Author: churchlitigationupdate

DUTY OF NONDISCLOSURE

While we have examined publication of reports of sexual misconduct by clergy as a basis for a defamation claim, and it generally will not support a defamation claim, it is rare to see a claim that the victims were outed by the local church.  The difference between defamation as a claim and invasion of privacy as a claim alone might account for different treatment of such claims.  The uncertainty regarding invasion of privacy claims is whether the church at the time of disclosure had a duty to safeguard the identity of victims.

In John Doe v Woodland Presbyterian, Slip Op. (Tenn. App. 2022), the denomination was dismissed by the trial court because the denomination as a corporate entity had no minimum contacts with Tennessee and therefore, personal jurisdiction could not be exercised by the court over the denomination.  A theory of agency or corporate alter ego (aka respondeat superior) did not save the claim.  But, the rest of the claim remained viable at this stage (the motion to dismiss stage) against the local church and archdiocese.  One of the claims preserved was that the local church revealed the identity of the victims to the media.  The appellate court held there was a duty in Tennessee of reasonable care to safeguard the identifies of the alleged victims.

“Invasion of privacy” is not widely recognized as an independent tort arising from a duty.  Indeed, while identities of certain classes of sexual misconduct victims are protected in various states, there is a lack of universality.  Because the legal clarity of this type of protection is uncertain in some states, the better practice is to avoid the issue at all by non-disclosure other than as required by Mandatory Child Abuse Reporting statutes.

DONATION SOLICITATION FRAUD

Generally, donation to a charity does not give the donor any legally protected interest in the operations, management or spending of the charity.  However, that does not give the charity free reign to issue any inducement to donate that is false or corrupt.  Donors must be able to show the amounts given and the economic loss from the gift.  Merely being offended or disappointed in the failure to perfectly appreciate or follow donative intent will not state a claim.

In Carrier v Zacharias International Ministries, Opinion and Order (ND GA, 2022), the federal trial court, in part, overruled a motion to dismiss.  The case will proceed but no outcome can be predicted at this stage.  The Plaintiffs alleged they donated money because they believed the representations that Ravi Zacharias and his company, RZIM, were worthy of trust.  However, Plaintiffs alleged Zacharias was a serial sexual predator.  Zacharias allegedly invested in two “health spas” at which “nearly two dozen therapists” reported inappropriate sexual behavior by Zacharias.  Zacharias allegedly used donated money to pay for silence and compliance.  Complaints in writing were made three years before Zacharias died but RZIM allegedly did not investigate the complaints.  Zacharias allegedly travelled to speaking engagements accompanied by a spa “therapist” using donated funds.  Plaintiffs alleged they would not have donated money if they had been made aware of the facts.  Plaintiffs filed a Class Action.  The Court held it was barred by the Ecclesiastical Abstention Doctrine from hearing claims that Zacharias or RZIM were engaged in immoral conduct in violation of their spiritual messages.  But, the Court held it would hear claims “predicated on misuse-of-funds allegations” because no ecclesiastical inquiry was required and Neutral Principles of Law applied.  In addition to “misuse-of-funds” claims, the Court held it would hear claims that Defendants “wrongfully failed to disclose their misuse of donor funds” even though they had “exclusive knowledge” of the alleged misconduct.

While it is nearly impossible for claims by angry donors to obtain a judicial remedy by objecting to management decisions by a charity, using donated funds for personal expenses like settling sexual misconduct claims and funding sexual misconduct might be viable with adequate detailed proof.  In the reported case, the Defendant non-profit entity investigated and self-reported the allegations, although allegedly only after many detailed claims were submitted, so the detailed proof might have been made public.

DIRECTORSHIP CHURCHES

Churches can generally organize their corporate structure in any way.  Churches independent of a denominational structure are especially free to development organizational documents that meet their own needs and beliefs.  The only limitation on non-denominational church Constitutions, By-Laws, and amendments thereto are corporate law statutes of the state of residence of the local church.

In Bogle v Sewell, Slip Op. (Mich. App. 2022) (Per Curiam) (unpublished), the trial court granted summary judgment to the congregation and against the church leadership.  The church leadership amended the By-Laws of the local independent church to forego binding congregational votes on pastor retention.  Also, the By-Laws were amended to authorize that church board members be chosen, appointed and confirmed by the Senior Pastor and the church board and not by congregational vote.  The amendments to the By-Laws were not adopted by a congregational vote.  The appellate court affirmed the summary judgment for the congregation.  Changing a congregational church to a directorship church, so the court held, could not be done because the original incorporation of the church was as a congregational church.

Congregational votes as a means of church governance are cumbersome except in small churches.  They can also be dangerous in medium to large size churches if a membership role is not credibly maintained so that qualified voters can be identified.  However, hybrid systems work well.  The congregation can be tasked with votes on momentous matters, matters of policy and some church leadership positions.  But, operational matters and salaried church staff employment should be handled by the leadership elected by the congregation.

DETERMINING PATERNITY

Determining whether a local church is a “member” of a denomination is usually no harder than looking at the name on the building or the signage.  But, sometimes determining church paternity requires a review of church governance documents at both the local and denominational level.  Church property issues may also include review of property deeds and state laws governing non-profit corporations or associations.  Further, if a local church attempts to end its denominational “membership,” whether it can unilaterally do so or do so at all, requires review of these documents as well as creation of “divorce” documents.

In District Advisory Board, Church of the Nazarene v Centro De Alabanza Oasis, Slip Op. (FL. App. 2022) the trial court granted summary judgment to the local church based on the local churches’ attempt to end its membership in the denomination.  The appellate court reversed.  The trial court was required to conduct a review of the evidence to determine whether the denomination was hierarchical.  If so, the denomination would control the property of the local church.  The trial court also had to determine if the local church was actually a “member” of the denomination.  The reported case recited instances in which the local church arguably admitted it was a denominational “member,” starting with the signage, and in documents submitted to the denomination to end the membership.  The documents submitted to end the “membership” were arguably insufficient.

Local churches contemplating a departure from a denomination should determine if it is possible and probably engage a lawyer with writing skills to assist in completing the documents.  Other departure strategies may have to be considered, too.  Clinging to property without careful consideration of the foregoing can burn through the cash needed to start a new church.