THE “BAD MOTIVES” DEFENSE IN THE HIERARCHIAL CHURCH CASE

After a fire destroyed the church building in 2013 and insurance paid $1 million, the denominational authority had to decide whether to rebuild the building.  In order to make the decision, the denomination decided to first test whether the congregation was viable.  The congregation had stopped paying dues to the denomination, stopped attending synods, and stopped obtaining approval of elected board members of the local church.  When the denomination asked the congregation how many dues paying members it had, the congregation could only identify “twenty seven and one half” dues paying members rather than the number required to prove viability, which was fifty.  The Plaintiffs sued to try to stop the denomination from ending the existence of their congregation and seizing the church property and accounts.  St. Cyrillus v Polish National Catholic Church, Inc., Slip Op. (Superior Court, NJ, 2017).

The St. Cyrillus opinion was issued by a New Jersey trial court in which the court granted summary judgment to the denomination based on the reversionary clause in the denominational documents.  (In many states, trial courts do not have staff attorneys and do not write opinions so this opinion represents a rare opportunity.)  It was alleged the denomination in correspondence referred to the St. Cyrillus congregation as that “peruvian congregation.”  The argument was that the reference to nationality or ethnicity was pejorative.  It was argued it showed a “bad motive” by the denomination to reach the decision to close the congregation and gather the assets.  The trial court held the mere mention of the congregation by that label did not in isolation indicate the term was used pejoratively.  In any event, the court held the congregation could not prove it was viable.

There are not many reversionary clause cases extant.  Those that are almost always find the denomination, if the congregation was a member, has the right to exercise the reversionary clause.  The St. Cyrillus congregation was an active member of the denomination from 1937 until 2010 and therefore its membership in the denomination was not effectively contestable.  The denomination tracked the participation of the congregation in synods over several decades.  Correspondence from pastors of the congregation going back forty years demonstrated acknowledgment of membership.  The congregation was incorporated before it joined the denomination but that gap in the documents was insufficient to negate the other abundant evidence.  The lesson regarding the need for quality denominational documents and document retrieval was well made.

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