Category: Uncategorized

CHURCH NAME WARS

Church marketing and branding has become sufficiently commercial that occasionally a church will try to copyright or trademark its name. Even if the name is extra-scriptural (regardless of whether the scriptures are Biblical, Taoist, or Sanskrit), most such words are so generic no copyright or trademark can be obtained. My favorite example of how such a simple principle can go awry is my favorite spice: “Bon Caca.” The name is part of a registered trade mark proving that the United States trade mark registrars do not speak “Cajun.”

In the The Universal Church, Inc. v Toellner, Slip Op. (2nd Cir. 2018), the United States Court of Appeals for the 2nd Circuit affirmed a federal trial court summary judgment by Summary Order. The Plaintiff sued a para-church organization called “Universal Life Church” for copyright and trademark infringement as well as cybersquatting. Cybersquating is prohibited by statute. 15 USC §1125. The Plaintiff’s name, “Universal Church” was held to be a generic term. In addition to legal authorities, the Court relied on the Oxford English Dictionary. The Court also held that Plaintiff, an actual Pentecostal Church (the opinion did not specify whether this was a doctrinal statement or if there was a denominational affiliation), was not facing unfair competition because the Defendant para-church organization only provided free online ordination and did not conduct church services anywhere except for occasional mass weddings. The Plaintiff had been defending its copyright and trademark by issuing “cease and desist” letters to alleged infringers but the Court held that did not matter. The Plaintiff claimed 30,000 members and 800,000 television viewers but the Court held that did not prove a claim that the “relevant public” associated the name with the Plaintiff. Both the Plaintiff and the Defendant provided reports from “expert witnesses” regarding usage of the phrase “universal church” in the history of Christendom. One must wonder if the word “catholic” was in either report.

There is nothing more dangerous in civil commercial litigation than a litigant that cannot afford to pay a judgment but can afford a lawyer. The Plaintiff church probably selected the Defendant to sue based on the faulty assumption that in a battle of offering plates, the Plaintiff’s would be larger to a crushing extent. The better approach, rather than expensive unsuccessful litigation, might have been to spend the same money buying the Defendant, especially its website.

Corporate Usurpation and Trespass – the Keys to the Kingdom?

As churches have grown both in membership and accumulation of assets, both become the subject of considerable interest to those looking to benefit from them. It is easier to rocket up the numbers of members in a church by draining nearby churches. It is easier to build personal wealth or the wealth of a church formed from a split if the assets of another or predecessor church can simply be absorbed or liquidated. Thus, churches are targets. Because of their volunteer nature, non-denominational churches are especially at risk.

In International Society of Krishna v Britten, 2018 NY Slip Op 32787 (King County, NY 2018), the trial court stopped the $58,000,000 sale of church property by a faction of the church board. The organizational documents of the denomination required that board members could be removed by the denomination. The organizational documents also required denominational consent to sale of church property. The Court held that there was no ecclesiastical issue intertwined with the corporate law applicable through the organizational documents of the denomination. Thus, the faction of the local church board that sought sale of the church property was removable by the denomination and written consent of the sale from the denomination could be required.

Whether a local church board has gone rogue or is well intended does not matter to a Court if neutral organizational documents control or allow exertion of denominational control. Even a well intended church board that might in desperation resort to corporate usurpation will be unable to overcome organizational documents. However, non-denominational churches that get too comfortable in sloppy documentation of membership lists, church board governance minutes and reports or lack either will have only their organizational documents, if they can be identified, to fall back upon to fend off usurpation from within or without in expensive and avoidable litigation. Good stewardship includes these things as much as lawn care and coats of paint.

CHURCH PROPERTY RECOVERY

Denominational churches often are not only members of the denomination but through the organizational documents of the church, the denomination, and even a filed real estate title the congregation does not have the power to withdraw their property or assets from the denomination. The rationale for this is that denominational members are believed to trust the denomination to protect their offerings, which are turned into property and assets at the local level, even after the member has died or moved to another local church.

