A.M. v. Holy Resurrection Greek Orthodox Church of Brookville

Full title: A.M. and E.M., both minors, by and through their parents and natural…

Court: SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 30

Date published: Aug 3, 2020

2020 N.Y. Slip Op. 32541 (N.Y. Sup. Ct. 2020)

Opinion

INDEX NO. 156132/2016

08-03-2020

A.M. and E.M., both minors, by and through their parents and natural guardians, EFTIHIA MIHOS and EVANGELOS MIHOS, Plaintiffs, v. HOLY RESURRECTION GREEK ORTHODOX CHURCH OF BROOKVILLE, NEW YORK aka GREEK ORTHODOX CHURCH OF THE HOLY RESURRECTION, et al., Defendants.

SHERRY KLEIN HEITLER, J.S.C.

NYSCEF DOC. NO. 219 Motion Sequence 12/13

DECISION & ORDER

SHERRY KLEIN HEITLER, J.S.C.

By decision and order dated February 24, 2020 (Prior Order), this Court granted the motions for summary judgment of defendants Holy Resurrection Greek Orthodox Church of Brookville (Holy Resurrection), Greek Orthodox Archdiocese of America (Archdiocese), and Archbishop Demetrios Trakatellis (Archbishop). Now, in motion sequences 12/13, plaintiffs A.M. and E.M. (Plaintiffs), both minors, move pursuant to CPLR 2221(d) for leave to reargue the Prior Order, and defendant Father Demetrios Kehagias (Father Kehagias) moves pursuant to CPLR 3211(a)(5) for an order dismissing the action against him based on a bankruptcy discharge and the doctrine of res judicata. As more fully set forth below, both motions are denied.

The facts of this case are set forth in significant detail in the Prior Order. Briefly, this case involves a sexual assault perpetrated by non-party P.K. against Plaintiffs on Holy Resurrection grounds following church services on May 10, 2015. Father Kehagias, who at the time was affiliated with Holy Resurrection as a substitute priest, is P.K.'s father. Plaintiffs commenced this action on July 15, 2016, alleging, inter alia, that defendants negligently allowed P.K. to be on church grounds when they knew or should have known that P.K. had a propensity for sexual violence.

By letter dated August 10, 2016, Nationwide Mutual Insurance Company (Nationwide), the insurance carrier for Holy Resurrection, disclaimed coverage of Father Kehagias and advised him that it would not defend him in this matter (NYSCEF Doc. 209):

This letter is to inform you that there is no coverage for you under the policy issued to the Greek Orthodox Church of the Holy Resurrection. You were not an employee of the church and would not qualify as an insured under our policy. Therefore, we will not assign defense counsel on your behalf or indemnify you should an award or settlement be entered against you.

On October 10, 2017, Father Kehagias filed a Petition for Voluntary Bankruptcy under Chapter 7 of the United States Bankruptcy Code. On December 20, 2017, the Bankruptcy Court issued an order which provides in relevant part (NYSCEF Doc. 213):

ORDERED, that A.M. and E.M. shall have relief from stay solely for the purpose of prosecuting and determining liability and damages, if any, of Debtor Demetrios Kehagias with respect to their claims [in this case], and it is further
ORDERED that A.M. and E.M may collect any settlement or judgment from their pending case against the Debtor solely from the proceeds of insurance, including the policies issued by Philadelphia Indemnity Company (or its affiliates) and the policy issued by Nationwide Insurance (or its affiliates)....

By order dated January 18, 2018, the Bankruptcy Court issued a discharge in Bankruptcy under Chapter 7 in favor of Father Kehagias.

By letter dated May 8, 2018, Philadelphia Insurance Companies, the insurance carrier for the Archdiocese and the Archbishop, disclaimed coverage of Father Kehagias and advised him of same (NYSCEF Doc. 210):

Philadelphia denied coverage to you under the GCL Coverage Part of the Primary Policy because you are not - and never were - an "employee" of the Archdiocese....
Even if you were entitled to insured status under the CGL Coverage Part of the Primary Policy . . . coverage for the underlying lawsuit is precluded by the Abuse or Molestation Exclusion to the CGL Coverage Part.

