6/29/2017
Is Nothing Sacred?

Is Nothing Sacred?

Examining the halo effect in cases against religious organizations and non-profits.

By Teresa M. Beck , Stephen J. Henne

Religious and nonprofit organizations often have a public perception akin to Mickey Mouse. Who would sue Mickey Mouse? And what could Mickey Mouse possibly do wrong? Of course, our friends from Disney likely would tell us that there is no shortage of claims because even Mickey Mouse can make a mistake. 

When it comes to religious organizations and nonprofits, however, there sometimes occurs a “halo” effect in which positive feelings about an organization’s work and purpose can cause ambiguous or neutral traits to be viewed positively. Conversely, these types of organizations also may be susceptible to the opposite of a halo effect, facing a potential backlash because of an expectation of increased standards due to their perceived “higher purpose,” resulting in the potential for runaway verdicts.

The possibility that such a positive or negative effect will occur at trial for these organizations means that it is critical for claims professionals and defense counsel to be aware of the halo effect and factor it into their claims evaluations. A review of recent jury verdicts involving religious and nonprofit organizations provides some insight into whether halo effects are issues for nonprofits and religious organizations.

Case #1: Oversized Boxing Lesson
In the first case, a 14-year-old boy filed suit in Texas against a large and well-known religious organization, including both the local entity and the national organization. 

The boy had attended a youth convention sponsored by the local branch of the religious organization. He went to a ballroom that housed activities, including a boxing game rented from an inflatable product company, which featured oversized boxing gloves designed, manufactured, marketed, sold, and distributed by an inflatable product company that was also a defendant. The boxing game took place in a continuous airflow inflatable boxing ring. The minor was involved in two separate but consecutive matches against two different opponents. He received several blows to his head from his opponents, who wore the oversized gloves. In the lawsuit, the minor claims he suffered severe physical injuries, including multiple concussions, resulting in permanent traumatic brain injury and all associated damages. 

The minor sued the product manufacturer of the gloves and the local and national branches of the religious organization. The local church also was sued via a third-party complaint. The plaintiff asserted claims for design, marketing, and warning/instruction defects as to the gloves against the manufacturer, and negligence claims for lack of supervision against the religious organizations.

We don’t know much about the injuries themselves, as the parties did not report the nature of the alleged brain damage. The injury was described as severe and irreversible brain damage. The particular religious organization involved is fairly well known in Texas, operating many local churches and active in a variety of social services. 

The Evaluation: With these facts in mind, what verdict range do we expect in a case like this? There is certainly a potential that a jury will go easy on the church. The church was engaging youth who may otherwise be involved in less desirable activities, which could help create a halo effect for the religious organization. On the other hand, this was a case involving a 14-year-old with brain damage. It would not be unreasonable to think that halo effects will not be operating in a case involving such terrible injuries to such a young person. A verdict of $10 million or more would not be surprising, assuming liability. The share of liability of the church is more difficult to assess, but given potential proof of negligent supervision that could have prevented the injuries in their entirety (e.g., not allowing blows to the head), the church entities could be expected to share a large proportion of responsibility.

The Verdict: The jury assigned 30 percent fault to the product manufacturer, 30 percent to the rental company, one percent to the minor, four percent to the national arm of the church organization, and 35 percent to the local branch of the church. All told, the church was assigned 39 percent fault, a fairly large proportion. The total verdict was over $17 million, which included $6.5 million as exemplary damages for gross negligence against the product manufacturer. Thus, the total verdict as to the church entities was approximately $4 million. Overall, the church entities did fairly well in this case, indicating that, perhaps, a halo effect was in operation.

Case #2: Slip, Trip, and Fallout
In another case, a retired food services worker in her late 60s tripped and fell over a chair in the aisle at a crowded funeral in a cathedral in Bridgeport, Conn., causing her to break her hip. The plaintiff sued the cathedral, alleging that it was negligent in allowing a dangerous condition to exist. At trial, the plaintiff testified that she had gone to the bathroom during the service and, when she returned to her seat, she encountered a chair in the aisle that was covered by a coat. Not anticipating the chair, she tripped over it and fell.

The plaintiff’s building codes expert opined that the presence of the temporary chair in the aisle violated several fire codes. Witnesses testified that there were more than 300 people in attendance, which was well beyond the capacity set by the city’s fire marshal. The defense maintained that the plaintiff was comparatively negligent in not seeing the chair, which was open and obvious. Three cathedral officials testified that they saw the plaintiff using a cane during the service, which she denied.

The plaintiff was taken by ambulance to a hospital, where she was diagnosed with a non-displaced subcapital fracture of the left femoral neck. She underwent an open reduction with internal fixation, in which six screws were implanted. About a month later, the plaintiff was transferred to an inpatient rehabilitation facility, where she was treated for several weeks. She then was discharged and received home nursing care for about six weeks. She followed up with her surgeon and was treated with physical therapy for several months. 