In Ohio District Council of the Assemblies of God v Speelman, 2018 Ohio 4388, Slip Op., (Ohio App. 12th, 2018), declining local church membership caused the remnant of the local congregation to seek a merger with another denominational group and to “disaffiliate” with the Plaintiff. The local church joined the Plaintiff denomination in 1972. The Pastor Defendant was paid $200 per week during his tenure from 2006 to 2011 but he could not arrest the decline in church attendance although his efforts were briefly summarized by the Court and seemed genuine. The trial court after a bench trial (a trial without a jury) ruled in favor of the Pastor Defendant holding the “disaffiliation” and merger with another denominational group was lawful. The appellate court reversed and ordered the trial court to consider organizational documents of the denomination and the local church. The local church title to property did not contain a reservation of the denomination’s ownership interest. On remand, the trial court entered judgement in favor of the Plaintiff denomination but on the damages theories only ordered the property and assets, an 18,000 square foot facility and equipment, returned and only $100 in monetary damages. The Plaintiff denomination appealed the damages award and the appellate court ordered the trial court to assess reasonable monetary damages for loss of use of the facility and affirmed the ordered return of property and assets. Punitive damages, though sought by the denomination, were not assessed because the Pastor Defendant admitted he had assumed the local church denominational affiliation was “voluntary” and terminable at will and did not read the local church organizational documents. Thus, the court found no “malice” with which to support an award of punitive damages.

Local church titles often do not contain reversionary clauses because lending institutions do not believe by foreclosure they can recover clear title against such clauses. Denominations do not require such clauses because local churches need mortgages. This case, as in most, a reversionary clause in the title does not matter. The organizational documents of the local church and denomination control in most cases. Even in cases where the local church documents are unavailable or otherwise murky, the denominational organizational documents will usually be sufficient to force reversion of the property and assets to the denomination. Monetary damages judgments may also be possible and the losing local church leadership should not count on mercy from the denomination bent on recouping litigation costs the denomination often feels were unnecessarily expended. Indeed, if the local church leadership acted with intent or maliciously, punitive damages might be awarded.

THE MINISTERIAL EXCEPTION GRAVITY WELL

The Ministerial Exception, generally a rule that prohibits court review of religious organization employment decisions, would seem simple enough. But, lawsuits to survive must escape its pull. Generally, the former employee plaintiff will contend they are not a minister. This claim is often made in the face of common sense when even slight common sense would demand the person must have been a type of minister. Sometimes religious organizations muddy the water by claiming every employee is a minister, confusing their doctrinal view that every member is a minister even though some people are paid to do non-ministry work because no one else is called to donate the service.

In Yin v Columbia International University, Slip Op. (D SC 2018), the Plaintiff was terminated due to a financial downturn. The Plaintiff was otherwise not criticized for her service as a professor. The Plaintiff sued claiming violation of federal employment laws. The Defendant was a religious school and its primary mission was training ministers. As a faculty member, the Plaintiff signed an undertaking to be responsible for certain religious duties. The Plaintiff, for example, started classes with prayer and the Plaintiff led chapel services. But, the Plaintiff alleged the Plaintiff’s faculty position was “academic” and not religious. The Plaintiff alleged the job title was secular and not religious. Based on the substance of the Plaintiff’s job, including religious duties and the Plaintiff’s obligation to prepare students for ministry, the Court held the case was “extremely close” but granted summary judgment on the Ministerial Exception and dismissed the case with prejudice.

Religious organizations defending employment cases should not do so complacently even if the outcome seems predestined. The Ministerial Exception is typically classified as an affirmative defense, and affirmative defenses often present a factual question from the perspective of the Court hearing the facts for the first time even if from the perspective of the religious organization everything seems obvious. The religious organization’s governing documents, employment manuals, and employee specific documentation should be organized and presented at the earliest opportunity. Otherwise, the lawsuit might escape from the tidal forces of the Ministerial Exception and keep the case alive through many thousands of dollars in legal fees.