Following the close of discovery, the Defendants, other than Father Kehagias, moved for summary judgment. In granting their motion, this court held that the movants could not be directly liable for failing to supervise P.K. or Father Kehagias because church officials were unaware that P.K. had a history of and propensity for sexual violence. This court further held that movants could not be vicariously liable for any alleged negligence of Father Kehagias because his failure to disclose P.K.'s history/propensity was tantamount to acting outside the scope of his employment.

Plaintiffs now move for leave to reargue the Prior Order on the ground that this court misapprehended the law in reaching its decision. Father Kehagias cross-moves to dismiss the complaint against him, arguing that his discharge in bankruptcy, combined with this court's Prior Order, bar Plaintiffs' claims against him.

I. Motion to Reargue

CPLR 2221(d) provides that a motion for leave to reargue "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion." While the determination to grant leave to reargue a motion lies within the sound discretion of the court, a motion for leave to reargue is not designed to afford an unsuccessful party successive opportunities to reargue issues previously decided or to present arguments different from those originally asserted. See William P. Pahl Equip. Corp., 182 AD2d 22, 27 (1st Dept 1992).

In the Prior Order, this court held that "even if Father Kehagias knew his son had a predilection for sexual violence, there is no evidence that he disclosed his concerns to Holy Resurrection and to the Archdiocese. And by keeping this alleged knowledge to himself, he was clearly acting outside the scope of his employment." Defendants agree with the court's decision, arguing that that the steps Father Kehagias took to conceal his son's proclivities broke the agency relationship such that his knowledge cannot be imputed to them. Plaintiffs contend that, in reaching this decision, this court misapprehended a basic principle of agency - that knowledge of the agent (Father Kehagias) should be imputed to the principal (Holy Resurrection and/or the Archdiocese). This position, however, pushes the boundaries of agency law beyond what is authorized by caselaw and basic principles of foreseeability.

In determining whether an employee's tortious conduct falls within the scope of his employment, courts should consider the following five factors: (1) "the connection between the time, place and occasion for the act," (2) "the history of the relationship between employer and employee as spelled out in actual practice," (3) "whether the act is one commonly done by such an employee," (4) "the extent of departure from normal methods of performance, and (5) "whether the specific act was one that the employer could reasonably have anticipated." Riviello, 47 NY2d at 303; see also Haybeck v Prodigy Servs. Co., 944 F. Supp. 326, 329 (SDNY 1996). "While all five factors are considered, New York courts generally place greater emphasis on the fifth factor, namely, whether the acts involved . . . could reasonably have been anticipated by [the] employer." Mingo v United States, 274 F. Supp. 2d 336, 346 (EDNY 2003).

Plaintiffs' continued reliance on Riviello v Waldron, 47 NY 2d 297 (1979) to support their argument that Father Kehagias was acting within the scope of his employment is misplaced. In Riviello, the Court of Appeals affirmed a finding that a bar employee's tortious conduct - injuring a bar patron while flipping a pocketknife - was within the scope of his employment. Id. at 301, 305. The Court reasoned that while the employee's job was to take orders, the act of "mingling" was not "beyond the range of things commonly done by such an employee." Id. In reaffirming a basic tenet of agency law, the Court held that an employer may be liable for its employee's actions even if the employer did not "foresee[] the precise act or the exact manner of the injury as long as the general type of conduct may have been reasonably expected." Id. Unlike a bar owner who should reasonably anticipate a certain degree of revelry between patrons and employees, in the case at bar the Defendants could not have foreseen that Father Kehagias would bring his son to church services knowing that he had a proclivity for sexual violence. Cf., Adorno v Corr. Servs. Corp., 312 F. Supp. 2d 505, 516 (SDNY 2004) (employer not liable even where it had notice of the employee's propensity to commit sexual acts because a complaint had been registered).

Plaintiffs also rely on O'Boyle v Avis Rent-A-Car Systems, Inc., 78 AD 2d 431, 442 (2d Dept 1981) in which the court held that an underage gas station attendant was working within the scope of his employment when he took a rental car from the premises to get lunch and caused an accident. In holding the employer liable, the O'Boyle court discussed the seminal case Bushey & Sons v United States, 398 F2d 167 (2d Cir. 1968), which held that the United States was liable for the damages caused by a drunken sailor who, while returning to his ship from shore leave, caused flooding to a neighboring drydock. The Court stated, "a business enterprise cannot justly disclaim responsibility for accidents which may fairly be said to be characteristic of its activities" and concluded that the inebriated seaman's conduct was "not so 'unforeseeable' as to make it unfair to charge the Government with responsibility." Bushey, p. 171. Additionally, Plaintiffs cite to Holmes v Gary Goldberg & Co., 40 AD3d 1033 (2d Dept 2007) in which a financial advisor who converted funds of a family member was found to be acting within the scope of his employment because it was foreseeable that a person entrusted with a significant amount of money could convert funds to his own use.

