Category: Church Governance

THE POWER OF MEMBERS

Congregational church governing documents often are not drafted with any an eye to resolving disputes or reflecting significant changes in leadership.  They should be.  They should be reviewed annually or bi-annually to make sure they are current and complete.  At least bi-annually church counsel should review them.  In hierarchal churches, the governing documents of the denomination are usually adopted or modified in denominational meetings that occur less often.  The local church governing documents, unless dictated by the denomination, should still be reviewed.

In Bui v Bach, Slip Op. (CA. App. 2022), the “internecine battle for control of the temple” commenced upon the death of the founder.  The founder allegedly selected a successor, a successor allegedly confirmed by the membership, but two factions formed to challenge each other.  The Plaintiffs were “long-time dues-paying congregants” but not office holders.  The Defendants were two of the members of the board of directors that allegedly sought to force out the allegedly chosen and confirmed successor.  The trial court held the “long-time dues-paying congregants” did not have “standing.”  In other words, the court held the congregants did not have an interest recognized in the law to allow them to judicially challenge the actions of the directors.  The appellate court reversed in part.  While the appellate court held the congregants lacked standing for a cause of action based on a state corporation statute, which required that the Plaintiff be a director, other theories were allowed to proceed.  The appellate court held a congregant had standing to demand an accounting from the Defendant directors.  The appellant court held a congregant had standing to seek a judicial declaration as to who the legitimate directors might be under corporate law, if applicable.

The winner will be ultimately determined in the trial court on remand.  However, such litigation can generally be avoided if bylaws, or other governing documents regardless of what they are named, are routinely reviewed and authenticated by the corporate secretary.  The original and copies should be separately stored.  Digital copies are acceptable, but the only copy should not be on the computer sitting in the church office.  Indeed, the membership should have a digital copy.  In the reported case, the original bylaws, thought to be lost, were only located because by happen stance someone filed a set as an attachment to incorporation documents.  Succession of leadership procedures should be clearly set forth, easily enacted by a congregation, and easily documented.  Membership rolls should reviewed and authenticated annually.  Likewise, copies should be stored.

CHURCH SPLIT LITIGATION ARMAGEDON

While numerous court opinions have been reported previously that involved church splits of varying degrees of nuisance, expense, or even violence, few have inspired nearly 21,000 words in over 70 pages.  Usually, the issue is in the end simple:  a court will not hear or review pastoral employment or church governance decisions.  A court may review governance documents and state non-profit corporation law to determine who gets to make the choices, and more importantly, control the accounts and property, but the Ecclesiastical Abstention Doctrine generally is a hedge a court will not cross.  Church split litigation usually consumes tithes and offerings for attorney fees at an alarming rate that threatens survival of the local church.  Church split litigation often seems to convince some courts that church governance immunity does not work outside of denominational governance.

In Bookout v Shelley, Slip Op. (Tex. Civ. App. Fort Worth 2022), the exact outer limit of the Ecclesiastical Abstention Doctrine had to be determined on various theories of recovery.  The appellate court opinion began by characterizing the case as an “internecine battle for control” of the church.  To resolve the issues, took 21,000 words and over 70 pages.  The trial court denied a motion to dismiss based on the Texas Citizens Participation Act (“TCPA”).  The TCPA, like many Texas statutes had a worthy political remedial goal in mind but the draftsmanship applied to the TCPA by the legislature left no corral fence.  Most of the appellate court’s opinion regarding TCPA claims will be omitted because outside of Texas it probably will be of no interest.  The church split was brought to a head when the former pastor resigned due to alleged sexual improprieties.  The Appellants claimed they were the duly elected board of directors for the church, terminated the new pastor, and seized control of church bank accounts and property.  The Appellees claimed they were the duly elected board.  Appellees also claimed the Appellants converted church funds, in part by paying their lawyer $40,000.  The alleged change of leadership from one board to another was accomplished by alleged forgeries of corporate documents.  The documents were never filed of record with the state.  Corporate documents were allegedly also created to install the board and these were filed with the state.  Each side adopted new bylaws to obtain favorable governance documents.  One of the Appellants took to social media videos to accuse one of the Appellees of being a “sodomite,” abusing his children, and embezzlement.  The appellate court held the accusations of abusing children and embezzlement had no Ecclesiastical implications and could be heard as any other defamation claim.  The accusations of being a “sodomite” were Ecclesiastical accusations, the court held, and could not be heard.  The reason for termination of the new pastor set forth in a termination letter, “due to many irregularities in the accounting, managing, and handling of donations to the church,” was a defamation claim that could be determined, the court held, under Neutral Principles of Law.  The issue of eligible church leadership could be determined under Neutral Principles of Law by reviewing the governance documents.

The attempt to summarize the case reported in less than 1,000 words probably has resulted in a report that omits many things valuable to a Texas practitioner.  The elements of each claim were carefully enumerated and analyzed both in terms of Texas law and the Ecclesiastical Abstention Doctrine.  This church split, like too many we have reported, should have been mediated and reasonable people would likely have settled matters.  A good settlement is one in which no one is completely satisfied but everyone can live with it.  Further, defamation as a way of resolving church disputes has been proven repeatedly, and herein reported repeatedly, as a losing tactic.  Persons engaging in it, even if somehow justified in an Ecclesiastical sense, will appear to be unreasonable and not believable when reviewed by anybody and everybody else.  From the outside of the incestuous emotions of a church split, observers are left wondering if there are adults in charge.  Church factions that insist upon scorched earth tactics, announcing their allegations after a trumpet blast, e.g., social media videos, may wreck the church but will not likely prevail.

LEADERSHIP SUCCESSION FIASCOS

The court decision reported below started with the summary, “a dying bishop, a simmering feud over his successor, and allegations of misappropriated assets provide the backdrop to this church property dispute.”  Orderly succession, especially anticipating the unexpected passing of a founder, can only be achieved by adopting and following governance documents that provide a clear process.  The “Insurrection of the Bubbas” on January 6, 2021 notwithstanding, succession has been a hallmark of the democracy since inception much to the surprise, and envy, of much of the world in different eras.  Thus, it would seem succession at the local denominational or local church level should be easier to implement.  Apparently, that is not always so.

In Early Church of God v Jackson, 2022-Ohio-4034 (Slip Op.) (Ohio App. 2022), the appellate court reversed the dismissal of the case by the trial court on two of the three theories for relief or recovery submitted by the Plaintiff.  The theory upon which the trial court dismissal was affirmed was pled in “trespass.”  The allegation was that the Defendants were trying to conduct an unauthorized ordination of one of the Defendants to be a successor bishop.  The trial court held the alleged basis of the claim to be an ecclesiastical issue.  The Plaintiffs claims for breach of fiduciary duty and demand for an accounting regarding church bank accounts and other property were held to be viable using Neutral Principles of Law.  The appellate court held allegations of embezzlement or misappropriation are secular issues for which ecclesiastical claims need not be considered.

The ”trespass” claim should have been pled as a “trespassing” claim after the locks were changed and if defendants tried to use Plaintiff’s facilities without authorization regardless of the event contemplated.  If the financial transactions complained of were unauthorized by the governing documents or the authorized leadership, then such claims can be proven.  Once the denomination or church becomes aware of a problem, the banks and other property custodians should be notified so that access to the funds or property can be regulated.

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.