Category: Church Governance

THE NO BYLAWS PROVISION SCENARIO

We have repeatedly reported church governance cases that turned in favor of the church because the church had and followed its own governance documents, of which bylaws are usually a center piece.  Of course, implicit was the assumption the bylaws were complete in dictating the policies and procedures of church governance to be followed.  Not all bylaws are complete.

In Auguste v Hyacinthe, Slip Op. (FL App. – 2022) the trial court dismissed the case based on the Ecclesiastical Abstention Doctrine.  The Plaintiffs alleged the procedure used to reconfigure the board of directors violated state law and that there were no provisions in the bylaws that supported the procedure for ouster used.  The procedure allegedly used by the Defendant, after the founder died, was filing unauthorized annual reports with the Florida Department of State listing himself as director and pastor of the church and removing the plaintiffs as church officers.  The Plaintiffs alleged the filing arose from a meeting of a “small portion of the church membership,” held “secretly,” and a resolution ousting Plaintiffs adopted by a rump of the board.  The Defendants argued that no provision in the church bylaws provided for this removal procedure and that Neutral Principles of Law, such as the state statute governing non-profit corporations, required other procedures.  The appellate court reversed the dismissal for determinations whether bylaws procedures were in existence or followed. Church founders should have carefully crafted governance documents in place to securely transfer positions and authority to the appropriate successors.  Church bylaws, like any other corporate non-profit, should have governance documents drafted or at least edited by a lawyer.  Governance documents should clearly specify the procedures for hiring or appointing and terminating church employees, including senior pastors, and other church officers.  What is not needed in the first generation of leadership will undoubtedly be essential in every other.

SHIFTING SAND

In decades past, denominational doctrines often seemed established, immutable, and immoral to oppose.  Denominational doctrines seem to be challenged, and in some cases abandoned or revised, in growing numbers.  Whether in the distant future these changes will be viewed as aberrational or merely a form of maturation remains for others to determine.  Opposing denominational doctrines in court has always faced the all but insurmountable barriers of the First Amendment:  the Ecclesiastical Abstention Doctrine (doctrine), the Church Autonomy Doctrine (governance) and the Ministerial Exception (“ministry” employment).

In Payne-Elliott v Roman Catholic Archdiocese of Indianapolis, Inc., Slip Op. (Ind. 2022), the Supreme Court of Indiana affirmed the trial court’s dismissal of the case.  The Court concluded the plaintiff pled himself out of court by pleading facts that established the Church Autonomy Doctrine defense.  The opinion reported the Plaintiff’s same sex marriage led to two different results.  The Plaintiff’s spouse was an elementary school teacher at a Catholic elementary school.  The elementary school refused to terminate the spouse.  The archdiocese removed the school from the denomination.  The archdiocese ordered the Catholic high school employing the Plaintiff to terminate Plaintiff and they did so.  Apparently, the high school entered a financial settlement with the Plaintiff.  However, the case continued against the archdiocese.  The Supreme Court of Indiana set forth the elements of the Church Autonomy Doctrine affirmative defense as prohibiting a court from penalizing via tort law a communication among church officials on a matter of internal church policy (i.e., governance) that does not culminate in a criminal act.  Because the Plaintiff pled that the Catholic high school was commanded by the denomination to terminate Plaintiff due to Catholic doctrine, the Church Autonomy Doctrine elements were held satisfied resulting in dismissal.

While the legal outcome of the reported case was not surprising, we have reported many similar decisions and few exceptions, the reported case was startling because of its “Birdseye view” of denominational doctrinal slippage.  A Catholic school stopped being a Catholic school.  Another Catholic school paid a settlement to avoid further litigation.  Only the denomination continued until the case was concluded.  Only future generations of church members will be able to judge whether choices like these were reached following immutable doctrine or reflecting changing doctrine.

NEUTRAL PRINCIPLES V ECCLESIASTICAL PRINCIPLES

While it is true some Courts never find an Ecclesiastical Issue over which to abstain, and some expand Neutral Principles of Law to fill all voids, generally most Courts do not seem to have any trouble with a hands-off approach to church governance.  It is true that non-profit corporations in general and churches in particular can be vulnerable to usurpation because of the volunteer nature of their leadership.  Thus, there is recognized by some Courts a “fraud or collusion” exception to the church autonomy doctrine.

In Moon v Family Federation for World Peace, Slip Op. (DC Cir., 2022), the ongoing litigation between the widow and two sons of the deceased founder was revitalized when the board of directors of Unification International, Inc. allegedly reconfigured the governing documents to permit donation of half of the assets, about half a billion dollars, of Unification to entities “not affiliated” with Family Federation.  We last reported on the litigation between these and affiliated parties on August 3, 2019.  The trial court in this instance concluded the Neutral Principles of Law could be deployed and granted summary judgment to Family Federation, directed the board members be personally liable for the assets, and removed from their positions.  The Court of Appeals for the DC Circuit reversed the summary judgment, wiping out the judgment against the board members, and remanded for a determination of whether the fraud or collusion exception to the church autonomy doctrine was a viable claim.  If the claim survives in the trial court, it may lead to a second judgment.

The failure of the founder to have a firmly structured plan for succession led to years of litigation among the surviving family.  Nevertheless, a deceased founders’ intentions and plans may or may not survive the transition to new leadership resulting in restructuring of the surviving entities and relationships.  In very rare cases, there may be evidence that the restructuring was not based religious beliefs but rather on self-dealing, fraud and conspiracy.

INVISIBLE LANGUGE IN CHURCH PROPERTY DEEDS

Whether a local church can break away (“disaffiliate” in some groups) from a denomination, and whether the local church has followed the procedure to do so to conclusion, are usually very difficult inquiries.  Because the determination of whether there is an ability to break away, and whether it has been done, usually determine who owns the local church property some courts are tempted to decide these issues as if they were amenable to review under Neutral Principles of Law.  Others refuse to decide the issues under the Ecclesiastical Abstention Doctrine.

In Blue v Church of God Sanctified, Inc., Slip Op. (Tenn. App. 2022), the trial court refused to determine whether the local church “disaffiliated” by holding the issue was shrouded in the Ecclesiastical Abstention Doctrine.  Nevertheless, because the denomination determined that the local church held the church property in trust for the denomination, the trial court held that decision was also shrouded in the Ecclesiastical Abstention Doctrine.  The Tennessee Court of Appeals in its lengthy and detailed opinion affirmed the trial court.  While the appellate court authorized trial courts to review all governance and property ownership documents, the decision of the denomination that the local church property was held in trust for the denomination was ecclesiastical if it was enshrined in denominational governance documents.  That was so regardless of whether or not the local church property deed contained a “trust clause” making the local church owner a trustee for the denomination.

Courts were sometimes hung up on the boundary between the ecclesiastical and secular property ownership.  Such courts can elevate the presence or absence of language in deeds above denominational governance documents, or even local church governance documents.  The approach in the reported case avoids blurring the ecclesiastical boundary by elevating the denominational governance documents and relying on other documents only in the event of silence or ambiguity in the denominational governance documents.