Pastor, Church & Law

Court Decisions Recognizing Vicarious Liability

§ 10.18.01

Key point 10-18.01. Some courts have found denominational agencies liable for the acts of affiliated ministers and churches on the basis of a number of grounds, including negligence and agency.

This subsection addresses the “secondary” liability of denominational agencies for the acts and obligations of affiliated churches, ministers, and lay workers. This form of liability is sometimes referred to as “vicarious liability” or “ascending liability.” Denominations also are subject to direct liability for their own acts, and this kind of liability is addressed previously in this and other chapters.

Some courts have found denominational agencies liable for the acts and obligations of affiliated churches, agencies, clergy, and lay workers. Most of the earlier cases involved liability based on the negligent driving of affiliated clergy. To illustrate, in 1951 the California Supreme Court ruled that a presbytery was responsible for injuries caused by the negligent driving of the pastor of an affiliated “mission church.”252 Malloy v. Fong, 232 P.2d 241 (Cal. 1951).The court concluded that the pastor was an “agent” of the presbytery, since “he was not responsible to the local church but only to the presbytery. The presbytery, not the church, had the power to remove him. Furthermore, he could not transfer to another pastorate without permission of the presbytery, and in fact he was a member of the presbytery rather than of the local church.” The court concluded:

The existence of the right of control and supervision establishes the existence of an agency relationship [making the employer legally responsible for the acts of an employee committed within the scope of his or her employment]. The evidence clearly supports the conclusion of the jury that such control existed in the present case. The right of the presbytery to install and remove its ministers, to approve or disapprove their transfer to other jurisdictions, and to supervise and control the activities of the local churches, particularly those in the mission stage, is inconsistent with a contrary conclusion.253 Id. at 249-50.

The court emphasized that the presbytery exercised significant control over missions churches (it held title to all church property, assisted with the churches’ finance, and paid a portion of clergy salaries).It cautioned that “we are not here called upon to determine the liability of the presbytery for negligence in the activities of a fully established and independently incorporated Presbyterian church which has passed from the mission stage.”

In a similar case, a California appeals court ruled that a trial court had improperly dismissed a lawsuit against a denomination (the International Church of the Foursquare Gospel).254 Miller v. International Church of the Foursquare Gospel, Inc., 37 Cal. Rptr. 309 (Cal. 1964).The denomination had been sued by a person who was injured as a result of the negligent driving of one of the denomination’s pastors (while engaged in church business). The court concluded that there was ample evidence demonstrating that the denomination was legally responsible for the injuries since the pastor was its “agent,” and was acting within the scope of church business at the time of the accident. Accordingly, the trial court acted improperly in dismissing the case.

The court based its finding of an agency relationship upon the following factors: (1) The denomination’s charter specified that it was incorporated “to supervise the management of the churches of the [denomination],” and to establish and grant charters to churches which would “be subject at all times to the supervision of [the denomination].” (2) The denomination ordained ministers “for the furtherance of the work of the [denomination].” (3) All property or equipment acquired by any local church is required to be held in the name of the denomination. (4) No church is allowed to execute a general contract to build without the written consent of a denominational official. (5) Each church is required to keep books of account and to prepare full and accurate monthly reports of activities in such form as is prescribed by the denomination. (6) The denomination is empowered to remove from office pastors who are not functioning in such a manner as to promote the best interests of their church. (7) Pastors who desire to transfer to a church in another state must secure a letter of transfer from a denominational official. (8) One of the pastor’s duties is to see that the local church cooperates in all programs of the denomination.

The court concluded, on the basis of these facts, that “manifestly, this evidence meets every requirement for the establishment of an agency relationship as set forth in Malloy v. Fong.”255 See note 258, supra, and accompanying text.Further, the pastor was not only an agent of the denomination, but also was acting within the scope of his duties at the time of the accident. Accordingly, the denomination was legally responsible for his negligence.

In a third California state court ruling, an appeals court ruled that a Catholic bishop was legally responsible for a death caused by the negligent driving of a priest.256 Stevens v. Roman Catholic Bishop of Fresno, 123 Cal. Rptr. 171 (Cal. App. 1975).The priest was a French citizen who was sent to the United States to minister to the religious and cultural needs of Basque Catholics residing in the western United States. The state appeals court concluded that the priest was an agent of the bishop, and was acting within the scope of his agency at the time of the accident. The “significant test of an agency relationship,” observed the court, “is the principal’s right to control the activities of the agent.” While acknowledging that the “evidence of agency is not strong,” the court concluded that there was sufficient evidence to establish that the priest’s activities were subject to the control of the bishop. It relied primarily upon the following considerations: (1) The bishop, “had he chosen, could have exercised full authority over [the priest] by extending to him an official, written assignment.” While the bishop never took this step, the court concluded that he could have, and this was sufficient. (2) The bishop had jurisdiction over the priest’s ministry. (3) In a letter to the Immigration and Naturalization Service, the bishop had stated that the priest was “under the direction of the undersigned bishop of this diocese.” (4) In ministering to Basque Catholics, the priest “was performing some of the duties the bishop was responsible for.”

In a fourth California case, a state appeals court ruled that the United Methodist Church (UMC) could be sued for the alleged misconduct of a subsidiary.257 Barr v. United Methodist Church, 153 Cal. Rptr. 322 (1979), cert. denied, 444 U.S. 973 (1979).The UMC was sued for the alleged improprieties of a subsidiary corporation that operated fourteen nursing homes in California, Arizona, and Hawaii. When the subsidiary encountered financial difficulties, it raised the monthly payments of residents in violation of the terms of their “continuing care agreements” that guaranteed lifetime nursing and medical care for a fixed price. The subsidiary went bankrupt, and a class of nearly 2,000 residents sued the UMC for fraud and breach of contract. Although the case eventually was settled out of court, a California appeals court did rule that the UMC could be sued for the misconduct of its subsidiary. The court emphasized that the UMC was a hierarchical denomination with control over local churches and subsidiary institutions, ranging from restrictions on the purchase or sale of property to the selection of local church pastors. Such control, observed the court, made the UMC responsible for the liabilities of its affiliated churches and subsidiary institutions. The court also found it relevant that the subsidiary organization that operated the nursing homes was engaged in a commercial enterprise.

The court suggested that the First Amendment guaranty of religious freedom might prohibit direct actions against the UMC on account of the actions of subsidiary organizations if the allowance of such actions “would affect the distribution of power or property within the denomination, would modify or interfere with modes of worship affected by Methodists or would have any effect other than to oblige UMC to defend itself when sued upon civil obligations it is alleged to have incurred.”258 Id. at 332.

More recent cases involving denominational liability have focused largely on “ascending liability” claims involving sexual misconduct by affiliated clergy or lay workers.

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