7/2/2014

Unfair Standard?

Are School Districts Being Held to an Unfair Standard for Negligent Supervision and Retention?

By David D. Ernst , Stephen L. Backus , Sharon K. Stull

It is often said that, “he who frames the issue wins.” The test for school district liability in cases arising from alleged teacher sexual abuse will likely receive increased analysis over the next few years as more of these cases reach the appellate courts. Why should the courts be urged to use a test found in the Restatement Second of Torts when defending these claims?

There has been an increase in lawsuits against school districts based on alleged sexual abuse by teachers. The number of new cases may be attributed to under-reporting in past decades, societal changes, or to some extent hypersensitivity by parents. Frequently, perpetrators either do not have the resources to pay a civil judgment, or have spent their resources on criminal defense counsel. Legal counsel representing students in civil actions then look to school districts, non-perpetrator administrators and teachers to fund a settlement or judgment.

In 2013, one California school district settled sexual abuse claims made by numerous children against two teachers at one school for a reported estimated $30 million. Another California school district in 2013 settled with a single plaintiff alleging sexual abuse for $4.75 million.

Vicarious Liability

Generally, a school district is not liable for the criminal act of an employee, since the act is outside the scope of his or her employment. The school district, however, can be vicariously liable for the negligence of other employees who fail to report improper behavior by a teacher, or fail to adequately discipline or investigate an accused teacher after receiving a report that results in further student injury. The jury apportions fault between the molester, the school district and other third parties.

If a supervisor or a mandatory reporter has actual knowledge that a teacher is sexually abusing or harassing a student, the school district can be vicariously liable if the employee fails to report the problem. The difficult question arises when teachers and supervisors have knowledge of a teacher’s behavior that may raise only a suspicion of inappropriate activity, such as a possible affair between the teacher and a student, but where the facts are inconclusive.

The problem for an observing teacher or principal is made difficult because acts that may be telltale signs of a molester’s “grooming” process are often ambiguous, such as an overly-long handshake or a pat on the back. By contrast, if an employee were to discharge a gun, there is a loud noise, a hole in the wall, gun powder residue on the employee’s fingers, witnesses and forensics. If a question arises as to the employee’s penchant for violence or ability to work as an armed guard, there is clear evidence to examine. Child molesters stealthily groom children in small increments. When a molester touches a child, it is usually silent, nearly imperceptible and over in an instant. It can leave nothing behind but the injured child who too often tells no one. Add to that scenario that many perpetrators are excellent teachers and very often beloved by students, parents and co-workers.

Should Have Known

Some courts have stated that a non-perpetrator employee can be liable for the injury caused by the molester if he or she “should have known” that the perpetrator was a danger to children. Yet, without more explanation, this provides little guidance to the trier of fact. The abhorrent circumstance of an abused child no doubt causes some jurors to conclude that someone in a position of authority “should have known” about the abuse. Unless clearly instructed early in the proceeding, some jurors may lapse into an emotionally driven default mindset akin to strict liability. Once locked in, a juror’s perception of fault is difficult to change. Thus, in sexual abuse cases, defense counsel should ask the court to pre-instruct the jury as to the grounds for potential school district liability, preferably before opening statements.

In the context of negligent hiring, if the school officials “knew or should have known” or “had reason to know” that the teacher represented a danger to the students, the school is liable for foreseeable injury caused by that teacher. The terminology “should have known” and “had reason to know,” however, are words of art and, although there is some overlap in their meaning, they are not interchangeable. The “should have known” test impliedly incorporates what would have been discovered by further investigation. The phrase “reason to know,” is explained by the Restatement Second of Torts Rule 12, sub 1. The “reason to know” test is grounded on what is actually known and what a reasonable person can infer from that information. When antecedently obtained information concerning a teacher forms the basis of the claim, courts have used the “reason to know” test.

