Claims against an Estate: Don’t miss the boat!

In Florida, a claim against an estate must be brought: on or before that later of the date that is 3 months after the time of the first publication of the notice to creditors or, as to any creditor required to be served with a copy of the notice to creditors, 30 days after the date of service on the creditor.

Claims by religious organizations against an estate could include claims for funeral or burial expenses and claims for personal property in the possession of the personal representative.  Therefore, it is important that religious organizations pay close attention to the deadlines to file claims against an estate.

In a recent opinion, a Florida appellate court denied a creditor a claim against an estate because the creditor filed the claim one day too late. The court found that the first day for calculating the 3 months for filing a claim against the estate started on the date of the first publication of the notice to creditors, and not the day after the first publication. The claimant mistakenly believed the 3 months ran from the day after the first publication. As this opinion evidences, religious organizations asserting a claim against an estate are wise to file the claim long before the deadline expires, so as to avoid any misapplication of the deadline.

Premises liability-The defense of an open and obvious danger:

A religious organization that owns land owes a duty of care to members to keep the premise in a reasonably safe condition, and a duty to give members timely warning of hidden perils on the property. In a recent opinion, a Florida appellate court found a land owner did not breach its duty of care to a child who broke her leg when she fell as a result of the change in elevation on the property. This opinion helps set the boundaries for property owners on keeping invitees safe from open and obvious dangers.

The child fell at a skating rink when she was stepping off the rink floor onto the building floor. The court held that uneven floor levels in public places, by themselves, do not constitute hidden, dangerous conditions. Because there is no duty to warn an invitee of an obvious danger, such as uneven floor levels, the property owner did not breach a duty of care to the child. The fact that the skating rink was dimly lit at the time of the fall did not transform the floor elevation into a hidden danger.

With so many members of religious organizations traversing in and out of places of worship weekly, it is important that organizations have a good understanding of their duties of care to members. The attorneys at GrayRobinson help property owners understand their responsibilities to the public, and can help defend religious organizations should someone become injured.

You Defamed Me… Well, Maybe Not!

Religious organizations can be sued for defaming a congregant.  For example, if a religious leader publically speaks negatively about a member, and if what is addressed turns out to be false, that leader and his employer are exposed to a lawsuit for defamation.  Despite this traditional application of defamation law, in Florida, religious organizations are permitted to freely discuss among internal leadership matters that might otherwise result in a defamation lawsuit.

To prevail in a lawsuit for defamation, the defendant must have made the statement to a third person.  In Florida, a corporation’s board of directors is considered corporate management, such that the acts of a corporation’s board of directors are the acts of the corporation itself. Therefore, as recognized by a recent Florida appellate court, when the party “hearing or seeing the purported defamation is so closely connected with the potential…defendant that they merge into a single entity…there is no publication to a ‘third person’ necessary to the cause of action.”

What this means for a religious organization is that negative discussions with the organization’s board about another member of the congregation, though offensive to that member, are probably not subject to a lawsuit for defamation. By keeping the conversation exclusively within the organization’s leadership, the religious organization has not taken the critical step of publishing the discussions to a third party.

Florida’s Alcohol or Drug Defense:

If a claimant suing a religious organization was under the influence of alcohol or drugs at the time of an accident, in Florida, the claimant can be prohibited from recovering monetary damages.

Florida’s “Alcohol or Drug defense” statute provides that in any civil action, a claimant may not recover damages if at the time of injury the claimant was under the influence to the extent the claimant’s normal faculties were impaired, or the claimant had a blood or breath alcohol content level of 0.08 percent or higher. To get the benefit of the defense, it must also be shown that as a  result of the drugs or alcohol, the claimant was more than 50 percent at fault for his or her harm.

This defense applies to automobile accidents, trip and falls, and all other civil bodily injury claims.  So long as there is some evidence the claimant was under the influence at the time of injury, a religious organization will be able to assert the defense. By way of example, the fact that claimant’s blood alcohol level, drawn five hours after an accident, detected no signs of alcohol and the claimant did not exhibit signs of impairment such as slurred speech,  the defense was still permitted to pursue the alcohol defense because the claimant  admitted to drinking prior to the accident and witnesses smelled alcohol on the claimant.

