The sheriff again informed the victim’s parents.
The defendant was later charged with several sex offenses. An investigation by the sheriff’s office uncovered text messages between him and the victim containing strong sexual content. His cellphone contained a partially nude image of the victim, and he sent a partially nude image of himself to the victim via a text message. This evidence was used in prosecuting the defendant for violating a state law making it a criminal offense for the sexual exploitation of a counselee by a counselor. The court found that the defendant, as a youth counselor engaged in counseling the victim, was a “counselor” and it sentenced him to a prison term of five years. State v. Duvall, 776 N.W.2d 301 (Iowa App. 2009).
EXAMPLEA 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).
EXAMPLEA youth pastor (the “defendant”) sent several sexually explicit emails to a female adolescent in the church’s youth group. The victim told her mother about the emails. After reviewing the messages, the mother contacted the police. A police officer questioned the defendant about the emails. The defendant admitted that he sent the emails and expressed deep remorse for his actions. In the transcript of this conversation, the defendant stated that he had made “a very, very poor decision to engage in these email conversations with her, uh, and allowed myself to get caught up in things of a sexual nature.” The state charged the defendant with six counts of communicating with a minor for immoral purposes under a state law making it a class C felony for a person to communicate with a minor for immoral purposes through electronic communication. At trial, the defendant testified that he did not remember sending any of the emails. The jury didn’t believe him, and found him guilty on all six counts. The trial court sentenced the defendant as a class C felon to the statutory maximum of five years per count. State v. Haack, 2010 WL 4216705 (Wash. App. 2010).
EXAMPLEA volunteer youth leader (the “defendant”) in a local church was sentenced to eight years in prison on each of two counts of sexual assault in the first degree and contributing to the delinquency of a minor. At trial, the defendant’s former husband testified that he suspected his wife of having an affair. He set up surveillance in his house and then left for the weekend. When he returned and retrieved the hidden device, he watched the videotaped recording of his wife and a 17-year-old male consuming alcohol and having sexual relations. He gave the police this recording, which led to the defendant’s arrest and prosecution. Among the several items of evidence introduced at trial by the prosecution were several sexually explicit text messages from the defendant that the mother of one of the victims found on her son’s cellphone. Cluck v. State, 2009 WL 1362863 (Ark. App. 2009).
Any social media contacts (e.g., email, Facebook, photo sharing) between adult youth workers and minors are inappropriate. Such communications should be banned. Any need to communicate with minors should be done through their parents. When social media communications evolve into “sexting,” this can expose the adult participant to felony criminal liability. Hillman v. Commonwealth, 811 S.E.2d 853 (Va. App. 2018).
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 of 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 federal district court in Virginia ruled that an insurance company that posted confidential medical records online without security restriction gave "unreasonable publicity" to, and "disclosure" of information about, patients' private lives.
This case suggests that a church may be liable on the basis of invasion of privacy to publishing a "prayer list" in a church bulletin, newsletter, website, or some other resource that contains the names and medical conditions of church members who are either hospitalized or ill.
To illustrate, in another case, a church music director was hospitalized for severe depression. During the period of his hospitalization, the church placed him on a medical leave of absence, and an acting music director was appointed. A few months later, the music director was again hospitalized following a suicide attempt.
A few days after the music director was discharged from the hospital, the church posted an article on its website that contained the following statements: "We have good news for you! Our music director is returning to the church after a long medical leave of absence. Since the summer of last year, he has been treated for bi-polar illness, a condition which at times has resulted in serious depression for him. Various therapies and medications have been tried, and finally, after much experimentation, his health has improved considerably. For that we are all very happy."
The music director was dismissed by the church, and he filed a lawsuit claiming that his dismissal amounted to wrongful discrimination based on disability. He also claimed that the church "invaded his privacy" by printing the notice on the church website regarding his hospitalization and medical condition. A trial court dismissed the privacy claim, but a state appeals court reversed this ruling and ordered the case to proceed to trial. It observed, "The right of privacy is the right of a person to be let alone, to be free from unwarranted publicity, and to live without unwarranted interference by the public in matters with which the public is not necessarily concerned." The court concluded:
The comments made on the church's website were based purely on the music director's private affairs, i.e. his hospitalization for depression. While he did inform those necessary persons about his condition—the pastor and a few close friends who belonged to the church—this cannot be seen as a waiver to enter his private life … . While the church's publication could be based upon informing the congregation of the music director's return to the church, the inclusion of the additional personal information about his bi-polar illness could be viewed as offensive or objectionable to a reasonable person. Therefore … the trial court erred by granting summary judgment based on this claim. Mitnaul v. Fairmount Presbyterian Church, 778 N.E.2d 1093 (Ohio App. 2002).
What this means for churches
These cases demonstrate the potential liability churches face when they publish information on their websites, or in church bulletins or newsletters, concerning the health condition of employees or church members. In order to eliminate this risk, these kinds of disclosures should not be made without consent, even if the purpose is to call the congregation to pray for the individuals. Consent may be obtained in various ways. It can be "express," meaning that no information about the health condition of a member or employee is published by the church in any form without that person's signed consent.
Obviously, larger churches would find it difficult to obtain the express written consent of every member or employee who is ill or hospitalized.
A second type of consent is "implied" consent. This can be obtained by publishing occasional notices in church publications (newsletters, bulletins, websites, and so on) advising members that prayer lists are compiled by the church that contain the names and medical conditions of persons who are known to be hospitalized or ill, and advising members who do not want their name and medical condition published on church prayer lists to so inform the pastor or church office. A list should be made of persons who object to being included on such lists. The same kind of notice can be published in an employee handbook or policy manual. Implied consent is not as effective as express consent, since a member can always claim that he or she did not see any of the notices printed by the church. But, implied consent is obviously easier to obtain. Travelers Indemnity Company v. Portal Healthcare Solutions, 35 F.Supp.3d 765 (E.D. Va. 2014).
National Episcopal Church Owns Local Church Property
Local church votes to disaffiliate and loses ownership of church building.
Applying the “neutral principles of law” approach, the Virginia Supreme Court ruled that the national Episcopal Church owned the property of a local church that voted to disaffiliate from the denomination and align with the Church of Nigeria. The Protestant Episcopal Church in the United States of America (the “Episcopal Church”), organized in 1789, was the product of secession of the Anglican church in the colonies from the Church of England, the latter church itself being the product of secession from the Church of Rome in 1534. The Episcopal Church is governed by a general convention and a presiding bishop. In the United States, the Episcopal Church is divided geographically into dioceses, including the Diocese of Virginia. Each diocese is governed by a diocesan convention and a bishop. A diocese is itself divided into missions and parishes, which are individual churches where members meet to worship. A parish is governed by a rector and a board of elected lay persons called the vestry.
The Dennis Canon, and mutual consent
In 1979, the Episcopal Church added section 4 to Canon I.7 (Canon I.7.4, sometimes referred to as the “Dennis Canon”), which states:
All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission or Congregation is located. The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.
The dissident church claimed that the Dennis Canon did not apply to it since there was no evidence that it ever consented to it, or in any other manner conferred any rights in its property to the national church. The court, in rejecting this argument, observed:
To determine the issue of mutual assent, we look exclusively to the expressions of the parties’ intentions which are communicated between them. Here, the record clearly establishes that [dissident church] affirmatively assented to the constitution and canons. Upon joining the Episcopal Church and the diocese in 1836, it agreed to “be benefited and bound … by every rule and canon which shall be framed, by any Convention acting under this constitution, for the government of this church in ecclesiastical concerns.” Moreover, [dissident church’s] Vestry Manual states “The church is subject to the constitution and canons of the national church and of the Diocese.” Thus, contrary to its argument, it is clear that the church agreed to be bound by the constitutions and canons of both the Episcopal Church and the diocese.
Similarly, the court rejected the dissident church’s argument that the Episcopal Church and diocese acted in a unilateral manner in passing certain canons:
The record demonstrates that the adoption of the canons is hardly “unilateral.” The triennial General Convention, the highest governing body of the Episcopal Church, adopts … the constitution and canons. The General Convention is composed of representatives from each diocese. The legislative body of each diocese (referred to in Virginia as the “Annual Council”) selects the representatives that are sent to the General Convention. The Annual Council is composed of representatives from each of the churches and other congregations within the Diocese. Thus, it is clear that each canon, including the Dennis Canon, is enacted through a process resembling a representative form of government.
Moreover, even if the implementation of the canons were unilateral, the court concluded it would not matter. It quoted from an earlier ruling by the United States Supreme Court: “Religious freedom encompasses the power [of religious bodies] to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.'” Kedroff v. St. Nicholas Cathedral, 344 U.S. 94 (1952). As a result, “even if implementation of the Dennis Canon was unilateral, this court would be powerless to address any issues of inequity wrought thereby, as to do so would involve judicial interference with religion and clearly violate the First Amendment.”
Course of dealing
The court found the prior “course of dealing” between the parties to be relevant to the ownership of the dissident church’s property. It observed:
Turning to the course of dealing between the parties, the record clearly demonstrates that the church allowed the diocese to play an active role in its overall operations. Indeed, the trial court found that on at least two occasions, the diocese vetoed the employment of clergy at church [which] complied with the decision; bishops of the diocese and other bishops within the Episcopal Church have visited the church every year between 1934 and 2005; and the vestry members of the church have regularly “subscribed to the oath or declaration prescribed by Diocesan Canons.” It is worth noting that the church actively participated in the diocese, having sent representatives to the Annual Convention every year for at least 100 years (1909-2010).
