The concept of Neutral Principles of Law is founded on the idea that certain documents are not so ecclesiastical in their composition, purpose and usage that courts can resolve certain church related disputes. Typically, those documents are property deeds, church corporate organizational documents required or authorized by a state, and denominational organizational documents. In denominational procedure and policy manuals and handbooks in which the operational rules of the organization are typically published, there may be secular sections that are removed from ecclesiastical issues.
In Re Texas Conference of Seventh Day Adventists, Slip Op. (Tex. Civ. App. 2nd 2022), the appellate court “allowed” the trial court to dismiss the case for lack of jurisdiction. Texas views the Ecclesiastical Abstention Doctrine as a jurisdictional limitation on the authority and power of Courts to hear cases involving churches. The denomination forced the pastor after a quarter century of service to retire. He continued to serve the local church for five more years. The local church during those years gathered money for the pastor’s pay and transferred the cash to the denomination so the denomination could exercise the payroll function. The denomination terminated the pastor at the end of the five years. The local church did not resist and prepared to wind down the payroll fund and pay the pastor the remaining balance. The denomination ordered the remaining balance transferred to the denomination but paid the pastor nothing further. The local church turned to its savings account to obtain funds to continue operating. The denomination prevented withdrawals from the savings account. The denomination changed the locks on the church property and excluded the local church leaders and members from gathering at the church property. The local church sued the denomination and alleged the denomination violated the secular provisions in the denominational manual that placed ownership of the funds taken and the church property in the ownership of the local church. The appellate court held that the Ecclesiastical Abstention Doctrine does not allow secular issues entangled with ecclesiastical issues, such as church governance and authority, to be heard in Texas courts. The trial court was permitted to dismiss the case.
The opinion does not explain how the denomination came to control the savings account otherwise held by the local church. The denomination apparently ordered the local church financial officer to transfer the payroll fund to the denomination. Therefore, implicitly, the denominational control of the finances of the local church predated the dispute. Local churches that wish to retain some financial autonomy must open their bank accounts in their own ownership and update authorizations periodically. Denominations that wish to avoid local church financial autonomy must require all local church funds be deposited in denominational sweep accounts. The denomination can fund a petty cash account at the local church for basic operational necessities.
Church Litigation Update 