Monday, June 8, 2026
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Court of Appeal:
$25 Million Judgment Stands in Case Against Foster Agency
Opinion Says Non-Profits May Be Liable for Placing Children With Predators if They Should Have Known Risk, Rejecting View That Shrinking Insurance Market for Such Groups Justifies Actual Knowledge Rule
By a MetNews Staff Writer
Div. Five of the First District Court of Appeal has held that private agencies that approve and supervise foster-care placements may be liable for sexual abuse suffered by the children in the selected homes if the non-profit should have known that the perpetrator posed a risk, rejecting the view that a collapsing insurance market for such groups justifies imposing an actual knowledge rule.
Affirming a nearly $25 million judgment in a case in which a jury apportioned 60% of the fault to the agency and 40% to the foster parents, Justice Mark B. Simons, writing for the court, acknowledged that “the limited availability of insurance weighs in favor of limiting the scope of the duty to protect, especially because state policy favors the continued viability” of foster-family agencies (“FFAs”), but said that other factors justified imposing liability.
Applying the factors set forth by the California Supreme Court in the 1968 decision in Rowland v. Christian regarding limitations on the imposition of a duty of care, including foreseeability, the moral culpability of the defendant, and the availability of insurance for the risk involved, Simons declared:
“Denying liability to foster children wronged by negligent FFAs would be a blunt and morally fraught approach to addressing the lack of liability coverage; the other branches of government are better suited to craft creative solutions that broadly distribute the costs associated with supporting a sustainable insurance landscape for FFAs.”
Constructive Knowledge
He added:
“[A]fter balancing the Rowland factors, we adopt the constructive knowledge formulation of foreseeability as a limit on an FFA’s duty to protect the foster children it serves….[I]n order to hold an FFA liable under negligence for sexual abuse of a foster child by a foster parent, a plaintiff must show that the defendant FFA knew or should have known that the parent presented a risk of committing sexual abuse.”
In an unpublished portion of the decision, Simons said that Sonoma Superior Court Judge Patrick M. Broderick erred by instructing the jury on negligence in a way that “permitted the [panel] to find defendant liable absent a showing it knew or should have known of the risk presented by the foster father” but opined that “defendant has not shown a reasonable probability the jury would have reached a different verdict had it been properly instructed.”
He remarked:
“We acknowledge defendant’s evidence that nothing in [the foster father’s] background checks, references, or history as a parent and foster parent gave any indication of a risk of abuse. However, it is undisputed that [the foster father] indicated ‘sexual relations’ were a ‘major area[] of conflict’ with his wife and that he left numerous questions blank on his [agency] questionnaire, including questions about childhood sexual abuse, accusations of sexual abuse, and child pornography. Both parties’ experts agreed that marital sexual conflict is a risk for possible sexual abuse, and plaintiffs’ expert testified [that the] failure to answer questions was another red flag.”
Presiding Justice Teri L. Jackson and Justice Gordon B. Burns joined in Thursday’s opinion.
Three Minors
The question as to the scope of liability arose after three minors, identified as “C.F.,” “S.F.,” and “E.F.,” filed a complaint against Alternative Family Services Inc., an FFA based in Northern California, and their former foster parents, Mark and Marta Matinez, in May 2019, asserting negligence based on allegations of sexual abuse.
According to the children, they were placed in the Martinez home in 2018, when they were between two and six years old, and two of the minors were sexually abused. Mark Martinez pled guilty to two counts of sexual abuse relating to the allegations and was sentenced to prison in 2020.
At the September 2023 trial, the plaintiffs presented evidence that Alternative Family Services failed to comply with certain regulations and their own policies in approving the Martinezes as temporary guardians.
Pointing out that a party that did not create a danger is generally not liable in tort for failing to protect unless there is some special relationship between the victim and the defendant, Simons opined:
“FFAs undoubtedly have a special relationship with the foster children they serve….[F]oster children are a uniquely vulnerable population. FFAs have an extraordinary impact on the fate of foster children, given that they screen, recommend, and monitor foster parents, and foster children have little ability to protect themselves if placed in an unsuitable home.”
Exception to Duty
However, he added that “courts may create an exception” to the imposition of a duty of care “[e]ven where there is a special relationship” if the factors identified in Rowland “justify excusing or limiting a defendant’s duty of care.”
Alternative Family Services argued that the unique circumstances surrounding FFAs favored limiting liability against them to cases involving actual knowledge that the foster family posed a risk to the children. The plaintiffs, on the other hand, argued against any restriction.
Rejecting both views, Simons wrote:
“We adopt a different position: FFAs have a duty to protect foster children from sexual abuse where an FFA knew or should have known a foster parent presented a risk of such harm….[A]lthough the sexual abuse of foster children is generally foreseeable, other…factors—the closeness of the connection between the negligence and the harm, moral blame, and the limited availability of insurance—weigh against liability absent at least constructive knowledge of a specific risk of harm, and the prevention of sexual abuse does not require imposition of liability based on general foreseeability alone.”
Known Risk
Saying that “FFAs undertake to screen and supervise specific foster parents who will have unlimited access to vulnerable foster children,” he commented:
“[T]he possibility of sexual abuse by foster parents is known and an important focus of screening and supervision; and, in every instance, an FFA’s recommendation will have been necessary for the placement of a child with the child’s abuser. Due to all of those circumstances, FFAs have a responsibility and opportunity to mitigate the harm from a foster parent unlike that present in cases relied on by defendant [that imposed an actual knowledge standard].”
As to the insurance issue, Simons cited a public notice filed by Insurance Commissioner Ricardo Lara in 2024, declaring:
“Primarily due to recent high-valued court judgment settlements against FFAs,…the [Nonprofits Insurance Alliance of California] began issuing nonrenewal notices to some FFAs…as well as pausing acceptance of coverage for new FFAs. Those FFAs…are unable to readily obtain available and/or affordable replacement coverage…This lack of coverage will likely force many FFAs to start shuttering their programs, thus upending the stability of the foster children and youth that they serve.”
Recognizing that “the limited availability of insurance weighs in favor of limiting the scope of the duty to protect, especially because state policy favors the continued viability of FFAs,” he concluded that “we do not believe it strongly weighs in favor of limiting liability, given the uncertainty that such a step will result in the broad availability of coverage.”
The case is C.F. v. Alternative Family Services Inc., 2026 S.O.S. 1654.
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