Constructive trust
The court further concluded that “when one considers the constitution and canons, specifically the adoption of the Dennis Canon, and the course of dealing between the parties [the parties] intended, agreed and expected that the property at issue would be held in trust by the dissident church as trustee for the benefit of the Episcopal Church and diocese. As such, we find that the fiduciary relationship required to impose a constructive trust has been shown to exist. The fact that the church attempted to withdraw from the Episcopal Church and diocese and yet still maintain the property represents a violation of its fiduciary obligation to the Episcopal Church and diocese. Therefore, equity dictates that a constructive trust be imposed on the property for the benefit of the Episcopal Church and diocese.”
What This Means For Churches:
Church leaders should consider the following points:
1. In general. A decision by the Virginia Supreme Court is not binding on any federal or state court in any other state. Nevertheless, the case represents one of the most extended discussions of church property disputes in recent years by a respected state court, and as a result, it may be given special consideration by other courts. The impact of the case is doubtless enhanced by the court’s unanimous ruling in favor of the Episcopal Church.
2. Judicial resolution of church property disputes—in general. The United States Supreme Court has noted that a state “may adopt any one of various approaches for settling church property disputes so long as it involves no consideration of doctrinal matters, whether the ritual and liturgy of worship or the tenets of faith.” Jones v. Wolf, 443 U.S. 595 (1979). No single approach is prescribed by law. The only requirement is that a state court’s approach to resolving such disputes does not involve the interpretation or application of religious doctrine.
To illustrate, the so-called “departure from doctrine” approach that was used for many years to resolve church property disputes is no longer allowed since it requires civil courts to determine which faction in a church property dispute has departed from church doctrine. Such an inquiry is clearly barred by the First Amendment.
The Supreme Court has approved two methods for resolving church property disputes:
Under the “principle of government” approach (sometimes called the “compulsory deference” approach), “whenever the questions of discipline, or of faith, or ecclesiastical rule, custom, or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them, in their application to the case before them.” Watson v. Jones, 80 U.S. (13 Wall.) 679 (1871).
Under the “neutral principles of law” approach, the civil courts “rely upon provisions of state statutory law governing the holding of property by religious corporations, upon language in the deeds conveying the properties in question to the local church corporations, upon the terms of the charters of the corporations, and upon provisions in the constitution of the [national church] pertinent to the ownership and control of church property.” Md. & Va. Churches v. Sharpsburg Church, 396 U.S. 367 (1970).
3. The canons of the Episcopal Church. The Supreme Court has explained the neutral principles of law approach as follows:
Through appropriate reversionary clauses and trust provisions, religious societies can specify what is to happen to church property in the event of a particular contingency, or what religious body will determine the ownership in the event of a schism or doctrinal controversy. In this manner, a religious organization can ensure that a dispute over the ownership of church property will be resolved in accord with the desires of the members. Jones v. Wolf, 443 U.S. 595 (1979).
In 1979, shortly after the Jones case was decided, the Episcopal Church responded to the Jones decision by enacting Canon I.7.4 (the “Dennis Canon”) in an attempt, in the words of Jones, “through appropriate … trust provisions [to] specify what is to happen to church property in the event of a particular contingency [and] in this manner [to] ensure that a dispute over the ownership of church property will be resolved in accord with the desires of the members. The Virginia Supreme Court concluded that the Dennis Canon was a legitimate effort by the Episcopal Church to create a mechanism for resolving church property disputes internally.
The court’s ruling will serve as support for the efforts of any denomination to resolve church property disputes internally through the adoption of trust language, reversionary clauses, or any other “neutral principle of law” that can be applied by the civil courts without delving into church doctrine.
4. Limitations on the neutral principles of law approach. The Supreme Court has cautioned:
The neutral-principles method … requires a civil court to examine certain religious documents, such as a church constitution, for language of trust in favor of the general church. In undertaking such an examination, a civil court must take special care to scrutinize the document in purely secular terms, and not to rely on religious precepts in determining whether the document indicates that the parties have intended to create a trust. In addition, there may be cases where the deed, the corporate charter, or the constitution of the general church incorporates religious concepts in the provisions relating to the ownership of property. If in such a case the interpretation of the instruments of ownership would require the civil court to resolve a religious controversy, then the court must defer to the resolution of the doctrinal issue by the authoritative ecclesiastical body.” Jones v. Wolf, 443 U.S. 595 (1979).
5. Mutual assent. One of the most important aspects of the court’s ruling was its rejection of the dissident church’s argument that it could not be subject to the Dennis Canon because it never formally consented to it. As the court noted: “The triennial General Convention, the highest governing body of the Episcopal Church, adopts … the constitution and canons. The General Convention is composed of representatives from each diocese. The legislative body of each diocese (referred to in Virginia as the Annual Council) selects the representatives that are sent to the General Convention. The Annual Council is composed of representatives from each of the churches and other congregations within the Diocese. Thus, it is clear that each canon, including the Dennis Canon, is enacted through a process resembling a representative form of government.”
This is the very point that was missed by the Texas Supreme Court in a recent case in which it found that the Dennis Canon could not serve as the basis for resolving a property dispute between the Episcopal Church and a dissident congregation since the congregation never explicitly assented to it. Masterson v. Diocese of Northwest Texas, 2013 WL 4608632 (Tex. 2013).
Similarly, the Indiana Supreme Court issued a ruling in 2012 in a church property dispute in which it refused to award title to the property of a dissident church to the Presbyterian Church on the basis of a trust provision in the denominational Book of Order. The court concluded that the trust provision did not apply since the local church had never consented to it. Presbytery of Ohio Valley, Inc. v. OPC, Inc., 973 N.E.2d 1099 (Ind. 2012). While the court did not mention it in the Indiana case, an argument can be made that churches in some cases do affirmatively consent to provisions in the governing documents of a parent denomination that seek to impose a trust on church property if, for example, churches and their representatives comprise some or all of the voting delegates at denominational meetings in which governing documents are adopted and amended. Under these circumstances, which are common, denominational governing documents are not “imposed” by the national church on affiliated churches. Rather, the churches themselves, by their delegates and representatives, adopt and amend the denominational governing documents at the official meetings of the national church. This provides a compelling case of an affirmative assent by affiliated churches to the provisions of their denominational governing documents, but it is an argument that the Indiana Supreme Court failed to address, perhaps because it was not raised.
6. Course of dealing. The court found the dissident church’s long involvement in the Episcopal Church supported the existence of a fiduciary relationship that was breached by the dissident congregation’s attempt to disaffiliate and retain its property. Falls Church v. Protestant Episcopal Church, 740 S.E.2d 530 (Va. 2013).
In a case of direct relevance to the legal duty of churches to employ security guards, the Virginia Supreme Court ruled that the Commonwealth of Virginia was not legally responsible for the murder of 32 students by an armed assailant on campus property because the massacre was not reasonably foreseeable.
At approximately 7:30 a.m. on April 16, 2007, the Virginia Tech University Police Department received a call that an "incident" had occurred in a dormitory. The specifics of what happened were unknown. When officers arrived, they found two gunshot victims, a male and a female. Although officers from the university police department were the first on the scene, the municipal police department led the investigation.
During the investigation, police came to believe that they were investigating an isolated incident that posed no danger to others and that the shooter had fled the area. They did not believe that a campus lockdown was necessary.
At the crime scene, police learned that the female victim's boyfriend was a gun enthusiast and identified him as a person of interest. The police located the boyfriend at 9:45 a.m. As police spoke with him they received word that there were "active shots" in a Virginia Tech building.
The president of Virginia Tech learned of "a shooting" at approximately 8 a.m. and called a meeting of a group of administrators tasked with campus safety, named the University Policy Group, to assess the situation and handle the release of information. Shortly after 8 a.m., the president spoke with the chief of the Virginia Tech Police Department, and learned that a female and a male student had been shot, at least one of whom was dead, that the shootings were likely domestic in nature, and that the shooter apparently had left the campus.
The Policy Group convened around 8:30 a.m. During this meeting, the president learned that the police were on the lookout for the female victim's boyfriend as a person of interest. One of the group's members notified the governor's office at approximately 8:45 a.m. of what had happened but indicated that the information was not releasable because Virginia Tech was working on a press release. The e-mail to the governor's office stated "Not releasable yet. One student dead, one wounded. Gunman on loose. State police are involved. No details available yet."
Virginia Tech wanted to notify the next of kin before releasing the information to the public. The president instructed a Policy Group member to compose a campus notice, and following revisions and technical problems with the computer system, it was sent out by campus-wide "blast e-mail" at 9:26 a.m. The notice stated that "a shooting incident occurred … earlier this morning. Police are on the scene and investigating" and advised students to be alert for anything suspicious.
At approximately 9:45 a.m. the mass shooting in another campus building began. At 9:50 a.m. a second campus-wide "blast e-mail" was sent stating that "a gunman is loose on campus. Stay in buildings until further notice. Stay away from all windows." Police later identified Seung-Hui Cho as the shooter. It was later determined that he shot and killed 32 persons, and wounded 17 others, before committing suicide.