Finally, Plaintiffs seek to distinguish the holding of Rivera v State of NY, 34 NY3d 383 (2019), in which a corrections officer brutally assaulted an inmate with the assistance of two other officers. All three officers were found to be acting outside the scope of their employment. Plaintiffs argue that, "if Father Kehagias had assisted or participated in P.K.'s sexual assault of A.M., by for example holding A.M. down during the assault, then his conduct would fall outside the scope of employment and there would be no employer liability; but where he had not assisted or participated, but his conduct instead reflects a failure to exercise oversight and supervision necessary to prevent a foreseeable injury, it is within the scope of employment and there is employer liability." (NYSCEF Doc. 190, pp. 10-11).

This court disagrees. The facts of the cases relied upon by Plaintiffs are quite different from those of the present case; in other words, sexual abuse in religious organizations is different from underage gas station attendants who borrow rental cars and from financial advisers who convert funds. In this regard, and as this court pointed out in its Prior Order, appellate courts have routinely carved out sexual abuse cases from the scope of vicarious liability. N. X. v. Cabrini Med. Ctr., 97 NY2d 247, 251 (2002); Acosta-Rodriguez v City of New York, 77 AD3d 503, 504 (1st Dept 2010); Osvaldo D. v Rector Church Wardens & Vestrymen of Trinity Church of N.Y., 38 AD3d 480, 480 (1st Dept 2007); McKay v Healthcare Underwriters Mut. Ins. Co., 295 AD2d 686, 687 (3d Dept 2002); Joshua S. by Paula S. v. Casey, 206 AD2d 839 (4th Dept 1994). "New York courts consistently have held that sexual misconduct and related tortious behavior arise from personal motives and do not further an employer's business, even when committed within the employment context." Ross v Mitsui Fudosan, Inc., 2 F. Supp. 2d 522, 531 (SDNY 1998); see also Kirkman v Astoria Gen. Hosp., 204 AD2d 401, 402 (2d Dept 1994) (rape of child patient by hospital security guard); Joshua S. v Casey, 206 AD2d 839 (4th Dept 1994) (sexual abuse of a child by a priest); Koren v Weihs, 190 AD2d 560, 560-61 (1st Dept 1993) (hospital psychotherapist who engaged in "sex therapy" with a patient).

To Plaintiffs' point, not all cases like this can be decided as a matter of law. For example, in N. X. v. Cabrini Med. Ctr., 97 NY2d 247, 251 (2002), although a doctor-employee acted outside the scope of his employment when he sexually assaulted a patient, questions of fact remained regarding the direct negligence of other hospital staff for failure to supervise and protect the patient. Id. However, as noted by the Cabrini Court, its holding was sui generis and limited to its facts: "We simply hold that observations and information known to or readily perceivable by hospital staff that there is a risk of harm to a patient under the circumstances can be sufficient to trigger the duty to protect." Id. at 255. Here, unlike the doctor in Cabrini, P.K. was not an employee of the church and, unlike the nurses in Cabrini, the sexual proclivities of P.K. were not known to the other defendants.

Personal motives play an important role in these types of cases as well. For example, in Haybeck v Prodigy Servs. Co., 944 F Supp 326 (SDNY 1996), the court deemed an employee's failure to reveal his HIV status before having sex with the plaintiff to be outside the scope of his employment as a matter of law. Id at 331 ("The purely personal decision by [the employee] whether to disclose a medical fact about himself cannot be said to have furthered his employer's business. Rather, his decision to conceal his HIV status arose from a purely personal motivation"). Also, returning to the nurses in Cabrini, who negligently discharged their duties, Father Kehagias' failure to notify his employer of his son P.K's proclivities could be deemed as "an intentional act that constitutes a callous disregard for the members of the church community." (NYSCEF Doc. 200, p. 8). In general, this is akin to what has been described as the adverse interest rule (Center v Hampton Affiliates, Inc. 66 NY 2d 782, 784 [1985]):

This exception provides that when an agent is engaged in a scheme to defraud his principal, either for his own benefit or that of a third person, the presumption that knowledge held by the agent was disclosed to the principal fails because he cannot be presumed to have disclosed that which would expose and defeat his fraudulent purpose.

