Category: Uncategorized

STATUTORY CHARITABLE IMMUNITY

The older eastern states have statutory charitable immunity. Charities resident in these states are typically not liable for negligence. However, they can be held liable for gross negligence. Gross negligence usually arises from reckless conduct or indifference to risk. Most states west of the Mississippi River do not provide tort immunity to charities. Readers should not assume their state of residence does so.

In Jack v Calvary Cemetery, Slip Op. (NJ Super. App. 2017), the plaintiff was injured when his walker was caught by a crack in the cement and he fell. The plaintiff was departing from a funeral conducted by the Catholic Church and the cemetery was owned by the Diocese. The crack in the cement extended across the parking lot and the court held mere awareness of the crack did not elevate the negligence of the church, if any, to reckless conduct. The plaintiff pointed out that the corporate governing documents of the diocese did not mention cemeteries as an authorized activity but the court rejected that omission as immaterial. The cemetery was not found to be a “secular, profit making activity” which would have been outside the scope of the statutory immunity. The court contrasted it to a bingo game, which was considered outside the statutory immunity even though the profits of the gaming were used for church expenses. It was also immaterial whether the cemetery was “religious.” The Catholic funeral rites and service conducted on the premises were sufficient and there was no question the Diocese owned the grounds.

Many churches and para-church organizations own facilities to provide various services. Profitable church owned or controlled service providers should be carefully and specially insured. Pastors that lack the background to do such a risk assessment should engage someone other than an insurance salesman to conduct a review. Insurance carriers sometimes provide a valid review but so too do accounting firms and law firms. All service providing facilities should be carefully reviewed to confirm that the ecclesiastical nature or governance of the facility is abundantly clear.

DISCOVERY SANCTIONS: TAR BABY WARS

Litigating about litigating is the most expensive battle in a lawsuit because it does not directly decide the case on the factual merits. Discovery disputes are the worst because they usually decide the least number of issues between the parties.

In Padron v Watchtower Bible and Tract Society of NY, Slip Op., (CA App., 2017), the trial court imposed a sanction of $4,000 per day for non-compliance with a document discovery order of the court. The appellate opinion affirming the trial court’s order laboriously considered and rejected the denomination’s arguments against production of reports to the denomination by local congregations over many years regarding sexual abuse of children. The Plaintiff asserted the denomination allowed accused officers to transfer from one congregation to another even though the denomination knew of multiple accusations against the transferring officer. The discovery sanction by the trial court came about after the denomination had unsuccessfully challenged the discovery sought by the Plaintiff but openly refused to obey the court’s order. It might also be noted that the trial court appointed a discovery referee (aka “special master”) and it was the referee’s recommendations the trial court adopted in its order. The denomination did not help its argument by making inconsistent arguments in different proceedings about whether it had the documents sought.

Denominations should probably use a single discovery coordinating law firm or law department rather than only the local law firm assisting with defense of the case. Such coordination would reduce the likelihood of internal inconsistency in discovery positions and reduce the cost of the learning curve regarding denominational document flow. Likewise, a single qualified technology vendor can assist the denomination with searches of electronic document storage and reduce the risk of inconsistent results from one case to the next. One issue that the denomination lost was limitation of the document searches to congregations in the state of California, the location of the trial court, the Plaintiff and the relevant congregations. Once a discovery issue hops state boundaries national coordination becomes less expensive than fragmented responses.

A TALE OF TWO VICARS

In a single church building, two factions formed and irrevocably divided the congregation. One faction was led by a presiding vicar appointed by a metropolitan and the other faction was led by another presiding vicar appointed by a different metropolitan. The metropolitans were from two different nations. The two factions shared the church building for several years while their litigation for ownership proceeded. But, one faction tired of awaiting the judicial outcome and locked out the other. The locked out faction sought an injunction to resume sharing the building and it was granted. An appeal followed. The faction that sought to lock out the other claimed they were changing the locks because their metropolitan ordered that sacraments be offered in the building only once per Sunday. The faction that changed the locks claimed that their action was ecclesiastical because they were obeying an ecclesiastical order. The appellate court affirmed the injunction because it was a preliminary and temporary order meant only to preserve the status quo. St. Mary’s Knanaya Church, Inc. v Abraham, Slip Op., Commonwealth Court PA, 2017.

The Court certainly did not accuse anyone of trying to game the system with an “ecclesiastical” order. Nevertheless, it is hard not to wonder if that was the strategy. It would have been a clever ruse but like most “trick plays” it had no lasting impact on the score. Regardless, the amount of money the competing factions are expending on legal fees to protect their respective ownership rights in the building would likely have comfortably relocated one of the factions.

The primary legal lesson from this opinion might be that a preliminary injunction designed only to preserve the status quo will receive greater tolerance even if it tends to intrude into ecclesiastical matters. Also, because this is at its core a dispute over real estate, neutral principles would allow disposition without consideration of ecclesiastical orders delivered solely to resolve the land dispute.

EMPLOYMENT CONTRACT BREACH

In states that have adopted the Neutral Principles Doctrine in non-religious issue church disputes employment contracts with non-clergy are enforceable in court. A church can contractually impair or limit the First Amendment Ecclesiastical Abstention Doctrine and the Ministerial Exception Doctrine. The financial aspect of the contract will typically not be deemed ecclesiastical even if reinstatement as a remedy is not available under these Doctrines. Courts will be reluctant to try to force reinstatement on a religious organization even for non-clergy and prefer a financial remedy. But, the remedy could be technically available.

In Saint Augustine School v Cropper, Slip Op. (KY 2017), the very brief opinion of the state supreme court did not explain why the elementary school “lay administrator” was in fact “lay.” The “lay administrator” was rehired under a written contract but then shortly after that terminated in what the court seemed to describe as a reduction in force required by a financial downturn at the school or the church. The opinion was silent as to any other reason for termination. The lower court granted summary judgment to the church based on the Ecclesiastical Abstention Doctrine. The Ministerial Exception Doctrine was not asserted by the church. Thus, the Kentucky Supreme Court reversed the lower court on neutral principles grounds.

Written employment contracts are two edged swords. Churches should use them as do businesses to reduce their exposures. But, doing it badly or autonomically usually leads to unintended consequences. Most states in the west have adopted the “at will” employment doctrine. It applies when there is no written or implied contract. State law regarding “at will” employment doctrine should be considered in the evaluation of the need for and contents of an employment contract. Written employment contracts should have a limited duration, typically short, and expressly state renewal is not automatic even if employment continues beyond expiration. There are many other considerations.