The families of two of the victims sued the Commonwealth of Virginia, the president of Virginia Tech, and several other persons (the "defendants") for wrongful death. The plaintiffs claimed that the defendants had a duty to warn students of criminal acts and that their failure to do so in a timely manner was the cause of most of the deaths and injuries.
The defendants argued that they had no duty to warn students since the massacre was not reasonably foreseeable. A jury returned a verdict in favor of the plaintiffs and awarded $4 million to each family. On appeal, the Virginia Supreme Court reversed the trial court's ruling and dismissed all claims against the defendants, concluding that "the facts in this case do not give rise to a duty to warn students of the potential for third party criminal acts."
The Virginia Supreme Court's Ruling
The court began its decision by noting that "as a general rule, a person does not have a duty to warn or protect another from the criminal acts of a third person," and that "this is particularly so when the third person commits acts of assaultive criminal behavior because such acts cannot reasonably be foreseen." The court concluded:
Here … there simply are not sufficient facts from which this court could conclude that the duty to protect students against third party criminal acts arose as a matter of law. In this case, the defendants knew that there had been a shooting in a dormitory in which one student was critically wounded and one was murdered. They also knew that the shooter had not been apprehended. At that time, the defendants did not know who the shooter was, as law enforcement was in the early stages of its investigation of the crime. However, based on representations from three different police departments, Virginia Tech officials believed that the shooting was a domestic incident and that the shooter may have been the boyfriend of one of the victims. Most importantly, based on the information available at that time, the defendants believed that the shooter had fled the area and posed no danger to others … . Based on the limited information available to the defendants prior to the shootings … it cannot be said that it was known or reasonably foreseeable that students would fall victim to criminal harm. Thus, as a matter of law, the defendants did not have a duty to protect students against third party criminal acts.
What This Means For Churches:
This case is important for the following reasons.
1. Impact on other courts
While only binding on state courts in the Commonwealth of Virginia, this case will be "persuasive" authority in other jurisdictions because it represents one of the few cases to address the liability of schools for deaths and injuries caused by armed shooters on their premises.
2. Liability based on foreseeability
The court applied the general rule that landowners generally are not liable for the acts of armed shooters on their premises unless such acts are reasonably foreseeable. The Restatement (Second) of Torts, a respected legal treatise, states the general rule as follows:
[A property owner] is not liable where he neither knows nor should know of the unreasonable risk… . He is not required to take precautions against a sudden attack from a third person which he has no reason to anticipate. Section 314A, comment e.
Similarly, Restatement (Second) of Torts § 344 (comment f), provides:
Since the possessor is not an insurer of the visitor's safety, he is ordinarily under no duty to exercise any care until he knows or has reason to know that the acts of the third person are occurring, or are about to occur. He may, however, know or have reason to know, from past experience, that there is a likelihood of conduct on the part of third persons in general which is likely to endanger the safety of the visitor, even though he has no reason to expect it on the part of any particular individual.
In summary, according to the Virginia Supreme Court and the Restatement (Second) of Torts, the foreseeability of an unreasonable risk of criminal conduct is a precondition to imposing a duty on a property owner to protect others from that risk. It is important to note that
criminal conduct of a specific nature at a particular location is never foreseeable merely because crime is increasingly random and violent and may possibly occur almost anywhere, especially in a large city. If a [property owner] had a duty to protect people on his property from criminal conduct whenever crime might occur, the duty would be universal. This is not the law. A duty exists only when the risk of criminal conduct is so great that it is both unreasonable and foreseeable. Whether such risk was foreseeable must not be determined in hindsight but rather in light of what the premises owner knew or should have known before the criminal act occurred. Lefmark Management Company v. Old, 946 S.W.2d 52 (Tex. 1997).
Notable Quote
"[W]hat protective measures should be pursued to protect against a mass murderous assault truly defy exact delineation, because how can one know which measures will be effective against a degenerate, a psychopath or a psychotic?" Lopez v. McDonald's Corporation, 238 Cal.Rptr. 436 (Cal. App. 1987)
In deciding if criminal conduct on a landowner's premises was foreseeable, the courts generally have examined the following factors:
whether any criminal conduct previously occurred on or near the property
how recently and how often similar crimes occurred
how similar the conduct was to the conduct on the property
what publicity was given the occurrences to indicate that the landowner knew or should have known about them.
Each of these factors is summarized below.
(1) Other crimes have occurred on the property or in its immediate vicinity
Criminal activity occurring far from a landowner's property bears less relevance because crime rates often vary significantly within a large geographic area. This is not to say that evidence of remote criminal activity can never indicate that crime is approaching a landowner's property. But such evidence must show that the risk of criminal conduct on the landowner's property is not merely increasing, but has reached a level as to make crime likely. One court explained foreseeability as follows: "It does not necessarily follow that the prior similar criminal activity must have taken place at the premises; it is required only that the criminal act or acts occurring near the premises in question give notice of the risk that crime may travel to the premises of the business owner."
(2) How recently and often similar crimes occurred on or near the property
Foreseeability also depends on how recently and how often criminal conduct has occurred in the past. The occurrence of a significant number of crimes within a short time period strengthens the claim that a particular crime was foreseeable. On the other hand, the complete absence of previous crimes, or the occurrence of a few crimes over an extended time period, negates the foreseeability element.
To illustrate, the courts have found a criminal act to be foreseeable when similar crimes occurred on or near the property in question (1) ten times within three years; (2) 394 times within two-and-a-half years; (3) 40 times within one year; (4) 85 times within three or four years; (5) seven times within one year; and (6) 75 to 100 incidents within three years.
On the other hand, the courts have concluded that a criminal act was not foreseeable in several cases, including the following: (1) an apartment owner was not liable for a criminal assault on a tenant because no violent crimes had occurred at the premises; (2) sexual assault on a female customer of a parking ramp was unforeseeable in light of only 17 previous crimes over a 10-year period; (3) a bank could not foresee an assault at one of its ATMs based on two previous crimes within the eight preceding years; (4) an assault in a grocery store was not foreseeable because no robberies or assaults had ever occurred in the store; (5) "because there are no reports of prior similar crimes occurring on the Wal-Mart Supercenter parking lot, the crime was unforeseeable"; (6) a cab company could not foresee an employee's criminal act based upon one prior incident in a 20-year period.
(3) Similarity of previous crimes
The previous crimes must be sufficiently similar to the crime in question to place the property owner on notice of the specific danger. To illustrate, one court found that the stabbing of a guest at an apartment complex was not foreseeable from four prior incidents of vandalism and the theft of a refrigerator.
The prior crimes need not be identical. A string of assaults and robberies in an apartment complex make the risk of other violent crimes, like murder and rape, foreseeable. On the other hand, a spate of domestic violence in the complex does not portend third-party sexual assaults or robberies.
To be sure, this factor is often difficult to apply because, as one court observed, "criminal activity is not easily compartmentalized." In addition, property crimes may facilitate personal crimes. For example, a burglar who breaks into a home to steal property may decide to assault a person who is discovered inside. On the other hand, vandalism to automobiles in an apartment complex's parking lot generally does not suggest the likelihood of sexual assault.
(4) Publicity given to prior crimes
The publicity surrounding the previous crimes helps determine whether a property owner knew or should have known of a foreseeable danger. Actual notice of past incidents strengthens the claim that future crime was foreseeable. However, unreported criminal activity on the premises is no evidence of foreseeability. Previous similar incidents cannot make future crime foreseeable if nobody knows or should have known that those incidents occurred. One court noted that "property owners bear no duty to regularly inspect criminal records to determine the risk of crime in the area. On the other hand, when the occurrence of criminal activity is widely publicized, a property owner can be expected to have knowledge of such crimes."
In summary, these factors (proximity, timing, similarity, and publicity) must be considered together in determining whether criminal conduct is foreseeable. The frequency of previous crimes necessary to show foreseeability lessens as the similarity of the previous crimes to the incident at issue increases. The frequent occurrence of property crimes in the vicinity is not as indicative of foreseeability as the less frequent occurrence of personal crimes on the landowner's property itself. The court must weigh the evidence using all the factors.
"Foresight, not retrospect, is the standard of diligence. It is nearly always easy, after an accident has happened, to see how it could have been avoided. But negligence is not a matter to be judged after the occurrence. It is always a question of what reasonably prudent men under the same circumstances would or should, in the exercise of reasonable care, have anticipated. Reasonable anticipation is that expectation created in the mind of the ordinarily prudent and competent person as the consequence of his reaction to any given set of circumstances. If such expectation carries recognition that the given set of circumstances is suggestive of danger, then failure to take appropriate safety measures constitutes negligence. On the contrary, there is no duty to guard when there is no danger reasonably to be apprehended. Negligence is gauged by the ability to anticipate. Precaution is a duty only so far as there is reason for apprehension. Reasonable apprehension does not include anticipation of every conceivable injury. There is no duty to guard against remote and doubtful dangers." Shearman and Redfield on Negligence.
If a church receives a threat of an attack by an armed assailant, this will immediately elevate foreseeability toward certainty, triggering a corresponding duty on the part of the church to implement the most stringent safeguards. Depending on the circumstances, this may require the cancellation of church services. It is imperative that church leaders coordinate the church's response with local enforcement agencies.
