Author: churchlitigationupdate

OUTBREAKS OF CONGREGATIONAL DEMOCRACY

There is no particular legal argument local denominational churches can use to escape “trust clauses.” A “trust clause” typically means that the local church property and assets will revert to or taken over by the denomination if the local church no longer functionally exists. The motion common unsuccessful legal argument is that the local church conducted a “congregational meeting” and exited from the denomination. However, it is usually impossible for the local church to prove that there was an actual “congregational meeting” called or conducted consistent with the local church bylaws or the denominational governance documents.

In Presbyterian Church of the Palisades, Inc. v Hwang, Slip Op. (Sup NJ Chancery Div., 2019), a faction or remnant of the local church tried to defeat the “trust clause” by arguing a congregational meeting was convened to extract the local church from the denomination. The argument that the “will” of the congregation can be determined using Neutral Principles of Law, typically state corporate law, has not been available since it was rejected by the United States Supreme Court in 1969 and it was not resurrected in this case. In this case, too, the corporate minutes did not document that a congregational meeting was called consistent with the state statute or the local church bylaws. Indeed, the proof did not appear to support the assertion there had been such a meeting. Also, the faction remaining did not appear to have been properly elected to office. Summary judgment for the denomination was affirmed. The parallel foreclosure on the church property because of the default on the $2.7 million mortgage was also allowed to proceed.

Joining a denomination is easy and departing is nearly impossible. It is usually faster and cheaper for a congregation that desires to depart from a denomination to simply leave the church property and start over again elsewhere. Few congregations survive either staying and fighting with the denomination or leaving, but leaving presents the greater chance. The emotional attachment to a church property always seems misplaced.

CHURCH LITIGATION SETTLEMENT AGREEMENTS

It is possible to settle a dispute without litigation or without completing the litigation process. Settlements can reduce costs and give the parties some control of the resolution. When a resolution is left to a trial, all control can be lost. In order to settle a lawsuit, parties often resort to mediators. Typically, the mediation is concluded by either no agreement at all or some document that constitutes an agreement in principle if not the final contract of settlement.

In Christian Methodist Episcopal Church v Grimes, Slip Op. (Ind. App. 2019), the pastor was serving under an agreement to be paid but was not actually paid. The inability of the church to pay resulted from a “downward spiral” caused by the departure of the prior Pastor. The departing Pastor took most of the membership with her. The successor Pastor served for five years without being paid, although everyone admitted there was a contractual obligation of the church to pay when its finances recovered. The successor Pastor terminated his employment and sued to be paid. During the mediation conducted to try to settle the case within the assets available, an agreement was reached with “reasonable certainty.” The church did not pay and the former Pastor alleged breach of the settlement contract. While the facts recited by the Court regarding the mediation settlement agreement indicated there may have been no meeting of the minds which might mean there was no settlement contract, the church did not contest the motion to enforce the agreement filed by the Pastor. The church appealed the Judgment on the settlement agreement and argued the Court had no jurisdiction to hear a dispute about employment of a Pastor. The Court held the Ecclesiastical Abstention Doctrine did not prevent a court from enforcing the settlement agreement with the Pastor by imposing Neutral Principles of Law.

A settlement agreement is a contract and if a court finds that such an agreement exists, the court can enforce it by any means that would be used in a secular contract enforcement action. It seems extremely unlikely that any lawsuit settlement agreement entered into at a mediation would be unenforceable. It seems more likely that a settlement agreement would be subjected to the Neutral Principles of Law faster than any other agreement involving a church. That would likely be true even if the settlement was regarding the payroll of a Pastor. While Pastoral employment is usually shielded from court review by the Ministerial Exception, a written employment contract is more likely to be enforced applying Neutral Principles of Law. A settlement agreement arrived at by mediation to settle a lawsuit regarding a Pastor’s employment is even more likely to be judicially enforced.

