Author: churchlitigationupdate

WHEN THE SEWER BACKS UP

Most of the time when a utility like a sewer fails clean up and repair follow at costs low enough for the local church, like any other property owner, to absorb. But, when it is a disastrous backup from a city maintained line the damage from which is either not insured at all, or inadequately insured, further investigation of the cause may be required. If the cause is not the church building or its people, it may be the municipality providing the sewer line. If it is, the church may have to proceed with a claim for reimbursement of its damages.

In Crestwood Vineyard Church, Inc. v City of Oklahoma City, 2020 OK CIV APP 3, the trial court’s summary judgment in favor of the city was reversed. The church timely filed a tort claim notice in compliance with the state tort claim statute that required filing of the notice. Without such a properly filed notice, the lawsuit may have been barred. When the city denied the claim, or by operation of law it was denied, the church filed suit. The trial court entered summary judgment because the city proved it had no user complaints from the sewer line in the five years prior to the incident. The sewer back up into the basement of the church was cleaned out by the city but the damage to the basement was extensive. The appellate court held that while the lack of a user complaint to the city indicated the city did not have that type of notice, the city had not proven it lacked notice by virtue of its own maintenance records. On remand to the trial court, the church will have the opportunity to prove through sewer maintenance records, if the church can do so, that the city had another form of notice.

A large city may or may not have records that are reliable as to whether there were, indeed, user complaints. Complaints may come from so many sources that complaint tracking for a government entity is a technological and records preservation challenge. A church in such a situation should check with the neighbors, such as other users on the same sewer line. Whether maintenance records will prove the matter one way or another may also be problematic. A large city covering many square miles and managing substantial infrastructure may or may not have records of completeness and clarity. Gaps in maintenance records, if any, may be more valuable than the records themselves.

CHURCH PRENUPTIAL AGREEMENTS

While prenuptial agreements are generally outside the scope of the author’s knowledge as well as outside the scope of these reports, this report does not appear to require either divorce law knowledge or a change in focus. Churches have, however, wandered into this area. Churches may increasingly need agreements to govern the exit of the church from an employment contract with a pastor, a denomination, or a parachurch organization.

In Tilsen v Benson, Slip Op., 2019 WL 6329065 (Supp. Ct. Conn., 2019), the trial court was asked to enforce the alleged Torah law mandate of an even division of marital property based upon a prenuptial agreement known as a “ketubah.” The ketubah apparently had some indicia of a civil contract enforceable in any court between husband and wife. It was signed by both parties and may have been supported by legally cognizable consideration other than personal promises of fidelity. The ketubah contained a dispute resolution clause that required submission of disputes to the “Biet Din,” a Rabbinic Court. A dispute resolution clause requiring arbitration or mediation could be similar. The trial court refused to consider the ketubah because to do so required ecclesiastical entanglement. Indeed, rabbinical experts were being lined up to testify and many of the terms of the agreement were not secular but were religious. To the extent the parties wished to enforce in court a secular provision in the ketubah, which appeared to the court to be a written contract, that might have been possible. But, the provisions based on Torah law were not enforceable in court. Of course, the court rendered no opinion about whether the religious provisions could be enforced in some manner not involving a secular court.

Regardless of denomination, churches struggle with civil ceremonies conducted under secular civil law. The logical solution may someday be considered. The civil ceremony and the church ceremony do not have to be in the least related, except where the parties want it. A parallel solution would be to have ketubahs and similar documents translated into English, rewritten into secular terms by a lawyer, the secular version approved by the appropriate religious authorities and the original religious version kept as well. Both could be signed in parallel. They could incorporate each other by reference. It may be that this has been done but because the case reported involved a thirty year old ketubah it may be that changing practices left it behind.

SUING CHURCH ADVISORS

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.

RELIGIOUS BYLAWS

There is sometimes a thin line between ecclesiastical language in church bylaws and secular language intended to satisfy state law requirements. Enforcement of church bylaws is generally possible in a contract action in a secular court. However, religious language in bylaws may not be.

In Weare Bible Baptist Church v Fuller, Slip Op. (NH, 2019), the New Hampshire trial court tried to enforce the bylaws as written using its contempt powers. The founding pastor was permanently incapacitated by stroke. The wife of the founding pastor refused to give up the parsonage resulting in its loss of property tax exemption. The wife also led a faction, primarily of family members, that usurped the corporate seal and office of the Treasurer. Using the corporate seal, the wife’s faction attempted to terminate the successor pastor’s employment and notified the Secretary of State in a writing sealed with the corporate seal that only the wife’s faction retained control of the corporation. Resolution of the issues in the trial court required a three day evidentiary hearing that included testimony from an expert witness in denominational practice and polity. The appellate court reversed and remanded ordering the trial court to consider only deeds, trusts, and statutes. If the trial court could not resolve ownership and control issues with those documents, church governance documents would next be considered but only within the confines of Neutral Principles of Law.

The opinion is silent regarding whether the disabled pastor was provided for through disability insurance or other church purchased safety nets. The opinion is silent regarding whether the parsonage was fungible in some reasonable manner. The silence prevents a determination as to motivations: such as whether the wife was trying to retain control or was acting in desperation because of an involuntarily imposed vow of poverty. The lesson that can be gleaned however is that religious language in bylaws can be internally enforced by the church or not at all. To be enforced regarding corporate governance rather than church governance, the bylaws should give unto Ceasar.