Paprocki: These Damage Awards Are Killing Us

(Why The Bishops Are Wrong, Part V)

excerpts from:

"AS THE PENDULUM SWINGS FROM CHARITABLE IMMUNITY TO BANKRUPTCY, BRINGING IT TO REST WITH CHARITABLE VIABILITY"

by MOST REVEREND THOMAS J. PAPROCKI, published in
JOURNAL OF CATHOLIC LEGAL STUDIES [Vol. 48:1]


...One might ask why a not-for-profit charitable institution
should be treated any differently than a for-profit entity when it
comes to corporate liability. This question can be answered on
different levels. On one level, unlike the for-profit world where,
if a for-profit company is rendered insolvent by its liabilities such
that it ceases to function, another will come along to take its
place (since nature abhors a vacuum and the dynamic of supply
and demand works to fill the void), the kinds of needs satisfied in
the case of charitable organizations are not subject to the same
dynamics. As the late Pope John Paul II recognized in his social
encyclical, Centesimus Annus,

the free market is the most efficient instrument for utilizing
resources and effectively responding to needs. But this is true
only for those needs which are “solvent” . . . and for those
resources which are “marketable” . . . . But there are many
human needs which find no place on the market. It is a strict
duty of justice and truth not to allow fundamental human needs
to remain unsatisfied, and not to allow those burdened by such
needs to perish.

Likewise, certain fundamental human needs might go unsatisfied if liability against charitable institutions (including the Church) is left unchecked.

At a deeper level, there is the very nature of the Church,
which is not simply another charitable institution, but whose
self-understanding is the Body of Christ. Thus, decisions about
leadership, authority, and discipline are not simple questions of
management and punishment, but must be understood in
keeping with the rights conferred by divine institution and
described in canon law, as well as in light of religious terms, such
as apostolic governance and apostolic succession from the time of
the foundation of the Church by Jesus Christ. This is where the
attempt to apply neutral principles of purely secular law to the
Church breaks down. As Father John Coughlin, Professor of Law
at Notre Dame University, has pointed out,

...The state has every right to encourage shareholders in a for profit corporation to change corporate leadership by holding the
corporation liable for negligence on the part of the corporate
executives and thus cutting into the enterprise’s profits. The
application of the same liability rules loses its claim to
neutrality when state law punishes a church for making what is
essentially a religious decision and compels the church to divert
funds from its charitable and educational purposes to
compensate victims (John J. Coughlin, Canon Law and Constitutional Law: The First Amendment, Anthropology, Separation, and Neutrality 50–51 (Notre Dame Law Sch., Legal Studies Research Paper No. 07-24, 2007)

…There have been roughly three phases in our culture’s
handling of allegations of sexual misconduct with minors over
the past half-century or so....prior to 1960, sexual
misconduct with minors was viewed primarily as a moral failure
to be dealt with spiritually, according to which penance,
absolution, and a firm purpose of amendment not to sin again
were the prescribed remedies. From 1960 to roughly 1990, the
approach was primarily therapeutic, for which treatment was the
apparent solution, after which offenders were often deemed
rehabilitated and recommended for return to ministry.

However, since 1990, the approach has been primarily legal, in
terms both of canon law and of civil law, with the imposition of
penalties on clerical perpetrators and the seeking of monetary
settlements and damages for alleged wrongs. As a result of our
highly litigious culture and relatively unchecked exposure to
liability, an undue burden has been placed on our free exercise of
religion guaranteed by the First Amendment of the United States
Constitution. This burden needs to be lifted.

While a full return to the complete charitable immunity of
the past is neither likely nor desirable, the civil law of our land
needs to reflect a reasonable balance between providing equitable
remuneration for those who have been harmed by agents of
charitable and religious institutions and respecting the
charitable intent of donors whose contributions have been given
in trust to be used for charitable and religious purposes. The
unlikelihood of returning to full charitable immunity is a political
reality, but full charitable immunity is also undesirable because
reasonable liability serves legitimate public purposes of
compensation and accountability. My point is that the pendulum
has swung from the complete protection of charitable immunity
to the complete exposure of charitable liability and, in some
cases, all the way to charitable bankruptcy. My hope would be to
restore some sense of balance, which I would call preserving
charitable viability.

Charitable immunity came into existence because society felt
a need to protect the donative intent of charitable contributions
and to protect the institutions that such donations supported.
Society determined that these institutions provided services or
promoted values that fostered the common good. The doctrine
eroded because of the desire to provide just compensation for
those who have been harmed by the tortious conduct of
charitable institutions and their agents, as well as to serve as a
measure of public accountability for their wrongful or negligent
actions. Now we must ask whether we are seriously eroding the
charitable patrimony of American society that has done so much
to feed the hungry, to educate and care for children, and to
otherwise provide for the basic human needs of the poor. We
must also ask as a matter of public policy if society is prepared to
shoulder the cost of the increased demand for government to
provide such services if charitable institutions can no longer
afford to do so.