3. Other considerations
Most churches will not be legally liable for deaths and injuries caused by armed assailants on their premises because such violent acts ordinarily are not reasonably foreseeable. To be sure, there are exceptional cases in which such acts are foreseeable, but this will be the exception rather than the rule. As a result, most churches should not base their decisions regarding armed guards and other security measures on a desire to reduce legal liability, and the recent decision by the Virginia Supreme Court underscores this conclusion. That said, there are reasons other than the avoidance of liability why church leaders may consider implementing measures to respond to armed assailants, and these include theological and moral considerations. To illustrate, many church leaders and congregations, guided and informed by their theological values, feel compelled to take steps to protect human life from acts of violence whether or not they have a legal duty to do so. In responding to the risk of armed assailants, there are several factors for church leaders to consider, including the following:
Church shootings, and other violent crimes on church premises, are rare.
The law imposes upon any place of public accommodation, including a church, a duty to protect occupants against foreseeable criminal acts. The level of protection is directly proportional to the degree of foreseeability. Many courts assess foreseeability on the basis of the following factors: (1) whether any criminal conduct previously occurred on or near the property; (2) how recently and how often similar crimes occurred; (3) how similar the previous crimes were to the conduct in question; and (4) what publicity was given the previous crimes to indicate that the church knew or should have known about them. If shootings or other violent crimes on church property are highly foreseeable based on these factors, then a church has a heightened duty to implement measures to protect occupants from such acts.
In evaluating which measures to implement in order to discharge a legal or moral duty to protect occupants, church leaders should consider the affordability, effectiveness, and acceptability of a measure before implementing it.
Church leaders should consult with local law enforcement professionals, the church insurance agent, and legal counsel, in making decisions regarding which protective measures to implement. These same persons should also review the church's crisis response plan.
Contact other churches and other places of public accommodation in your community to see what measures they have enacted to protect occupants against shootings and other violent crimes. Examples include schools, malls, libraries, restaurants, stores, sports facilities, theaters, and concert halls. This research will help church leaders ascertain the "community standard," which is an important consideration in deciding if a property owner was negligent.
Note that even the most stringent protective measures would not deter a dedicated assailant from entering church property and firing at parishioners. In fact, in some cases involving shootings on church property, the church implemented what seemed to be reasonable precautionary measures. However, no measures will foil an armed and dedicated assailant, especially if that person plans on taking his or her own life.
While it is not possible for churches to prevent acts of violence on their premises, it is possible to deter such acts in some cases, and to contain the damage and destruction when an incident erupts. Commonwealth v. Peterson, 2013 WL 5833262 (Va. 2013).
Key point 10-11. A church may be legally responsible on the basis of negligent supervision for injuries resulting from a failure to exercise adequate supervision of its programs and activities.
A Virginia court ruled that a reduction in a pastor's salary was not sufficient grounds to reduce his alimony payments to a former spouse. A pastor and his wife were divorced in 2007. The final divorce decree awarded the wife $4,000 per month in spousal support and ordered the husband to pay $43,318 to his wife for attorney's fees. A few weeks after the entry of the parties' final decree, the church's board of directors voted to cut the husband's salary in half, from $80,000 to $40,000, and reduce his housing allowance from $25,000 to $20,000.
As a result, the husband unilaterally reduced his spousal support payment to $500 per month. He later filed a motion to reduce his spousal support obligation pursuant to a state law granting courts the authority to "increase, decrease, or terminate the amount or duration of any spousal support [award] as the circumstances may make proper." The husband pointed out that the church's board of directors decided to reduce his income by half based on changes in the economy and revenues earned. He claimed that he was not involved in the church's decision to reduce his income and that he was not present at the meeting. However, the trial court held that the "evidence which he [husband], and others on his behalf, presented strains credibility. We do not find it a coincidence that the vote of the church board of directors to do this occurred just a few weeks after the entry of the final decree of divorce in this case." The trial court found that the husband's reduction in income was "voluntary and orchestrated by him," and on this basis rejected his motion to reduce his monthly support obligation.
A state appeals court affirmed the trial court's ruling, noting that "a trial court has broad discretion in awarding spousal support, and its ruling will not be overturned unless there is an abuse of discretion." It concluded: "The trial court found the timing suspect, especially since the parties' final decree was entered on November 27, 2007; the church board of directors reduced husband's income on December 19, 2007; and husband reduced his monthly payments in January 2008. The trial court also questioned whether husband was involved in the reduction of his income. Based on the facts and circumstances, the trial court did not abuse its discretion …." 2009 WL 2496324 (Va. App. 2009).
This Recent Development first appeared in Church Law & Tax Report, November/December 2010.
When drafting a will, consult with an attorney to ensure the document’s validity.
Richard R. Hammar, J.D., LL.M., CPA
Key point Wills and other testamentary documents must be drafted and executed in compliance with applicable law to be legally enforceable.
The Virginia Supreme Court ruled that a church member’s will, that left the bulk of her estate to her church, was valid even though the witnesses’ names were printed without signatures. An elderly church member (“Cora”) executed a will naming her church as her primary beneficiary. According to the terms of the will, the church received Cora’s home and several substantial bank accounts. The will was executed in the presence of a notary public who printed the names of three witnesses, without signatures, below Cora’s signature. Attached to the will was a “self-proving affidavit,” which was signed by a notary public and all three witnesses, and which affirmed that Cora signed the will in the presence of the witnesses as her free and voluntary act.
Following Cora’s death, the church submitted her will for probate. However, a court clerk refused to admit the will on the ground that it was not properly witnessed “since where signatures of the witnesses should be, the names of the witnesses are printed.” Cora’s nearest relatives also opposed the admission of the will to probate. One of these relatives was the sole “residuary beneficiary” under the will who would receive Cora’s estate in the event that the will was rejected for probate.
A trial court rejected the will for probate on the basis of the following statute: “No will shall be valid unless it be in writing and signed by the testator … and moreover … the signature shall be made or the will acknowledged by him in the presence of at least two competent witnesses, present at the same time; and such witnesses shall subscribe the will in the presence of the testator, but no form of attestation shall be necessary.” According to the trial court, the witnesses did not “subscribe the will in the presence of the testator” because they failed to sign the will below Nora’s signature. Their printed names without signatures were insufficient.
The state supreme court reversed the trial court’s ruling and ordered the will to be admitted to probate. It acknowledged that the witnesses did not affix their signatures at the end of the will itself, but concluded that their signatures at the end of the self-proving affidavit attached to the end of the will was sufficient. It noted that “the literal meaning of the word ‘subscribe,’ as used in the statute, is ‘to write underneath; sub, under; scribere, to write.'” The court concluded that the witnesses’ signatures at the end of the self-proving affidavit that had been attached to the end of the will satisfied the statute’s requirement that the witnesses “subscribe the will in the presence of the testator.” It observed:
The purpose of the statute in requiring subscription of a will by competent witnesses in the presence of the testator is to prevent fraud, deception, mistake, and the substitution of a surreptitious document. These requirements, however, are not intended to restrain or abridge the power of a testator to dispose of his property. They are intended to guard and protect him in the exercise of that power. The safeguards of the statute are not designed to make the execution of wills a mere trap and pitfall, and their probate a mere game. Additionally, the witnesses’ subscription establishes and proves that the testator’s signature is genuine. Even though the requirements in [the statute] must be strictly followed, the statute must not be construed in a manner that would increase the difficulty of the transaction to such an extent as to practically destroy” an uninformed layperson’s right to dispose of property by will.
Application. It is important that all applicable legal formalities be satisfied in the execution of a will. It is for this reason that church leaders should not rely on will kits and other “homemade” documents in assisting members with their estate plans. The services of an attorney should always be utilized to ensure the validity of the document. Hampton Roads Seventh-Day Adventist Church v. Stevens, 657 S.E.2d 80 (Va. 2008).
This Recent Development first appeared in Church Law & Tax Report, January/February 2009.
Background. David was a volunteer treasurer at his church. His duties allowed him to write and sign checks on behalf of the church and reconcile the church's bank accounts. David began using church funds to pay a number of personal debts, including his mortgage, his cell phone bill, a car loan, and other personal expenses. On several occasions, he made the checks payable to himself and indicated "payroll" on the checks. After the end of his two-year term as treasurer, his successor discovered the discrepancies in the church's accounts. It was later determined that 142 checks, worth $82,130, had been "written outside the scope of David's authority and for his benefit." The church informed the police.
David admitted to the police that he had embezzled money from the church to pay personal bills. He explained that he began embezzling the church's money when his income from his employment dropped by $30,000 and he began to have financial difficulty. He used his position as treasurer of the church to embezzle the church's funds to pay his bills and support his lifestyle. He stated, "I was broke. I had no money. I was getting ready to lose everything." He took the church funds "to continue living."
David also admitted to the police that he wrote checks to a friend "for computer work that he did for me," gave another individual a check for $750 on Christmas Eve, and took the same person with him on a trip to Israel, costing $3,572. All of these expenses were incurred after David began embezzling from the church, when he claimed he needed the funds to cover living expenses.
