In Russell Forde Hornor v. Upper Freehold Regional Board of Education, Dct. No. A-0366-22 SEAN _ ADDDATE AND COURT, the New Jersey Appellate Division reversed the trial court’s denial of the Board’s motion to dismiss those counts of Hornor’s complaint asserting claims for breach of fiduciary duty and vicarious liability and remanded for the dismissal of those counts with prejudice.

Facts:

Hornor filed a seven-count complaint against the defendants, Upper Freehold Board of Education (the “Board”) alleging that Hornor’s freshman science teacher sexually abused him in 1978-79. Specifically, Hornor alleged that after a Future Farmers of America plant and landscaping competition at Rutgers in April 1979, in which Hornor had placed fourth, Hutler took Hornor and his friends out to celebrate, driving them to a liquor store and purchasing wine for the group. After taking the other boys home, Hutler drove Hornor to Hutler's apartment on a ruse, where he sexually assaulted him.

The Complaint alleged; negligence, negligent supervision, negligent hiring and retention, gross negligence, intentional infliction of emotional distress, breach of fiduciary duty, a sexually hostile environment under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -50, and his entitlement to punitive damages.  The Board moved to dismiss with prejudice the counts containing allegations of breach of fiduciary duty, punitive damages and any claims asserting vicarious liability.

Trial Court’s Holding:

On the fiduciary duty claim, the Trial Court found that Hutler and the Board owed Hornor a fiduciary duty by extending the Supreme Court’s holding in F.G. v. MacDonell, 150 N.J. 550, 556 (1997)(“MacDonell”).

On the vicarious liability claim, even though Hornor acknowledges his abuse occurred outside the scope of Hutler’s employment, the Trial Court relied on Hardwicke v. American Boychoir School, 188 N.J. 69, 101-02 (2006) to find that the Board could be held vicariously liable for Hutler’s sexual abuse of Hornor.

Appellate Division Decision:

Issue 1 – Fiduciary Duty Claim.

            The Appellate Division dismissed the fiduciary duty claim with a 3-part reasoning:

First, the Appellate Division distinguished MacDonnell on the ground that because of the court’s hesitancy in MacDonnell to entangle itself in a clergy malpractice cause of action which would require imposing a standard of care, the Court could avoid that and allow the victim to recover simply by framing it in terms of fiduciary duty. That does not exist Hornor’s case. In addition, MacDonnell provided no guidance on how that claim could be brought against a school district with whom P did not have a confidential relationship. In addition, assigning a fiduciary duty to specific students from an entity like the Board, that owes obligations to multiple stakeholders involved in educating the district’s children, often with conflicting interest, is incompatible with the duty’s defining characteristic of undivided loyalty to a particular person.

Second, the Appellate division was troubled by the trial courts adoption of P’s argument that grooming created a special relationship. The Appellate Division pointed out the fact that the alleged harm did not arise out of Hutler’s breach of the duties of loyalty and reasonable skill and care or giving advice within the scope of a defined relationship with Hornor,  rather the harm was in the nature and scope of the relationship. The Appellate Division stated that grooming a student for sexual abuse is not remotely akin to the voluntary counselling relationship between pastor and parishioner in MacDonnell. The Appellate Division found the concepts antithetical.

Third, the Appellate Division stated that there was no need for the trial court to have wrestled with the question of the Board’s duty to Hornor. In Frugis v. Bracigliano, 177 N.J. 250, 257 (2003), the court held that [s]chool personnel owe a duty to exercise reasonable care for the safety of students entrusted to them," which "extends to supervisory care required for the student's safety or well-being as well as to the reasonable care for the student at school-sponsored activities in which the student participates." The court continued to hold that the duty may be violated by not only the commission of acts but also in the neglect or failure to act. Later, the court in Davis v, Devereux Found,, 209 N.J. 269, 289, 291-92 (2012) noted that Frugis confirms that the in loco parentisis institution are held to a duty of due care. Thus, the trial court erred in recognizing any different duty in the Board to Hornor.

Issue 2: Plaintiff’s Claims for Vicarious Liability:

The Appellate Division stated that, because Hornor concedes that Hutler’s sexual abuse was outside the scope of his employment, the Board contends Hornor cannot establish the Board’s vicarious liability for the sexual assault.

First, the Appellate Division began with the overarching principle that: in analyzing a claim against a public entity in New Jersey, the first task is always to locate the predicate for liability in the act. If there is no predicate for liability, the inquiry is at an end. Public entities are immune from liability unless they are declared to be liable by a provision of the Tort Claims Act. N.J.S.A. 59:2-1(b) "establishes the principle that even common-law and statutory immunities not contained in the Act can prevail over the Act's liability provisions." The guiding principle that governmental immunity from tort liability is the general rule and liability is the exception. Only when the employee is acting within the scope of his employment, Because N.J.S.A. 59:2-2 makes a public employer, like the Board, vicariously liable for the acts of an employee, Horner cannot establish a statutory predicate for the board vicarious liability for Hutler’s acts.