Whether intended or not, the current legal reality of
complete liability exposure is undermining the charitable works
and the religious freedom of the Church and other religious and
charitable organizations. This is an important issue. We should
not be passive, but take considered, compassionate, and
constructive steps to address it. Some of these devices to help
preserve charitable viability are under our own control, such as
forming parishes as separate not-for-profit corporations or
express trusts in order for their structures to more closely reflect
their status in canon law as separate juridic persons that are
distinct from the diocese. Others may be pursued as legislation
or may be decided by the courts themselves as a natural
evolution of the doctrine of charitable immunity.

Recognizing that it is not realistic or desirable to return to
the former notion of charitable immunity, we might want to look
to reforms that have already been enacted or are under
discussion in various states that have put some limits on medical
malpractice liability. Just as those reforms seek to preserve the
provision of medical services, this revised approach might
appropriately be termed preserving charitable viability, which
seeks to strike a balance between preserving the ongoing
existence of the charitable activities for which funds were
donated, while providing reasonable compensation for those who
have been harmed by the charitable institution.

Some possible approaches to preserving charitable viability
that merit serious discussion:

• Lobbying the state legislatures to enact legislation
that limits tort recovery against a charitable
organization to the extent of the organization’s
annual aggregate liability insurance, but that also
requires that the organization maintain a minimum
level of insurance coverage.
• Mandating appropriate state regulation of insurance
coverage.
• Capping compensatory damages at predetermined
levels, given that insurance may not be available.
• Eliminating punitive damages in cases involving
charitable institutions.
• Placing caps on attorneys’ fees when suing a
charitable institution.
• Providing statutes of limitations that are consistent
in their application and meaningful, rather than
subject to questionable notions such as “recovered
memory” and ambiguous terms such as when the
harm is “discovered.”
• Requiring that the charitable institution have actual
knowledge of a perpetrator’s previous wrongdoing in
order to be liable for any subsequent harms.
• Requiring that indemnification be provided in
conjunction with government grants and contracts for
the provision of social services.
• Mandating conciliation or arbitration of claims.
• Providing that any damages that are awarded are
actually used to help victims and prevent future
harm, rather than intending punishment as the
primary objective of awards....

(end of excerpt)
___________________



In our NEXT POST:

we analyze this very interesting piece of writing.
the first thing of note is the audience Bishop Paprocki was speaking in front of:
the occasion was the annual meeting of the National Diocesan Attorney's Association, from last year. here I would like to make a special request to all the lay Catholic apologists out there who say things like "oh, the abuse scandal was very sad...but that's ancient history. The church used to be in denial, but they've come a long way".

Folks, how about re-thinking that? Paprocki's address to the diocesan attorneys was LAST YEAR, as in 2008, and his published remarks are from 2009!

it will be recalled that we last encountered this group of attorneys when Springfield Diocese Attorney Jack Egan tried to have the law firm of Nixon Peabody thrown out of the 8.5 million insurance suit. elsewhere (in Chapter Four of the 8.5 study) I wrote this:

In all of these cases the role of the diocese as employer was crucial. But, even more interesting, the question of how dioceses share information among themselves and their lawyers became a flashpoint for a significant part of the Springfield suit. I am referring to Paper 50, where the Diocese asked to have opposing counsel dismissed because of a perceived conflict of interest.

They argued that since Nixon Peabody, the firm representing one of the insurers, also represented several dioceses, that the lawyers opposing the Diocese might come into confidential information from their colleagues that would undermine the Diocese's case. In other words (if you use words like a lawyer) the lawyers from Nixon Peabody might be guilty of practicing "simultaneous representation of adverse interests". Here I learned that one of the meanest things one lawyer can say to another, apparently, is "…you have no standing…", which was a retort from Mr. Tanski (representing Nixon Peabody) to Mr. Egan (representing the Diocese).

But, to back up his claim, Mr. Egan noted that both he and Mr. Tanski were members of the National Association of Diocesan Attorneys [sic], and that the organization sponsored an e-mail list-serve to share information about combating common problems, one of which was insurance litigation in connection with sexual abuse. Egan stated in P.50 that "…given the magnitude of the claims underlying this action, Plaintiff will be hesitant to avail itself of the benefits provided by the NADA knowing that attorneys from the law firm representing one of its principal opponents in this case have access to that organization's information…"

in the event, Egan did not prevail, and Nixon Peabody was kept in the suit.

it is my contention that Paprocki's remarks take on an added significance if we keep his audience in mind. could his remarks be a blueprint for what the church plans to do next?

next time, we discuss his remarks and what they reveal about the church's attitude toward the discredited doctrine of charitable immunity.