David was later charged with 5 separate counts of embezzlement. He argued that the five embezzlement counts should have been "merged" into a single count since he had "a continuous desire to take the money for on-going bills." The state argued the embezzlement was a "series of individual impulses." The trial court agreed with the state. It concluded that the funds were embezzled on "individual impulses" and were not based on a "preformulated plan". It concluded:
He embezzled these funds as the needs arose and his bills came due and that to some extent is corroborated or reflected in the dates and groupings of the checks and in the time intervals that exist between the various checks …. There is no regular pattern. He was apparently incurring substantial personal debt for what most people would consider discretionary items, such as trips and expenses for other individuals.
A jury convicted David on all 5 counts of embezzlement, and he appealed. He did not deny his guilt, but insisted that since he wrote the 142 checks under a "single impulse" he should have been charged with a single count of embezzlement.
The court's decision. A state appeals court agreed that "a series of larcenous acts will be considered a single count of larceny if they are done pursuant to a single impulse and in execution of a general fraudulent scheme." The court listed the following factors to be considered in deciding if a series of thefts is one crime or multiple crimes: (1) the location of the items taken; (2) the lapse of time between the takings; (3) the general and specific intent of the taker; (4) the number of owners of the items taken; and (5) whether intervening events occurred between the takings. However, "the primary factor to be considered is the intent of the thief."
The court applied this five-factor test to the facts of this case and concluded that David was properly charged with five separate crimes instead of one.
(1) location of items taken. The court noted that "the church was the only victim, perhaps suggesting a single intent."
(2) lapse of time between takings. The lapse of time from the first act of embezzlement to the last was 25 months. The court concluded that "such a length of time constitutes a factor indicating the acts were separate."
(3) intent of the taker. David testified he did not form a general plan to steal church funds every time a bill came due. This testimony, the court concluded, "supports the trial court's finding that he acted on individual impulses, not to further a general scheme." The court also noted:
When a debt was due, it created the "need" to embezzle again. David claimed that he cashed the checks to "continue living" because he could not pay his bills otherwise. According to his own testimony, he did not intend to continue taking money from the church. Only when a debt arose that he could not pay from his own income would he cash a check from the church. After paying that debt, he had no intention to embezzle again. These debts were intervening acts that created individualized intentions to embezzle. Further, the trial court properly concluded that David, by using funds for making gifts to third parties, evidenced a series of single impulses. His bills for computer services, his extravagant gifts, and his international trip rebutted any general and continuing need for basic living expenses.
The fourth and fifth factors in the five-factor test were not applicable in this case and were not considered by the court.
What this means for churches
If someone with access to church funds engages in embezzlement over a period of time rather than in one act, and the matter is turned over to the police, a decision must be made whether to prosecute the thief for one crime or several crimes. Church leaders often assume that continuing acts of embezzlement will be treated as a single offense. But, as this case shows, this will not always be the case. Persons who engage in repeated acts of embezzlement may be charged with several separate offenses, and this will greatly expand the potential prison sentence of the offender. This is an important, and often overlooked, consequence of embezzlement.
A Virginia court ruled that an adult male who sexually molested a 15-year-old girl while taking her home from church was in a “custodial” relationship with the girl and therefore was properly convicted of the crime.
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. Failure to Report Child Abuse
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. Negligence as a Basis for Liability
A Virginia court ruled that an adult male who sexually molested a 15-year-old girl while taking her home from church was in a "custodial" relationship with the girl and therefore was properly convicted of the crime of molesting a minor with whom he had a "custodial or supervisory relationship."
A 15-year-old girl (the "victim") frequently was taken to church by the family of one of her friends. She usually would be driven to church by her friend's mother, and would be taken home by her friend's father (the "defendant"). The defendant was the only adult in the car during these trips. He and his wife were the only people who had permission from the victim's mother to take the victim to and from church. On two occasions the defendant stopped the car in an isolated area while driving the victim home from church and sexually molested her. The victim told her mother about these incidents, and a report was filed with the Department of Social Services. The defendant later confessed to the allegations, and he was convicted of a "class 6" felony of molesting a minor over whom he exercised custodial or supervisory control. The defendant appealed his conviction on the ground that his involvement with the victim "consisted only of assisting her in transportation from church," whereas the criminal statute requires a "custodial or supervisory relationship." The court concluded that the defendant did have such a relationship with the victim:
The word "custody" has been defined generally as "[t]he care and control of a thing or person." Additionally, the Supreme Court has rejected limiting the definition of "custody" to legal custody. In its language [the statute] is unambiguous, justifying no limitation of the meaning of "custody" to legal custody. To give it such a restrictive definition would eliminate, among others, teachers, athletic instructors and baby-sitters, all of whom might have temporary custody of children, from the purview of the statute. Accordingly, we hold that the "custodial or supervisory relationship" required [under the criminal statute] is not limited to those situations where legal custody exists. The statute specifically provides that such a relationship "includes but is not limited to the parent, step-parent, grandparent, or step-grandparent." The term also includes those individuals eighteen years or older who have a temporary, custodial relationship with a child, such as, "teachers, athletic instructors and baby-sitters." The child in each instance has been entrusted to the care and control of the supervising adult.
The evidence established that, with the permission of the victim's mother, [the defendant] willingly drove the victim home from church. As the only adult present during these trips [he] had the responsibility for and control of the victim's safety and well-being while she was in his care. His contact with the victim was in the nature of a baby-sitter, i.e., one entrusted with the care of the child for a limited period of time. Indeed, in [his] interview with investigators he acknowledged that he "assumed a custodial or guardianship role over" the victim by transporting her to and from church. The Commonwealth's evidence was sufficient to prove beyond a reasonable doubt that [the defendant] maintained the requisite custodial or supervisory relationship over the victim when he proposed that they have sexual relations and when he sexually abused her.
Application. This case is important for the following reasons:
1. Custodial or supervisory relationships. This is one of the few cases to address the meaning of "custody" and "supervision." These terms are important not only in the context of criminal law, but also in evaluating the definition of "child abuse" that is reportable under state law. The May-June and July-August 2000 issues of this newsletter contained tables summarizing the child abuse reporting laws of all fifty states. One of the features of those tables was each state's definition of reportable child abuse. As a quick review of the tables will illustrate, many states define reportable child abuse restrictively to include only abuse inflicted by parents, guardians, or "custodians." This case suggests that the term "custodian" may be interpreted broadly by the courts to include more than "legal" custodians. A parent who volunteers to drive another's minor child to church may satisfy this definition.
2. The "two-adult" rule. For many years we have recommended that churches institute a two-adult rule in all activities involving minors. Such a rule does not require that two adults be present at all times when minors are present (few churches would have enough adult staff or volunteers to do so). Rather, it means that one child is never alone with one adult. Individual children must always be in the presence of two or more adults. This case illustrates the risks associated with a deviation from this important standard. While churches cannot dictate how children are brought to church, they certainly can make recommendations to parents. And, church leaders can implement and enforce a two-adult rule in all church-sanctioned activities and programs. This case demonstrates the importance of doing so. Krampen v. Commonwealth, 510 S.E.2d 276 (Va. App. 1999).
Recent Developments in Virginia Regarding Insurance – Part 2
A Virginia court ruled that amounts payable to a church under its insurance policy following the complete destruction of its sanctuary in a fire would not be reduced by the amount of contributions the church received from sympathetic donors following the fire.
• Key point. Under the so-called “collateral source rule,” benefits payable under a church’s insurance policy as a result of a fire loss are not reduced by the amount of contributions the church receives from sympathetic donors following the loss.
A Virginia court ruled that amounts payable to a church under its insurance policy following the complete destruction of its sanctuary in a fire would not be reduced by the amount of contributions the church received from sympathetic donors following the fire. A church was destroyed by a fire. The church’s insured value was not adequate to cover the actual loss. The church sued its insurance broker, claiming that (1) the broker’s “negligent breach” of his professional duties caused the church to be grossly underinsured, and that (2) the broker breached his contract with the church to obtain adequate property insurance coverage. This case is addressed in the previous recent development in this section of the newsletter. In the course of this litigation, the insurance broker requested that the church turn over detailed information on charitable contributions made to the church following the fire, including the amount of donations and the names, addresses, and telephone numbers of individual contributors. The church contended that the broker’s motive for seeking this information was a desire to offset these charitable contributions against its responsibility to compensate the church for the uninsured loss potential resulting from the broker’s alleged negligence and breach of contract. In fact, the church received $230,237 from its donors. The Aetna insurance company paid the church $143,000 under the church’s insurance policy, plus an additional $50,000 by way of settlement. In sum, the church collected a total of $423,237 in the aftermath of the fire. The broker submitted that one contractor estimated the re-construction costs at between $440,000 and $485,000. According to the broker, if the church had selected this bid then its out-of-pocket losses would only have totaled between $16,763 and $61,763, rather than the $250,000 of uninsured losses sought. The church contended that the estimated cost to rebuild its house of worship exceeded $600,000.