More specifically, the “reason to know” standard was articulated by the California Supreme Court in John B. v Superior Court (2006) where it was found that liability for transferring HIV does not depend solely on actual knowledge of HIV infection and would extend at least to those situations where the actor, under the totality of the circumstances, has reason to know of the infection. Also in John Doe v City of Los Angeles it was found that the City had no liability for sexual molestation that occurred during an Explorer Scout program. In John Doe, the Court stated the rule noting that “under the reason to know standard, an actor has information from which a person of reasonable intelligence or of the superior intelligence of the actor would infer that the fact in question exists, or that such person would govern his conduct upon the assumption that such fact exists.” Further, the John Doe Court explained that the “reason to know” standard is not the same as “actual knowledge” and that it does not include “inquiry notice.” That is, a principal is not liable for what she “would have discovered” had she secretly examined the teacher’s desk or computer.

What makes the “reason to know” standard potentially applicable to other jurisdictions (outside California) is that the standard is articulated in Section 12 of the Restatement Second of Torts. Further, the Restatement Second of Agency, Rule 213, which governs the liability of a principal for the negligent or reckless conduct of his agent, goes on to apply section 12 of the Restatement Second of Torts. See Rest.2d Agency, Rule 213, comment a, page 458 (“The rule stated in this Section is not based upon any rule of the law of principal and agent or of master and servant [but is instead] a special application of the general rules stated in the Restatement of Torts…”).

The key point is that the “reason to know” standard is based on actual facts known and the inferences that can reasonably be drawn from those facts. It does not permit the jury to consider what facts should have been known or could have been known and constrains speculation by the jury.

Moreover, the “reason to know” standard does not impose liability where the conduct of the alleged perpetrator is ambiguous. Two California cases illustrate the application of this point.

In Federico v. Superior Court (1997), the court overturned a trial court order denying a summary judgment motion by a hairstyling school that was being sued because one of its teachers molested the young child of a student who brought the child to school. In connection with a cause of action for negligent supervision of the teacher, the plaintiff’s evidence concerning whether the school knew or had reason to know that the teacher was molesting children brought on to the school’s premises consisted of events that “were not explicitly sexual, consisting of such occurrences as an unusually prolonged handshake, an overly friendly pat on the shoulder, or, on one occasion, [the teacher] having a younger child sit in his lap.”

Applying the “reason to know” standard found in Rule 213 of the Restatement Second of Agency, the Federico court held that “[s]uch contact was, at the time it occurred, ambiguous at worst and did not result in any complaints to defendant by the children involved or their parents. Thus, even if the incidents described could be deemed a warning sign that [the teacher’s] continued employment might pose a risk to minors, they cannot be used to impose liability for negligence on [a non-perpetrator] defendant, who had no actual knowledge, or reason to suspect, that they had occurred.”

In Steven F. v. Anaheim Union High School Dist. (2003), a high school teacher was discovered to have had an improper relationship with a female student and the student sued the school district. In a finding for the school district, the court concluded that, “doing nothing about ambiguous conduct which, in hindsight, confirms evil suspicions is not worthy of moral opprobrium. Some people actually think well of their colleagues and will assume the best if the evidence is ambiguous.”

In sum, the “reason to know” standard set out in Section 12 of the Restatement Second of Torts is a fair test. It is clear and comprehensible, and part of an authoritative text already adopted in most jurisdictions. It seems advisable that counsel and claims managers defending negligent supervision or retention cases based on antecedently acquired knowledge, consider including the test in proposed jury instructions. If the court adopts the test, the jurors will have a clear, fair standard during deliberation. If the court declines to give the requested instruction, the issue is preserved for appeal.



David D. Ernst, Esq., is a partner with Backus & Ernst LLP. He has been a CLM and Insurance Fraud Committee Member since 2012 and can be reached at (213) 777-1779, dernst@belawca.com.

Stephen L. Backus, Esq. is a partner with Backus & Ernst.

Sharon K. Stull J.D., SPHR-CA, CharterSAFE JPA, is the HR Specialist for CharterSAFE.

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