Tag: church property

A TALE OF TWO VICARS

In a single church building, two factions formed and irrevocably divided the congregation.  One faction was led by a presiding vicar appointed by a metropolitan and the other faction was led by another presiding vicar appointed by a different metropolitan.  The metropolitans were from two different nations.  The two factions shared the church building for several years while their litigation for ownership proceeded.  But, one faction tired of awaiting the judicial outcome and locked out the other.  The locked out faction sought an injunction to resume sharing the building and it was granted.  An appeal followed.  The faction that sought to lock out the other claimed they were changing the locks because their metropolitan ordered that sacraments be offered in the building only once per Sunday.  The faction that changed the locks claimed that their action was ecclesiastical because they were obeying an ecclesiastical order.  The appellate court affirmed the injunction because it was a preliminary and temporary order meant only to preserve the status quo.  St. Mary’s Knanaya Church, Inc. v Abraham, Slip Op., Commonwealth Court PA, 2017.

The Court certainly did not accuse anyone of trying to game the system with an “ecclesiastical” order.  Nevertheless, it is hard not to wonder if that was the strategy.  It would have been a clever ruse but like most “trick plays” it had no lasting impact on the score.  Regardless, the amount of money the competing factions are expending on legal fees to protect their respective ownership rights in the building would likely have comfortably relocated one of the factions.

The primary legal lesson from this opinion might be that a preliminary injunction designed only to preserve the status quo will receive greater tolerance even if it tends to intrude into ecclesiastical matters.  Also, because this is at its core a dispute over real estate, neutral principles would allow disposition without consideration of ecclesiastical orders delivered solely to resolve the land dispute.

“I DON’T THINK A CHURCH OF THIS SCOPE WAS ENVISIONED”

West of the Mississippi the word “megachurch” brings to mind a church complex serving thousands of people.  Contrast that to Maryland where apparently a “megachurch” is a 31,500-square foot sanctuary building, which would afford seating for 1,000 people, classrooms for religious education, a nursery area, a warming kitchen, offices, parking and a “fellowship hall” which would also serve as a gymnasium all on 16.6 acres.  At least, it is a “megachurch” in Maryland if certain evangelical denominations are involved.  Such a “megachurch,” in Maryland, may threaten the watershed, threaten the traffic pattern, and otherwise endanger the peace of the neighborhood so zoning laws can be invoked to stop its construction.  Little did the Marylanders realize that West of the Mississippi such a church would be at best considered medium in size.

In Hunt Valley Baptist Church, Inc. v Baltimore County, Memorandum Opinion (USDC, D. Maryland, 2017), the Plaintiff outgrew its original location and facilities and bought 16.6 acres that was approved for a housing subdivision but only contained two single family residences.  The zoning powers simply stopped the development of the entire 16 acres by the church.  The parking lot proposed was too porous, even though it was identical to the parking lot at the church next door.  The church building proposed might use a third of the land and threaten the watershed but the golf course next door had no environmental impact.  The zoning board was especially afraid of the fellowship hall that might double as a gymnasium even though five other churches in the same zoning tract were approved for such facilities and the zone was automatically by statute open to school construction.  Based on such facts, and many others, the Court in its 76 page opinion refused to dismiss the church’s lawsuit brought to enforce its rights provided by the Religious Land Use and Institutionalized Persons Act of 2000, 42 USC §§2000cc, et. seq. (“RLUPIA”).  One board member was quoted in the news media as saying, “I don’t think a church of this scope was envisioned.”  The Court noted it in passing but it seemed to explain the inconsistencies in application of the zoning laws.  This decision meant only that the church got to proceed to try to prove their allegations.