The church refused to turn over the donor records the broker requested. It based this decision on the so-called “collateral source rule.” Under this rule, compensation or insurance benefits received by a claimant from a source “collateral” to the wrongdoer may not be applied as a credit against the amount of damages the wrongdoer owes. In other words, contributions received by the church following the fire cannot “offset” or reduce the amount payable under the church’s insurance policy. As a result, there was no reason to turn over the contribution records. The court explained the collateral source rule as follows: “[The rule] is designed to strike a balance between two competing principles of tort law: (1) a plaintiff is entitled to compensation to make him whole, but no more; and (2) a defendant is liable for all damages that proximately result from his wrong. A plaintiff who receives a double recovery for a single tort enjoys a windfall; a defendant who escapes, in whole or in part, liability for his wrong enjoys a windfall. Because the law must sanction one windfall and deny the other, it favors the victim of the wrong rather than the wrongdoer.” The court agreed with the church that the collateral source rule prevented the broker from obtaining the church’s contribution records.
The court also ruled that the broker failed to show that disclosing charitable donors would lead to the discovery of admissible evidence. Generally, a party to a lawsuit may compel the other party to turn over any documents or information “reasonably calculated to lead to the discovery of admissible evidence.” The court concluded that the broker’s request for contribution records failed this test: “The issue in this case is simple: whether the [broker’s] procurement of insufficient insurance coverage constituted negligence and/or breach of contract. The evidence on donations does not tend, even slightly, to prove a fact relevant to any issue in the case … . Testimony is properly excluded where it is irrelevant and immaterial to determination of the issues involved. The church’s fund raising capabilities and the generosity of its donors have no place in the jury’s deliberations.” The court concluded,
Should the [church] prevail, its measure of damages will, under the contract cause of action, be that amount of money which would have placed the church in the same position it would have been but for the [broker’s] breach. The evidence of contributions does not tend to place the [church] in that position. That money may well have been raised for other purposes of the church. Each dollar raised for the building reconstruction is one dollar that is unavailable for other purposes. In order for the [broker] to establish the relevance of a contribution, it would be required to show that a particular donation would have never been made to the church for any other purpose. Each contribution and each contributor would have to be examined. In other words, there would be mini-trials over each donation. Judicial economy, public policy, and sound discretion require such evidence to be precluded.
The court is also concerned with the chilling effect that such revelations could have on the flow of future donations to this or any other church. Trial courts are expressly authorized … to make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense. The court will order that the names, addresses and telephone numbers of church donors, and amounts of their donations shall remain undiscovered by the defendants. This will adequately protect the donors from any annoyance or embarrassment that may arise from disclosure of their charitable ways.
Application. It is common for churches to receive contributions from sympathetic individuals following the destruction of church property in a fire or other catastrophe. According to the collateral source doctrine, these contributions do not offset or reduce the insurer’s obligation to pay the amount specified in the church’s insurance policy. Glorious Church of God in Christ v. Aetna Casualty and Surety Co., 1998 WL 972132 (unpublished opinion, Va. Cir. Ct. 1998). [Corporations]
Recent Developments in Virginia Regarding Church Property
The Virginia Supreme Court ruled that a church lost title to a portion of its property in a boundary line dispute because an adjacent property owner acquired title to the disputed property through adverse possession by openly occupying and maintaining the disputed property with an intent to claim it as her own regardless of the actual legal boundary line.
• Key point. A church may lose title to some of its property in a boundary line dispute through adverse possession if an adjacent property owner openly occupies and maintains the disputed property with an intent to claim it as his or her own regardless of the actual legal boundary.
The Virginia Supreme Court ruled that a church lost title to a portion of its property in a boundary line dispute because an adjacent property owner acquired title to the disputed property through adverse possession by openly occupying and maintaining the disputed property with an intent to claim it as her own regardless of the actual legal boundary line. A boundary line dispute arose between a church and an adjacent homeowner. The dispute arose because the homeowner and her predecessors had used the disputed land mistakenly believing that their property ran to a line of trees at the edge of woods on the church’s property. The homeowner claimed that she and her predecessors had mowed, gardened, and otherwise maintained the strip of land up to the tree line as a part of their residential property for more than 15 years, believing that it was the common boundary between their property and the church’s property. The evidence also indicated that the homeowner and her predecessors intended to claim title to the land extending to that line as a part of the property they thought was conveyed to them. The homeowner claimed that this evidence was sufficient to show that she intended to claim title to a definite line on the ground, regardless of what the deed to the property stated, and as a result she should be awarded title to the disputed strip of property on the basis of adverse possession. A trial court concluded that all the elements necessary to establish title by adverse possession had been clearly established except for the requirement of an adverse or hostile possession. Because the homeowner’s possession of the land was based on a mistake as to the ownership of the land, the trial court determined that the possession was not adverse since “there was no intent … to oust the true owner of the title of the property.” The homeowner appealed.
The appeals court noted that “to establish title to real property by adverse possession, a claimant must prove actual, hostile, exclusive, visible, and continuous possession, under a claim of right, for the statutory period of 15 years.” Further, “the burden is upon the claimant to prove all of the foregoing elements by clear and convincing evidence.” The court emphasized that “one who possesses the adjoining land of another under a mistake as to his own boundaries with no intention to claim land that does not belong to him, but only intending to claim to the true line, wherever it may be, does not adversely hold the land in question.” The court further explained doctrine of adverse possession as follows:
[T]he rule in Virginia may be taken to be that, where the proof is that the location of the line in question was caused in the first instance by a mistake as to the true boundary, the other facts and circumstances in the case must negate by a preponderance of evidence the inference which will otherwise arise that there was no definite and fixed intention on the part of the possessor to occupy, use and claim as his own the land up to a particular and definite line on the ground. That is to say, on the whole proof a case must be presented in which the preponderance of evidence as to the character of the possession, how held, how evidenced on the ground, how regarded by the adjoining land owner, etc., supplies the proof that the definite and positive intention on the part of the possessor to occupy, use and claim as his own the land up to a particular and definite line on the ground existed, coupled with the requisite possession, for the statutory period, in order to ripen title under the statute. Whether the positive and definite intention to claim as one’s own the land up to a particular and definite line on the ground existed, is the practical test in such cases. The collateral question whether the possessor would have claimed title, claimed the land as his own, had he believed the land involved did not belong to him, but to another, that is, had he not been mistaken as to the true boundary line called for in his chain of title, is not the proximate but an antecedent question, which is irrelevant and serves only to confuse ideas.
The court concluded that the homeowner and her predecessors based their legal claim “not only on the deed descriptions, but also on their belief that their property line ran to the line of woods.” As a result, the court ruled that the homeowner’s possession was accompanied by the necessary adverse or hostile intent.
Application. This case illustrates how a church may lose title to a portion of its property in a boundary line dispute by allowing an adjacent property owner to occupy and maintain a portion of the church’s property for the number of years specified by state law. These cases may arise whenever an adjacent landowner mistakenly believes that the boundary line is on the church’s property. If the landowner occupies the disputed strip of property by using or maintaining it, and has an “adverse intent,” he or she eventually will acquire title to the property through adverse possession. However, the landowner must have an adverse intent, meaning that he or she intends to claim title to all land up to the disputed boundary line regardless of the actual legal boundary. Church leaders can minimize the risk of losing title to church property through adverse possession by taking the following steps: (1) Be certain that you are aware of the actual boundaries of your church’s property. Obtain a legal survey if you have not done so previously, and identify the true boundaries of your property. (2) Do not allow adjacent property owners to occupy or maintain any portion of your property. (3) Be certain that any fence or other boundary marker is accurately placed. Hollander v. World Mission Church, 498 S.E.2d 419 (Va. 1998). [Corporations]
Recent Developments in Virginia Regarding Insurance – Part 1
A Virginia court ruled that a church that was destroyed by fire and that was insured for only one-third of the value of the property could sue its broker and insurance company for the balance.
• Key point. Many churches insure their property for less than its market or replacement value. In the event of a total loss through fire or other catastrophe, the church faces an unexpected and often substantial uninsured loss. In some cases, the church may have a legal claim against its insurance broker for the uninsured amount if the broker breached a contract to provide the church with adequate insurance coverage. The insurance company itself may also be liable for the broker’s acts.
A Virginia court ruled that a church that was destroyed by fire and that was insured for only one-third of the value of the property could sue its broker and insurance company for the balance. For many years, a church purchased insurance from the Aetna insurance company through a local insurance broker. These policies provided coverage for any fire loss to the church building. The church’s insurance broker set the coverage limits on the church’s policies each year. The church’s pastor claimed that he was assured by the broker that adequate insurance coverage was being provided under the Aetna policy. For the policy period between February 15, 1987 and February 15, 1988, the broker obtained an Aetna policy with a $100,000 property coverage liability limit. The coverage amount increased gradually between $2,000 and $4,000 each year, until the broker obtained an Aetna policy with a $132,000 property coverage liability limit for the policy period between February 15, 1996 and February 15, 1997. The 1996-1997 policy premium increased approximately 46% over the 1995-1996 rates.
In 1996, an Aetna underwriter instructed the church’s broker to inform the church that its current fire insurance coverage was inadequate. The letter specifically notified the broker that the church’s insured value needed to be increased to $353,352 in order for the building to be “properly insured” and requested that the church be notified that “if there is a loss, the building is not adequately insured.” The church was destroyed by a fire one week after the broker received the letter from Aetna, and before he had instructed the church to increase its fire loss coverage. A few days after the fire, an Aetna claims representative notified the chairman of the church’s board of trustees that the structure was worth $383,000 prior to the incident, or $251,000 more than the insured property coverage of $132,000 procured by the broker from Aetna. Aetna tendered a check for $143,000 to the church ($132,000 for building damage, and $11,000 for personal property loss). The church did not consent to any release.