In the ensuing years, she continued to be evaluated by her surgeon. She had planned to return to her job in food services, but was unable to do so because of the injury. Her pre-accident lifestyle included volunteering her time to the church and visiting friends. She now walks with a limp, has to ambulate with a cane, and requires assistance from family and friends to engage in daily activities. Additionally, she claimed she is largely a shut-in, as she is no longer able to pursue an active lifestyle. Her medical costs were approximately $51,000.

The Evaluation: In this matter, liability was debatable and it makes sense that the cathedral decided to litigate the open and obvious nature of the chair that the plaintiff tripped over. From the facts, a defense verdict, perhaps assisted with some influence of a halo effect, seems likely. Assuming liability, a broken hip and significant restrictions for an older woman could exceed $500,000. Thus, even with a halo effect, a verdict could be significant.

The Verdict: After a four-day jury trial, the plaintiff was awarded $1 million. The jury found that the cathedral was 100 percent liable. Considering that three cathedral officials testified that the plaintiff was seen using a cane before the accident, which would suggest a pre-existing condition, quite clearly the cathedral officials’ stories were not believed. In a case involving a religious organization, a sense that church officials are not trustworthy could have very negative consequences, and that may have been a factor here. 

Case # 3: Gut Decisions
Our final case comes out of Tennessee, in which a male assistant kitchen manager (age not provided) works for a non-profit that supplies prepared meals for the Meals on Wheels program. 

The plaintiff was working when he suddenly suffered stomach pain and noticed bleeding upon going to the bathroom. Because his boss was not at work that day, he called his boss’ supervisor and left a detailed message. He also explained to his co-workers what had happened. The plaintiff left work and walked some 20 minutes to a nearby diner. He had a cup of coffee before heading home. He returned to work the next day and was promptly fired for walking off the job. Thereafter, the plaintiff tried to seek care, but he could not get a medical appointment until 10 days later. He was diagnosed with a colitis-type condition and continued a course of treatment to manage it.

The plaintiff alleged that the firing represented Family Medical Leave Act (FMLA) retaliation. His proof included that he had a serious medical condition, he gave notice to his employer as well as he could, and he was fired for taking off to seek treatment. The plaintiff also presented a disability discrimination claim. (This claim was defeated by summary judgment as the trial court concluded that the firing decision-maker was unaware of the claimed disability.) The case advanced to trial on the FMLA claim alone.

The defendant argued that a little stomach pain was not a serious medical condition within the meaning of the FMLA. The defense noted that the plaintiff did not even leave work to go to a doctor—he went to a diner. Even if the condition was serious, the plaintiff failed to give adequate notice of FMLA leave. The defense suggested that the real reason the plaintiff left had nothing to do with illness; it claimed that he was hoping to get out of work on one of the agency’s busiest days of the year. The plaintiff’s annual salary was estimated at $50,000. 

The Evaluation: The outcome of this case likely came down to the believability of witnesses and the credibility of the plaintiff. It would not be surprising for a halo effect to operate here, where an employee who left work and later complained of illness was discovered to have gone for coffee instead of going to the doctor. Conversely, employment retaliation claims are often some of the highest exposure employment claims and a jury could hold the non-profit to a higher standard.

The Verdict: This case ended in a defense verdict. In this situation, perhaps a halo effect operated to lessen the impact of the immediate termination of an employee who appears to have had a legitimate health problem, although he seemed to recover quickly. Such cases can be very expensive for employers, though, and there is never a guarantee of a good outcome.

These outcomes suggest that there is no simple answer to whether a halo effect operates for non-profits and religious organizations at trial. The plaintiffs in these cases were diverse: children, men, and women. There does not seem to be a particular type of plaintiff who is more or less sympathetic. The cases come from venues in Texas, Connecticut, and Tennessee, and venues are an important factor in assessing these cases. None of these verdicts suggest either significant halo effects or backlash. If anything, religious organizations and non-profits should be prepared to be held to a higher standard of care than other defendants because juries tend to hold them to one.

Backlash and halo effect aside, all of these outcomes raise the question of whether opportunities for resolution were fully explored. Even defense verdicts and low verdicts come at a large cost. Certainly, the very large verdicts come at even greater cost. These examples serve as reminders that accurately assessing verdict potential can provide a good groundwork for effective resolution efforts.



Teresa M. Beck is a partner with CLM Member Firm Lincoln Gustafson & Cercos. She can be reached at (619) 233-1150, tbeck@lgclawoffice.com, lgclawoffice.com.

Stephen J. Henne, ARM, is director of claims for the National Catholic Risk Retention Group Inc. He can be reached at shenne@tncrrg.org.

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