Churches sometimes hire “experts” based on referrals or recommendations and never inquire as to licensure. Generally, these “experts” are bookkeepers that are not Certified Public Accountants or Public Accountants, or non-lawyers providing legal advice. The internet has exacerbated this practice. Small evangelical churches are especially prone to do so. The economics that drive these decisions sometimes are not reviewed even after the church has outgrown its hand to mouth beginnings.
In El Pescador Church, Inc. v Ferrero, Slip Op. (Tex. Civ. App. 8th 2019), a letter from three church board members, or former board members, requested access to a filing cabinet containing church financial records. It may have been that the records were lost. Indeed, no copy of the church bylaws were placed in the court record. The pastor denied access to the financial records. Thereafter, the dispute widened into a church split. The church split resulted in an unsuccessful lawsuit against the pastor. The trial court dismissed the case as to the pastor and the appellate court affirmed based on the Ecclesiastical Abstention Doctrine. The issues raised regarding the pastor involved only church governance issues including congregational votes and similar issues. None of the issues involved property ownership, control of church property, and no issue as to who the officers or directors of the church could be. Also sued was an advisor engaged to advise regarding church governance and financial issues. The advisor was not licensed as an accountant or a lawyer even though he was asked to conduct an “audit” and advised the church regarding legal matters. The case against the advisor continued, at least as far as further amended pleadings in the trial court, because the church was a “consumer” under the Texas Deceptive Trade Practices Act and because the church alleged the advisor did not disclose the lack of licensure.
Church “advisors” that are not licensed to provide the service being sold typically cannot respond in damages and have no insurance. Without licensure, there is no regulatory oversight of the “advisor.” An “advisor” caught in a church split is also taking a risk. In the reported case, the pastor that engaged the “advisor” was shielded by the Ecclesiastical Abstention Doctrine but the “advisor” was not. While it remained to be seen whether on remand to the trial court the claim against the “advisor” would survive, the “advisor” was still left “holding the bag.” The church had a claim against the “advisor” because the pastor that engaged the “advisor” was an agent of the church. Thus, the “advisor’s” argument the “advisor” was not engaged by the church failed.