The church sued its broker, claiming that (1) the broker’s “negligent breach” of his professional duties caused the church to be grossly underinsured; (2) the broker breached his contract with the church to obtain adequate property insurance coverage; (3) Aetna was legally liable for the negligence and breach of contract of its agent (the broker). The broker argued that any “contract” to obtain adequate insurance coverage was void under the Virginia “statute of frauds,” which requires all contracts that cannot be performed within one year to be in writing and signed by the party who is accused of violating it.
The court first addressed the existence of a contract to obtain adequate insurance coverage. It noted that “a contract that may be performed on either side within one year is not within the statute of frauds” and need not be in writing to be enforceable. The court concluded, “The church procured first party property coverage on an annual basis from Aetna via [the broker]. . . . The policy was renewed each February 15 for the period of 1987 through 1997. By clear inference, this demonstrates to the court that the accompanying oral contract to procure adequate insurance was capable of being performed within a year.” As a result, the court rejected the broker’s argument that the contract was void because it was not in writing.
The court also concluded that Aetna was legally responsible for the actions of its broker. Aetna had argued that it could not be liable for the broker’s actions since they were not in the course of the agency relationship. In rejecting this defense the court observed, “A principal is held liable to third persons in a civil suit for frauds, deceits, concealments, misrepresentations, torts, negligence, and other malfeasances, or misfeasances, and omissions of duty, of his agent, in the course of his employment, although the principal did not authorize, or justify, or participate in, or, indeed know of such misconduct, or even if he forbade the acts, or disapproved of them.”
Application. Every church faces the risk of a total loss of its property through fire. The tragedy of such an event is made even worse when church leaders discover that they have inadequate insurance to cover the loss. What about your church? Do you know the value of your church property? Do you know the amount of insurance you carry for fire and other catastrophic losses? Is your church underinsured, or adequately insured? Church leaders should review the adequacy of their insurance coverage annually with their insurance agent. If there is any question about the property’s value, your agent can suggest ways to obtain an accurate valuation. As this case illustrates, this is an important but often neglected safeguard. Glorious Church of God in Christ v. Aetna Casualty and Surety Co., 1998 WL 972079 (unpublished opinion, Va. Cir. Ct. 1998). [Corporations]
Nestle v. Commonwealth of Virginia, 470 S.E.2d 133 (Va. App. 1996)
Background. A charity hired a new bookkeeper, despite its knowledge that the bookkeeper had previously been charged with writing a bad check. The charity wanted to give her a second chance. Shortly after the bookkeeper began her duties, two officers noticed problems with the books and bank deposits. They decided to conduct an internal audit. At the conclusion of the audit, the auditor reported several "substantial irregularities in the accounts." Among other things, the auditor noted that (1) the bookkeeper had written a check to herself for $250 shortly after beginning her employment that was never repaid; (2) the bookkeeper had stapled a deposit slip for $1,086 to the fund ledger account but no deposit had ever been made; and (3) the bookkeeper had issued a check to herself in the amount of $2,150.
An officer confronted the bookkeeper with these problems. When asked about the $250 check, the bookkeeper replied, "I've got that right here" and pulled the money out of a filing cabinet. She claimed that she had written the check to provide a petty cash fund, but the internal auditor was unable to find the fund in the same cabinet when he conducted his audit. When asked about the $1,086 deposit discrepancy, the bookkeeper produced the funds later that day. With regard to the $2,150 check, the bookkeeper stated that she was attempting to reimburse herself for $21.50 in travel expenses, but that the check-writing machine erroneously left out the decimal and printed the check for $2,150. The bookkeeper was later charged with embezzlement.
The court's ruling. The court noted that to prove the crime of embezzlement, the state must prove "that the accused wrongfully appropriated to her use or benefit, with the intent to deprive the owner thereof, the property entrusted to her by virtue of her employment or office." It emphasized that the intent to deprive the owner can be inferred from all the facts and circumstances of the case, and concluded that "the evidence contained in this record clearly proved beyond a reasonable doubt [the bookkeeper's] guilt of the crime of embezzlement."
What this means for churches
This case is important for the following reasons:
• Negligent selection. The case illustrates the risk churches take in employing persons in a capacity involving access to funds who have a history of financial improprieties. Giving such persons a "second chance" is certainly understandable, especially for a church. Church leaders who want to employ such persons should consider positions not involving access to church funds.
• The bookkeeper's defenses. The bookkeeper's attempt to "explain" the financial irregularieties that were brought to her attention, and her reimbursement of the charity for the $250 check and the undeposited funds, did not prevent her from being convicted for embezzlement. The crime had already occurred.
• The clergy-penitent privilege. The court ruled that the bookkeeper could not prevent her pastor from testifying regarding statements she had made to him in the course of counseling, since under Virginia law the clergy-penitent privilege can be asserted only by clergy, and not by counselees.
Background. What do you do when you suspect that an employee or volunteer has embezzled church funds, but you can't prove it? How much evidence do you need before you accuse or remove the person? If the person is prosecuted for the crime of embezzlement, what kind of evidence is needed for a conviction? A Virginia court addressed some of these questions, and its decision provides helpful guidance to church treasurers and other church leaders.
The Virginia case. A hospital operated a cafeteria. At the end of each day, cashiers would count the money in the cash registers, report the amount on "face sheets," and then deposit the money in a safe. The next morning, an employee (the "defendant") opened the safe, counted the money, reported this amount on a deposit slip, placed the money in a bank bag, and gave it to a member of the hospital's security staff for deposit at a bank. Other employees had access to the safe, and were authorized to perform the same responsibilities as the defendant.
Over a four-day period, a discrepancy of $1,010 occurred between the amount of money the cashiers reported and the amount deposited in the bank. The defendant was charged with the crime of embezzlement. He denied any wrongdoing, and insisted that there often were discrepancies between the cashiers' deposits and the amounts deposited in the bank. The defendant was found guilty by a trial court, and he appealed.
An appeals court reversed the defendant's conviction. It noted that "to establish the crime of embezzlement … it is necessary to prove that the accused wrongfully appropriated to his use or benefit, with the intent to deprive the owner thereof, the property entrusted to him by virtue of his employment or office." The court then provided the following additional clarification:
It is not sufficient that the evidence creates a suspicion of guilt, however strong, or even a probability of guilt, but must exclude every reasonable hypothesis save that of guilt …. A bookkeeper cannot be held criminally liable for embezzling funds merely because the funds received had not been deposited where there is an obvious lack of internal control and where persons other than the accused received funds and made some entries in the accounts in the absence of a showing that he converted the funds to his own use.
The court conclude that the evidence was not sufficient to convict the defendant. It based this conclusion on the fact that other employees had access to the safe, and therefore the state "failed to disprove the reasonable hypothesis that another individual who had access to the safe removed money from the envelopes."
The court also noted that the amount of money reported by the cashiers often did not match the amount printed on the cash register receipts, and this was another possible explanation for the alleged embezzlement. The court observed:
This evidence supports a reasonable hypothesis that the amount of money the cashiers actually placed into the envelopes did not match the amount of money the cashiers reported on their face sheets. Simply put, the evidence failed to exclude the reasonable hypothesis that the discrepancy was caused by counting errors committed by the cashiers.
The court concluded that the state failed to "overcome the presumption of innocence and establish the defendant's guilt beyond a reasonable doubt."
What this means for churches
This case demonstrates the difficulty that may be encountered in proving that a particular employee or volunteer committed embezzlement, if other reasonable explanations exist. Of course, this case involved a criminal prosecution requiring the highest degree of proof—beyond a reasonable doubt. While a lesser degree of proof applies to a church's decision to accuse or remove a suspected embezzler, church leaders must recognize that a reasonable and credible basis still must exist. Even this lesser standard of proof may be difficult to prove if the suspected embezzler denies any wrongdoing and other reasonable explanations exist.
Key point. In this case, embezzlement was not proven because (1) more than one person had access to the safe, and (2) there was ample evidence that the discrepancies between the cashiers' money counts and the amounts deposited by the defendant could have been caused by counting errors by the cashiers rather than by embezzlement. Before accusing an employee or volunteer of embezzlement, be sure that you can rule out any other reasonable hypothesis.
A federal court in Virginia ruled that a city council acted unlawfully when it denied a church’s request to construct two cellular antenna towers on its property.
• Key point. City governments cannot arbitrarily deny requests from churches to construct telecommunications towers on their property.
