Author: churchlitigationupdate

ARTFUL PLEADING BE IT NOT ARTFUL DODGING

Some courts, it is true, will put a Plaintiff’s Petition or Complaint under a microscope and search for a phrase that might constitute a claim that can be adjudicated in a civil court. Artful pleading, accidental or creative, should not be the standard for stating a cause of action, i.e., pleading a claim that can stay in court. The “substance and effect of plaintiff’s claims” should be the standard.

In Speller v Saint Stephen Lutheran, Slip Op. (Mich. App. 2017) (Per Curiam) (unpublished), the appellate court tracked through each theory of recovery alleged by Plaintiff, apparently as had the trial court, to affirm the trial court’s summary judgment dismissing the Plaintiff’s case. The Plaintiff alleged that through “wrongful conduct” the defendants were ousting him as pastor of St. Stephen’s and impairing or revoking his credentials in the denomination. The Plaintiff alleged that the church:

→violated its own constitution and bylaws;

→the constitution and bylaws constituted an employment contract with the pastor that the church directors violated;

→no notice to church members of consideration of termination of the pastor;

→acted without a vote of the membership;

→church directors breached their “fiduciary duty;”

→defamation in internal church letters (which included allegations of “dependence on prescription pain killers” and a lack of candor about it);

→fraud and misrepresentation;

→false light invasion of privacy;

→defamation in letters sent to third parties such as the denomination; and

→intentional infliction of emotional distress.

The Michigan court swept all of these theories of recovery aside because to adjudicate these claims would require “matters of ecclesiastical polity.”

The harder cases are those that do not involve pastors or involve only parachurch organizations. Also, many courts will not “work through” a multiplicity of theories of recovery, due to tedium, resource limitations, or rules precluding it. Nevertheless, a court that takes a “substance and effect of plaintiff’s claims” approach seems more likely to recognize the Ecclesiastical Abstention Doctrine’s limitation on the court’s jurisdiction early enough in proceedings to save the defendant, and maybe all parties, substantial legal fees.

INSURANCE CLAIMS – THE LEGAL MINEFIELD

One of the axioms that govern lawsuits is that litigating about litigating is almost always the best first strategic move by the defense. It is almost always the Plaintiff in a lawsuit that has suffered some loss and then to recover the loss legal fees and expenses must be paid. This has the impact of deepening the loss without certainty of recovery. Also, litigation choices, which are almost always at best guesses about future events in a case, e.g., whether this expert witness will persuade when another might not, or whether a witness will give reliable trial testimony or whether a deposition should be taken to reduce that uncertainty, will drive the cost but not always the outcome.

An example of this is Ministerio Evangelistico International v United Specialty Insurance Company, Slip Op. (SD FL, Miami Div., 2017). Ministerio endured water damage from a roof leak and could not reach an accord with its insurance carrier. The opinion does not disclose the reason for the dispute but a reasonable speculation might be that the insurance carrier thought a neglected maintenance issue was the culprit rather than roof damage from a casualty loss. Regardless, Ministerio sued but sought a declaratory judgment, a declaration of rights under the policy, rather than merely a breach of contract claim or a bad faith claim. The insurance carrier moved to dismiss the declaratory judgment claim, only one of two claims the church had, and the court dismissed it. The case continued as a breach of contract claim but Ministerio likely incurred legal fees resisting the carrier’s motion to dismiss the declaratory judgment claim. The case started in state court at the end of 2015 and by April 2017 had only reached the Answer stage, meaning a year and a quarter passed. Many federal courts in the United States can still bring a case to conclusion in that amount of time.

The longer a case lasts, higher legal fees, higher expenses, and greater fatigue are often the result. Insurance carriers, however, because litigating risk is part of their business model and part of their cost of doing business, are less sensitive to such fatigue than would be a church. Thus, a lesson from this case is that church litigants should be focused and not scattershot in their lawsuits to avoid, if possible, the trap of litigating about litigating. Indeed, in this case, after a year of litigating about litigating, the case is not over but is barely under way.

MANDATORY REPORTING LAWS – ALL OF THEM

The National Center for the Prosecution of Child Abuse of the National District Attorneys Association updates periodically a document entitled State Laws Regarding Mandated Reporting of Child Abuse. The latest version on their website is current through September 2016 and lists the statutes in effect in all fifty states. This is very handy for church lawyers.

Also, on the NDAA website is the Clergy Communications and Clergy as Mandated Reporters document last updated January 2012. This is equally valuable for church lawyers considering clergy confidentiality, clergy privilege and penitent privilege. A quick reading of this document well convinces that this is still a mine field, especially in light of the reporting statutes, which do not always expressly explain how these privileges should be weighed against the duty to report, or if they can be weighed at all under the law.

These very valuable resources should be used with caution. The march of time is relentless in these areas. Also, these documents were created by lawyers for lawyers. These issues are not simple and counsel should be engaged to assist if a church leader finds that such an issue has arisen.

CORPORATE FORMS – FOLLOW THEM

Especially local congregational churches, but even denominational connectional churches, seem to adopt a corporate Constitution and Bylaws only to ignore them. When a church split arises, it may become a subject of secular litigation to identify the actual qualified voting members and the actually elected officers. A court will not select a Pastor, but sometimes the identification of the voting members or the officers has that indirect effect.

In Victory Valley Church, Inc. v Purported Victory Valley Church, Slip Op. (Wis. App. 2017) (unpublished subject to further editing)(Per Curiam), both sides in the church split had the right to resort to an “ecclesiastical court” under the church Bylaws, but neither did. Instead, both sides submitted the identification of voting members and officers to the court to decide, but one side was not happy with the decision and tried to demand a “do over” arguing the Ecclesiastical Abstention Doctrine. Once submitted by both parties, however, the court could, and did, decide the issue presented pursuant to Neutral Principles of Law, i.e., according to the church Bylaws that were adopted but not substantially followed. The court had to hold a trial to identify qualified voters and elected officers because the church had not kept its corporate minutes updated, had not kept its election(s), if it had any, recorded, and had not kept updated voting membership rolls (which should be done at least annually). Most churches do these things autonomically and quite simply. Even done sloppily would be better than not done at all.

The other problem was that the Bylaws envisioned removal of an officer but required the officers to preside over the removal, creating an inescapable conflict of interest because the officer to be removed would be part of the decision. The Court decided because of the inherent conflict the Bylaws were not workable in this instance and resorted to the state corporations statute which was the default rule if corporate Bylaws were silent or ambiguous. Thus, the other lesson of the case opinion was that churches should make sure the Constitution and Bylaws adopted by the church cover all foreseeable contingencies. Homemade foundational documents of this type, usually drafted by an interested party trying to protect their own interest, can and do backfire.