What seemed clear from the opinion was that the church invested enough in its legal representation to make a viable fight against “city hall.”  While the outcome remains to be determined, the opinion is a relatively good blueprint of what a church zoning challenge may entail.  Typically, such challenges are factually byzantine because wide discretion is permitted, and the statutes often do not limit the exercise of discretion in a material way, no matter how many elements are in the statute.  Also, the record of the reasons for decision available from such proceedings is often very thin.  Indeed, in this case before the zoning board, no expert witnesses were engaged by the city to counter the expert witnesses called by the church during seven hearing sessions scheduled during a year.  Only in public hearings before the city council were experts for both sides deployed.  That means the church hired expert witnesses to testify before the zoning board, before the city council and will have to do so before the court.  The costs have been and will be staggering.  In federal court, the experts, if they have not already done so, will have to write reports compliant with the federal rules, testify at deposition, and if they survive that gauntlet testify at trial.

CHURCH BUILDING REPAIR AS A SECULAR PURPOSE

Reported in a prior posting on this website was the United States Supreme Court opinion in Trinity Lutheran Church of Columbia, Inc. v Comer, 137 S. Ct. 2012 (2017).  In Comer, Missouri disallowed payment of a grant to a church to install a rubber surface on its otherwise concrete playground.  The Supreme Court held that the neutral purpose, safeguarding playing children, was not a violation of the Establishment Clause.  Indeed, the Supreme Court went on to point out that excluding an applicant just because the applicant was a religious organization was discriminatory.  That decision was relied upon in Taylor v Town of Cabot, 2017 VT 92.

In Taylor, the Supreme Court of Vermont tentatively upheld a municipal vote that approved an award of $10,000 of building repair and restoration funds for repair of an “historic church” building against the Vermont equivalent of an Establishment Clause challenge.  The decision was a reversal of a preliminary injunction issued by the trial court before Comer was issued.  Thus, the case was returned to the trial court for further proceedings which still could eventually result in a decision against the church and in favor of the tax protestors.

While the decision might seem to be favorable to the church, and the Town of Cabot may have been defending the case, at some point someone may decide this much litigation over $10,000 is simply too much and the church might return the money.  Indeed, the Vermont Supreme Court held that if the trial court on remand again decided the award violated the Vermont constitution the money might have to be repatriated by the church.  Churches that take governmental money of any kind run such a risk.  Historically important church buildings might not be economic to preserve.  Nevertheless, just because an applicant for governmental funds is a church by itself should not result in denial as long as the funds have a secular purpose not reasonably related to establishment of worship.

TOO MUCH ECCLESIASTICAL ABSTENTION? – 2nd Ed.

In late 2016, and summarized in a post here March 11, 2017, in the case of Church of God in Christ, Inc. v L.M. Haley Ministries, Inc., Slip. Op. (Tenn. App. 2016), the Plaintiff was attempting to assert hierarchal control over church property of one of its daughter churches when the local church leadership “went rogue.”  The founding Pastor of the church died and the presiding bishop installed a “speaker – rotation” system to prevent “dissension among those vying” to become the new Pastor.  But, two years later the presiding bishop died and a new presiding bishop was appointed.  The new bishop had the authority to appoint a new Pastor and appointed himself to be Pastor.  But, when the new bishop in the role as the new Pastor tried to assume control of the church assets he was blocked by local church leaders.  The opinion does not explain the motive.  Because the church had not withdrawn from the denomination, and the denomination had not declared the church withdrawn (or excommunicated) prior to the dispute, the courts determined the dispute was internal and further court intervention was barred by the ecclesiastical abstention doctrine.  The court would not declare the denomination’s rights to the assets of the affiliated church and the court would not confirm the new bishop as the new Pastor pursuant to the denomination’s governing documents.

On September 21, 2017, the Supreme Court of Tennessee opinion was issued reversing the intermediate appellate court and trial court, holding that the ecclesiastical abstention doctrine did not foreclose application of neutral principles of law.  The Plaintiff denomination, pursuant to its control documents which were adopted by the local church prior to the dispute, was awarded control of the assets of the daughter church including its real property.  It was interesting to note that the Supreme Court of Tennessee was careful to explain that the result would be the same if either the deed or the hierarchical control documents contained reversionary clauses, but that both were not required.

The better practice is for hierarchical churches to maintain reversionary clauses in both the denominational control documents and the local church deed.  But, in some if not by now most states, failure to put the language in the deed does not impair denominational enforcement of the reversionary clause.  Also, strategic (or fraudulent) related party transfers of the deed that attempt to strip the reversionary clauses of their impact are ineffectual.

