the following is an abridged version (footnotes and citations are omitted) of the Picher decision of the Maine Supreme Court dated July 7, 2009. This version was edited for the WesternMassachusettsCatholics blogsite. The full pdf version is here.
Possibly the key paragraph is this one:
[¶29] For three reasons, we do not recognize the defense of charitable
immunity in claims involving intentional torts.
applying charitable immunity to intentional torts would set Maine so far outside the mainstream that it would put this State in a class by itself. We do not believe it advisable to expand so profoundly a doctrine that has generally been acknowledged as bankrupt.
nothing in the legislative history of section 158 indicates any legislative intent to so interpret the doctrine of charitable immunity.
there are no convincing policy reasons to apply charitable immunity to intentional torts. We therefore hold that charitable immunity is not available as a defense to intentional torts.
BISHOP OF PORTLAND
[¶2] Picher brought this suit against a former priest, Raymond Melville, and
the Bishop, based on sexual abuse of Picher by Melville when Picher was a minor in the late 1980s. Picher asserted claims against Melville for negligence, sexual assault and battery, invasion of privacy, intentional infliction of emotional distress, clergy malpractice, and breach of fiduciary duty. Melville defaulted. Picher asserts claims against the Bishop for negligent supervision, breach of fiduciary duty, canonical agency, and fraudulent concealment of facts.
[¶3] Picher alleges that the Bishop was on notice that Melville had abused a
child before he was ordained as a priest and before he was assigned to the parish where the abuse of Picher occurred. Picher further alleges that the Bishop failed to report Melville to law enforcement officials and concealed Melville’s propensities from parishioners and the public. The Bishop denies these allegations.
[¶5] From July 1, 1986, to July 1, 1988, during the period when the alleged
acts occurred, the Bishop was insured by Lloyd’s of London pursuant to two
consecutive policies, each of which contained an endorsement entitled “Sexual
Misconduct Exclusion.” This endorsement provides that “[s]exual or physical
abuse or molestation of any person by the Assured, any employee of the Assured or any volunteer worker does not constitute personal injury within the terms of this policy and as such any claim arising, directly or indirectly, from the aforementioned is excluded.”
[¶6] The Bishop moved for summary judgment based on its affirmative
defense of charitable immunity. The court granted the Bishop’s motion, holding that the Bishop qualifies as a charitable organization and has not waived its charitable immunity pursuant to 14 M.R.S. § 158 because it has no insurance coverage for the claims made by Picher. The court also held that the doctrine of charitable immunity covers both intentional and negligent torts. After a damages hearing, a final judgment was entered against Melville in the amount of $4,227,875. Picher appealed the grant of a summary judgment in favor of the Bishop.
A. Standard of Review
[¶8] The Bishop asserts a charitable immunity defense as to Picher’s claims
for negligent supervision, breach of fiduciary duty, and fraudulent concealment. Because we treat the intentional tort claim of fraudulent concealment differently from the negligence claims, we discuss them separately, after we explain the history of the doctrine of charitable immunity.
B. History and Current Status of Charitable Immunity
[¶10] Picher has… directly challenged the application of charitable
immunity to all intentional torts, an issue we have not previously had occasion to consider. Our decision not to extend the doctrine to intentional torts is based on three aspects of its history: (1) charitable immunity is discredited and has been abandoned in the majority of jurisdictions; (2) the Legislature did not intend to expand the scope of the common law doctrine of charitable immunity when it enacted section 158; and (3) we have previously held that we would maintain, but not expand, the doctrine, and we would leave it to the Legislature to decide whether to abolish it. We address each of these in turn.
1. Charitable Immunity Is a Discredited Doctrine
[¶11] This Court introduced charitable immunity as a judicial doctrine
almost one hundred years ago and adopted it as an affirmative defense available to non-profit organizations to bar negligence claims. Jensen, 107 Me. at 410-11, 78 A. at 899. In Mendall v. Pleasant Mountain Ski Development, Inc., 159 Me. 285, 290, 191 A.2d 633, 636 (1963), we acknowledged, for historical purposes, the two policy justifications for charitable immunity that had been advanced in Jensen. These were “(1) that funds donated for charitable purposes are held in trust to be used exclusively for those purposes, and (2) that to permit the invasion of these funds to satisfy tort claims would destroy the sources of charitable support upon which the enterprise depends.” Id. We upheld charitable immunity in Mendall, not because we concluded that these policy reasons were sound, but rather because non-profit organizations had relied upon charitable immunity for so long that abrogation of the doctrine would be far-reaching and should be undertaken by the Legislature. Id.
