Category: Church Governance

A COURT DECISION LEADING NOWHERE

We have repeatedly reported opinions of the United States Court of Appeals for the 9th Circuit that reveal a political agenda at work to suppress a legal one.  In 2019, in flagrant disregard of United States Supreme Court rulings to the contrary, see, Hosanna-Tabor Evangelical Lutheran Church & School v E.E.O.C., 565 US 171 (2012), the 9th Circuit continued holding that Catholic school teachers could still make federal employment law claims even though extra-ordinary dissents among their own ranks resulted.  See, Biel v St. James School, 911 F3d 603 (9th Cir. 2018).  The Supreme Court reversed the 9th Circuit.  Our Lady of Guadalupe School v Morrissey-Beru consolidated with St. James School v Biel, ___US___, 140 S. Ct. 2049 (2020).  The 9th Circuit uses various means to navigate past the First Amendment, the Ecclesiastical Abstention Doctrine, and the Ministerial Exception.

In Cedar Park Assembly of God v Kreidler, Order (WD Wash., 2022) the federal trial court ultimately allowed the Plaintiff’s challenge to state statutes imposing on church employers the duty to include abortion coverage in their medical coverage.  The 9th Circuit reversed a prior ruling of the federal trial that had swept aside a Free Exercise claim but affirmed that the church waived its Establishment Clause claim for failing to brief it in the church’s opening brief before the 9th Circuit.  Sadly, the error of the federal trial court pushed the church to the 9th Circuit and the lawyer for the church either made a drafting error or did not think that issue was before the 9th Circuit.  In any event, treating constitutional level jurisdictional challenges as waivable in an interlocutory appeal, particularly in light of a remand, seems typical of the 9th Circuit.  Also, ignoring the authority of the United States Supreme Court is another hallmark.  This issue was decided in Burwell v Hobby Lobby Stores, Inc., 573 US 682 (2014).  Amazingly, the Burwell opinion is not discussed in the Cedar Park Order by the federal trial court.  In any event, the Free Exercise claim, which is an Establishment Clause claim, are simply some of the names given to First Amendment claims.  The 9th Circuit seems to treat the language of the First Amendment (“Congress shall make no law…”) as subservient to its political agenda.

CONGREGATIONAL SOVERIGNTY

In hierarchical and denominational churches, the ability to ascertain what final decisions have been made (or not made) is generally greater than in independent congregational churches.  That is because in independent congregational churches, every document of decisions made, or not made, must come from the local church.  Local churches that are not very good at keeping a record of their congregational votes, membership rolls, or board agendas and minutes, or have no organizational documents, may endure factional strife, hurt feelings in abundance, or even fission.

In McKnight v Wakefield Missionary Baptist Church, Inc., 2022 NCBC 10, Slip Op. (Supp NC 2022), an independent congregational church fell into a factional dispute that spilled out into the street and a North Carolina trial court.  The church was originally organized as an association and had a “constitution” and “bylaws.”  The Plaintiffs were two “trustees” that sued eight other “trustees.”  It all seemed to start at a congregational meeting to decide who should be the signatories to the church bank account(s).  Why this was not being decided by the trustees was not explained, but was probably required by the organizational documents of the association.  The congregation “elected” three signatories.  But, the eight trustees objected to irregularities in the congregational vote and rejected the appointment of the new signatories.  The bank would not allow itself to become the referee, froze the church accounts and filed an interpleader action asking a court to determine who controlled the church accounts.  The eight trustees also fired the pastor, who seemingly sided with the other faction, and locked the building pending release of the church funds in the interpleader action.  One faction conducted off site worship services.  The eight trustees incorporated the church and conducted another congregational vote that ratified all of their actions.  The eight trustees reopened the church building.  The trial court applied the Neutral Principles of Law to determine “who constitutes the governing body of this particular church and who has that governing body determined to be entitled to use the properties.”  The trial held the eight trustees were confirmed in their actions by the congregational vote they conducted after incorporation under the newly adopted Constitution and Bylaws.  The trial court held the eight trustees had a credible membership roll that indicated the voters entitled to vote at the congregational meeting.  The court refused to look behind the congregational vote ratifying the actions of the eight trustees because to do so would intrude on church governance in violation of the Ecclesiastical Abstention Doctrine.  The trial court held no jury had greater authority to inquire into the congregational vote.  The trial court enjoined the Plaintiffs from using the church name in fund raising or a new congregation because the name of the church belonged to the entity and not the membership.  The ratification of incorporation placed the ownership of the church name, previously owned by the association, in the church corporation.