Abernathy v. Sisters of St. Mary's (1969)

(Why The Bishops Are Wrong, Part IV)

The more I delve into charitable immunity, the more curious it becomes.

In coming posts we'll visit the great states of Arkansas and Virginia to consider some of the consequences of the charitable immunity doctrine.

When the 85K cap was enacted here, Governor Sargent said that charities, including the churches, were "special" and deserved separate rules. He said that “by their nature and the quality and character of their charitable endeavor” they should be “treated differently” with regard to their legal liability. It's likely that he and other officials never dreamed that the church could be guilty of covering up sexual abuse and other crimes, nor that these egregious actions would instead demand that justice be applied in a neutral, across-the-board manner, whether the corporation was a widget factory, a bank, or a church.

It is beyond question that most states have dumped charitable immunity, and that they have had good reason for doing so. So far, this state, Massachusetts, has not made the jump. People talk, rightly, about the dysfunction of the NY legislature. I hope that Massachusetts lawmakers will rise above and address the issue of charitable immunity - as the judges have begged them to - by reforming 85K once and for all. Failing that, it would be a step in the right direction if they opened a window of justice for the sexual abuse victims who have been shut out of the courtroom.

It's interesting that while the rest of society has been abandoning the charitable immunity doctrine, one of its few champions is a Catholic archbishop. Bishop Paprocki of Chicago has mounted a rear-guard defense of the charitable immunity doctrine. You don't hear much about his reasoning in the popular or church press but on a quiet day I can almost hear the pages of his articles being thumbed in chanceries around the country. We will examine why he feels that charitable immunity must be restored and even broadened. His theories have support from some Catholic academics such as law professor Fr. John Coughlin of Notre Dame. We will also consider those arguments.

But, in this section, I present the gist of the Abernathy decision (Missouri).

I find this one interesting because it lays out in plain language the reasons why charitable immunity is an illogical, unfair doctrine. By this time (1969) the doctrine had been in a slow decline for 25 years. This decision accelerated the decline. Today, Massachusetts is looking more and more isolated as one of the few left to regularly uphold it in a court of law. In fact, the tide is running the other way toward limiting the protection available under the doctrine, as the Picher decision shows. Picher, in Maine, found that the church's protection under charitable immunity did not extend to intentional acts.

This makes the Massachusetts bishops' ringing defense of the doctrine even more curious than it already is.


Abernathy v. Sisters of St. Mary's

Supreme Court of Missouri, 1969
446 S.W.2d 599

Brief Fact Summary
Plaintiff was injured as a result of negligence on the part of the defendant's employee. The defendant claims immunity due to the fact they are a charity.

Rule of Law and Holding
The doctrine of charitable immunity was not well founded. "A nongovernmental charitable institution is liable for its own negligence and the negligence of its agents and employees acting within the scope of their employment."


Opinion by: HENLEY, C.J.

This is an action by a patient against a hospital for $35,000 damages for personal injuries allegedly suffered as a result of negligence of defendant. Defendant moved for summary judgment, alleging that it is, and operates the hospital as, a benevolent, religious, nonprofit corporation and charitable institution and, therefore, is immune from liability for its torts. The motion was sustained, judgment was entered for defendant, and plaintiff appealed.

[. . .]

Plaintiff's petition alleges, in substance, that while a paying patient in defendant's hospital he was assisted by Marie Taylor, an employee of the hospital and an original defendant in this action, to move from his bed to his bathroom where he was left by the employee unattended; that due to his weakened condition he fell to the bathroom floor and suffered multiple injuries, including a fracture of his right leg; that his injuries were the result of negligence of the hospital in failing (1) to provide handrails for his support in lowering and raising his body to and from the toilet seat; and (2) to furnish a nurse or attendant to remain with and assist him in these necessary body functions. We assume the truth of these allegations of fact and those of the motion for summary judgment.