[¶12] Since Mendall, we have explicitly acknowledged that the rationale for
charitable immunity has been severely criticized…this criticism has been explained in the Restatement (Second) of Torts:
[T]here has been resort to ideas of “public policy” for the
encouragement of charities and mention of the fear that they may be
stifled if donors are discouraged from making gifts because their
money may go to pay tort claims. The development of liability
insurance has made it quite unlikely that donors would fail to
recognize it as a legitimate expense of operation. In fact, all of the
supposed reasons for the immunity fail when the charity can insure
Restatement (Second) of Torts § 895E cmt. c (1979).
[¶13] A review of the history of charitable immunity and its widespread
rejection in other jurisdictions confirms that it remains a doctrine in general
disrepute. Charitable immunity had a precarious start in this country after it had been tried and rejected in Great Britain. It was first adopted in the United States in McDonald v. Massachusetts General Hospital, 120 Mass. 432 (1876). The court relied on a line of English cases, originating in 1846 from The Feoffes of Heriot’s Hospital v. Ross, (1846) 8 Eng. Rep. 1508 (H.L.). ….however, even before McDonald was decided, this line of cases had already been repudiated. ….eventually… most states recognized the doctrine….
[¶14] Despite its widespread adoption in the late nineteenth century and the
first half of the twentieth century, charitable immunity began to erode quickly by the 1960s… the Pennsylvania Supreme Court noted that the doctrine of charitable immunity “was built on a foundation of sand.” ….. By 1984, “virtually all states with decisions on the subject at all ha[d] rejected the complete immunity of charities” with only two or three states having retained “full immunity in the absence of legislation to the contrary.” …..
[¶15] With respect to our neighboring states, charitable immunity has either
never been adopted or has long been abolished. New Hampshire and Vermont
have never adopted the doctrine….In 1961, the Rhode Island Supreme Court upheld a statute establishing charitable immunity for hospitals, but it stated that “[t]he question of whether such immunity as a matter of public policy is sound or otherwise may be open to debate,” and it left the debate to the legislature. …. Seven years later, the legislature repealed the statute….. Connecticut abolished charitable immunity by statute in 1967…..
[¶17] A review of the remaining jurisdictions shows that only a minority of
them still recognize charitable immunity, and no state has applied the doctrine to intentional torts. … twenty-eight states, in addition to those mentioned above, and the District of Columbia have abolished the doctrine of charitable immunity by either supporting or adopting section 895E, which provides: “One engaged in a charitable, educational, religious or benevolent enterprise or activity is not for that reason immune from tort liability.” Those jurisdictions include: Alaska, Arizona, California, Delaware, District of Columbia, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Texas, Utah, Washington, West Virginia, and Wisconsin.
Ohio, Louisiana, and Nebraska have also abrogated the common law doctrine of charitable immunity.
[¶18] South Carolina initially recognized the doctrine of charitable
immunity, but, in 1973, the South Carolina Supreme Court explicitly declined to extend it to intentional torts. In Jeffcoat v. Caine, the court noted the absence of a public policy rationale for extending charitable immunity to intentional torts, stating,
Regardless of the public policy support, if there now be such, for a
rule exempting a charity from liability for simple negligence, we
know of no public policy, and none has been suggested, which would
require the exemption of the charity from liability for an intentional
tort; and we refuse to so extend the charitable immunity doctrine.
198 S.E.2d 258, 260 (S.C. 1973)
South Carolina has since abolished the doctrine of charitable immunity as to all torts, although it limits the amount of damages one can recover from a charitable institution.
[¶19] New Jersey still recognizes charitable immunity, but does not grant
immunity for intentional torts. …
[¶20] Of the remaining states that retain some form of charitable immunity,
no state has explicitly applied the doctrine to intentional torts. Virginia recognizes charitable immunity, but provides an exception for the negligent hiring of an employee who commits an intentional tort. J. v. Victory Tabernacle Baptist Church, 372 S.E.2d 391, 394 (Va. 1988). In Victory Tabernacle Baptist Church, a church hired an employee recently convicted of aggravated sexual assault of a minor. Id. at 392. As was the case here, the employee had duties that put him in contact with children. Id. The Virginia Supreme Court held that “the independent tort of negligent hiring operates as an exception to the charitable immunity of religious institutions.” Id. at 394.
[¶21] Alabama has not directly addressed whether charitable institutions
should be liable for intentional torts, but the Alabama Supreme Court has
otherwise limited the doctrine of charitable immunity, and in dicta implied that
charities could be liable for the failure to use ordinary care in the selection of
employees..….in addition, an Alabama statute granting immunity to the unpaid directors and officers of non-profit organizations does so only when individuals have not acted with willful or wanton misconduct….
[¶22] In Maryland and Wyoming, the highest courts have not addressed whether the doctrine applies to intentional torts, but both have created intentional tort exceptions to other doctrines of immunity.
