Category: Hierarchial Authority

TORTIOUS INTERFERENCE WITH CHURCH CONTRACTS

As lawsuits become more acceptable to churches as a means of enforcing their rights among themselves, secular legal theories are more often asserted. In struggles between denominations and their local churches or parachurch organizations, there are often contracts about which one or all parties will allege a breach of contract. Less often but becoming more common is the claim that a religious organization interfered with a contract.

In Samara Iglesia Evangelica, Inc. v Lorenzo, Order on Cross Motions for Summary Judgment and Motion to Strike (D Mass., 2019) the federal trial court sorted out a struggle between a denomination and its local church and the local church pastors. The denomination alleged the local church pastors were contractually bound not to alienate the property of the local church without authorization. When the local church and its pastors decided to terminate their relationship with the denomination, they transferred the property from the local church to a new church unaffiliated with the denomination. However, unlike more established denominations, the deed only named the local church as the owner which allowed the local church to transfer the deed to the new church without hinderance. Also, the governing documents of the local church did not grant the denomination any rights in the local church governance or property. The contracts with the local pastors, however, stated no definite duration which made the contracts terminable at will by either party. The local pastors resigned from the contracts. Those resignations terminated the contracts leaving no contract with which to interfere tortuously or otherwise.

From the denomination’s perspective, the error made was the failure to engage counsel to amend and update local church governing documents and deeds as well as denominational governing documents since the 1970s. The law has changed substantially since then. Also, religious promissory language is generally not enforceable in a court in the United States. Explicit contractual promises must be made, typically in writing signed by all parties. The employment contracts of pastors must be of a definite duration even if they automatically renew for a new term if not terminated at the anniversary date, or they will be “at will” employment contracts in most states. Venue and applicable selection clauses will prevent legal battles from always being fought in the location of the local church rather than in the location of the denominational headquarters.

TRADEMARK INFRINGEMENT BY CHURCHES

Church trademark cases are so rare that in our three years of posts we have reported but two cases and this report is a follow up on one of them. Our first report on this matter was in August 2017, Hierarchal Church Titles and Trademarks. In that post, we reported on Protestant Episcopal Church, et al, v The Episcopal Church, 806 SE2d 82, (SC 2017) in which the South Carolina Supreme Court held that the land, buildings and other property of local churches leaving the denomination remained the property of the denomination.

In vonRosenberg v Lawrence, Order and Opinion (D SC ED, 2019), the federal trial court had before it the federal trademark claim of the denomination against the departing local churches. The federal trial court deployed more than 24,000 words to hold that the denominational trademarks, which were federally registered and reached “incontestability,” were infringed by the departing local churches. The federal court issued an injunction against further infringement. In passing, the court noted the departing local churches had recently affiliated with another denominational group. It may have been by the time the decision was issued the dispute was moot or headed in that direction. Also, because there was little advertising done by either group, the main casualties would have been building signage, church bulletins, and websites. Most interesting in the opinion was the Court’s description of the members of the public that were potentially “misled” by the “confusion.” Both sides conceded “that parishioners are generally sophisticated” (at page 51) so those that might be confused would be “potential parishioners” (at page 52) and others that “may never attend” either church or “have to decide between doctrines and communities.” Oddly, the latter two groups are generally known as targets of evangelism. Finally, merely adding a geographical limitation to a name did not prevent infringement.

Local churches departing from a denomination should be prepared to leave behind not only buildings and land but registered names to avoid litigation. A new identity may have to be forged along with a new place to worship to enjoy certain doctrinal or structural freedoms. The only alternative is a contract by which certain rights are purchased, leased, or licensed.

CHURCH LITIGATION DISCOVERY: CONFESSIONAL PRIVILEGE AND DAUBERT SCREENING

The most expensive components of a lawsuit revolve around the briefing phases necessitated by motions, discovery and discovery disputes, and trial. Discovery, which includes written questions under oath in the form of interrogatories and written depositions, actual forensic depositions before court reporters, and document searches and production. In church litigation, due to First Amendment issues briefing is usually the predominate expense. Also, the matters at issue are often non-economic, or economically fragile, and the parties quickly reach financial exhaustion. Financial exhaustion can cause abandonment of even a good claim and certainly makes non-economic claims, battles over principal, increasingly less attractive. One of the cost elements may be that the money spent on an expert witness may not result in useable testimony. FRCP Rule 702, sometimes referred to as a Daubert challenge because of the case from which the modern application of the rule for the most part emerged, requires a court to act as a gatekeeper to preclude “junk science” and opinions without material basis from contaminating the trial.

