Often corporations and businesses do not update their registered agent’s name and address, typically with the Secretary of State of the state in which the principal place of business is located, so it is no surprise churches and non-profit entities fail to do so.  This is especially true when a founder or long time business manager for a non-profit entity or a church dies or retires.

An example of this is found in Fernwalt v Our Lady of Kilgore, 2017 Ohio 1260 (Ohio App. 2017).  This is such a strange little case that detecting the legal principles is hard due to the distractions.

Apparently, Fernwalt found himself “a fugitive of the law” and “attempting to leave the country and flee to Canada.”  The opinion does not explain this tantalizing fact further.  But, Fernwalt decided he could trust a priest named Steger and he transferred title to property to Steger.  Good to his word, Steger transferred the property title out of Steger’s name and into the ownership of a non-profit corporation Steger created called Our Lady of Kilgore.  Steger was the pastor of a church from which he resigned about a decade after the title transfer and then promptly died.  A second decade passed and Fernwalt returned to reclaim title to his property.  The opinion does not explain the triggering event that brought Fernwalt back.  Fernwalt filed a lawsuit against Our Lady of Kilgore, the non-profit entity, to recover his property title.  Fernwalt served the papers at the last address on file for Steger as the registered agent, which was the church he pastored a decade earlier.  The church rejected the service and no one forwarded the papers.  Fernwalt took a default judgment.

In the nick of time, Steger’s successor corporate officer found out about the lawsuit and moved to set aside the judgment.  The trial court refused to set aside the judgment but the appellate court reversed the trial court.

Some jurisdictions would not have been so forgiving, and even then in this case it took an appeal to reverse the judgment.  It is possible that due to a procedural error in entering the judgment, it would have been considered null and void and had to be reversed in any event.  Thus, the reversal of the judgment might not have occurred without the defect in entering the judgment.

In other words, do not risk it.  Make sure the church has a registered agent and that the registration is current and on file with the appropriate authorities…and do it now!

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