ESCAPING THE LEASH

Parachurch organizations, like senior care facilities and universities may eventually want to slip the leash and go their own way. Sometimes the efforts are crude and tempestuous. Other times they look like perpetual slow motion over a generation or more. In the end, however, if denominational control is exerted through organizational incorporation or governance documents, such as bylaws, the likelihood of escape under current law remains minimal. In the long drawn out efforts to escape, in contrast to the short noisy ones based on momentary shock and awe, it is a test of wills cloaked in the political correctness of the culture of the denomination in which each side attempts to drown the other’s position in kindness and mild rhetoric.

In Missouri Baptist Convention v Missouri Baptist University, et al, Slip Op. (Mo. App. 2019), the denomination’s lawsuit to enforce the governing documents of the university and the senior care center was filed in 2002 and summary judgment granted by the trial court in 2017. There is no explanation in the opinion why this case pended, or was allowed to pend, for fifteen years. The Court of Appeals affirmed the Summary Judgment in 2019 in the seventeenth year of the case. While the university and senior care center defendants attempted to convert the issue to an ecclesiastical issue that could not be judicially resolved, the attempt failed. However, the clever argument was that by deciding the denomination retained its explicitly preserved right to veto changes to the governance documents, the court was in effect deciding a religious dispute that arose between them. The religious dispute was not fully detailed but appeared to be that the denomination wanted the university to adhere in teaching to traditional religious doctrine rather than current scientific theories or conclusions. The clever argument about control and implied ecclesiastical decision making was blunted by the admission by the university and the senior care center that that the denomination was not, in fact, motivated by religious principles in its pursuit of control of the governance documents. That left the governance documents free to be enforced under Neutral Principles of Law, even if the implication of such a ruling would determine where control of the parachurch organization might reside. The appellate court held that third party consent clauses in corporate governance documents did not violate public policy but rather actually effectuated public policy.

Third party consent to amendment clauses in corporate governance documents will generally be enforced. Rather than litigating them, the better practice for the parachurch organization would be to try to raise the capital to buy the clauses back from the third party. A purchased release or waiver would be more certain and less expensive than litigation. Negotiations stretching back over many years may be necessary but stand a greater chance of success. If litigation is preferred, the argument that enforcement of the governance documents will also unfairly decide, not just implicate a true religious dispute, is the only avenue that offers any material slim hope in most states.

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