Showing posts with label legal liability. Show all posts
Showing posts with label legal liability. Show all posts

Sunday, July 19, 2020

Rector Candidates Beware! You Could Be Personally Liable in Church Lawsuits!

Grace Episcopal Alexandria

In a recent conversation with someone connected with Grace Episcopal, the clergy perjury parish, the question came up as to whether an incoming rector could be held personally liable in the various civil cases pending against the church. My answer, which is not legal advice, since I am not presently licensed to practice, is quite possibly yes.

Before we go further, one additional caveat: I have not seen a recent copy of the church’s insurance binder. But I have seen quite a few policies over the years, so I can speak with some confidence.

The issue arises in the context of punitive damages, and claims involving intentional misconduct. In those cases, insurance policies almost invariably do not cover a successful claim.

Why is that? There are several reasons. 

First is that intentional torts and punitive damages can be massive. Consider the case of the Ford Pinto, which allegedly was known by the manufacturer to explode on impact. In its calculus, Ford apparently concluded that it would sell enough units to cover any potential liability arising from the defect. But it failed to consider punitive damages, which when imposed resulted in catastrophic liability for the company. Needless to say, at that point Ford’s plans when up in a cloud of smoke.

Second is the issue of public policy. More than one jurisdiction has held that offering coverage for deliberate injuries would incentivize potential tortfeasors to behave badly.

What conduct on the part of the church might a court consider deliberate? Answers are myriad, but several come to mind, including the malicious state of mind evinced in perjuring priest Bob Malm’s email to +Shannon Johnston, in which he falsely claimed that my departure from RPJ Housing occurred before I arrived at Grace Church. That itself likely is not tortious, but when combined with Bob’s defamatory per se statement about allegedly embezzling funds, the results are damning. (I’ll also be very interested to learn who these people are who allegedly believe I’ve hacked Grace’s network, such as it is. Potential defamation per quod anyone?)

Another factor is that the church is not incorporated. In such cases, the firewall of the corporate veil does not apply, which means that individual members can be personally liable. Thus, assuming an incoming rector becomes a member, she could be personally liable as well.

There’s also a practical aspect to all of this. Judges, like anyone else, tend to view things in practical terms, meaning that they will look to the real-life results of specific actions. Yet nowhere in the whole sordid mess now in front of the courts do we see any real sign of folks at the diocese or within the parish trying to fix things. Indeed, the diocese has said that Bob’s misuse of funds and other misconduct is “not of weighty and material importance to the ministry of the church.” This attitude is not one likely to endear the diocese or other defendants to the courts. In the back of any judge’s mind will be the question, “Will the diocese take the same approach in cases of child sexual abuse?” As things stand, the church has articulated its standard of review, and that is, “No criminal charges, no foul.” Nor is a court likely to be impressed in a positive way by perjuring priest Bob Malm’s multiple lies.

In fairness, personal liability isn’t a particularly likely outcome. But it is a possibility, and one that should be factored into your decision-making process.

Thus, if you are applying for the position of rector, I will reiterate my advice: Ask lots of questions, including about this conflict. While you are likely to get a response that includes something about not being able to comment on pending litigation, you need answers. If nothing else, I strongly encourage you to ask your own legal counsel about the potential implications for you and your family, as well as any suggestions for not tramping in any church poo if you do accept the position.

Grace Episcopal Alexandria


As a practical matter, the fact that the diocese has had multiple opportunities to play the honest broker, as has the vestry, speaks volumes about the internal dynamics at play. And if you want, I will be more than happy to talk with you about getting the one-gun salute to Jesus from the good Christians of Grace Church.