Tag: church property

TAXING CHURCHES – CALL IT SOMETHING ELSE

 

While most people want everyone to pay their fair share of taxes, however that may be defined, most people do not want government anywhere near the church or anything that belongs to the church.  Indeed, for centuries in the United States we have forbidden taxation of churches.

 

 

But, if the tax is not called a “tax,” but is called a “special assessment,” well then, that is different is it not?  Apparently, in Minnesota, that is the law.  In Bryant Avenue Baptist Church v City of Minneapolis, Slip Op. (MN Civ. App. 2017), the Court explained why a church of about 80 members was the proud recipient of a “special assessment” for street repairs in the amount of $31,191.30 to be paid off in five annual installments.  The Court was convinced that the state constitution did not exempt churches from “special assessments” for civic improvements even though cemeteries and other types of entities were exempt.

 

 

The Court solved the 1st Amendment entanglement issue by pretending it did not exist.  Indeed, there is no mention of it in the opinion.  It is possible the church did not raise the 1st Amendment as a defense, but that seems unlikely, and even so, most courts would inquire into their own jurisdiction to hear a matter obviously touched by a fundamental federal right.  Apparently, there is no prohibition of entanglement with religion in the Minnesota constitution.

“History is particularly compelling in the present case because of the undeviating acceptance given religious tax exemptions from our earliest days as a Nation.  Rarely if ever has this Court considered the constitutionality of a practice for which the historical support is so overwhelming.”  Walz v. Tax Comm’n of City of New York, 397 U.S. 664, 681 (1970) (Brennan, J., concurring).

ROOFING WARS

Few things present a greater maintenance challenge to a church than the roof.  Even medium size churches usually have under the roof a lot of square footage, some not being visually beheld, if at all, except for very short times during their main worship time.  Also, as a volunteer organization, typically led by Pastors that have been to Bible college or seminary but not worked as roofers or contractors, churches are usually hard pressed to maintain a commercial size roof.

Insurance companies and churches have one thing in common:  the insurance company will not invest in underwriting prior to policy issuance and the church usually has poor roof maintenance records even if the roof has been well maintained.  Neither usually has a photo history updated annually or bi-annually.

In State Auto Property Casualty Insurance Company v El Shaddai Christian Ministries, Inc., Slip Op. (USDC, SD, N Div, 2017), the church claimed it had roof damage and water intrusion from a storm in March 2012.  The church had policies, one at a time, with Brotherhood Mutual, State Farm, and State Auto, one right after the other.  The church made the claim on all three policies, again one after the other, and was denied by all three on the claim that the roof damage was caused by neglect.  The Court was not deciding the case; the Court overruled State Auto’s Motion for Summary Judgment finding factual disputes and set the case for trial later in 2017.  The church had to hire a PhD in meteorology to prove there was a storm and an expert that opined the damage to the roof was storm related.  The insurance carrier expert claimed the damage was due to neglect, wear and tear.

All three insurers did not appear, from the evidence reviewed in the opinion (but which might be presented at a trial), to have performed underwriting prior to policy issuance beyond accepting an application and a check.  While it may be that at trial the carrier may be able to prove that the application contained misrepresentations, that was not the subject of the Court’s opinion.  Likewise, the church might have substantial evidence that all three carriers were on notice and the church was transparent in its business dealings with the carriers.  If so, the church will be hard to beat.

CRABAPPLE TREE TORTS

Trees have the uncanny ability in winter to stick their branches straight up and appear to need no trimming.  But, in the spring, throw in a few leaves and those same branches bend, curve, and dance in the wind.  Those branches that bend, curve and dance in the wind will smack roofs, twang power lines and wave at moving and stationary objects.  Sidewalks that could be walked along for blocks are suddenly encroached by limbs.

In Kane v Bethany Community Church, Slip. Op. (Wash. App. 2017)(unpublished opinion) the crabapple tree on church property probably picked that very night in July (about 11pm) for its limb to obscure a stop sign.  Of course, because such limbs on trees are a bit sneaky, it did not block the view of the stop sign from every angle on the street.  A drunk driver with a blood alcohol of .116 ran the stop sign and injured the plaintiff, a moped pilot.  In a deposition in the case brought against the church over the tree limb, the drunk driver admitted the crabapple limb might have obscured his vision.  He could not under oath definitively state that it had.

The appellate court affirmed summary judgment, judgment without trial, awarded to the church by the trial court.  “To say that the tree would have obscured the stop sign at the vantage point shown in a photograph is not inconsistent with, and does not overcome, [the drunk driver’s] testimony that he does not know why he failed to stop.”

The outcome in favor of the church is not the lesson that should be derived.  The lesson is that church property should be inspected carefully, at least annually, and even something as minor as an errant crabapple tree limb should be mitigated, especially around public right of ways like streets and even church parking lot entrances and exits.  The other lesson is the church liability policies should likewise be reviewed at least annually.  However good these things are to do, in volunteer organizations like churches, and because the Pastor cannot be everywhere, they will not always be done or done effectively.  In the case of tree limbs that move about especially in the wind, and that grow and change with the seasons, even a good inspection may not catch it.

PROPHECY BY CONTRACT

It is a little known fact that contracts without temporal limitations will often not fit the situation after the passage of time.  A church that enters into a contract to avoid a legal dispute but does not limit the scope of the contract may have to buy out the contract to meet a future need.  If buying it is problematic or too costly, then the church may be stuck with keeping its word for what might seem like eternity while the circumstances change.

In Abel v Pawleys Island Community Church, Slip Op. (SC App. 2017), the church in 2000 filed an application for a permit to fill in wetlands during the construction of a new sanctuary.  The application was challenged and the church, probably to break the log jam, agreed to a settlement agreement, i.e., a contract.  From the settlement agreement a consent decree agreed to by the parties was issued, which stated:  “The Church agrees that the wetland preserved by this Consent Order shall remain in its natural state.”  In 2014, the church sought to modify the consent decree, the original challengers objected and accused the church of welching on the 2000 deal.

The appellate court enforced the settlement agreement, and thus the original consent decree, and noted “[w]e find the explanatory opening paragraph to the consent order does not create a temporal restriction on the nine clauses contained therein.”

While it was expedient to make a deal in 2000 so that construction of the sanctuary could proceed, and possibly it was not then predictable that someday might bring a need to change the deal, nevertheless someday inexorably came along with a need to modify the consent decree.  It is possible the settlement could not have been reached with a temporal limitation imposed.  It is likely that the push to complete the sanctuary on time and on budget caused undue haste.  Regardless, churches must take contracts seriously before too easily agreeing.