Duty to Prevent Harm and Duty to Disclose are Both Part of General Duty to Exercise Reasonable Care

In Doe v. Superior Court (filed 5/29/15, No. H040674), the California Court of Appeal, Sixth Appellate District, held that a defendant’s reasonable duty of care to prevent harm to a minor and her parents encompassed the duty to disclose credible reports of suspected molestation of a minor by the defendant’s employee. This decision further defines the scope and extent of the duty of care owed by a company with respect to disclosure of the harmful conduct of its employee.

The Doe lawsuit arose out of the suspected molestation of Plaintiffs’ minor daughter by a camp supervisor which occurred at a summer camp operated by Defendant First Baptist Church of San Jose dba Camp on the Hill (“Camp”). In 2006, the supervisor worked at Camp’s summer camp for young children. In 2007, while Plaintiffs’ eight year old child was attending the camp, two camp lifeguards witnessed inappropriate behavior and touching by the supervisor toward the minor child. The lifeguards provided statements to Camp management who investigated the matter and eventually fired the supervisor. Camp, however, did not disclose the incident to the minor’s parents or police.

Plaintiffs only learned about the 2007 incident after police began investigating the supervisor for suspected molestation of other young children years later in 2013. Thereafter, Plaintiffs filed suit against the supervisor and Camp for various causes of action, including intentional concealment and negligent concealment by fraud or deceit. Camp successfully demurred to the concealment causes of action on the grounds that it did not owe a duty to disclose the 2007 incident to the minor’s parents, prompting Plaintiffs’ petition to the Court of Appeal.

On review, the Court of Appeal noted that fraud by concealment is typically alleged with respect to fraudulent business transactions premised upon the concealment of information by a defendant who has a special or fiduciary relationship with plaintiff. In the instant case, Camp had a special employer/employee relationship with the supervisor and was found to have a special relationship with the minor and her parents as customers of Camp’s summer camp. Based on the existence of these relationships, the Court concluded Camp’s general duty to act reasonably and prevent harm included the duty to disclose the incident to Plaintiffs as parents of the minor.

In support of its holding, the Court applied the Rowland v. Christian (1968) 69 Cal.2d 108 factors, which are used to help determine the existence and scope of a duty of care in any given case. With respect to these factors, the Court found: 1) it was foreseeable that both the minor and her parents would suffer further trauma if the incident was not properly reported; 2) there was a high degree of certainty that the minor suffered injury as a result of the incident; 3) the connection between the supervisor’s actions and the minor’s injury was close such that Camp was obligated to control the supervisor’s conduct because he was an employee of Camp; 4) the moral blame associated with failing to disclose suspected molestation to the minor’s parents was great; 5) the policy of preventing future harm to other parents and minors was high; 6) the burden on Camp to disclose the incident was low; and 7) the availability and cost of insurance for the risk of injury applied equally to the parties involved.

In closing, the Court qualified its holding as limited to the finding “that Camp’s general duty to exercise reasonable care to prevent harm to minor and her parents encompassed a duty to disclose a credible report of harm suspected to have already occurred.”

This case is significant because it specifies the duty owed by camp operators to camp attendants and their parents. But more generally, this case may be used to extend the scope of the duty of care owed by a company to its customers with respect to the conduct of its employees. The Court’s holding also reaffirms the applicability of the Rowland factors to determine the type of duty that is owed under a particular set of circumstances. Employers may owe a duty of disclosure regarding the conduct of their employees where third parties are likely to suffer harm for failure to make such disclosure.

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June 5, 2015