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.

HIERARCHIAL CHURCH TITLES AND TRADEMARKS

For some reason, some in the judicial branch have difficulty refraining from interfering in internal denominational matters when the local church or local diocese tries to escape from the parent organization with the local land holdings, too, rather than simply leaving and starting anew.  This seems odd given that these assets are generally amassed by local church members over a period of decades or even centuries that thought they were supporting their denominational church.  The new leadership or congregation in the local church may in recent times decide it can no longer as a matter of conscience support the parent church, but that does not automatically relieve them of the duties they may owe the denomination as to church assets accumulated by prior generations of members.

Episcopal Church litigation has focused the judicial microscope on denominational documents, land titles and ecclesiastical process as well as the hesitancy of some in the judicial branch to abstain as noted above.  In Protestant Episcopal Church, et al, v The Episcopal Church, ___ SE2d ___, 2017 WL 3274123 (SC 2017) it took four justices each writing separately to reverse the trial court (and there was a dissent).  The guiding finding was that the Defendant was the parent church in a hierarchical church and that the Plaintiffs were subordinate church entities.  Once this finding was made, the Ecclesiastical Abstention Doctrine required the Court to defer to the ecclesiastical decision-making by the parent church.  The Court concluded (quoting) “what happens to the relationship between a local congregation that is part of a hierarchical religious organization when members of the local congregation vote to disassociate is an ecclesiastical matter over which civil courts generally do not have a jurisdiction.”  Thus, the denominational requirement that the subordinate church entities held title to local church property in trust for the parent church was enforceable as were the federally registered trademarks.  Indeed, one of the concurring opinions suggested the Plaintiffs were “masquerading” as an authorized diocese in an effort to secure their land titles.  The autonomic reflex of the Court to switch to “neutral principles of law” regarding trust issues and property title issues was deemed inapplicable given the applicability of the Ecclesiastical Abstention Doctrine and the resulting deference to ecclesiastical due process imposed by the parent church.

The lesson for local churches is to be prepared to buy the property from the parent church or be prepared to leave it behind when disassociating and before announcing the disassociation.  With most local churches, the denominational parent will be unable or unwilling to keep the local church property and payoff remaining mortgages and maintenance costs and will negotiate a reasonable and affordable sale of the rights.  But, if the parent church decides to play “hardball,” the local church may be forced to relocate.

THE PRIESTHOOD OF THE LAW

Pastors, priests and professional ministers will sometimes bristle at the idea of “lay persons” infiltrating their profession and exercising their duties and functions.  It should come as no surprise that in secular courts, the church entity, typically a corporation or association, cannot be represented by the clergy but must be represented by a lawyer.  The “must” is not enforced by the lawyers, their advocacy for or against the law notwithstanding, but rather by the courts.

In Horowitz v Stewart Title, Order (D. Haw. 2017) the church leadership brought suit on behalf of the church corporation against a title company to enforce a real estate title insurance policy.  The case was dismissed because the church corporation was not represented by a lawyer.  The dismissal was “without prejudice” because the church corporation could engage counsel and refile the case (within certain time limits).  The church leadership had no claims in their individual capacities so their claims were dismissed.  The transfers of title and the attempts through foreclosure to obtain clear title were sufficiently convoluted that a more careful study of the court file would be required to accurately trace the motives and rights of the participants.  However, the allegation was that the real estate title in question was worth $6,000,000.  That would seem, if true, to have been enough to justify retention of competent legal counsel.

Nevertheless, the lesson to this point is that a church entity cannot represent itself in court and it cannot be represented by non-lawyer clergy or leadership.  That same rule applies to every corporate or alter ego entity and that is the law in every state or federal court.  The reason it probably should be the law, beyond my own bias in favor of full employment for lawyers, is that the entity may represent the assets and capital of a group of people, whether they be stockholders, stakeholders, donors or other participants and courts and governments want a licensed lawyer representing such group ownership so that accountability may be imposed when needed.