Opinion
No. A05-828.
Filed January 24, 2006.
Appeal from the District Court, Stearns County, File No. CX023081.
Jeffrey R. Anderson, Kathleen O'Connor Stafford, Jeff Anderson Associates, P.A., St. Paul, Mn, (for respondent)
Thomas A. Janson, Schmitt Janson Law Office, St. Cloud, Mn, (for appellant)
Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Dietzen, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
In this appeal from the denial of summary judgment in an action alleging sexual abuse by a priest, appellant The Diocese of St. Cloud argues that it is entitled to summary judgment because (a) the Diocese was not the priest's employer as a matter of law; and (b) the delayed-discovery statute, Minn. Stat § 541.073, does not apply to respondeat superior claims. We reverse.
FACTS
Abuse allegations
Upon being ordained in 1964, Father James Thoennes was assigned to St. Anthony of Padua Parish. Thoennes taught at the parish school and was also active in youth ministry. Respondent Wayne Eller attended school at St. Anthony from first to sixth grade.
Eller alleges that when he was in fifth grade, Thoennes invited him to Thoennes's parents' home in Sauk Centre. Eller recalls sleeping in the same bed as Thoennes and that sometime during the night, Thoennes put his hand down Eller's underwear and manipulated his genitals. Eller was scared and moved away from Thoennes, but Thoennes again approached and molested him. Eller does not recall anyone else present at Thoennes's parents' home and does not recall what else happened that evening. Eller recalls that the next day, on the drive home, Eller sat on Thoennes's lap, so Eller could "drive." While in that position, Thoennes unbuttoned Eller's pants and started to manipulate his genitals.
Eller recalls that when he got home, he told his grandmother what had happened, and his grandmother slapped him and instructed him to never again speak that way about a priest. Eller alleges that as a result of his grandmother's reaction, he repressed memories of the incident. Eller developed chemical-dependency and mental-health problems and a history of criminal activity. Eller spent the 1970s through the 1990s in and out of criminal institutions, hospitals, treatment facilities, and living on the street. In 1996, while being treated for depression and suicidal ideation, Eller reported that a major stressor in his life was sex abuse by a priest. He claimed that recent events triggered those memories and that he was experiencing flashbacks. Eller brought this action against appellant The Diocese of St. Cloud (the Diocese), Bishop John Kinney, and Father James Thoennes, alleging that he had been sexually abused by Thoennes.
Employment relationship
Marvin Enneking, a Roman Catholic priest and the vicar general for the Diocese, stated in an affidavit: Both St. Anthony and the Diocese are religious corporations organized under Minnesota law. St. Anthony has no legal relationship with the Diocese and is not subject to the Diocese's direction and control. Thoennes's salary, benefits, and any other compensation were paid by St. Anthony's, not the Diocese. The Diocese has never owned or controlled St. Anthony's school or rectory.
Enneking cites Minn. Stat. § 515.15-.16 as the statutes under which St. Anthony's and the Diocese were incorporated. That appears to be a typographical error. Minn. Stat. ch. 515 governs condominiums. Minn. Stat. ch. 315 governs religious corporations, and a copy of Minn. Stat. § 315.16 is attached to Enneking's affidavit. Also attached to Enneking's affidavit is a copy of the Diocese's articles of incorporation, and the language of the articles of incorporation is consistent with the language of Minn. Stat. § 315.15.
Enneking also stated:
[The Diocese] does not own or operate any schools, nor has it previously owned or operated schools, nor does it control any schools. The [Diocese] provides an Education Office as a resource for Catholic Schools. However, it has no authority over those schools. Any policies it develops are model policies within the geographical area of the ecclesiastical diocese. These schools are free to adopt in whole, in part or reject the model policies developed by the Education Office. All Catholic Schools in the 16 counties comprising the geographical area of the ecclesiastical Diocese of St. Cloud, are either owned and operated by a parish corporation, or are owned and operated by non-profit corporations, with the exception of St. John's Prep School, which is owned and operated by the Order of St. Benedict, Inc. which also owns and operates St. John's University.
Francis G. Morrisey, O.M.I., a Roman Catholic priest with degrees in canon law, stated in an affidavit, "The Code of Canon Law governs the religious practice and administration of the Roman Catholic Church world-wide, without regard to geographical or political division." The assignment of a priest to a parish and the removal of a priest from a parish against his will are governed by canon law. The bishop has exclusive authority under canon law to appoint and remove priests and has no authority under civil law to perform those functions.