A federal court in Virginia ruled that a city council acted unlawfully when it denied a church’s request to construct two cellular antenna towers on its property. AT&T holds a license from the Federal Communications Commission to serve the Virginia Beach region in Virginia with digital wireless service. Digital wireless service requires a system of overlapping “cells” or transmission areas in order to provide uninterrupted data transmission and phone service. In order to provide such digital wireless services to individuals in the Virginia Beach area, AT&T began searching for antenna sites. It investigated a number of potential sites, which were rejected for aesthetic or technical reasons, before contacting a Methodist church. The congregation agreed to lease a part of its property to AT&T for the erection of two antenna towers. Under local law the construction of the towers required the church to obtain a conditional use permit. As a result, the church submitted an application for a conditional use permit to the city council. The application included a site plan specifying the location of the towers and related buildings, a letter from the manufacturer of the towers certifying compliance with engineering specifications, and a certificate of compliance with federal guidelines for exposure to radio frequency radiation. A letter from a property appraisal firm was also submitted stating that the proposed towers would have no adverse effect upon the residential property values of neighboring homes. The city council met to review the application, and heard several witnesses on both sides of the issue. One council member told the church that “under the law you may have rights that I’m not aware of, but under a conditional use permit, you’re about to go down in flames.” The city council voted unanimously to reject the church’s application. The church sued the city, claiming that its refusal to allow construction of the towers violated the federal Telecommunications Act of 1996. The court agreed. It acknowledged that the Act generally gives local governments the authority to determine the placement of antenna towers. However, it noted that the Act imposes a procedural duty upon state and local zoning authorities by providing that “any decision by a state or local government … to deny a request … [for] personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record.” The church insisted that the city’s decision was not supported by “substantial evidence contained in a written record.” The court agreed, noting that all the city had produced were the minutes of the council meeting listing the names of the council members and their decision to deny the church’s application. This evidence did not contain sufficient information “to permit a reviewing court to ascertain the rationale behind the decision.” The city insisted that the church’s application was denied because of concerns for the compatibility of the antennas with the neighborhood, particularly with regard to aesthetic and visual impact. The court was not persuaded, noting that conclusory statements without any supporting justification were not a sufficient basis for denying the church’s application. The court ordered the city to issue the church a conditional use permit for the construction of the antenna towers.
Application. Many churches have been approached by telecommunications companies to construct antenna towers on their property. This case will be a useful precedent to any church that wants to use its property for such a purpose, and that is opposed by local authorities. AT&T Wireless PCS, Inc. v. City Council, 979 F. Supp. 416 (E.D. Va. 1997). [Zoning Law and Churches]
Key point. Personal notes ministers make during counseling sessions may be privileged.
A federal court in Virginia ruled that the clergy-penitent privilege applied to a pastoral counselor, and that as a result the counselor did not have to disclose notes she took during counseling sessions.
A woman was injured when she was struck by a can falling from the top shelf in a grocery store. She later sued the grocery store for personal injuries and emotional distress. At the time of the accident and thereafter the woman sought counseling from a pastoral counselor at a local nonprofit, multidenominational counseling center operated by 8 churches. All of the counselors at the center are ordained ministers.
During the woman's counseling sessions, her counselor followed her usual practice of taking notes. The grocery store learned of the counseling relationship and issued a subpoena seeking disclosure of all of the counselor's notes in an attempt to verify the woman's injuries. The counselor claimed that her notes were protected from disclosure by the clergy-penitent privilege, and refused to disclose them.
The grocery store argued that the clergy-penitent privilege only applied to "testimony [given] as a witness in any civil action," and accordingly did not apply to a request for notes or other documents. The court ruled that the counselor's notes were protected from disclosure by the privilege. It began by quoting the Virginia clergy-penitent privilege:
No regular minister, priest, rabbi or accredited practitioner over the age of eighteen years, or any religious organization or denomination usually referred to as a church, shall be required in giving testimony as a witness in any civil action to disclose any information communicated to him in a confidential manner, properly entrusted to him in his professional capacity and necessary to enable him to discharge the functions of his office according to the usual course of his practice or discipline, wherein such person so communicating such information about himself or another is seeking spiritual counsel and advice relative to and growing out of the information so imparted. Va. Code Ann. § 8.01-400.
The court rejected the grocery store's claim that the privilege applied only to in-court testimony by ministers and not to subpoenas demanding the disclosure of documents. It acknowledged that the privilege protects ministers from "giving testimony as a witness in any civil action," and that this language could be interpreted to limit the privilege to in-court testimony. However, in rejecting this interpretation the court observed:
Although a close question, this court concludes that to compel the production of these "documents" would render meaningless the clear protection against disclosure of confidential communications as to clergy provided by [the privilege. The counselor's] notes would reveal the substance of [the woman's] confidential communications to [her]. Consequently [the counselor's] testimony as a witness in the civil trial would no longer be needed …. Moreover [the grocery store] could use the notes to cross-examine [the woman], thereby placing into evidence the substance of the notes. Thus, a party seeking disclosure of such confidential communications could easily subvert the protections provided by the statute in cases in which a prudent clergyperson had documented the counseling. This court holds, therefore, that the protection … given to the clergy, "in giving testimony as a witness in any civil action," against compelled disclosure of "any information communicated to them in a confidential manner" also extends to their disclosure, in any civil action, of documents that contain the substance of that testimony.
There are a few additional aspects of the court's ruling that are of interest. First, the court ruled that the privilege could only be asserted by the minister-counselor and not by the pastoral counseling center. Second, the court noted that the woman herself sought to obtain her counselor's notes in order to verify her injuries, but could not do so since the privilege (under Virginia law) can be asserted or waived only by the minister and not by the counselee. The court observed:
This situation exposes a peculiar feature of the privilege …. The statute grants the privilege only to the clergyperson, not to the communicant. Vesting the clergyperson with the privilege without regard to the wishes of the communicant, however, serves no apparent purpose. In fact, in this case it has frustrated the needs of the communicant, the person whose confidences such statutes have traditionally sought to protect. Moreover, by giving the clergy the exclusive right to assert the privilege, the statute actually discourages candid disclosure in that the clergyperson can choose to reveal a confidential communication without the consent of the communicant.
Finally, the court noted a number of problems with the language of the privilege and encouraged the Virginia legislature to address them:
First, the statute leaves unclear whether, in a civil action, it protects against all compelled disclosure, regardless of its form, or whether it protects only against compelled testimonial disclosure. Second, the statute inexplicably grants the privilege exclusively to the clergy, regardless of whether the communicant consents to disclosure. Third, the statute does not address whether the privilege extends to counseling services provided by the clergy, for a fee, in cases which those counseling services differ from secular counseling only by their emphasis on "spiritual" issues rather than psychopathological issues.
This is the first court ruling to question the propriety of applying the clergy-penitent privilege to pastoral counselors who charge a fee for their services and whose counseling services differ from secular counseling only by an "emphasis on spiritual issues."
The court's concern was misplaced. The purpose of the privilege—encouraging persons to unburden their souls to the clergy—is in no way diminished by the fact that a person pays a fee, or that the minister-counselor's services are similar to secular counseling except for an emphasis on spiritual issues. Indeed, the whole point is that the minister-counselor's services emphasis the spiritual. This is the very distinction that makes pastoral counseling unique and that supports the clergy-penitent privilege.
• Key point: A public school that permits any community group to rent its facilities cannot charge churches a higher rental fee in order to encourage them to build their own facilities.
• A federal district court in Virginia ruled that a public school policy of charging churches more rent than other community groups for the use of school facilities violated the constitutional guaranty of free speech. A public school board allowed virtually any community group to rent school facilities. As many as 9,000 community groups and individuals rent some 180 school facilities each year. The school board adopted a policy that treats churches differently from any other group. For the first five years, churches pay the same rent as any other nonprofit organization. In the sixth year, they pay twice the nonprofit rate. In the seventh year they pay three times the nonprofit rate. In the eighth year they pay four times the nonprofit rate. After the eighth year they pay five times the nonprofit rate. Further, unlike any other nonprofit organization, churches are required to provide public school authorities with “satisfactory evidence of progress towards the construction or acquisition of a church site.” School authorities defended this special treatment of churches by arguing that allowing church groups “to use school facilities on a long-term basis, at a low rental rate, would constitute the establishment of religion.” A church that had rented school facilities for 11 years sued the school board for a violation of its constitutional rights. It also demanded a refund of some $235,000 (plus interest) in excess rental fees that it was forced to pay because of the school board’s discriminatory treatment of churches. A federal district court agreed with the church, and ordered the struck down the school board’s discriminatory policy. It observed that by allowing any community group (including religious groups) to rent school facilities, the school had created an “open forum.” Accordingly, the first amendment guaranty of free speech prohibited the school from discriminating against any group solely on the basis of the content of its speech. Since the school board discriminated against churches solely on the basis of the religious content of their speech, its policy of charging churches higher rental rates violated the first amendment. The court quoted from a previous decisions of the United States Supreme Court: “Religious institutions need not be quarantined from public benefits that are neutrally available to all.” The court rejected the school board’s claim that charging churches the same rent as any other nonprofit group had the “primary effect” of advancing religion in violation of the first amendment’s ban on the establishment of religion. The court observed: “Allowing religious groups to meet in an open forum like any other group, and pay the same rent as other groups, does not have the primary effect of advancing religion. It both allows and promotes the free exchange of ideas and speech.” The court acknowledged that the church received an incidental benefit by being able to rent school facilities, but it noted that the Supreme Court had concluded in a similar case that “a religious organization’s enjoyment of merely incidental benefits does not violate the prohibition against the primary advancement of religion.” The court deferred ruling on the church’s demand for a refund of $235,000 plus interest until the parties had an opportunity to file briefs on this issue. Fairfax Covenant Church v. Fairfax County School Board, 811 F. Supp. 1137 (E.D. Va. 1993).
