• Key point 10-18.3. There are several legal defenses available to a denominational agency that is sued as a result of the acts or obligations of affiliated clergy and churches. These include a lack of temporal control over clergy and churches; a lack of official notice of a minister’s prior wrongdoing in accordance with the denomination’s governing documents; lack of an agency relationship; the prohibition by the first amendment of any attempt by the civil courts to impose liability on religious organizations in a way that would threaten or alter their polity; and elimination or modification of the principle of joint and several liability.
Denominational Liability

* A federal court in New York ruled that a church was not responsible on the basis of agency for the sexual molestation of a minor by the director of its youth basketball program. A church operated a youth basketball program that consisted of various teams divided into different age groups. The youths involved in the program compete regularly in both local and national tournaments. An adult male (Tim) served as the program’s director and also acted as a volunteer coach. An adolescent male who participated in the program for three years claimed that Tim sexually molested him on numerous occasions at Tim’s private residence as well as on church property. The victim sued the church in federal court, claiming that it was responsible for Tim’s actions on the basis of negligent hiring, retention and supervision, and agency. All of the negligence claims were dismissed by the court on the ground that they were not filed before the expiration of the statute of limitations. That left the victim’s “agency” claim as the only viable claim.

actual agency

The court noted that “the general rule is that the acts and knowledge of an agent acting within the scope of his agency are imputed to the agent’s principal.” However, it concluded that the victim had produced no evidence that Tim’s sexual assault “was committed for anything other than personal reasons, or that the alleged assault was somehow in furtherance of church business.” As a result, “a jury could not conclude that the alleged abuse was within the scope of Tim’s authority as a coach in and director of the church basketball program.”

The court added that even if the sexual abuse was within the scope of Tim’s agency, the “adverse interest exception” would apply. Under this exception, “when an agent acts adversely to its principal, the agent’s actions and knowledge are not imputed to the principal.” Although the exception is narrow, applying only when the agent has “totally abandoned the interests of the principal,” the victim offered no evidence “to indicate that the alleged sexual abuse was anything other than completely adverse to the interests of the church.”

apparent authority

The victim claimed that church was responsible for Tim’s acts on the basis of “apparent agency.” Most states recognize the theory of apparent agency. Under this theory, a person can become the “agent” of another though no actual agency relationship exists. Section 267 of the Restatement of Agency, which has been adopted by many states, specifies: “One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.” An official comment to this section further specifies that “the mere fact that acts are done by one whom the injured party believes to be the defendant’s servant is not sufficient to cause the apparent master to be liable. There must be such reliance upon the manifestation as exposes the plaintiff to the negligent conduct.”

The court rejected the victim’s argument that Tim was an “apparent agent” of the church. It noted that he had failed to produce “evidence of words or conduct on the part of the church that would give rise to a reasonable belief by the victim that Tim possessed the authority to sexually abuse him. Hence, a rational [jury] could not find the church liable for the alleged sexual abuse of the victim based on the doctrine of apparent authority.”

Application. This case is important because it is one of the few courts to address actual and apparent agency as bases of church liability. Agency, unlike negligence claims, requires no fault on the part of a church. The only question is whether a wrongdoer was an “agent” of the church at the time he or she injured someone. The court’s decision reached two helpful conclusions. First, the acts of an agent are imputed to his or her employer (principal) only when the agent was acting within the scope of the agency relationship. The court concluded that this condition was not met when Tim sexually molested the victim, since this behavior in no way furthered the church’s ministry. Second, the court rejected the victim’s claim that the church was responsible for Tim’s sexual assaults on the basis of apparent authority. An apparent agency relationship is one that does not exist in fact, but that is legally recognized because of actions on the part of a principal suggesting to third parties that a person is acting as its agent. The court noted that no apparent agency relationship existed in this case since the church had engaged in no conduct suggesting that Tim possessed the authority to sexually abuse anyone. Significantly, the court concluded that apparent agency requires actions by a principal suggesting that a person is acting as its agent when engaged in the conduct giving rise to a plaintiff’s injury. This test will be virtually impossible to meet in the context of sexual misconduct. Holmes v. Lorch, 329 F.Supp.2d 516 (S.D.N.Y. 2004).

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