Category: Uncategorized

Turning Out the Lights

The case of In Re Glass & Garden Drive-in Church, Slip Op. (Ariz. App. 2016)(not for publication) is interesting because the church was trying to wind down its existence and allow, rather than resist, a denominational takeover (interestingly enough called “suppression”) because of inadequate membership growth, inadequate revenue growth, and property costs that were too much to carry. However, at least one member led a few others to resist the takeover of the property by the denomination. One of the members wanted $150,000 in compensation from the assets of the church but the reason for the demand was unclear.

The Arizona Appellate Court declined to allow the member(s) to proceed to oppose the “suppression” because the church’s foundational documents, articles of incorporation and bylaws, recognized the church’s existence as a part of the denomination. Thus, the actions of the denomination to marshal the assets of the local church were conducted under the shield of the ecclesiastical abstention doctrine.

As a result, civil courts cannot “inquire into internal organizational disputes between different factions of a religious organization or into property disputes that would require interpreting religious doctrine or practice.” [Citation omitted.] Rather, they “must accept the decisions of the highest judicatories of a religious organization of hierarchical polity on matters of discipline, faith, internal organization, or ecclesiastical rule, custom, or law.” [Citation omitted.]

Slip Op. at 7.

Petitioners’ characterization of the core issue as one of property simply does not transform this case into a church property dispute under the neutral principles doctrine.

Slip Op. at 10. The court noted the ownership of the church property was not in dispute. The property was owned by the local church (which was incorporated). The denomination simply had the right to take over the existence of the local church pursuant to the governing documents.

Evangelical Pastor Wars

In evangelical churches not governed by a hierarchical denomination, sometimes the brawl spills out into the street.

In St. Union Baptist Church, Inc. v Howard (AL., 2016)(slip op), the Pastor tried to fire the board of deacons. A few months later, the deacons tried to fire the Pastor at a congregational meeting. The opinion of the court is not completely clear on whether the action was unilateral by the board or whether it resulted from a congregational vote. The Pastor “declined to leave his position” and a couple of months later the Pastor called a congregational meeting in which 47 members voted. The court opinion reflected that the second congregational meeting resulted in a vote in favor of the Pastor. The board did not accept the second congregational meeting vote and the situation persisted for two years. The board still had control of the finances and at the end of the two year stalemate stopped paying the Pastor. The Pastor issued an announcement that as of the second congregational meeting the board had been terminated and the church had no deacons.

The Pastor decided to break the stalemate by resigning in exchange for payment of $16,600 and a written agreement was signed and the money paid. A month later, the Pastor rescinded his resignation. The board through the church corporation sued the Pastor for breach of contract. The Pastor counterclaimed for conversion, conspiracy and breach of fiduciary duty.

The Court, under the ecclesiastical abstention doctrine, refused to allow decision of the effectiveness of the resignation or whether the written agreement had been breached, because “in a Baptist Church, the congregation rules” and could hire, fire or rehire. Slip. Op. at 19.

The Court, however, remanded to the trial court the Pastor’s counterclaims regarding financial matters because “unlike the selection of a pastor, these are not ecclesiastical issues that a court lacks jurisdiction to consider.” Slip Op. at 20.

The opinion of the majority drew concurring and dissenting opinions. One concurring opinion noted the church corporation had not made a claim for recovery of the $16,600 and opined that would not be an ecclesiastic issue requiring abstention.

One lesson that can be gleaned from the foregoing is that votes, be they by a church board in its official minutes or by a congregation, should be carefully documented. The first congregational meeting is not reported by the court as culminating in a vote. Churches, as volunteer organizations, are often not careful about documenting there official actions. Church board members are typically not paid and tend to view their volunteer service as somehow different in character from their work, businesses, and personal finances.

Church Property Ownership Revisited

The case of Ohio District Council, Inc. of the Assemblies of God v Speelman, 47 NE 3d 954 (OH App., 2016) is an excellent example of how the real estate of a denominational church will be viewed by a court in a “neutral principles of law” jurisdiction. In Speelman, the appellate court reversed the trial court’s abstention decision and ordered reconsideration on remand “based upon the nature of the relationship incident to affiliation in a hierarchical church polity.” The trial court was instructed to review the constitution and bylaws of the general council of the Assemblies of God and of the district council. Most likely, the review will or did result in the church property being deemed owned or held in trust by the district council or the general council, or both.

The church in the case fell on hard times and its membership dwindled. It sought financial resources and eventually a merger with a church not a part of the Assemblies of God. The merger would have had the effect of moving the church real estate and buildings out of the Assemblies of God. The Assemblies of God district council sought to recover the real estate and buildings from the merged entity.

From the denominational side, the typical view is that the church real estate and buildings were paid for over a period of decades by several generations of members that had an expectation that their contribution would remain in the denomination to accomplish the mission even after they passed away or out of that local church. In other words, the denominational leadership believes such a lawsuit is needed to protect the investment of prior generations of members. Sometimes, the current generation of local church members come to believe the real estate and buildings are owned by them even though in most cases they inherited much of their capital from prior generations of members. Neutral principles jurisdictions will usually ignore the arguments of both sides, no matter how pungent or equitable, in favor of the controlling constitution and bylaws.

Can You Just Add “Minister” to the Contract?

In the United States Supreme Court case, Hosanna – Tabor Evangelical Lutheran Church and School v EEOC, 565 US___, (01/11/2011), with which everyone is now trying to bring their employment relationships into alignment, the teacher in question was classified as a “minister” because of her religious licensure and her religious teaching responsibilities. As such, employment decisions could not be reviewed by the courts without violation of the First Amendment Ecclesiastical Abstention Doctrine. Other religious organizations have had the idea based on the case that all of their employees, regardless of expertise, are also religious operatives and so described them in employment contracts and employment policy manuals.

Will it work?

So far, it generally has. It probably will if the job, as described in the policy manual, includes religious education or other religious duties. In the absence of a policy manual or job description, there may be other proof of the religious entanglement of even secular positions. If the religious organization accepts government money there may be the need to trace whether the federal programs in which the employees serves is secular, and funded by government, or secular but related to the religious objectives. Absent a financial entanglement with government, most courts will likely allow church schools to enforce the tenants of their religious sponsors and probably most other types of organizations, too.

Another valid question would be, is it necessary? Most courts will see the reality rather than look only to the form. For now, until a few more court decisions come down the pipeline, the better practice is to revise employment agreements and policy manuals of church schools to make clear the religious nature of the duties of the teachers.

Another method of deflecting employment claims will be the “morality clause” inserted in employment contracts or policy manuals. Most denominations have a central document that sets forth a clear statement of the religious morality expected or sought, too. Evangelical churches that do not have a denominational base document usually have corporate bylaws or other constitutional documents upon which the church school or employment policy manual can be based to achieve the same result.