Morrisey also stated: The ecclesiastical Diocese of St. Cloud is not a legal entity under United States civil law, and the Diocese is not an ecclesiastical entity subject to canon law. The Diocese, as a corporation, has no authority under civil or canon law to appoint, supervise, or remove a parish pastor.
Thoennes was assigned to St. Anthony by Bishop Peter W. Bartholome. Thoennes remained at St. Anthony until 1967 and then moved several times to various parishes within the Diocese. In 1977, Thoennes was assigned to a parish in Dent, and in 1978, while keeping the Dent parish, he was also assigned to a parish in Pelican Rapids. In 1982, parishioners questioned Thoennes's sexuality and the appropriateness of his permitting Vietnamese refugees to live in the rectory. In August 1982, Thoennes was removed from the Dent parish but kept his position in Pelican Rapids. In 1984, the Otter Tail County Department of Social Services reported to the Otter Tail County Attorney's office that Thoennes had engaged in inappropriate touching with the Vietnamese refugees who were staying in his home.
Thoennes was moved to another parish, and Bishop Speltz placed restrictions on his activities. After Thoennes was asked to begin sexual-abuse treatment and forbidden from having any youth live with him or have regular overnight visits, Thoennes was assigned to another parish. In 1988, Bishop Hanus directed Thoennes to participate in an ongoing sexual-treatment program. At Hanus's suggestion, Thoennes sought treatment at the human-sexuality treatment program at the University of Minnesota. Hanus appointed Father Daniel Taufen, who served as a vicar general in the Diocese, to act as a parole officer. The chancery paid for Thoennes's treatment and had access to Thoennes's medical and psychological treatment records.
Taufen testified that in his position as vicar general, he was involved in responding to sexual-abuse allegations at the bishop's direction and was mandated to report any such allegations. But Taufen testified that when acting as a parole officer, he was not acting as vicar general and described the role of parole officer as "incidental" to the role of vicar general. Taufen prohibited Thoennes from being with a minor or vulnerable person unless another adult was in the vicinity. Taufen monitored Thoennes's therapy attendance and attended quarterly meetings to review his progress.
Settlement agreement
The parties stipulated to a "high-low" settlement agreement, under which they agreed to submit the case to the district court for decision upon cross-motions for summary judgment. The stipulation provided for a $25,000 payment to Eller if the Diocese and Kinney were granted summary judgments on all counts against them and a $125,000 payment to Eller if the Diocese and Kinney were not granted summary judgment on all counts against them. The parties reserved the right to appeal from the district court's decision.
Based on determinations that genuine issues of material fact existed regarding whether all claims were filed within the limitations period and whether the Diocese was Thoennes's employer, the district court denied summary judgment for the Diocese on Eller's respondeat superior claim. The district court granted summary judgment for the Diocese and Kinney on the remaining claims against them. The district court denied summary judgment for Thoennes on the breach-of-fiduciary-duty and battery claims against him. The district court found that no just cause for delay existed and directed the entry of judgment. Judgment was entered.
In this appeal, the Diocese challenges the denial of summary judgment on the respondeat superior claim. No other claims are at issue in this appeal.
DECISION
On appeal "from a denial of summary judgment, we review the record to determine whether a genuine issue of material fact exists and whether the law was correctly applied." Murphy v. Allina Health Sys., 668 N.W.2d 17, 20 (Minn.App. 2003). "[W]e view the record in the light most favorable to the nonmoving party." Wright Elec., Inc. v. Ouellette, 686 N.W.2d 313, 318 (Minn.App. 2004), review denied (Minn. Dec. 14, 2004).
The parties entered into a "high-low" settlement agreement, which was approved by the district court. The parties agreed that appellants would pay the agreed-upon "low" figure if appellants obtained summary judgment on all counts against the Diocese and its bishop, and appellants would pay the agreed-upon "high" figure if any counts remained against the Diocese and the bishop, after decision on cross-motions for summary judgment. The settlement agreement included a specific reservation of appeal rights. The district court thereafter granted summary judgment in part. A partial judgment is not appealable, absent the district court's express determination that there is no just reason for delay and its express direction that a final judgment be entered. Minn. R. Civ. App. P. 104.01, subd. 1. The district court made that determination, and a judgment was entered, thereby making the grant of partial summary judgment immediately appealable. Because the stipulation unequivocally binds all parties and was approved by the district court, and because it is undisputed that no claims remain for the district court to determine, the judgment entered on the order granting summary judgment in part and denying it part had the effect of determining the entire action, and it is appealable.