In Doe v Guthrie Clinic, Ltd., 22 NY3d 480 (2014), the Court of Appeals held that an employee acted outside the scope of her employment when she disclosed confidential information. In that case, a nurse employed by a medical clinic recognized her sister-in-law's boyfriend who was being treated for a sexually transmitted disease. She informed her sister-in-law about the boyfriend's condition in an unauthorized disclosure of confidential health information. The Court determined that her unauthorized release of said information was not reasonably foreseeable and that she was not acting within the scope of her employment. Thus, the clinic was not vicariously liable for the disclosure. Likewise, in Eng v NYU Hosps. Ctr., 172 AD2d 645 (1st Dept 2019), a nurse used her credentials to obtain medical records about her mother in order to support a guardianship petition. The First Department dismissed claims against the nurse's employer, finding that her "improper gaining of access to the . . . medical records was in furtherance not of defendant's business but of her own personal pursuit of guardianship over her mother." Eng, at 646-7. Here, too, Father Kehagias' motives appear to be personal.

Based on the foregoing, this court finds no cause to change the Prior Order dismissing Plaintiffs' claims against Holy Resurrection, the Archdiocese, and the Archbishop. None of the cases cited by Plaintiffs support a finding that Father Kehagias was acting within the scope of his employment when he withheld crucial information about P.K. from his employer. To the contrary, his actions appear to have been taken in his own interest. Thus, this court reaffirms that no direct or vicarious liability can be imputed to the other defendants.

Cross-Motion to Dismiss

CPLR 3211(a)(5) provides that a party may move for judgment dismissing one or more causes of action against him on the ground that "the cause of action may not be maintained because of . . . discharge in bankruptcy . . .." Here, Father Kehagias correctly asserts that the bankruptcy discharge precludes Plaintiffs from directly recovering against him. But that same order also explicitly allows Plaintiffs to seek a trial to determine the question of Father Kehagias' liability, if any, and to the extent to which Plaintiffs have been damaged as a result of his alleged conduct. This court's Prior Order awarding Holy Resurrection, the Archdiocese and the Archbishop summary judgment has no bearing on Plaintiffs' rights in this regard.

Plaintiffs may proceed to trial in an effort to secure a judgment against Father Kehagias. See Lang v Hanover Ins. Co., 3 NY3d 350, 352 (2004); see also Corle v Allstate Ins. Co., 162 AD3d 1489 (4th Dept 2018). If they do secure said judgment, they may commence a direct action against the insurers in this case. Pursuant to Insurance Law § 3420(b)(1), any person who "has obtained judgment against the insured . . . for injuries sustained or loss of damage occasioned during the life of the policy or contract" may maintain an action against the insurer subject to the provisions of Insurance Law § 3420(a)(2).

With regard to Father Kehagias' position that the current suit is barred by res judicata due to this court's ruling in the Prior Order, the question of Holy Resurrection and/or the Archdiocese's liability and whether their insurance carriers properly disclaimed coverage for Father Kehagias are two separate issues. The former has been decided but the latter has not. The issue of whether Nationwide and Philadelphia properly disclaimed coverage for Father Kehagias has never been decided and is not before this court. As there has been no judicial determination in a declaratory judgment action as to whether the insurers properly disclaimed coverage, Plaintiffs can still proceed against Father Kehagias in this case. As such, Father Kehagias' motion to dismiss is denied.

CONCLUSION

In light of the foregoing, it is hereby

ORDERED that Plaintiffs' motion to reargue is denied; and it is further

ORDERED that Father Kehagias' cross-motion to dismiss the complaint as against him is denied; and it is further

ORDERED that counsel appear for a virtual conference on September 14, 2020 at 9:30AM.

The Clerk of the Court is directed to mark his records accordingly.

This constitutes the decision and order of the court.

DATED: August 3, 2020

/s/ _________

SHERRY KLEIN HEITLER, J.S.C.