2019 Amendment made no changes:

The Appellate division stated Chapter 239 was intended to disable any immunity provided by the Tort Claims Act to a public entity or to public employee for their willful, wanton or grossly negligent acts in sexual abuse cases. It does not provide a statutory predicate for the vicarious liability of public entities for sexual assault or abuse committed outside a public employee’s scope of employment. See N.J.S.A. 59:2-1(a), 2-2(a). Hornor concedes the sexual abuse committed by Hutler was committed outside the scope of his employment. See Cosgrove, 215 N.J. Super, at 562-63 (holding social worker therapist's sexual relationship with his patient was outside his scope of employment under Restatement (Second) of Agency § 228 (1958) adopted in New Jersey). See also Davis, 209 N.J. at 303 ("[o]nly rarely will intentional torts fall within the scope of employment").

The Charitable Immunity Act, Hardwicke and the 2019 Amendments.

The Appellate Division then tackled whether the 2019 amendments to the Charitable Immunity Act and their effect, if any, on Hornor’s effort to hold the Board vicariously liable for the sexual assault committed by Hutler outside of the scope of his employment. In doing so, the Appellate Division pitched the law of the land prior to the amendments, their effects and whether they had any effect on the current action.

Before the 2019 amendments, charitable entities were immunized under the Charitable Immunity Act for only simple negligence following the Court’s 2006 decision in Hardwicke and were without even that immunity for claims of negligent hiring, supervision or retention resulting in the sexual abuse of a child under the age of eighteen following the enactment of N.J.S.A. 2A:53-7.4 in 2005. After Hardwicke, employers qualifying as passive abusers under the Child Sexual Abuse Act could also be held vicariously liable for common law claims based on conduct falling within the Act’s definition of sexual abuse committed by their employees acting outside the scope of their employment in accord with section 219(2)(d) of the Restatement (Second) of Agency. A nonprofit entity's trustees, directors, officers, employees, agents and volunteers enjoyed charitable immunity for tort claims alleging negligence but were without immunity for any "willful, wanton or grossly negligent act of commission or omission, including sexual assault and other crimes of a sexual nature" pursuant to N.J.S.A. 2A:53A-7(a) and -7(c).

The effect of the 2019 amendments to the Charitable Immunity act was to codify the holding in Hardwicke "that organizational charitable immunity only applies to protect organizations from lawsuits claiming injury based on merely negligent acts, not more aggravated forms of wrongful conduct, such as willful, wanton or grossly negligent acts," including sexual assault or abuse. Further, the 2019 amendments to the Charitable Immunity Act didn’t broaden liability for non-profit entities, it lengthened it – significantly.

The Appellate Division did not agree the Board “may now also be held vicariously liable for Hutler’s acts of sexual abuse,” although outside the scope of his employment, under the aided-by-agency theory recognized by the Court in Hardwicke. However, in the Appellate Divisions view, the 2019 amendments to those two statutes have not had, no were intended to have had, any effect on the law of agency, as applied to either nonprofit organizations or public entities. As stated, the legislature only intended to codify the central holding in Hardwicke that the Charitable Immunity Act immunizes simple negligence only, and not 'other forms of aggravated wrongful conduct, such as malice or fraud, or intentional, reckless and wanton, or even grossly negligent behavior.”

The 2019 amendments likewise disable any immunities the Tort Claims Act provided public entities that might otherwise absolve them of liability in sexual abuse cases for willful, wanton or grossly negligent acts, identified in E.C. as N.J.S.A. 59:2-10, which immunizes a public entity "for the acts or omissions of a public employee constituting a crime, actual fraud, actual malice, or willful misconduct." It does not provide a liability predicate for Hornor’s claim that the Board is vicariously liable for Hutler’s sexual assault, which Horner admits was committed outside the scope of Hutler’s employment.

Going forward, public schools and private schools, just as any "other person standing in loco parentis who knowingly permits or acquiesces in sexual abuse" of a child, can be held directly liable as a passive abuser under the Child Sexual Abuse Act. he 2019 amendments to the Child Sexual Abuse Act, while providing for the direct liability of an organizational entity as a passive abuser, do not address the entity's vicarious liability for sexual assault or abuse committed by an active abuser-employee. Thus, a public school cannot be held vicariously liable for such under the Tort Claims act.

Ultimately, Hornor’s failure to identify a liability predicate in the Act for the Board’s vicarious liability for Hutler’s sexual assault is fatal to Hornor’s vicarious liability claims against the Board.