"The party moving for summary judgment . . . must demonstrate no genuine issue of material fact exists." Thiele v. Stich, 425 N.W.2d 580, 583 (Minn. 1988). "A material fact issue is one which will affect the result or the outcome of the case depending on its resolution." Nw. Nat'l Cas. Co. v. Khosa, Inc., 520 N.W.2d 771, 773 (Minn.App. 1994) (citing Zappa v. Fahey, 310 Minn. 555, 556, 245 N.W.2d 258, 259-60 (1976)). The district court properly denies summary judgment "if reasonable persons might draw different conclusions from the evidence presented." Wood v. Astleford, 412 N.W.2d 753, 755 (Minn.App. 1987) (citing Ill. Farmers Ins. Co. v. Tapemark Co., 273 N.W.2d 630, 633 (Minn. 1978)).
But "the party resisting summary judgment must do more than rest on mere averments." DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
[T]here is no genuine issue of material fact for trial when the nonmoving party presents evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions.
Id.
Under "respondeat superior, an employer is vicariously liable for the torts of an employee committed within the course and scope of employment." Fahrendorff v. N. Homes, Inc., 597 N.W.2d 905, 910 (Minn. 1999) (quotation omitted). The Diocese argues that St. Anthony's, not the Diocese, was Thoennes's employer.
Whether an employment relationship exists is an issue of fact when the evidence is disputed. [F]actors traditionally used to determine the nature of a work relationship are: (1) the right to control the means and manner of performance; (2) the mode of payment; (3) furnishing of materials and tools; (4) control of premises where work is performed; and (5) right of employer to hire and discharge. The right to control is the most significant factor.
Olson v. First Church of Nazarene, 661 N.W.2d 254, 261 (Minn.App. 2003) (citation and quotation omitted).
Right to control
The record contains evidence that the Diocese provides an education office as a resource for Catholic schools. The education office develops model policies for schools within the geographical area of the ecclesiastical diocese, although individual schools are not required to adopt the policies. There is also evidence that once the sexual abuse allegations against Thoennes surfaced, the chancery office paid for Thoennes's treatment, and the Diocese had access to Thoennes's medical and psychological treatment records. The bishop restricted Thoennes's activities, prohibiting him from having any youth live with him or have regular overnight visits. The bishop directed Thoennes to participate in an ongoing sexual-treatment program, and at the bishop's suggestion, Thoennes sought treatment at the human-sexuality treatment program at the University of Minnesota. The bishop appointed the vicar general to act as Thoennes's "parole officer." The vicar general placed restrictions on Thoennes, prohibiting him from being with a minor or vulnerable person unless another adult was in the vicinity. The vicar general monitored Thoennes's therapy attendance and attended quarterly meetings to review his progress.
Eller argues that the evidence presented to the district court was sufficient to establish that the Diocese exercised control over the means and manner of Thoennes's performance as a parish priest, and, therefore, it is a genuine issue of material fact whether the Diocese was Thoennes's employer. But in making this argument, Eller cites actions that the bishop took to control the means and manner of Thoennes's performance and treats these actions as evidence that the Diocese exercised control over the means and manner of Thoennes's performance. Eller contends that
[t]he Bishop, as president and member of the Diocese of St. Cloud, had the authority to appoint and remove priests, and Defendant Diocese held itself out to have inherent authority to discuss with the Bishop issues regarding Defendant Thoennes, and to ensure that polices and procedures were in place to protect parishes, students, teachers and the public from sexual misconduct of priests including Defendant Thoennes."
But Eller does not cite any evidence that supports his contention that as the president and a member of the Diocese, the bishop had authority to appoint and remove priests.
Under Minn. Stat. § 315.16, subd. 1 (2004), "the bishop of a diocese may join with the vicar general and chancellor of the diocese" and with two residents of the diocese to become a corporation.