The takeaway for religious organizations defending personal injury actions is the importance of fully investigating a claimant’s condition prior to an accident. Any indication of intoxication could dramatically change the outcome of the case.

Contract interpretation: Do not expect courts to consider the contracting parties’ intent!

In a recent opinion, a Florida appellate court found the contract term “sale”, as related to the sale of property, included a foreclosure sale.  The contract provided payment would be due if any of three triggering events occurred, the first being “the sale of the property” located at a specific street address.  One party argued the contract contained an ambiguity requiring the court to look outside the words of the contract to determine whether the parties intended “sale” to include an involuntary sale, such as a foreclosure sale.  The appellate court rejected this argument, holding the clear definition of sale includes an involuntary sale of the property.

This case highlights the importance for religious organizations to pay close attention to contract terms when signing agreements.  It is a rare exception for a court to look past the language of a contract to consider the parties’ intent.  As recognized by the appellate court in holding “sale” to mean “any sale”, to consider parties’ intent for a contract term there would need to be either an “extrinsic fact or extraneous circumstances that changed the parties’ understanding of the contract,” or “the contract language would need to be susceptible to two different interpretations.”

If your religious organization has questions about what a contract term or provision means, do not assume you understand what you are signing. Get a lawyer’s advice before signing.  The ability to argue later that a court should look past the words in the contract and interpret the parties’ intent will usually fail.

I will sue you now, and you will learn about the lawsuit later…4 months later!

In Florida, a plaintiff can file suit and then wait 120 days to serve a defendant with the complaint.  Additionally, trial courts are required to extend the time to serve a defendant past the 120 days if the plaintiff makes a reasonable showing why more time is needed.

What this means for religious organizations who find themselves in an adversary position with a claimant making demands for compensation is that, although the organization has not been served with a lawsuit, the organization may have already been sued. Because a claimant can take its time in serving a religious organization with a filed lawsuit, that claimant can trick an organization into continuing to communicate possibly damaging information under the organization’s mistaken belief that cooperation will avoid a lawsuit; all the while, the claimant is simply informally building their case against an organization that has already been sued.

The takeaway for religious organizations is the value in getting legal counsel involved as early as possible in disputes.  Counsel can help religious organizations avoid being trapped into unknowingly helping adverse parties build their case, including uncovering whether a religious organization has been sued before the organization is served with the lawsuit.

Fool me once, shame on you! Fool me twice, shame on me!

If a religious organization is tricked into entering into a contract, Florida courts recognize that organization’s ability to sue the offending party under a claim titled fraudulent inducement. However, the organization’s reliance on the misrepresentations that fooled the organization must have been reasonable.  In a recent Florida appellate opinion, the court adopted a “fool me once, shame on you, fool me twice, shame on me” approach to find a claimant’s reliance on defendant’s misrepresentations unreasonable, resulting in the claim being dismissed.

The Court found:

If the plaintiffs were defrauded by an allegedly fraudulent inducement…to enter into the Merger Agreement in 2014, and the performance that was promised was not forthcoming, they certainly could not justifiably rely on further inducements to enter into the 2016 Share Issuance Agreement and its sweeping release. The principle is that “after the assertion of claims involving dishonesty, the claimant in negotiations culminating in a settlement and release cannot rely on oral representations made by the party already asserted to have been dishonest.”

This principle of law seems obvious.  However, religious organizations’ desire to forgive the wrongful actions of others leaves open the possibility that an organization may wish to give a contracting party a second chance.  Such an approach is dangerous. Should the organization be misled a second time resulting in damages to the organization, the religious organization may be prohibited from pursuing a lawsuit for fraudulent inducement into the second contract.

Crafting a release against future claims: Its trickier than you think!

