Determining whether a local church is a “member” of a denomination is usually no harder than looking at the name on the building or the signage. But, sometimes determining church paternity requires a review of church governance documents at both the local and denominational level. Church property issues may also include review of property deeds and state laws governing non-profit corporations or associations. Further, if a local church attempts to end its denominational “membership,” whether it can unilaterally do so or do so at all, requires review of these documents as well as creation of “divorce” documents.
In District Advisory Board, Church of the Nazarene v Centro De Alabanza Oasis, Slip Op. (FL. App. 2022) the trial court granted summary judgment to the local church based on the local churches’ attempt to end its membership in the denomination. The appellate court reversed. The trial court was required to conduct a review of the evidence to determine whether the denomination was hierarchical. If so, the denomination would control the property of the local church. The trial court also had to determine if the local church was actually a “member” of the denomination. The reported case recited instances in which the local church arguably admitted it was a denominational “member,” starting with the signage, and in documents submitted to the denomination to end the membership. The documents submitted to end the “membership” were arguably insufficient.
Local churches contemplating a departure from a denomination should determine if it is possible and probably engage a lawyer with writing skills to assist in completing the documents. Other departure strategies may have to be considered, too. Clinging to property without careful consideration of the foregoing can burn through the cash needed to start a new church.
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.
Denominational church property reverts to the denomination if the local church ceases to exist or becomes no longer viable. That is because most denominations include reversionary clauses in their organizational documents. Local churches often also have such reversionary clauses in their organizational documents. Not all deeds to property contain reversionary clauses.
In Central/Southern Illinois Synod of the Evangelical Lutheran Church in America v Trinity Lutheran Church of Kankakee, 2021 IL App 3d 190292-U, the appellate court affirmed summary judgment in favor of the denomination under the organizational document reversionary clause even though the property deed contained no reversionary clause. The membership of the local church had dwindled to a dozen and the denomination had provided $400,000 in subsidies. When a member of the local church changed the locks on the building and locked out the pastor appointed by the denomination, and rented the building to another church, the denomination invoked the reversionary clauses in the organizational documents.
While in recent months, especially in Oklahoma, there has been considerable angst regarding the scope of the sovereignty of tribal governments, virtually the same type of issue arises with regard to denominational authority. Indeed, some denominations resolve certain disputes by convening a court. It may be called an “Ecclesiastical Council” rather than called a court, or by some other name, but nonetheless it is a court.
In Church of God in Christ, Inc. v L.M. Haley Ministries, Inc., Slip Op. (Tenn. App. 2020), the appellate court affirmed summary judgment in favor of the denomination. The local church’s long time pastor died. He was succeeded for a couple of years by a “Jurisdictional Bishop” that appointed himself as pastor. However, the successor died. For a time, the position of “Jurisdictional Bishop” remained vacant and so, too, as a result did the pastorate of the local church. Tiring of the circumstances, the local church in a congregational vote attempted to terminate its “jurisdiction” membership and transfer to another denominational jurisdiction. However, the original denominational jurisdiction appointed a “Jurisdictional Bishop” and he in turned appointed himself pastor of the local church. The faction of the local church that led the attempt to change denominational jurisdictional membership refused to relinquish control of the local church property or assets to the “Jurisdictional Bishop” appointed as pastor. To resolve the dispute with the local church, the denomination convened an “Ecclesiastical Council” to decide the matter. The council affirmed the appointment of the “Jurisdictional Bishop” as local church pastor and excommunicated the dissenting faction. The local church led by the dissenters resisted and the lawsuit was filed to enforce the decision of the denomination. The courts refused to review the “Ecclesiastical Council’s” decision, treated it as binding and worthy of deference, and granted judgment to the denomination.
The governing documents of the denomination and the local church made ecclesiastical inquiries unnecessary. Once the denomination established its authority to select the pastor, its authority to hold the local church property in trust, and its authority to excommunicate the dissenters, the denominational decision was treated deferentially. To avoid such an outcome, the local church should have obtained a documented “acceptance” from the denominational jurisdiction to which it tried to transfer by congregational vote. Further, the acquiescence of the losing denominational jurisdiction should have been negotiated. Both efforts would have been cheaper than litigation and more likely to be successful.