Torrance Catholic school embroiled in nun theft scandal can be sued for firing teacher with breast cancer

In the spring of 2014, Kristen Biel had just been diagnosed with breast cancer and needed time off from her teaching job at St. James Catholic School in Torrance for a double mastectomy, chemotherapy and radiation treatments.

She asked the school’s principal, Sister Mary Margaret Kreuper, for a leave of absence during the upcoming fall semester. A few weeks later, she was fired, according to court documents.

Now, Biel can sue the school in federal court for discrimination — a right she was granted last month when an appeals court overturned a lower court decision ruling that Biel was effectively a minister and, therefore, constitutionally barred from suing the church-operated school.

“To be considered a minister under the law and, therefore, not protected and to be able to be fired with this cancer diagnosis is pretty unbelievable,” said Cathryn Fund, an attorney representing Biel.

The case is another black eye for St. James School and for Kreuper, who, along with another nun, has been accused of stealing from students’ tuition checks, fees and fundraisers for more than a decade, school officials recently announced.

Kreuper, 77, and her vice principal, Sister Lana Chang, 67, diverted hundreds of thousands of dollars into a long-overlooked church bank account that they used for personal expenses, school officials and church auditors told parents at a raucous meeting in Redondo Beach last month. Parents said the nuns spoke openly about gambling trips to Las Vegas and vacations in Lake Tahoe, claiming that Chang had wealthy relatives who provided for them.

Auditors working with the Archdiocese of Los Angeles said the nuns stole at least $500,000 but that the figure probably will rise as the investigation continues. The archdiocese initially said it would handle the investigation internally and not press charges, but later reversed course, saying it was cooperating with police and planned to become a complaining party in a criminal case.

Neither the nuns’ order, the Sisters of St. Joseph of Carondelet, nor the church dispute that the pair took the money. Kreuper and Chang, who retired from St. James School last spring, could not be reached for comment.

Sgt. Ronald Harris, a spokesman for the Torrance Police Department, said Friday that a criminal complaint had not yet been filed and that a police investigation is ongoing. Authorities have been asking parents for copies of old tuition checks and details about cash donations.

“Our detectives want to be sure we do a thorough investigation, but anything involving a potential theft of funds, just by its nature, can be extensive,” Harris said.

Biel, 53, of Redondo Beach, began working at St. James in March 2013 as a long-term substitute teacher and was hired as the school’s full-time fifth-grade teacher at the end of the school year, according to court records.

She received one formal, positive evaluation from Kreuper in which the principal praised Biel’s “‘very good’ work promoting a safe and caring learning environment,” court documents state. Kreuper also mentioned areas for improvement, noting that some of Biel’s students had cluttered desks and that two students were coloring in their books.

Biel was diagnosed with breast cancer in April 2014 and told Kreuper she would begin treatments the next month.

A few weeks later, Kreuper said she would not renew Biel’s contract, claiming it would be unfair for students to accommodate her leave by having two teachers in one year, according to court documents. Kreuper also accused Biel of not running a strict classroom.

Biel filed a federal suit against St. James in 2015, alleging discrimination, retaliation and wrongful termination in violation of the Americans with Disabilities Act.

The school, she alleged, terminated her employment “because of her cancer and because it did not want to accommodate her finite leave of absence for no legitimate reason.”

In January 2017, U.S. District Judge Terry J. Hatter Jr. sided with St. James, ruling that Biel was barred from suing the school under the ADA because of a “ministerial exception” that broadly shields religious organizations from civil rights claims involving its ministers.

Because some of Biel’s teaching duties involved conveying Catholic doctrine, including a 30-minute religion class four days a week, she was considered a minister under the law, Hatter ruled.

“It was a surprise,” Biel told The Times on Friday. “I’ve never been called a minister, ever.”

On Dec. 17, in a 2-1 decision, the U.S. 9th Circuit Court of Appeals reversed the lower court’s decision, saying Biel could not be considered a minister. She had no training in Catholic pedagogy when she was hired, the school had no religious requirements for the position, and her title was that of a teacher, not a minister, the court ruled.

“Biel’s role in Catholic religious education was limited to teaching religion from a book required by the school and incorporating religious themes into her other lessons,” Judge Michelle T. Friedland wrote in ruling.

Biel, who is still fighting cancer, said she was “very, very happy” with the appeals court decision.

The archdiocese indicated that it intends to contest the ruling.

“The Supreme Court has already unanimously said that churches, synagogues, and temples — not the government — ought to choose who teaches the faith in religious schools,” Eric Rassbach, vice president and senior counsel at the Becket Fund for Religious Liberty, which represents the archdiocese, said in a statement. “Given these principles, the Archdiocese will continue to advocate for the ability to operate schools in a manner that is consistent with Catholic values and teachings.”

Adrian Marquez Alarcon, a spokeswoman for the archdiocese, said the mounting legal fees associated with the theft and Biel’s case will be borne by the archdiocese, not the small K-8 school.

Fund, Biel’s attorney, said that the recent revelations about Kreuper’s alleged theft from the school could factor into her client’s case.

“What this case comes down to is the credibility of Ms. Biel and the credibility of Sister Mary Margaret,” Fund said.

She added: “When you’re involved in a huge scandal like this in the same time period that you made these employment decisions, it’s certainly relevant to the case.”

Jack Alexander, a Redondo Beach real estate appraiser whose three children attended St. James from 2003 to 2016, said the school’s reputation has been dragged through the mud recently and that there are rumors that enrollment will decline.

“We’ve had a series of bad situations,” Alexander said. “It is a bad stigma, especially for people still trying to put kids through school and go to the church.”

hailey.branson@latimes.com

Twitter: @haileybranson