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Court Decisions Recognizing Fiduciary Duty Claims

§ 10.13.01
Key point 10-13.01. A few courts have found churches and denominational agencies liable on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister. In some cases, the church or agency is found to be vicariously liable for the minister's breach of a fiduciary duty, but in others the church or agency is found to have breached a fiduciary duty that it had with the victim.

This section reviews court decisions in which a church or other religious organization was found liable on the basis of breaching a fiduciary duty.

"Courts in other jurisdictions are divided on whether it is constitutionally permissible to subject a member of the clergy to tort liability for the breach of a fiduciary duty to a parishioner. Some have adopted the view that the claim a clergyman violated a fiduciary duty is simply another way of saying that he committed malpractice, and is barred by the First Amendment for the same reasons. … Other courts reject this view, however, and allow claims by parishioners that clergymen breached a fiduciary duty as a result of sexually inappropriate conduct in the course of pastoral counseling, believing such claims can be adjudicated without reference to religious doctrine or practice where the conduct at issue is not part of the beliefs and practices of the defendant's religion. In the view of these courts, an action for breach of fiduciary duty does not require establishing a standard of care and its breach but merely proof that a vulnerable parishioner trusted and sought counseling from the pastor and a violation of that trust, which constitutes a breach of fiduciary duty."[158] Richelle v. Roman Catholic Archbishop, 2003 WL 329036 (Cal. App. 2003).

Case studies
A California court ruled that a pastor and his employing church could be liable on the basis of his sexual seduction of a female member of his congregation, but only if the member was vulnerable on the basis of age, mental capacity, illness, or a counseling relationship. The victim claimed that her relationship with the pastor was a "fiduciary relationship" that the pastor breached by engaging in sexual relations with her. The court noted that the concept of "fiduciary relationship" was a murky one, and that "a range of the relationships could potentially be characterized as fiduciary." In general, however, a fiduciary relationship is based on the "vulnerability" of one party based on advanced age, youth, lack of education, mental incapacity, grief, sickness, or some other incapacity. The court concluded that "a pastor may be subject to tort liability for sexually inappropriate and injurious conduct that breaches a fiduciary duty arising out of a confidential relation with a parishioner, provided the alleged injurious conduct was not dictated by a sincerely held religious belief or carried out in accordance with established beliefs and practices of the religion to which the pastor belongs, and there is no other reason the issues cannot be framed for the [jury] in secular rather than sectarian terms."[159] Id.
The Colorado Supreme Court ruled that an Episcopal diocese and bishop were responsible for a pastor's sexual misconduct with a female member of the congregation who had sought him out for counseling. The court concluded that the bishop and diocese breached their "fiduciary duty" to the victim. The court noted that a fiduciary relationship exists when there is a special relationship of trust, confidence, and reliance between two persons, and when one of them assumes a duty to act in the other's best interests. The court acknowledged that the clergy-parishioner relationship "is not necessarily a fiduciary relationship." However, the clergy-parishioner relationship often involves "the type of interaction that creates trust and reliance" and in some cases will constitute a fiduciary relationship. The court concluded that a fiduciary relationship existed between the bishop and the victim on the basis of the following factors: (1) The bishop was in a superior position and was able to exert substantial influence over the victim. An unequal relationship between two parties can be evidence of a fiduciary relationship, since the party with the greater influence and authority often assumes a duty to act in the dependent party's best interests. (2) The bishop, in his meeting with the victim, served as a counselor to the victim and not as a representative of the diocese. If he was acting only as a representative of the diocese, he failed to convey that fact to the victim and led her to believe that he was acting in her interest. The court concluded that the bishop and diocese had breached their fiduciary duty to the victim by not acting in her "utmost good faith" (by taking no action to help her, not assisting her in understanding that she was not solely responsible for the sexual relationship, and not recommending counseling for her).[160] Moses v. Diocese of Colorado, 863 P.2d 310 (Colo. 1993). Accord DeBose v. Bear Valley Church of Christ, 890 P.2d 214 (Colo. App. 1994), aff'd, 928 P.2d 1315 (Colo. 1996).
The Florida Supreme Court ruled that it was not barred by the First Amendment from resolving a woman's lawsuit claiming that she had been the victim of a priest's sexual misconduct. The court ruled that the church and diocese could be liable for the priest's acts on the basis of a breach of a fiduciary duty: "The counselor-counselee relationship has been characterized as a fiduciary one. As the Colorado Supreme Court has explained, a clergy member who undertakes a counseling relationship creates a fiduciary duty 'to engage in conduct designed to improve the [plaintiffs'] marital relationship. As a fiduciary, [the clergy member] was obligated not to engage in conduct which might harm [the plaintiffs' marital] relationship.' Accordingly, we hold that when a church, through its clergy, holds itself out as qualified to engage in marital counseling and a counseling relationship arises, that relationship between the church and the counselee is one that may be characterized as fiduciary in nature. We thus stress that the liability in this case rests on the assertion of an abuse of a marital counseling relationship through an inappropriate sexual relationship."[161] Doe v. Evans, 814 So.2d 370 (Fla. 2002). See also Doe v. Presiding Bishop, 91 So.3d 887 (Fla. App. 2012) (Florida court ruled that a church member could sue his pastor for defamation for publicly alleging that he was a homosexual).
An Ohio court ruled that a church and denominational agency could be sued on the basis of a breach of a fiduciary duty for the sexual misconduct of a minister. The court noted that the church defendants allowed the priest to supervise and coach youth activities. And, "because it is reasonable to claim the church had a duty to protect the participants in its youth program from its agents, the lawsuit … is sufficient to state a claim" for breach of fiduciary duty. The church defendants argued that they could not be liable for breaching a fiduciary duty since they were not legally required to report child abuse ("mandatory reporters") under state law. The court acknowledged that the church defendants were not mandatory reporters, but concluded that this was irrelevant to the question of liability. It pointed out that the lawsuit alleged that "despite numerous opportunities to discover the abuse, the church ignored the hundreds of acts of abuse which occurred not only in its rectory, but even in its [sanctuary]. The plaintiff has stated a cause of action for breach of fiduciary duty when the church had constructive notice of the abuse."[162] Mills v. Deehr, 2004 WL 1047720 (Ohio App. 2004).
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