Category: Uncategorized

ARBITRATION AND CHURCH LITIGATION

It is rare that a church dispute is compelled to arbitration.  Rarely is there a contract, local church control document or denominational control document that would require arbitration.  Even though there are private para-church organizations that offer the services of arbitrators, most church entities have never embraced them for anything other than disputes between members.

In Patterson v Shelton, 2017 WL 3446885 (ED Penn. 2017), twenty-two years of litigation over control over the denomination and its assets had progressed through arbitration, state trial courts, federal trial courts, and appellate courts.  The opinion does not explain the reason arbitration was compelled by the state trial court in 2006.  But, the arbitration award in favor of the Plaintiff was vacated by the state appellate court.  Efforts to enforce the arbitration award in federal court did not commence for six years for an unknown reason.  The federal court dismissed the arbitration award enforcement action and the dismissal was affirmed by the United States Court of Appeals for the 3rd Circuit.  The opinion summarized herein was the second case filed in federal court to enforce the arbitration award and again the case was dismissed.

The dismissal was based on a lack of subject matter jurisdiction because there was no federal question jurisdiction and there was not complete diversity of state citizenship between the plaintiffs and the defendants; the arbitration award had been vacated and in the eyes of the law no longer existed to enforce; further review of or enforcement of the arbitration award would require entanglement of the Court in ecclesiastical governance.

It was somewhat surprising the Court even reached the Ecclesiastical Abstention Doctrine given the absence of federal question or diversity jurisdiction.  The Court did not fully explore prohibition of enforcement of an arbitration award, a creature of contract, by the Doctrine but did explain it enough to indicate that practitioners considering mandatory arbitration clauses would do well to be skeptical of their utility in ministerial employment and church governance matters.

STAPLER RULES IN CHURCH LITIGATION

While typically Courts will not honor form over substance, sometimes they do and church lawsuits are not immune from the refusal to view the entire record before the Court on procedural grounds.

In Jane Doe v Coe and First Congregational Church of Dundee, 2017 IL. App. 2d 160875, even though it seemed from the Court’s opinion the Constitution and Bylaws of the denominational entity were in the record, the fact they were not stapled to affidavits relying upon them violated a Court rule requiring it resulting in appellate reversal of the dismissal of the case.  While such a holding would make sense if the identification of the Constitution and Bylaws were uncertain as a result, the Court’s opinion expressed no such reservation.  The issue in the case was whether any of the denominational defendants had the authority to hire or fire a youth pastor at the local church.  The Constitution and Bylaws allegedly either did not authorize that level of denominational control or prohibited it as noted in the affidavits.  Thus, a wrongful hiring or failure to fire claim would not rise above the local church absent authority or actual control.  While some denominations are vertically integrated and hierarchical in employment issues, not all are.  The autonomy of the local church as to employment issues could limit such a claim to the local church.

Stapler rules, requiring a document elsewhere in the court record to be attached to a particular pleading or other document to be considered, seem anachronistic.  Such a rule would only make sense in those remaining states that lag behind in computerization of court records.  Unless identification of the document is reasonably in doubt, if it can be considered at all and is not considered only because it is not stapled to the document considered, seems a huge waste of time and litigation cost both for the litigants and the courts.  Even in a state like Oklahoma that has generally good computer access to civil case records but where the underfunding of the courts results in judges in the trial courts not having staff attorney assistance such a rule would probably not be enforced absent extra-ordinary circumstances.  Nevertheless, church lawyers ever mindful of the resource limitations of their offering funded clients still must anticipate such things and prepare document meticulously.

ARCHEOLOGICAL CHURCH LAW

Sometimes a church has existed so long that not only has it outlived its institutional memory but may have existed long enough to cross from one legal era to another.  While such a church is so rare that it might be expected that any resulting legal problem might not be generally instructive, that is not true.  Indeed, church litigation often swirls around missing insurance policies, old sets of superseded church bylaws, or contracts that simply lapsed but no one recalled it so that it could be renewed or extended.

The case of First Congregational Church of Harwich v Eldredge, 2017 WL 3581629 (Mass. Land Court, 2017), the church was founded on a land title from 1743.  The separation of church and state in Massachusetts, according to the Court, did not occur until 1833.  The church cemetery had to be maintained by the Town of Harwich because of the Great Depression and a state statute authorized such private cemeteries to be preserved in that era of financial calamity.  The church by the 20th Century came to use one section of the cemetery and the Court held that the filed titles did not end the church’s ownership of that part of the cemetery and also held the church owned that portion of the cemetery, if for no other reason, by adverse possession.

The church was able to prove the alternative ownership theory of adverse possession through both publicly filed documents the document archives of itself and the Town.  For example, one letter from 1989 had been inscribed with identifiable handwritten notes of a telephone call that tended to establish the Town was on notice for adverse possession purposes of the church’s claim to that part of the cemetery.  In the age of the scanner, keeping hard copy is no longer essential if the digital version is reasonably well preserved against mishap.  A combination of local storage and cloud storage can assure document survival.  Most external portable hard drives will fit in safe deposit box if cloud storage is not deemed acceptable.  But, all document storage, hardcopy or digital, requires disciplined process implementation and training each successive generation of church office personnel.

PASTOR EMPLOYMENT CONTRACTS AND THE MINISTERIAL EXCEPTION

One of the interesting questions in church law is whether an employment contract with a pastor overrides the Ministerial Exception.  The Ministerial Exception is the label for the First Amendment doctrine which excludes some church employment issues from governance by secular law or secular courts.  Indeed, the uncertainty in recent years has been to determine the other church jobs that were outside the scope of court and regulatory jurisdiction.  Of course, ministers, priests and pastors were outside the scope.  Employment contracts raise the uncertainty of whether they remain outside the scope in whole or in part.

In Rev. Lee v Sixth Mount Zion Baptist Church, Slip Op., 2017 WL 3508140 (WD Penn. 2017) the federal court carefully traced the contours of a written employment agreement with a senior pastor to determine whether the employment relationship or parts of it had been carried outside of the Ministerial Exception.  The opinion also contained most of the salient terms of the employment agreement verbatim which might also assist practitioners.  The question the court answered was whether the employment contract terminated the applicability of the Ministerial Exception.  The Court held that the Ministerial Exception had, indeed, been preserved in its applicability to termination of the pastor by the employment contract.  Of course, that reserved for a future case whether some other contract might not.

The language in the employment contract that preserved the Ministerial Exception was a catch all reserve clause that merely stated termination could be “by law” and on “other grounds.”  The employment contract also specified “for cause” termination grounds and the church was claiming that the “for cause” grounds had been triggered.  The church put on evidence of declining attendance and declining finances, both of which the church labeled as “spiritual stewardship” and “financial stewardship” in the employment contract.  The Court held that these grounds for termination were ecclesiastical and triggered the Ministerial Exception because to decide them would lead to “excessive entanglement” in church affairs.  For example, the Court would have to decide whether the cause of declining finances was due to mismanagement or declining giving reflecting a loss of confidence in the pastor either of which could be ecclesiastic.