While an appeal might cause the reported rulings to be revised or reversed, the ability of the eight trustees to prove up a valid membership roll, and a ratifying congregational vote by such identified members, was determinative.  Ratification of incorporation and the other actions of the trustees was sufficiently well documented to convince the Court that church governance by the congregation of a congregational church occurred ending the dispute.  The lessons are clear and have been repeated in prior reports.  A well-documented membership roll, annually accepted by the congregation or an authorized governing board is crucial.  Clear governing documents are the next important.  Maintenance of both by meeting minutes, congregational and governing board, completes the proof.

UNINCORPORATED CHURCH ASSOCIATION DISORDER

Unincorporated church associations are governed, in some states, by a “non-profit organization” statute.  Such a statute may impose on the church association certain requirements to disclose financial records to members of the association.  An unincorporated church association can also have a Constitution and Bylaws.  The trap for the unwary is that such Constitution and bylaws, while not identical to those of an incorporated church, will not be effective as governing documents if they lack specificity similar to corporate cousins.

In the case of In Re Lee Edward Thomas, Slip Op. (Tex. Civ. App. 6th 2022), the Constitution and Bylaws of the unincorporated church association did not specify the procedure for termination of the pastor but did specify the procedure for hiring the pastor.  The same documents also described duties of a finance committee but did not disclose the method or procedure for appointment of finance committee members.  When the church split spilled into the street, each faction claimed it represented the congregation.  At stake was control of the church property and several hundred thousand dollars.  The bank holding the money threw up its hands and sought to interplead the money.  The trial court held the issue of the employment, or unemployment, of the pastor was outside the jurisdiction of the court because of the Ecclesiastical Abstention Doctrine.  Because the Constitution and Bylaws did not specify the method of selection of the finance committee members, their appointment was a matter of church governance, claims about which were barred by the Ecclesiastical Abstention Doctrine.  The court could not determine whether the allegedly voting members were in fact members because the church had not maintained an official membership roll.  However, embezzlement, conversion and breach of fiduciary duties claims were retained to the extent they could be decided by Neutral Principles of Law.

Unincorporated church associations have the same needs for governing documents and membership rolls as do incorporated churches.  The governing documents can certainly be inspired by the religious beliefs of members but the practical, secular, and, yes, worldly aspects should be drafted by a lawyer consistent with state statutory requirements.  Governing boards of unincorporated church associations should keep minutes just like incorporated churches and for the same reasons, such as documenting adoption of an annually updated membership roll and amendment of governing documents.  Without such, the unincorporated church association will fall into disorder which will be laid bare in an internal dispute.

LOCAL CHURCH MEMBERSHIP ROLLS

As we have reported several times, after maintaining the governing documents themselves, maintaining valid membership lists at least annually is about survival.  The local church that does not do both courts expensive legal repairs or a raid on assets.  Membership rolls should annually be made a part of the minutes of the church governing board.  Membership rolls kept in digital formats should at least annually be hard copy printed, or saved to media separate from the computer on which it is routinely hosted, and either or both attached to the minutes of the governing board.

In Cohen v Berliner, Unpublished Opinion (NY Supp Kings County 2021), the trial court held that the two hundred signatures submitted by the petitioner were not the valid ten signatures needed to demand a congregational meeting or vote.  However, the court conducted evidentiary hearings in which thirteen witnesses were tendered for testimony.  The local church owned a church camp primarily used in the summer.  The local church also leased the church camp to a parachurch organization for a girl’s summer camp.  Other local churches in the same denomination contributed money to the parachurch organization that operated the girl’s summer camp and that entity in turn leased the camp from the local church.  At some point, a falling out resulted and the churches supporting the para-church organization sought control over the summer camp.  The local church refused to surrender control.  The churches supporting the para-church organization submitted a petition for a congregational meeting by the local church supported by two hundred signatures from members of those churches, but none of which were members of the local church that actually owned the camp.  The petitioner sued to obtain a court order for the congregational meeting but the court upon holding extensive evidentiary hearings determined none of the two hundred signatories were members of the local church that owned the camp, but rather were members of the other churches.  The court rejected the claim that membership in the denomination was the same as membership in the local church absent such language in the governing documents.  The lease payments made by the parachurch organization did not constitute financial support of the local church that owned the camp, even if the lease payments were substantial.

Because the local church did not appear to have an official membership roll, each witness tendered had a shot at qualifying.  The court in the case reported may have given the petitioner as many as thirteen tries.  An official membership roll would have reduced the number of tries to one; only signatories also on the official membership roll could have been considered as “qualified” to call a congregational meeting.  A joint denominational asset like a church camp should be placed in a corporate shell controlled by the member congregations or the denomination and not owned by one of the constituent churches of the denomination.  Otherwise, no one but the owner of the denominational asset will have any say over its management, operation, sale or use as collateral.