Arkansas and Colorado retain some form of charitable immunity, but
have never expressly applied it to intentional torts. The highest courts in Georgia and Tennessee have not addressed charitable immunity for intentional torts, but charitable immunity in both states only protects the property of charitable trusts. Therefore, charitable institutions in those jurisdictions could potentially be liable for any tort, as long as the judgment is applied to non-charitable trust property. In Georgia, however, charitable trust funds can be used to satisfy a judgment against a charity that has failed to use ordinary care in the selection of its employees.
[¶23] Hawaii and South Dakota appear not to have addressed the doctrine of
charitable immunity. Finally, New Mexico has not addressed the existence of
2. The Legislature Did Not Intend to Expand the Scope of Charitable
[¶24] In 1965, the Legislature enacted 14 M.R.S. § 158, which limits the
extent of the charitable immunity defense available to a non-profit organization
that is covered by liability insurance…the Bishop argues that 14 M.R.S. § 158 should be interpreted to apply charitable immunity to intentional torts. This interpretation would require a determination that the Legislature intended to modify the common law…when the Legislature modifies the common law by statute, it must do so with clear and unambiguous language…
[¶25] Section 158 does not clearly and unambiguously express legislative
intent to expand the scope of the common law doctrine of charitable immunity.
Section 158 states: “A charitable organization shall be considered to have waived its immunity from liability for negligence or any other tort during the period a policy of insurance is effective . . . .” This language is ambiguous; the words “or any other tort,” plausibly suggest that section 158 was meant to expand the applicability of charitable immunity beyond its historical bounds, to cover any tort, including intentional torts. The other interpretation is that the statute has only one purpose, which is to deny charitable immunity, to the extent it would otherwise be available under the charitable immunity doctrine, when the non-profit organization is covered by insurance.
[¶26] When a statute is ambiguous, we review its legislative history to discern legislative intent……there is nothing in the legislative history to indicate that section 158 was intended to do anything other than that, nor is there any indication of an intent to confer immunity for intentional torts.
The 1965 floor debates for section 158 reflect several facts. As originally
introduced, the bill would have completely abolished charitable immunity….there are repeated references in the floor debates to this Court’s decisions recognizing charitable immunity for negligence. … the final bill was a compromise, abolishing immunity only when the non-profit organization has insurance. ….
There is no evidence that the Legislature intended the bill to expand the scope of charitable immunity, nor is there any discussion in the floor debates of immunity for intentional torts. The floor debates contain several references to the discredited status of charitable immunity and to the fact that most other states had abandoned it. …. Section 158 is therefore properly interpreted solely as a limitation on charitable immunity, not an expansion of it.
3. The Court Has Maintained Charitable Immunity but Declined to Either Expand or Abrogate It
[¶27] Charitable immunity remains a judicial doctrine, subject to our
interpretation, notwithstanding that the Legislature created an exception to the
doctrine with the enactment of section 158…. it is therefore appropriate for this Court to continue to determine the scope of charitable immunity.
[¶28] We have previously held that we would maintain, but neither expand
nor eliminate, the doctrine of charitable immunity. We noted in Rhoda that the
adoption of section 158 provides a basis “for our continued adherence to the
charitable immunity doctrine.” …although we have maintained the doctrine to date, we have declined either to expand it beyond its traditional bounds or to contract it….
C. Charitable Immunity and Picher’s Fraudulent Concealment Claim
[¶29] For three reasons, we do not recognize the defense of charitable
immunity in claims involving intentional torts. First, applying charitable immunity to intentional torts would set Maine so far outside the mainstream that it would put this State in a class by itself. We do not believe it advisable to expand so profoundly a doctrine that has generally been acknowledged as bankrupt. Second, nothing in the legislative history of section 158 indicates any legislative intent to so interpret the doctrine of charitable immunity. Third, there are no convincing policy reasons to apply charitable immunity to intentional torts. We therefore hold that charitable immunity is not available as a defense to intentional torts.
[¶30] We now consider whether Picher has stated a cause of action against
the Bishop, as a corporation sole, for fraudulent concealment. The elements of a claim of fraudulent concealment are: (1) a failure to disclose; (2) a material fact; (3) where a legal or equitable duty to disclose exists; (4) with the intention of inducing another to act or to refrain from acting in reliance on the non-disclosure; and (5) which is in fact relied upon to the aggrieved party’s detriment.
…. Picher alleges that the Bishop had actual or constructive knowledge that Melville sexually assaulted minors, breached its duty to disclose that knowledge, and affirmatively concealed the knowledge with the intent to mislead Picher and his family. Picher and his family relied on the Bishop to Picher’s detriment. Picher has stated a claim for fraudulent