TERMINATED PASTOR’S CONTRACT RIGHTS

The lack of any written contract will generally make a Pastor an at will employee. Termination would be governed by the church or denominational governing documents however the process may be outside the reach of a secular court because of ecclesiastical concerns. When there is a written employment agreement, secular contract terms in a pastor’s written employment contract may be subject to the Neutral Principles of Law in many jurisdictions such that a breach of contract action might be successful. However, termination decisions are generally at best both religious, or moral, and secular decisions the mix of which might put the termination decision outside of the reach of a secular court. Thus, enforcing a secular contract term in a termination may be problematic. Because of the entanglement between religious reasons for termination and secular reasons for termination of a minister, the Ecclesiastical Abstention Doctrine of the First Amendment will generally preclude judicial intervention in terminations. Some judges, and some courts, will believe the secular contract terms can be surgically separated from the termination. However, it seems that most courts will not be comfortable trying to parse the factual issues.

In the case of In Re First Christian Methodist Evangelistic Church, Slip Op. (Tex. Civ. App. 5th, Dallas, 2019), the appellate court ordered the trial to court to dismiss the case. The trial court apparently believed it could parse secular contract issues, such as entitlement to a six-month severance, from whether the termination was for religious cause. Because the termination resulted from a vote of the qualified congregation members, verifying the exact reasons for termination would have required an exhaustive inquiry. At the end of the factual inquiry, there still would have been no logical way to separate the termination of the pastor from religious reasons that might or might not impact the right to severance.

Pastors should avoid “for cause” termination provisions. A church will always have a “for cause” basis if pressed. Such a clause probably offers no protection. If there is a severance provision negotiated, it should be triggered on involuntary termination only and not on the reason for the termination. The Pastor may be unable to enforce the provision if a severance provision is dependent on conduct. The “I did nothing wrong” defense tends to be irrelevant to courts if the claimed “wrong” is religious in nature. Because it is unlikely the severance package negotiated at the date of hire is likely to be as expensive as litigation, the hiring church might share that preference with the Pastor. For the church, finality in the conclusion of the relationship may be more cost effective than a prolonged dispute over whether a severance package is “deserved.”

CHURCH BUILDINGS AS HISTORICAL ICONS

When venerable and historically recognizable church buildings are destroyed there is a profound sense of loss. While few are listed, some church buildings are on the National Register. Other types of buildings on the National Register are protected but church buildings may not be. Also, just because preservation seems like a good idea does not mean enough money to do so will follow.

In Friends to Restore St. Mary’s, LLC v Church of Saint Mary, Melrose, Slip Op. (Minn. App. 2019), the church building was sufficiently significant “historically” that it was accepted on the National Register. However, that did not prevent an arsonist from gutting the interior of the building. The archdiocese ultimately decided to demolish the entire building because, even if restored, it would no longer be a “functional” church building by modern worship standards. The Plaintiff sought an injunction to prevent demolition of the building. The injunction was denied by the trial court and the appellate court because adjudication of the claim was precluded by the ecclesiastical abstention doctrine. The appellate court held that the trial court could not evaluate whether “there are feasible and prudent alternatives to destroying the church building” under Neutral Principles of Law without invading ecclesiastical decisions. The argument the archdiocese did not have the authority to order demolition required an interpretation of Canon Law. The determination of whether an alternative use would be “profane” or “sordid” under Canon Law could not be made on other than ecclesiastical grounds.

Unstated in the opinion but likely at the heart of the problem for those wishing to preserve a historically significant building gutted by an arsonist was insufficient insurance coverage or other funding. A special policy may have been needed to create the resources to rebuild the church interior to its pre-fire look, much less to remodel the interior for modern worship needs. A typical fire loss policy would have been inadequate for what would otherwise be a total loss. But, maintaining the commitment to pay for such an extra or special policy year in and year out would have required an extraordinary commitment. Most churches simply cannot afford it. Too, unstated, was the financial burden on offering plates of restoring an antique, or obsolete, church building, which most courts are not interested in trying to enforce.