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.
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 particularly reprehensible and outrageous. This does not necessarily mean intentional misconduct. Punitive damages often are associated with reckless conduct or conduct creating a high risk of harm. It is critical to note that many church insurance policies exclude punitive damages. This means that a jury award of punitive damages represents an uninsured risk. Accordingly, it is critical for church leaders to understand the basis for punitive damages.
Key point. See section 10-16.07 for additional information regarding punitive damages.
• A Connecticut court ruled that a church and diocese could be liable for punitive damages based on "reckless indifference" if they were aware of a priest's proclivity to molest children but did not restrict his access to children. The court noted that "reckless indifference" can justify punitive damages. Further, "reckless misconduct exceeds mere negligence. A reckless actor is one who recognizes that his or her behavior involves a risk of injury to others substantially greater than negligence. It requires a conscious choice of a course of action with knowledge that that action will seriously endanger others or with knowledge of facts which would disclose this danger. In the present case, the plaintiff alleges that the diocese and local church knew of [the priest's] proclivity to abuse children sexually and consistently allowed him to have private access to such children, including the plaintiff. Reckless indifference encompasses such conscious behavior, if proven." Dumais v. Hartford Roman Catholic Diocese, 2002 WL 31015708 (Conn. Super. 2002). But see Hayes v. Norwich Roman Catholic Diocese, 2004 WL 2165071 (Conn. Sup. 2004) (no punitive damages without advance notice that a priest would molest minors).
• A Kentucky court ruled that an adult who had been sexually molested as a minor by a teacher at a parochial school could sue the diocese that operated the school for negligent hiring, supervision, and retention. Roman Catholic Diocese v. Secter, 966 S.W.2d 286 (Ky. App. 1998). A jury awarded the victim $50,000 in compensatory damages and $700,000 in punitive damages, and it apportioned fault seventy-five percent to the diocese and twenty-five percent to the teacher. An appeals court rejected the claim of the diocese that the jury erred in awarding $700,000 in punitive damages against it. Kentucky law provides that "[a] plaintiff shall recover punitive damages only upon proving, by clear and convincing evidence, that the defendant from whom such damages are sought acted toward the plaintiff with oppression, fraud or malice." The diocese argued that by the plain language of the statute, punitive damages are available only upon a showing that it acted with fraud, malice, or oppression toward the victim and that there was no evidence that it acted in this manner since it had no way of knowing that the teacher had abused the victim or would likely do so. The court rejected this argument.
• A Pennsylvania court ruled that a church and diocese could be liable for a priest's acts of child molestation. But the court reversed the trial court's award of $1 million in punitive damages against the church defendants. The court explained that punitive damages are designed to punish wrongdoers for reckless or wanton misconduct, and cannot be awarded on the basis of negligence. Therefore, to the extent that the church defendants' liability was based on negligence (in hiring, supervising, or retaining the priest), there was no basis for punitive damages. Hutchison v. Luddy, 2000 WL 1585672 (Pa. 2000).
• A federal court in Pennsylvania ruled that a church and diocese could be liable for punitive damages as a result of the sexual misconduct of a priest. The court noted that under Pennsylvania law, "punitive damages may be awarded for conduct that is outrageous, because of the defendant's reckless indifference to the rights of others," and that "as the name suggests, punitive damages are penal in nature and are proper only in cases where the defendant's actions are so outrageous as to demonstrate willful, wanton or reckless conduct." In determining whether punitive damages are warranted in a particular case, "the state of mind of the actor is vital. The act, or the failure to act, must be intentional, reckless or malicious. … As such, a showing of mere negligence, or even gross negligence, will not suffice to establish that punitive damages should be imposed. However, notwithstanding this heightened standard, punitive damages may be awarded based on a cause of action sounding in negligence if the plaintiff is able to show that the defendant's conduct not only was negligent but that the conduct was also outrageous." The court concluded that a reasonable jury would assess punitive damages against the church defendants, and so it rejected the defendants' request to dismiss the plaintiff's request for such damages. It pointed out that the defendants "knew that the plaintiff was routinely sleeping in [the minor victim's] bedroom and that he had taken [him] on several overnight trips. … A reasonable jury could conclude that a minor's sleeping in a priest's bedroom and a priest's taking a minor alone on overnight trips are facts which create a high degree of risk of physical harm to the minor. The failure to end this conduct, with its high degree of risk of physical harm to the plaintiff, could reasonably be viewed by a jury as reckless. As such, the court will deny the defendants' motion for summary judgment as to the plaintiff's claim for punitive damages." Doe v. Liberatore, 478 F.Supp.2d 742 (M.D. Pa. 2007).