According to an article appearing in the February 18, 2005 Milwaukee Journal-Sentinel (Church Told to Pay $17 Million: Archdiocese Found Liable for Volunteer who Caused Crash), a Milwaukee, Wisconsin jury awarded $17.0 million to an 82-year old man who was left a quadriplegic when a volunteer for the Legion of Mary ran a red light, crashing into the man’s car. The volunteer, who had served for four decades, was delivering a statute of the Virgin Mary when the accident occurred. The relationship between the Legion of Mary (apparently an unincorporated volunteer group), the local parish, and the Milwaukee Catholic Archdiocese is not entirely clear, but the Journal-Sentinel states that the award is against the Archdiocese.
So what’s the big deal? ...
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To a certain extent that is a fair question. We don’t generally cover personal injury litigation, but this case has a number of important implications for non-profits. Back in 1997, Congress passed the Volunteer Protection Act, which provides volunteers with protection from liability arising out of their activities as volunteers. The Act seems simple enough, but actually it does pose some interpretative questions. We will assume for purposes of this post that Wisconsin hasn’t made any of the permissible modifications to the Federal legislation.
As we read the Act, the woman driving the car was not shielded from liabilty by the Act because there is an exception to the Act's shield for liability arising from motor vehicles if the state requires insurance and a driver's license. The provision may be open to differing constructions. Was the intent to totally remove the shield, or provide that it isn't available if the driver doesn't meet state licensing or insurance requirements. That latter interpretation would make more sense to us, but the former interpretation is more in tune with the statutory language. Anybody who has had dealings with this portion of the Act should drop us an e-mail if you want to share your experience or thoughts.
Unfortunately, at least from a charity’s standpoint, the Volunteer Protection Act only addresses the volunteer's liability. It provides absolutely no protection for the charity. That’s a problem. If the volunteer was acting on behalf of the charity as its agent, then the charity is legally responsible for the volunteer’s acts under the respondent superior doctrine. Some will immediately ask about charitable immunity. With the exception of a very few states, that legal doctrine has largely disappeared from the legal landscape. As in the Milwaukee case, the charity must answer for the acts of the volunteer.
The Volunteer Protection Act clearly provided the Legion of Mary, the parish, or the Archdiocese with no protection. This case demonstrates why boards should be concerned that their organizations have adequately addressed vicarious liability through risk management policies and insurance coverage. In large part, that means that a charity should have an insurance policy that clearly covers its employees, volunteers, and agents when they are acting on behalf of the charity. The policy should cover the delivery situation, but it should also cover rental cars. This requires that the charity have a competent insurance agent to help it obtain the appropriate coverage. The charity should also be asking its volunteers and other agents who drive on its behalf to provide adequate proof that they have required insurance in place. Of course, we can expect the two insurance companies to argue over which policy is the first responder or primarily responsible.
The insurance part of the question is the easy part once the potential exposure is identified and understood. As is evident in the Milwaukee Archdiocese case, the organization also needs to focus on who might be considered to be its volunteer. This will not be a problem for the many charities with clearly-defined operations. But as the Milwaukee Archdiocese case points out, when related charities are using volunteers, it may not be entirely clear whether the volunteer is acting on behalf of one charity or another. This can be particularly problematic when one charity with a large facility permits other charities to use that facility. If the other charities have missions that in anyway further the mission of the charity with the large facility, that charity may find itself responsible for the acts of the volunteers that it never viewed as its agents. The legal problem can be exacerbated when the other charities are unincorporated groups.
A charity with a facility used by other charities should take steps to make sure the legal relationships between it and the other charities are clear before there is an incident. This may mean requiring incorporation of the other organizations or groups, indemnity agreements, and written contracts (leases) that clearly spell out the relationships between the parties. A clever plaintiff’s lawyer may still be able to overcome these hurdles, but his or her burden will be higher.
While we are on the subject of volunteers and liability, charities should also focus on the workers’ compensation aspects of volunteer service. Depending on state law, a charity may be required to have workers’ compensation in place for its volunteer workers. Once again, this is a case where having a good insurance agent or lawyer in place can be helpful. The charity doesn’t have to do the legal research, but it should raise the issue with its advisors. Depending on state law, there may actually be advantages to covering volunteers under the charity’s workers’ compensation policy.
BOARD ACTION: At least once a year, board's should review and discuss the adequacy of insurance coverage. This will likely entail a report by a risk management officer or insurance agent at a board meeting. In view of the Milwaukee incident, every board should immediately review the adequacy of its automobile coverages as they relate to employees, agents and volunteers. Regular readers of this blog may want to raise these issues at the next board meeting they attend. For those of you who are lawyers, you might want to give your clients a call today.
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THE
FOREGOING IS NOT AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. IF LEGAL
ADVICE IS REQUIRED, THE NON-PROFIT OR OTHER PARTY IN QUESTION SHOULD
SEEK THE ADVICE OF QUALIFIED LEGAL COUNSEL.