The corporation has power to take, hold, receive, and dispose of real or personal property for the use and benefit of the diocese, and for the use and benefit of the religious denomination creating the diocese, and to administer the temporalities of the diocese, to establish and conduct schools, seminaries, colleges, or benevolent, charitable, religious, or missionary work or society of religious denomination within the diocese, with the rights, powers, and privileges enumerated in this section and in section 315.15.
Minn. Stat. § 315.16, subd. 1.
The bishop of a diocese and the bishop's successors are members of the corporation. Minn. Stat. § 315.16, subd. 2 (2004). But the diocese and the corporation are not necessarily a single entity. See Parker Coll. v. Minn. Annual Conference, 182 Minn. 501, 505, 235 N.W. 12, 15 (1931) (stating, "That a church society does not necessarily become merged in a corporation organized by it may be conceded. Property and secular matters may be confided to a corporation, and ecclesiastical and church matters remain with the congregation as an unincorporated body.")
The Diocese's articles of incorporation indicate that in January 1900, the incorporation procedures that are now set forth in Minn. Stat. § 315.16, subd. 1, were used to create the Diocese. The Diocese's articles of incorporation state:
The general purpose of this corporation is to take charge of, and manage all temporal affairs of the Roman Catholic Church to the said Diocese belonging or in anywise appertaining; to promote the Spiritual, educational and other interests of the Roman Catholic Church in said Diocese, including all charitable, benevolent, eleemosynary and missionary work of said Church in said Diocese, and to establish and maintain Churches and Cemeteries therein and also to establish and conduct Schools, Seminaries, Colleges and any benevolent, charitable, religious or missionary work or society of the said Roman Catholic Church within said Diocese; to take charge of, hold and manage all property, personal and real, that may at any time, or in any manner, come to or vest in this corporation for any purpose whatever, for the use and benefit of the Roman Catholic Church therein, whether by purchase gift, grant, devise or otherwise, and to mortgage the same, sell or otherwise dispose of it as the necessities or best interests of the said corporation in the opinion of the members thereof, may require.
The articles of incorporation also state that the bishop is a member of the board of directors of the corporation and that "[t]he Bishop or persons appointed in his place or stead shall be ex-officio President." Thus, the evidence presented to the district court would support findings that since 1900, the Diocese has been a corporation, the bishop has been a member of the board of directors of the corporation, and the bishop or someone appointed in his place has been the ex-officio president of the corporation. But this evidence would not support a finding that, as the president and a member of the board of directors of the corporation, the bishop had authority to appoint and remove priests.
The board of directors of a corporation
derives its authority from only two sources: the state via statute or the corporation via its articles of incorporation or corporate bylaws. Likewise, it is a longstanding tenet of corporation law that a member of the board has no authority to act individually unless specifically authorized by the corporate bylaws or articles of incorporation.
Rehn v. Fischley, 557 N.W.2d 328, 334 (Minn. 1997) (citations omitted).
Minn. Stat. § 315.16, subd. 1, authorizes the formation of a diocesan corporation and grants specific powers to the corporation, but it does not grant any powers to individual members or officers of the corporation. The Diocese's articles of incorporation identify the members of the Diocese's board of directors and state that the board of directors "shall have power to transact all the business of said corporation." The only specific authority that the articles of incorporation grant to the president of the corporation is the authority to approve a bond provided by the treasurer of the corporation to assure that the treasurer will faithfully discharge the duties of treasurer. Absent any authority granted by the articles of incorporation to the bishop as either the president or a director of the corporation, the only authority that the bishop had to act on behalf of the corporation was the authority specifically granted to him by the board of directors under its general power to transact all the business of the corporation. There is no evidence in the record that indicates that the Diocese's board of directors specifically granted the bishop authority to appoint and remove priests.
Vicarious liability may be imposed when a master-servant or principal-agent relationship exists between a tortfeasor and a third party. Nadeau v. Melin, 260 Minn. 369, 376, 110 N.W.2d 29, 34 (1961). A principal-agent relationship results "from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other to so act." Restatement (Second) of Agency § 1 (1958); see also Plate v. St. Mary's Help of Christians Church, 520 N.W.2d 17, 20 (Minn.App. 1994) (noting Minnesota courts have adopted the Restatement definition of agency), review denied (Minn. Oct. 14, 1994). A master in a master-servant relationship is one who "employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service." Restatement (Second) of Agency § 2 (1958).
