Fiduciary Duty and Legal Liability

Breach of fiduciary duty is difficult to prove in court.

Church Law & Tax Report

Fiduciary Duty and Legal Liability

Breach of fiduciary duty is difficult to prove in court.

Key Point. Under some circumstances ministers may owe a fiduciary duty to members of their congregation, and they may be liable for breaching this duty. Most cases of fiduciary duty involve sexual misconduct, but this basis of liability is not limited to such cases.

Key Point. Intentional infliction of emotional distress is a theory of liability that involves extreme and outrageous conduct. Plaintiffs rarely establish this theory of liability because of the difficulty of proving that a defendant’s actions were outrageous.

A New York court ruled that a pastor who allegedly disseminated information about a member’s criminal record to both staff and congregants did not breach any fiduciary duty or commit intentional infliction of emotional distress. A woman (the “plaintiff”) was an active member of her church. Because of her background in psychiatry, the church’s senior pastor sought advice from her on both church and personal matters, and it was during these private conversations that the plaintiff claims she shared information concerning her personal life, and her strategies for dealing with her own personal challenges. She characterized the pastor as her “friend, confidant, as well as [her] pastor and spiritual counselor.”

Plaintiff was charged with a property crime, and during the two-year course of her criminal proceeding, the pastor counseled her and attended court with her in his capacity as friend and pastor. The plaintiff was convicted of the crime. A few years later, she began alleging mismanagement of church funds by the pastor, and it was at this time that copies of her conviction record began circulating among the church staff and congregation in what the plaintiff claimed was a deliberate attempt to humiliate her and intimidate her from further criticism of the pastor’s management of the church. She sued the pastor, claiming that he was responsible for intentionally disseminating the information. The lawsuit claimed that the pastor’s disclosures amounted to a breach of a fiduciary duty, and caused her emotional distress.

Breach of fiduciary duty claim

The plaintiff claimed that the pastor breached a fiduciary duty that he owed to her by intentionally disseminating information about her criminal conviction that he learned in his role as her pastor and counselor. The court reached the following conclusions regarding this claim:

  • The clergy-penitent privilege statute does not create a fiduciary duty on the part of pastors toward their congregants.
  • Exposing clergy to personal liability as a result of the breach of a fiduciary duty “would likely require the interpretation of religious doctrine, thereby creating troubling constitutional implications under the First Amendment.”
  • The scope of a pastor’s fiduciary duty must be narrow in order to avoid constitutional problems under the First Amendment: “Allegations that give rise to only a general clergy-congregant relationship that includes aspects of counseling do not generally impose a fiduciary obligation upon a cleric.” Rather, the minister must assume “control and dominance” over the congregant who was “uniquely vulnerable and incapable of self-protection regarding the matter at issue.”

The court concluded that even if the pastor had disseminated information about her criminal conviction to the church staff and congregation, this fell far short of demonstrating that she “became uniquely vulnerable and incapable of self protection as a result of her relationship with him.” The court further noted that the criminal record allegedly disseminated by the pastor was a matter of public record. As a result, the court dismissed this theory of liability.

Emotional distress

The court noted that liability for the intentional infliction of emotional distress requires a demonstration that a defendant’s conduct was (1) extreme and outrageous, (2) intended to cause severe emotional distress, (3) resulted in severe emotional distress. As such, “success turns on whether the conduct complained of is extreme, amounting to more than mere threats or annoyances, and ultimately, 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 added that “the threshold of outrageousness is so difficult to attain, that of the intentional infliction of emotional distress claims considered by the [state’s highest court] every one has failed because the alleged conduct was not sufficiently outrageous.”

The court concluded that the pastor’s conduct in disseminating information concerning the plaintiff’s criminal conviction fell far short of this standard: “By far, the most problematic obstacle is the simple fact that the document distributed here, plaintiff’s criminal record, is a public document. The distribution of this record while perhaps embarrassing, on its own carries no constitutional right to privacy …. One’s criminal history is arguably not a private personal matter at all, since arrest and conviction records are matters of public record.”

The court also noted that the pastor’s involvement in the dissemination of the plaintiff’s criminal record had never been conclusively proven. Plaintiff testified that she did not know who had obtained her criminal record, or who had distributed the copies.

Application. This case illustrates the difficulty of proving breach of fiduciary duty, or intentional infliction of emotional distress, by a pastor. These theories of liability are even harder to establish when they involve the dissemination of matters of public record such as a criminal conviction. 863 N.Y.S.2d 874 (N.Y. Sup. 2008).

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

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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