Category: church property

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In Cohen v Berliner, Unpublished Opinion (NY Supp Kings County 2021), the trial court held that the two hundred signatures submitted by the petitioner were not the valid ten signatures needed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.

BINDING THE DENOMINATION

While a church or denomination may have officers, directors, trustees, or similar leaders with ecclesiastical titles from the tradition of the denomination, generally no single officer can act for or bind the church or denomination without an enabling resolution of the governing body or authority granted by the governing documents.  Likewise, just because such an officer is a named party in a lawsuit or arbitration does not mean that the church or denomination is bound by the outcome.

In Trustees of the General Assembly v Patterson, Slip Op. (3rd Cir. 2021), upon the death of the founder, the denomination split between his sons.  Patterson went with one son to form a new church.  Both sons claimed to be the “General Overseer” of the denomination.  Patterson sued the son he had not followed and a board member of the Trustees.  Patterson, the son and the board member decided to dismiss the lawsuit in favor of arbitration.  An arbitration award was entered for Patterson.  Patterson sought to have the arbitration award enforced against the denomination as to certain church property and assets.  The federal trial court enjoined Patterson’s enforcement action and held the denomination was not a named party to the arbitration and was not bound by it even though a possible “General Overseer” and a single board member had been named.  Further, the denomination had never been served with process.  The federal court also determined that the denomination was not a “party in privity” with the alleged “General Overseer or named board member because the denomination did not agree to be bound by the arbitration, did have control of the litigation, and the legal relationship between those named and the denomination did not automatically make them representative of the denomination.  The federal appellate court affirmed.

In church litigation, just like all other cases, the correct party must be named and served.  If a church or denomination is incorporated, likely a service agent was appointed, so the correct service agent must also be served.  Proceeding through a litigated matter like an arbitration without the correct party is a colossal waste of money.  Lawyers must be cautious about merely following client advice about the nature of the legal relationship between the person named and the denomination or church to be bound and should independently verify the relationship will result in a binding outcome.

PROTECTING PAST GENERATIONS OF BELIEVERS

Generally, the local church in a hierarchical denomination owns its own property but holds it in trust for the denomination.  This is often also true in denominations that are not hierarchical but in their governing documents require the local church to own its property but hold it in trust for the denomination.  The rationale for such trust provisions is that generations of members of the local church, that also thought they were members of the denomination, gave offerings based on that premise.  The attempt by a future generation of local church members or leaders to divorce from the denomination does not, so the rationale goes, keep faith with the generations that came before.

In Presbyterian Church of the Palisades v Hwang, Slip Op. (NJ App. 2021), the local church lost membership and financial stability to the point it was about to lose its property to foreclosure.  The local church managed to salvage the situation by selling the property to a third-party non-church entity.  The funds paid by the third-party non-church entity were placed in escrow.  The litigation proceeded over who was entitled to the purchase funds placed in escrow.  The local church corporation claimed to be the owner but so did the denomination.  The mortgage default by the local church triggered the trust clause in the denominational governing document.  As a result, the local church was no longer owner of the property.  The denomination assumed the role as owner under the trust provision.  The “owner” would be entitled to the escrowed purchase funds.  The trial court determined under the trust provision the denomination was the “owner.”  The appellate court affirmed the trial court and ordered the escrowed funds released to the denomination.

If the denomination is hierarchical, most courts will under the “deference doctrine” defer to the decisions of the denomination regarding disposition of local church property.  The denominational governing documents generally compel the result.  If the denomination is not hierarchical, the “neutral principles of law doctrine” will generally compel the enforcement of the denominational governing documents.  If the denominational governing documents require that the local church owns its property in trust for the denomination, Neutral Principles of Law will generally dictate that the denomination is the owner.  There are few exceptions, the most recognized being when the deed filed of record expressly excluded the ownership of the denomination and the denomination approved the deed.

STANDING TO SUE A CHURCH

It should not automatically be assumed in church splits that the minority faction retained any rights to sue.  A minority group of members may have, before suing, erased their interest by taking some action.  Strangers to the church may never have had any interest.

In Dubois Street Church v Church of the Living God, Slip Op. (Mich. App. 2021), the Plaintiff was a new church entity created by former members of the Defendant church.  Indeed, while forming the new church, the former members announced it on social media and invited everyone.  The trial court held the Plaintiff was not the real party in interest.  In other words, the Plaintiff lacked standing to assert any claim because the Plaintiff had no connection to the Defendant church.  The appellate court affirmed the trial court.

A minority faction in a church split might still have an interest upon which to sue the church.  But, once they proceed to form a new church and accept a new membership, and publicly announce it, that interest they had as members might be no more.  Such determinations will likely turn on the record that can be submitted to a court.  In the current era, that record will most likely be social media posts.  In the past it might have been printed flyers or other advertisements.  The lesson might be that the faction retaining control of the church should not assume the minority faction retained any membership upon which to base a lawsuit.  In any event, the new church entity would have no such interest even if its members, as former members, might still have an interest.