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, 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.
The word “excommunication” labels a procedure by which an ecclesiastical authority under canon law terminates the membership, affiliation or fellowship of someone formerly welcome to those relationships. See, Broderick, Ed., The Catholic Encyclopedia (Nelson, 1987) at 204. Evangelical churches do not have “excommunication” although they may use the word to describe their own procedure for terminating membership typically for disciplinary reasons. More often, whether in ecumenical or evangelical churches, sometimes pestilential people are simply asked to leave and not return to a particular congregation rather than “excommunicated” from the faith. Sometimes in incipient church splits, one side will try to boot out the opposition.
In Lippard v Diamond Hill Baptist Church, Slip Op. (NC App. 2018), the Plaintiffs’ membership in the church was terminated by a congregational vote. The Plaintiffs claimed the vote never really happened and was not conducted, it if happened at all, according to the bylaws of the church. The trial court dismissed the case because in North Carolina, there are clear judicial pronouncements that membership is a “core ecclesiastical matter.” The Court of Appeals affirmed. While for many purposes the bylaws might be matters for application of neutral principles of law, membership qualification or disqualification pursuant to bylaws would not, the Court concluded, be free of ecclesiastical considerations.
Churches should annually recertify their official membership rolls without fail by a vote of their governing board recorded in the board’s minutes. If a church decides that termination of membership is the only recourse for disciplinary or other important reasons, the church should decisively and quickly implement the termination. Dithering about such things, especially in public meetings, is an invitation to litigation.
Courts only have authority to the extent of their jurisdiction. If something, someone, or someplace is outside of their jurisdiction, then the court is powerless to proceed for or against that entity. Some states hold that their courts have no subject matter jurisdiction over church governance issues and tend toward almost automatic dismissal of such claims. Generally, the claims are employment claims or church leadership issues. Some states hold that their courts have subject matter jurisdiction but the church may raise the Ecclesiastical Abstention Doctrine as an affirmative defense. As an affirmative defense, the church must prove that the issue raised by the plaintiff’s claims require delving into ecclesiastical matters rather than neutral principles of law, e.g., contract claims.
In Gilmore v Trinity Missionary Baptist Church, Slip Op. (unpublished) (Mich. App. 2018), the appellate court reversed summary judgment for the church. The trial court dismissed the case on the ground the issue presented was a church governance issue. The plaintiff was employed for over thirty years as the church business manager. Under an oral amendment to her employment contract, she alleged she was given five weeks of paid vacation annually. A new pastor, however, was unaware of any such oral amendment. The pastor learned of the Plaintiff’s vacation pay because in his third year he noticed she added five weeks of salary to her payroll when she set up the annual payroll. The plaintiff was given the choice of abiding by the written employment contract, i.e., not receiving the extra five weeks of salary, or retiring. The plaintiff agreed to neither and was terminated. The appellate court reversed solely because the trial court dismissed the case without conducting a factual inquiry into whether the employment claims raised by the Plaintiff implicated the Ecclesiastical Abstention Doctrine. On remand, such an inquiry would have to be conducted.
Churches may still be able to limit the scope of litigation by proving at the outset that the claims presented do intrude on ecclesiastical church governance. For example, a business manager may be more than a mere bookkeeper and may be directly involved in ministry management. As reported herein, some courts will limit discovery to that issue because there is no point in proceeding with the case if it involves ecclesiastical issues. The written employment contract was not the subject of the court opinion and a well-drawn contract might include a description of ecclesiastical job functions to which the employee has agreed by signing the contract.
Church members that wish to include their church in their will or pour over trusts, or settlor trusts for that matter, should provide a copy of the documents to the church. The passage of time, and changes in lives, might make the church beneficiary that was unaware to begin with to continue to be unaware of the bequest in time to prevent the bequest from being looted.
In Kogudus v Jurgenstein, Slip Op., (Cal. App. 2018)(unpublished), the caretakers allegedly had the pour over trust changed to make themselves the beneficiaries of the trust. The church did not learn of the amendment to the trust until many years later. However, in this instance, it was not too late to attempt to recover the bequest. The statute of limitation had ostensibly run but because the church did not learn of the amendment of the trust until long after the amendment was enacted, the appellate court reversed the trial court holding that the statute of limitations might not have run if the church could prove at trial it did not have inquiry notice of the amendment to the trust until long after the actual amendment.