The doctrine of immunity of charitable institutions from liability for tort was adopted in this state in 1907 by a decision of the Kansas City Court of Appeals in Adams v. University Hospital, 122 Mo.App. 675, 99 S.W. 453. Plaintiff, Adams, a paying patient, while still under the influence of an anesthetic, suffered postoperation burns from hot water bottles administered by incompetent nurses employed by defendant. Judgment was for plaintiff and the Court of Appeals reversed, holding, in substance, that it is the public policy of this state that a charitable institution is immune from liability for damages for its own negligence in selecting incompetent employees and for the negligence of its employees. In adopting this policy the court reasoned that it is in the best interest of every member of the public, and the state itself, that charitable institutions designed either for the alleviation of human suffering or for the ". . . moral being of mankind . . ." be built up and maintained by the funds of the benevolent and that those institutions be protected from any action which might tend either to close the purses of donors or deplete its funds and thereby prevent the institution from performing its functions. In other words, the court said, in effect, that it is better that the individual suffer injury without compensation from the negligent charitable institution than to risk the judicially assumed probability that the public and state would be deprived of the benefits of the charity; that the interest of the latter is so supreme that the former must be sacrificed to it.

[. . .]

Plaintiff argues that the general rule is, and always has been, that there must be a remedy for every wrong; that the doctrine of immunity runs directly counter to this basic concept of justice. The Court of Appeals in the Adams case, and this court in subsequent decisions, recognized the rule, but deliberately chose to create an exception to it. There can be no doubt that at the time of its adoption the exception was a rule of expediency justifiable then, and for some time thereafter, to encourage and protect charity as vital to the growth and development of the state, but the reasons for the exception to the rule do not exist today. Today we have a new set of facts, conditions and circumstances. In the period of our history when the doctrine of immunity arose charity operated on a small scale; most persons engaged in the operation of its institutions gave their time, free, as their contribution to society; most gifts to charity were not corporate but private; and the needs of charitable institutions were, for the most part, poorly satisfied. "Today charity is big business. It often is corporate both in the identity of the donor and in the identity of the donee who administers the charity. Tax deductions sometimes make it actually profitable for donors to give to charity. Organized corporate charity takes over large areas of social activity which otherwise would have to be handled by government, or even by private business. Charity today is a large-scale operation with salaries, costs and other expenses similar to business generally. It makes sense to say that this kind of charity should pay its own way, not only as to its office expenses but as to the expense of insurance to pay for torts as well." Parker v. Port Huron Hospital, supra, 105 N.W.2d at 12-13. Today public liability insurance is available to charitable institutions to indemnify them against losses by way of damages for their negligence, and it is common knowledge that most charitable institutions carry such insurance and pay the premiums thereon as a part of their normal cost of operation. In the states where immunity has not been accorded charity, experience has shown that the apprehension expressed here and elsewhere that the purses of donors would be closed and the funds of charity depleted if these institutions were not granted immunity was not well founded. In the quarter century since the doctrine began its decline, there has been no indication in the states which have abolished immunity that its withdrawal has discouraged donations or that the funds of these institutions have been depleted resulting in their demise.


The public is doubtless still interested in the maintenance of charitable institutions and we acknowledge society's debt to them and recognize their right to every benefit and assistance which the law can justly allow. But the day has arrived when these institutions must acknowledge the injustice of denying compensation to a person injured as a result of their negligence or the negligence of their agents or employees; when they must acknowledge that all persons, organizations and corporations stand equal before the law and must be bound or excused alike. They must recognize that ". . . immunity fosters neglect and breeds irresponsibility, while liability promotes care and caution. . .;" that the public has an interest also in the protection of life and limb of the individual as a member of society and must require that those who minister to these needs do so carefully; that to lift the mantle of immunity will tend to promote care and caution.

The theory of "implied waiver," namely, that he who accepts the benefit of charity impliedly agrees he will not assert against the institution any right of recourse for wrong done him is a mere fiction. The fiction is based upon impossibility in many instances. It is impossible to say that a conscious or unconscious grievously injured accident victim carried to the emergency room of a charitable hospital, or an ill person received at such hospital unconscious, or a conscious ill person who enters such hospital by arrangement of others waives his rights by accepting its benefits. To say that an insane person, a minor or babe in arms waives his rights when he receives or there is administered to him the benefits of any charitable institution does violence to the facts; such persons have no legal capacity to will away their rights. The waiver theory obviously cannot be applied alike to all persons and this fact points up the fallacy in relying upon it to support immunity as a rule of public policy.

The "trust fund" theory as support for the doctrine of immunity rests on an illogical, and therefore weak, foundation. The essence of the theory is that the institutions' funds, given and held for charitable purposes, cannot be used to pay judgments resulting from tort claims. Thus, the rationale of the theory is identified solely with the right to satisfaction of a judgment, rather than to the fundamental question of whether an injured person has a right to maintain an action and secure a judgment. If it is reasonable to say, and it is, that the existence of liability insurance does not create liability where none exists, then it is also reasonable to say that the inability to have satisfaction of a judgment does not create or support exemption from liability where exemption does not otherwise exist.

[. . .]