In Stevens v Brigham Young University – Idaho, Memorandum Decision and Order (D. Idaho, September 24, 2019), the federal trial court issued another decision regarding discovery disputes. In our May 4, 2019 post we reported the court’s decision regarding certain discovery disputes which included: whether the denomination and the church university had a common interest attorney client privilege, the university’s demand for a psychiatric examination of the Plaintiff because of her claim of emotional injury, and the university’s demand the Plaintiff waive the priest – penitent privilege. In May the court did not find evidence of a common interest, permitted the psychiatric examination, and refused to abate the priest – penitent privilege. In the September order, the court held the denomination, which was a third-party intervenor and not the defendant, was still subject to discovery. In a role reversal, instead of protecting her priest – penitent privilege, the Plaintiff waived it to force “an ecclesiastical leader” of the denomination to answer deposition questions but the denomination sought to impose it to bar the deposition. The Court held the priest – penitent privilege in this situation could only be imposed by the penitent, the Plaintiff, and not the church denomination. The Plaintiff demanded to know the precise amount of financial support the university received from the denomination, but this request was denied by the Court because the university and the denomination stipulated the denomination would pay any judgment against the university making precise answers irrelevant. However, the Court did order the denomination to produce copies of notices to church members of the denomination’s financial support to the university. Also, a friend and confidant of the Plaintiff was prepared for deposition by the denomination and university and they also apparently selected and paid for the friend’s lawyer. The Plaintiff sought discovery of the engagement of the lawyer and the source of funds to pay the lawyer, both of which the Court permitted for whatever impeachment value it might have. Plaintiff’s expert was also vetted by the Court and the expert’s testimony limited to his studies of the denomination’s hierarchal structure. The expert was prohibited from issuing an opinion in Court testimony that the hierarchal structure of the denomination, or its religious teachings, caused the Plaintiff to be sexually manipulated and abused by a university professor. Though this is our second report on this case, it does not appear to be at an end.

The lesson for denominations is that intervention in litigation in which a subordinate church or parachurch organization is a party may subject the denomination to the broader discovery permitted against parties. Also, the Court was applying the newest version of the federal priest – penitent privilege, which can only be asserted by the priest on behalf of the penitent but not on behalf of the priest. Further clash with certain denominations can be expected. The last lesson is about expensive experts in church litigation. Even if they are allowed to report on studies the expert conducted or wrote about the denominational structure or polity, making the inferential leap to causation of the specific harm alleged will likely be deemed speculative or not within the scope of the expert’s credentials.

PASTOR SEVERANCE AGREEMENTS DISCLAIMED BY DENOMINATIONAL AUTHORITIES

The author was acquainted with the presiding bishop of an evangelical denomination that carried in his brief case a journal from the turn of the century, the 19th to the 20th, that recorded the giving of those local church members a century earlier. The giving amounts, consistent with the economy of a century ago, were recorded in nickels and dimes. The bishop carried it with him to remind him of the legacy with which he was charged.

Most courts in the United States will not act as appellate courts over ecclesiastical courts or denominational bureaucratic regulatory authorities. When local congregations attempt to detach from the denominational authority they are usually unsuccessful or must depart without their real estate and buildings. While some view this as unfair, most such churches attempting to depart with their property were founded using the denominational brand, organizational support such as the bible college that trained their pastor, and sometimes direct financial support until they are strong enough to cut the umbilical cord.

In Presbytery of Seattle v Schulz, Slip Op. (Wash App. 2019), in a one or more prior appeals the local congregation’s attempt to disengage from the denomination was unsuccessful because it was not authorized by the ecclesiastical authority. The local church was founded at the beginning of the 20th century. The local church also tried to provide a severance agreement to the pastor that led their unsuccessful departure. The denomination revoked the severance contract, seized the local churches accounts and stopped all payroll to the pastor. The denomination’s “administrative commission” determined the severance agreement was invalid because it “constituted a change in the terms of call” for the pastor. The denomination also concluded the pastor’s conduct constituted a form of job abandonment but described it in religious terms: “renounced jurisdiction;” “standards of pastoral conduct.” The trial court held in favor of the denomination and the appellate court affirmed.

The denominational and local church governing documents were, as always, decisive in the reported case. Arguments to recharacterize the documents, especially with the history of litigation across the United States these have, were not successful. While employment contracts will generally be subject to judicial enforcement, not so when the employment contract clearly was not authorized by denominational, and possibly, local church governing documents.