With summer in full swing, fellowship outings, mission work, community service projects, and numerous other events await religious organizations over the next few months.   Knowing the importance of protecting against a lawsuit should a member unexpectedly injure themselves during such events, religious organizations often include in the registration documents some release language.  Ultimately, the level of protection afforded by such releases depends on how much attention was taken in crafting both the release, and the entire document in which the release is located.

Termed “exculpatory clauses,” these releases are strictly construed against the party seeking to be relieved of liability. Courts are required to read such clauses together with all other related provisions of the documents to determine whether the intention to be released was made clear, such that an ordinary person would know what he/she is contracting away. Acknowledging the heightened scrutiny applied to such clauses, one Florida court wrote “we do not look with favor on exculpatory clauses, we must require the draftsmen of all contracts which contain them to use clear and unequivocal language totally without a hint of deceptive come-on, or inconsistent clauses.”

In a recent opinion, Florida’s Third District Court of appeal reversed a trial court’s enforcement of a gym’s exculpatory clause.  The gym was sued by a member who was knocked unconscious by another customer. The gym contract contained language aimed at releasing the gym from claims brought by gym members. The appellate court found the language in the release that claimant would “assume full responsibility for any risk of bodily injury, death or negligence of any of the clubs or otherwise while [I am] on the premises occupied by any of the clubs,” though broad and clearly worded, conflicted with other language in the release.  Therefore, the gym was not protected against claims by the injured member.

The takeaway from the high scrutiny courts continue to apply to the enforcement of exculpatory clause is that great attention and care should be taken when crafting any such release language.  Religious organizations are well advised to have legal counsel assist with the drafting of such release provisions.

 

The Constitutional Bar to Actions for “Clergy Malpractice”

When a religious organization is sued by one of its members for physical or emotional injuries, the organization’s religious leader is typically included as a party defendant.  Though under certain circumstances a religious leader can be sued, religious leaders cannot be sued for failure to follow the religious principles of their faith.  Often termed claims for “clergy malpractice,” the First Amendment to the U.S. Constitution protects religious leaders, and their employers, from  such actions.

Claims for clergy malpractice are constitutionally barred because such actions require courts to determine whether the religious leaders properly interpreted and applied the tenets of their faith. It has been held that “[a]llowing a secular court or jury to determine whether a church and its clergy have sufficiently disciplined, sanctioned, or counseled a church member would insert the State into church matters in a fashion wholly forbidden by the Free Exercise Clause of the First Amendment.”

Therefore, when suit is brought against a religious leader, a careful review must be made to determine if the action includes a prohibited claim for clergy malpractice.  The attorneys in Gray Robinson’s Religious Organizations Practice Group can perform this important analysis.

Loose Lips Sink Ships: Protecting the attorney client privilege through litigation committees

The attorney-client privilege allows a client to candidly communicate with legal counsel without concern that the discussion will become public.  However, the privilege is only as secure as it is treated by the client.  Religious organizations involved in litigation are vulnerable to damaging disclosures of privileged communications because of the community relationship between leadership and the organizations’ membership.

Religious organizations’ leadership is primarily composed of members with deep ties to the membership. Typically, this leadership is constituted through a formal board. Because of this intimate relationship with the membership, when legal issues concerning a lawsuit come before the board, especially litigation concerning another member, it becomes extremely difficult for board members to keep from inadvertently sharing privileged information with their religious community. This difficulty is amplified for religious organizations with large boards.

The solution to this problem is the creation of a litigation committee. A litigation committee is composed of a handful of board members who become the point of contact for the lawyers.  All privileged communications pass between legal counsel and the committee members.  The committee is empowered by the full board with the authority to give legal counsel instructions.  If a report is to be made to the full board concerning litigation matters, a sanitized report can be crafted with the assistance of legal counsel. As long as the litigation committee is comprised of trusted members of the board, privileged information should be safe.

Due to the importance of protecting all attorney-client communications, a religious organization should communicate with counsel early in the course of litigation about creation of a litigation committee.