Legal Liability of Denominations

Recent ruling favors denominations in disputes regarding liability.

Church Law and Tax 1996-03-01

Denominations—Legal Liability

Key point. Denominational organizations are not necessarily responsible for the actions of affiliated churches on the basis of agency law.

A Minnesota appeals court concluded that a Catholic church was not an “agent” of its diocese and accordingly the diocese was not legally responsible for an injury that occurred on church property. A child was killed when a gravestone fell on him in a church cemetery. The child’s parents sued the church and diocese claiming that the death was due to the church’s negligence, and that the diocese was responsible for the church’s negligence since the church was its “agent.” A trial court entered a “directed verdict” in favor of the diocese at the close of the trial. A directed verdict is an extraordinary action by a court, for a judge makes a ruling without sending the case to the jury. Directed verdicts are rare, and are issued only in cases that are lacking in any merit. The parents appealed the judge’s action, and a state appeals court ruled that the judge had acted properly. The court observed that Minnesota courts have adopted the definition of “agency” set forth in section 1 of the Restatement of Agency (a respected legal treatise). This section specifies that “agency” refers to “the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other to so act.” The court stressed that “the party alleging the agency relationship bears the burden of proof.” It concluded that the parents failed to prove that the church was an agent of the diocese:

Here the record reveals that although the bishop has the exclusive power to hire and fire parish priests and the exclusive power to open and close parishes, the bishop has nothing to do with the operation of the parish itself. The bishop and vicar general are members of the parish corporate board, but they do not attend board meetings and they give their proxies to the parish priest. The parish is financially independent, it is a separate corporation, and it is the sole owner of its property, including the cemetery. While … the parish is insured through a diocesan policy … the parish participates in an insurance pool with other parishes in the diocese in order to obtain a lower group rate. The parish pays its own individually calculated premiums, receives a separate certificate of insurance, has different coverage types and limits than other parishes, and receives any payment directly from the insurance company. Participation in the insurance pool is strictly voluntary. Likewise, participation in the diocesan loan pool is strictly voluntary and the pool exists to provide low interest loans and an investment opportunity for local parishes. Finally, the diocesan assessments are used to support educational and ministerial missions that the parish benefits from but cannot afford alone.

The court concluded that “this evidence … does not show that the diocese consented to have the parish act on its behalf or subject to its control. Moreover, the record is devoid of evidence showing that the parish agreed to be controlled by the diocese.”

This case will be useful to any denominational organization in rebutting a claim that it is legally responsible on the basis of agency for injuries occurring on affiliated church property. Many denominational organizations have insurance and loan programs for affiliated churches, and in addition receive financial support from them. This court concluded that such contacts are not sufficient to create an agency relationship. Also significant is the court’s reliance on the Restatement definition of agency. Section 1 of the Restatement, which was quoted in part by the court, also states that “it is the element of continuous subjection to the will of the principal which distinguishes the agent from other fiduciaries and the agency agreement from other agreements.” In summary, an agency relationship is not one that ordinarily will characterize the relationship between a denominational agency and its affiliated churches. This conclusion is forcefully reinforced by two considerations. First, the court was affirming a directed verdict, which as noted above is an extraordinary and rare action for a court to take. Second, this case involved perhaps the most “hierarchical” religious body—the Roman Catholic Church. Plate v. St. Mary’s Help Church, 520 N.W.2d 17 (Minn. App. 1994). [ Legal Liability—Negligence, Vicarious Liability for the Wrongs of Employees, Negligence as a Basis for Liability, Denominational Liability]

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