Churches that are denominational members, and not just affiliated loosely, are typically bound by the denominational governing documents and rulings of the denomination about the scope or meaning of the governing documents. These denominations and their local churches are often referred to as “hierarchical” even though a few denominations do not like that word. The denominational governing documents were generally developed over many decades.
In Presbytery of New York City v Zion Presbyterian Church of Brooklyn, 2020 NY Slip Op 31649(U), the trial court quieted the title to the local church property in the denomination upon the local church’s attempted secession from the denomination. One of the arguments made that caused this opinion to differ from many others arising from this denominational split was that the local church claimed they never agreed to amendments three decades earlier to the denominational governing documents that first included the property reversion clause. The Court rejected the argument, among other reasons, because during the decades following the amendment the local church did not object to the amendment. An odd statement in the opinion, which was otherwise well and conventionally articulated was the statement: “On July 2, 1979, in Jones v Wolf, the United States Supreme Court held that a state is constitutionally entitled to adopt secular, neutral principles of law that rely on objective, well-established concepts of trust and property law familiar to law and judges to resolve church property disputes (443 US 595, 603 )” (underlining added).
The local church’s conduct during several decades in silently ignoring or, indeed, accepting the adoption of the reversionary clause was deemed an acquiescence. The lesson for the denomination was to obtain a “sign off” from its local churches in some manner even if it was subtle or hidden in fine print, although in a manner of speaking the court held the denomination did so. The lesson for local church leaders is to read the fine print and opt out where permitted. Battles by local churches against reversionary clauses have not gone well.
It seems unlikely that states are “constitutionally entitled” to decide property disputes by using Neutral Principles of Law. While the Eleventh Amendment does protect the sovereign rights of states, the fact that the Eleventh Amendment was necessary indicates the Constitution as originally formulated did not “entitle” states rights. Because ownership of land and buildings is generally a secular activity rather than an Ecclesiastical activity in which states have a responsibility to govern, the highest courts have pointed the way to decisions that do not require Ecclesiastical inquiries by secular courts.
Title to local church property like any other property in most states is controlled by the language of a deed filed in governmental property records. But, as the years pass, church life cycles may include names changes as well as substantive changes in affiliations. Sometimes these changes should be reflected in an amended deed. Because institutional memory in a primarily volunteer organization like a church is not well preserved and change in circumstances and conditions is usually gradual disparity in ownership and governance documents can result.
In First Presbyterian Church of Magnolia v Presbytery of the Pines, 2020 Ark. App. 253, the trial court held that the quiet title action commenced by the local church against the denomination was not justiciable. The appellate court reversed and held the quiet title action, and any other properly raised claim, was justiciable if Neutral Principles of Law controlled the outcome. In a quiet title action, Neutral Principles of Law could make the case justiciable. The local church was formed and acquired its property in the mid-Twentieth Century when there were two denominational bodies. The local church was a member of the denominational body that did not have a property reversion clause in its Book of Order until thirty years after the formation of the local church. As a result, the property deed of the local church did not contain a reference to the reversionary clause. Later, the two denominational bodies merged leaving a single denominational organization. The surviving entity did have a reversionary clause in the surviving Book of Order. On remand, the trial court will be faced with a reversionary clause adopted after the fact and twice removed from the original property deed that did not contemplate either reversionary clause.
Some states may place a property deed on a part with denominational governance documents. Denominations may desire that local church property deeds reflect denominational interests. However, that may make mortgages problematic. Local churches must evaluate their denominational affiliation carefully and determine whether the state of residence of the local church would consider denominational governance documents controlling over local church property deeds.
Economics sometimes requires denominations to reorganize local churches. If a denomination has several local churches in a locale that separately are no longer economically viable, merging the congregations into a single viable congregation is a possible solution. Indeed, it is often a better solution than allowing each local church to become insolvent, bankrupt, or to remain crippled. Denominations that control the geographical reach of their local churches may “suppress” the no longer viable local church. The decision making process of determining merger partners, surviving church staff employees, locations, and property disposition, to name but a few, invariably seem to set off disputes.
In Pagac, et al v Diocese of Pittsburgh, Slip Op. (PA 2020)(unreported), the denomination sought to “suppress” and then merge several local churches into a single survivor. The process, like most such do, suffered from fits and false starts. Eventually, the process was completed. Several parishioners of one of the closed local churches challenged in court the decision to “suppress” their local church. They also alleged that because their local church was formerly designated as a survivor of the process, and then later withdrawn from survival, they were defrauded of donations. The trial court dismissed both claims. The appellate court affirmed the dismissal of the challenge to “suppression” holding the parishioners did not have “standing” to make the challenge. Because the local church was “suppressed,” the Court held, the parishioners membership in the suppressed church no longer existed to form the basis of any challenge. Also, because any such claim would require an inquiry into internal church governance, the Ecclesiastical Abstention Doctrine precluded the claim. However, the appellate court reversed the trial court’s dismissal of the fraud claim. The appellate court held that while the denomination might have defenses to such a claim fraudulent inducement was a recognized claim and it could proceed to determination of the claim.
Whether to “suppress” a local congregation and merge it into another local church in a hierarchical denomination would in almost all cases require an inquiry into church governance issues protected by the Ecclesiastical Abstention Doctrine. Fraud in the inducement is a difficult claim to prove. Further, even if such a claim survived a motion to dismiss as this one did, running the gauntlet of discovery and other motions likely will prove more difficult. For one thing, the parishioners will have to prove that their donations were intended to be restricted to the local church and that their restricted donative intent was known to the denomination. They would also have to show expressions of restrictive donative intent were accepted by the local church or the denomination. Rarely are restricted gifts accepted at the offering plate but have to be specially arranged. Also, merely showing their local church was formerly designated as a merger survivor will not be enough. They will have to prove the designation was represented as irrevocable. They will have to prove the designation was intentionally misrepresented.
Usually, there is no doubt about whether a local church submitted to denominational authority because the governing documents, including the church bylaws or constitution, and property deeds reserve submission to the denominational authority. A court need not look beyond these documents. These documents are reviewable by a court applying Neutral Principles of Law. The Ecclesiastical Abstention Doctrine is rarely implicated.
In Korean New Life Methodist Church v Korean Methodist Church, 2020 COA 20 (Colo. App. 2020), the trial court held that church governing documents did not recite any submission to the denomination. The denomination urged that it was the intent of the church to submit to the denominational authority. The denomination produced the testimony of a founding board member and a record of financial payments over many years. The church characterized the nominal payments as donations and submitted the testimony of the founding pastor alleging there was no intent to submit. The trial court was affirmed.
Denominational authorities should not assume that churches are member congregations. The governing documents of the church either recite submission of the church to the denomination or do not. Churches that do not wish to submit should document that denominational interactions are not submissions to denominational authority. Financial gifts should likewise be carefully labeled as donations and not payment of dues or other indicia of membership.