Churches that receive documents containing bequests should preserve them as valuable papers and annually determine the status. Sometimes elderly members can no longer participate in the life of the church due to infirmity and caretakers may have to move them outside of the churches’ operational area. If the bequest is of sufficient concern, then a church can engage counsel, a private detective, a skip tracer, or other means in the internet age to determine the status and possibly even keep in contact with their elderly member. A church should have a committee that has as its sole task to minister to the elderly, anyway, and keep in contact.
In the present legal environment, church defense lawyers should almost always start with a well-crafted Motion to Dismiss. Indeed, exceptions to that general rule are difficult to conjure. The most prevalent might simply be that churches, as primarily volunteer organizations with little internal infrastructure, might simply be unable to engage counsel and gather the information needed for a Motion to Dismiss, and its higher standards, in the short time available after service of process on the church. In most federal courts and many state trial courts, discovery cannot commence until the case is at issue. Discovery is often the true cost center of litigation because it requires an immense investment of the time of a lawyer. A Motion to Dismiss often delays or limits discovery.
In Presbyterian Church USA v Hon. Brian Edwards, Slip Op. (Ky., 2018), the church was sued in the trial court by a terminated ministerial staff member. The termination allegedly arose from an unauthorized transfer of church funds to another entity incorporated without authorization from the church leadership. There was no allegation of defalcation. The church did not immediately respond to the lawsuit with a Motion to Dismiss on Ministerial Exception grounds. The former employee issued written discovery requests to the church. The trial court ordered the church to respond to the written discovery. The church appealed the decision through an extraordinary writ. The Court of Appeals of Kentucky and then Kentucky Supreme Court reversed the trial court and limited discovery only to the applicability of the Ministerial Exception.
The information needed for a Motion to Dismiss in most employment actions in which it is contemplated that the jurisdiction of the court will be challenged on First Amendment grounds, and especially the Ministerial Exception, will always include the governing documents of the church and church corporation. Job descriptions, employment contracts, if any, and employee manuals, if any, will follow in importance. Church files are notoriously hard to muster, especially if the insider now suing had access. Lastly, church bulletins, newsletters, websites, and internal communications may be needed to persuade that the former employee was, indeed, ministerial in function. Computers never forget and even deleted files can often be recovered.
The sanctity of contracts is so revered in the United States that contracts are preserved and protected in the Constitution of the United States. Article 1, §10, US Constitution. Indeed, the section prohibits any state from making any law that impairs the obligation of contracts. Thus, it should not be a surprise that a claim based on a written employment contract might survive assertion of the Ministerial Exception and the Ecclesiastical Abstention Doctrine arising from the First Amendment. The idea is not that one clause overshadows the other, but rather that they are co-equal in force and must be reconciled so that both survive.
In Sumner v Simpson University, Slip Op. (Cal. App. 3rd, 2018), the Dean of the Tozer Theological Seminary, a part of Simpson University, asserted a breach of contract claim and state tort claims, such as defamation arising from her second termination. She was reinstated after her first termination and compensated for lost wages so the first termination was not argued. However, violation of what might be characterized as a corrective action plan, an insubordination charge, was alleged to be the basis of the second termination that resulted in the lawsuit. The trial court granted summary judgment because Simpson University and the seminary were religious organizations and the Dean, who also taught in the seminary, was deemed to be subject to the Ministerial Exception. The California appellate court sustained summary judgment as to the tort claims under the Ministerial Exception. However it reversed the trial court as to the breach of contract claim. Succinctly, the conclusion of the appellate court was that a contract claim could be decided under Neutral Principles of Law. The appellate court held that a charge of insubordination might or might not be based on religious doctrine. The facts recited by the Court would lead to the conclusion the alleged insubordination may have been regarding secular administrative matters rather than religious matters. However, because the trial court might still be confronted with a religious question as the proceeding developed on remand the appellate court did not foreclose a future dismissal of the claim.
While church hierarchy, ministers, pastors and priests may not be able to assert claims arising from an alleged breach of a written contract in most cases, employees of parachurch organizations with dual roles, secular and religious, may still be able to do so. Much will be determined by whether the termination arises from religious matters or secular matters. Characterization of a termination as religious will be reviewed for authenticity. Therefore, written employment contracts should be written and negotiated carefully. Adverse employment actions should always be carefully documented and especially consistently with any existing written contract governing the relationship. A contract is at its core a promise, and churches should expect to have to keep those they enshrine in written contracts.