As reported repeatedly herein, local church submission to denominational governance documents adopted by the local church during formation, or during denominational joinder at a later date, cannot simply be dismissed. However, local church factions attempting to break away continue to try. They hire lawyers and those lawyers continue to attempt to earn their fees by searching for exceptions in the documents and clever factual distinctions that might defeat the denominational governance document.
In Free Wesleyan Church of Tonga v United Methodist Church, 2019 UT App 41, the local church amended its corporate constitution and bylaws to omit any reference to the denomination in an effort to depart after more than thirty years of membership. The denominational governance documents did not permit departure by this method. Moreover, the local church congregational vote to accomplish the amendments did not comport with denominational governance requirements. Probably knowing that these arguments would be decided in favor of the denomination, clever arguments were added by the local church. The local church argued: (1) The corporate regulatory authority of the state accepted the amendments and issued a new certificate of incorporation; (2) The denomination did not challenge the action of the state’s corporations regulatory authority and by so doing failed to exhaust administrative remedies denying the denomination standing in court; and (3) the denominational governance documents were religious and could not be interpreted by the court.
The trial court rejected all of the arguments and granted summary judgment which the appellate court affirmed. Predictably the denominational governance documents were controlling because the incorporation documents of the local church adopted them and contractually bound the local church. The state’s corporate regulatory certificate of incorporation was produced as a ministerial act and did not adjudicate any rights. Moreover, the state regulatory authority had no adjudicative powers so there was nothing to exhaust. The court also held the denominational documents were religious in part but not as to governance and the trial court’s action was least restrictive of free exercise in order to achieve the state’s compelling interest in regulating property ownership.
Local church rebellions against denominational authorities usually end poorly. Leaving and starting a new church is usually cheaper and something the denomination cannot impair. An attempt to retain or usurp the church property and other assets is usually the true motivation for the refusal to simply depart. Local churches that plan their departures carefully will leave an empty church building with a mortgage for the denomination to financially address. The departed local church will often be the only interested purchaser if the planning has included accumulation of sufficient capital to obtain financing and purchase anything.
Church Litigation Update 