Because there is no evidence in the record that indicates that the Diocese's board of directors specifically granted the bishop authority to appoint and remove priests, the evidence, viewed in the light most favorable to Eller, would not support a finding that the Diocese consented to the bishop appointing and removing priests on behalf of the Diocese. Therefore, the evidence would not support findings that when appointing and removing priests, the bishop acted as the agent or servant of the Diocese or that the Diocese had authority to ensure that polices and procedures were in place to protect parishes, students, teachers, and the public from sexual misconduct of priests.
We have also found no evidence that the Diocese held itself out as having inherent authority to ensure that polices and procedures were in place to protect parishes, students, teachers, and the public from sexual misconduct of priests. During this litigation, the Diocese has consistently taken the position that the bishop's authority to appoint and remove priests is an ecclesiastical authority that the bishop possesses by virtue of his status as bishop and not as a director or president of the Diocese. Nothing in the Diocese's articles of incorporation, which are publicly available, contradicts this position, and Eller has not cited any evidence that the Diocese has made any different representation outside the context of this litigation.
It is immaterial to our analysis whether the bishop's ecclesiastical authority includes the authority to appoint and remove priests. The party alleging an agency relationship bears the burden of proving the relationship. Plate, 520 N.W.2d at 20. Eller alleges that when taking actions with respect to priests, the bishop was an agent of the Diocese. Our conclusion that the evidence is insufficient to show that the bishop acted as an agent the Diocese is not based on the Diocese's assertion that the bishop's authority to appoint and remove priests is an ecclesiastical authority; it is based entirely on Eller's failure to produce sufficient evidence to meet his burden of proving that when the bishop acted with respect to Thoennes, he was acting as an agent of the Diocese.
The record also contains evidence that the Diocese maintains an education office that develops model policies for schools within the geographical area of the diocese, but Eller has not cited any evidence that the Diocese has required any school to adopt these policies, has authority to require St. Anthony's to adopt the policies, or that St. Anthony's or any other school has adopted the policies. Therefore, the model policies are not evidence that the Diocese had the right to control Thoennes's performance at St. Anthony's. Finally, there is evidence that once the sexual-abuse allegations against Thoennes surfaced, the chancery office, which is apparently under the control of the Diocese, paid for Thoennes's treatment, and the Diocese had access to Thoennes's medical and psychological treatment records. Eller cites the payment for treatment and the access to treatment records as evidence that the Diocese had the right to control the means and manner of Thoennes's performance at St. Anthony's, but he does not explain how the payments and access gave the Diocese the right to control Thoennes when he was at St. Anthony's before the payments and access occurred.
Right to hire and discharge
Our analysis of the right to control also applies to the right to hire and discharge. Eller contends that as the president and a member of the Diocese, the bishop had the authority to appoint and remove priests, but Eller has not produced evidence that the bishop acted as an agent of the Diocese when the bishop appointed Thoennes.
Mode of payment, furnishing of materials, and control of premises
Thoennes was paid by St. Anthony's, not the diocese, and St. Anthony's furnished any materials needed by Thoennes. The school was owned and operated by St. Anthony's. The district court noted that a fact-finder could determine that the Diocese and the bishop, as president of the corporation, controlled the premises where work was performed by promulgating education policies. But, as we have already stated, there is no evidence that the Diocese required any school to adopt its education policies, and there is no evidence that St. Anthony's adopted any education policies promulgated by the Diocese or that the Diocese exercised any control over St. Anthony's premises, which were owned by the St. Anthony's parish.
Viewing all of the evidence in the light most favorable to Eller, we conclude that there is not a genuine issue of material fact with respect to whether the Diocese was Thoennes's employer. The evidence will not support a determination that the bishop's actions with respect to Thoennes were acts of the Diocese, and when those actions are not attributed to the Diocese, the remaining evidence is not sufficiently probative with respect to the existence of an employer-employee relationship to permit reasonable persons to conclude that the Diocese was Thoennes's employer. Therefore, the Diocese was entitled to summary judgment on Eller's respondeat superior claim.
Because we have concluded that the Diocese was entitled to summary judgment on Eller's respondeat superior claim because Eller failed to produce sufficient evidence to establish that the Dioceses was Thoennes's employer, it is not necessary to address the Diocese's claim that the delayed-discovery statute, Minn. Stat § 541.073, does not apply to respondeat superior claims.