DATELINE: October 12, 2007
The Wisconsin Supreme Court effectively upheld a $17 million verdict against the Catholic Mutual Relief Society of Milwaukee and the Archdiocese of Milwaukee--the court was eqully divided so the appeals court's opinon was left to stand. The lawsuit stems from an automobile accident that resulted when Margaret Morse ran a red light, hitting a car driven by Hjalmer Heikkinen. The accident severely injured the then…
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then 82-year old Heikkinen, necessitating the amputation of one of his legs and causing him to lose bladder and bowel functions.
According to the Milwaukee Journal-Sentinel, the $17 million verdict has now risen to $23 million, due to accrued interest. Marie Rohde, Church Crash Verdict Upheld: Archdicese's Insurer to Pay More Than $23 Million, Oct. 12, 2007. An archdiocese spokesperson told the Journal-Sentinel that the full award would be paid by Catholic Mutual, meaning that no Archdiocese funds are being used.
Morse was a member of Christ King Parish (Christ King), a church within the Milwaukee Archdiocese. She was also a volunteer for the Christ King Legion of Mary (Legion of Mary), a volunteer service organization consisting of members of Christ King. An activity of the Legion of Mary is the delivery of statues of the Virgin Mary, that have been blessed by a parish priest, to parishioners who request them. At the time of the accident, Morse was in the process of delivering a statue to a family that had requested one. She was driving her own car.
In this case, the Archdiocese had received an insurance certificate issued by Catholic Mutual which provided:
Who is a protected person(s) under this certificate:
The term "you" or "your" in this certificate means: Jointly the Certificate Holder and all educational, charitable and religious institutions, whether separately incorporated or not, listed on the ledger pages of the certificate, and listed in or eligible to be listed in the Official Catholic Directory.
Christ King was listed on the ledger, but the Legion of Mary was not listed on the certificate. The policy provided $500,000 in regular liability coverage and $40 million in excess umbrella coverage.
The policy excluded bodily injury and property damages resulting from the ownership, operation, and maintenance of an automobile. However, the exclusion provided it did not apply to religious, volunteers, and employees while using their own automobiles on behalf of the certificate holder or protected persons. Morse had her own liability coverage, which had a $50,000 limit.
It should come as no surprise, but the dispute centered on whether Morse was acting for the Legion of Mary (not a protected person) or the Archdiocese or Christ King Parish (covered persons). The jury found that Morse was acting as a volunteer on behalf of the Archdiocese and/or Christ King Parrish. As a consequence, insurance coverage was available to pay the judgment—which is why the insurance company was a party to the suit.
The Wisconsin Supreme Court's opinion contains no substantive content. It simply upholds the $17 million verdict against Catholic Mutual. The appeals court decision runs 30 pages. After setting out the facts and relevant policy/certificate language, it engages in the typically technical analysis that is applied to the interpretation of insurance policies. In the end, the court ruled that Catholic Mutual was liable.
There are several simple, but important lessons from this case for charities:
LESSON 1: Charities must work with their insurance agents in procuring insurance that provides the charity with protection when a volunteer uses his or her own car while serving the charity. It is a simple question of recognizing the exposure and working with an insurance professional to put coverage in place.
LESSON 2: The insurance should cover every entity and unaffiliated group associated with the charity. Part of the apparent confusion in the Heikkinen case was the relationship between Christ King Parish (Christ King), the Milwaukee Archdiocese, and the Christ King Legion of Mary (Legion of Mary). From the standpoint of a charity that provides services through a number of entities, it is much better and cleaner to have insurance coverage and certificates of insurance written so coverage extends to all corporations, trusts, limited liability companies, and unincorporated associations in the charity's organizational structure. It never hurts to be over-inclusive. As we saw in the Heikkinen case, it is not always clear which entity the volunteer is serving.
LESSON 3: As a general matter, the Federal Volunteer Protection Act provides protection for volunteers for liability arising out of their activities. That protection does not apply to volunteers operating motor vehicles (if the state requires a license and insurance coverage), although state law might provide more expansive protection. For present purposes, the salient point is that the Volunteer Protection Act provides no protection to the charity for vicarious liability arising out of the volunteer's activities.
In sum, charities should obtain adequate automobile insurance coverage, even if it is only for one volunteer, driving one time, for one mile.
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