Tag: church splits

THE FINAL JUDGMENT, AGAIN

Increasingly, it seems, in civil litigation, following a similar trajectory in criminal law, there is no closure. Church litigation is increasingly no exception.

In September 2017 and then in December 2017, federal court and state court opinions in Patterson v Shelton, were reported herein. See the post, And Then Again, Maybe Not. In 1991, the founder and pastor of the church died. The power struggle that ensued was the stuff of legends, dueling and feuding, that is. It resulted in published appellate opinions in 2013 and 2017: 175 A3d 442 (Pa. Cmwlth. 2017); 78 A3d 1092 (PA. 2013). The first conflict involved the struggle to determine who was in charge. The second wave involved the conclusions of a forensic accounting investigator that hundreds of thousands of dollars were misappropriated by the church leadership that succeeded the founder. The third wave involved an arbitration decision in 2006 in which the arbitrator was persuaded by the forensic auditor and appointed a receiver to recover the assets of the church. The appellate court overturned the arbitration award concluding the arbitrator went beyond the scope of contractual authority in fashioning relief. See, 942 A2d 967 (Pa. Cmwlth. 2008). The fourth wave of litigation was the claim that Patterson was not a church leader but merely a member and did not have standing under the not for profit corporations statute to bring the claims. The appellate court overruled the trial court and held as a church member and beneficiary of the not for profit corporation, the church, Patterson had sufficient standing to bring claims. The fifth wave was marked by a bench trial regarding the claims conducted in 2014. The trial court concluded it did not have jurisdiction under the Ecclesiastical Abstention Doctrine of the First Amendment and dismissed the case. That had the effect of leaving the arbitration award as the last determination because the trial court, in effect, held that every decision made thereafter lacked jurisdiction. In the sixth and latest wave of Patterson v Shelton, the trial court was asked to strike its orders enforcing the arbitration award as the final judgment. The trial court declined. The appellate court affirmed.

One reason this litigation became so protracted was that the courts made two errors. The courts did not inquire into their own jurisdiction and its limits early in proceedings. The other was to allow judicial hostility to arbitration to again raise its long discredited visage. Arbitrations are no more or less effectual as dispute resolution mechanisms than jury trials. While judges may have greater experience than arbitration panels in dispute resolution, which in some cases would make a bench trial a better forum, the routine case does not benefit from such experience enough to invalidate the arbitral forum. Only arbitral forums that are either so expensive or so without procedural safeguards that their decision making is suspect are inferior in the typical routine case. However, if the parties contractually selected the forum, it should be assumed both sides knew the costs and the risks. If an arbitrator’s awarded relief seems to exceed the contractual grant of authority, the better practice is to either judicially revise the relief given or to remand to the arbitrator for the revision. Simply vacating the award leads to a quagmire.

DISCIPLINARY DEFAMATION

If a church through its local governing documents and denominational, if any, governing documents requires that disputes between members, especially church leadership, must be resolved pursuant to a particular procedure or process, then courts are likely to hold that defamation claims by the disparaged member or leader are barred by the Ecclesiastical Abstention Doctrine. This may be true even if the disparagement “leaks” out into the community and is not solely confined to the church.

The case of In Re Alief Vietnamese Alliance Church and Phan Phung Hung, Slip Op. (Tex. Civ. App. 1st 2019) was a request by a church for a writ sought from the appellate level to preclude the trial court from proceeding with a defamation lawsuit. The trial court overruled a plea to the jurisdiction. The appellate court ordered the trial court to dismiss the case on jurisdictional grounds or the appellate court would issue a writ of mandamus ordering the trial court to do so. In Texas, the Ecclesiastical Abstention Doctrine is a bar to exercise of jurisdiction by a court in most instances. However, the facts recited by the appellate court, and that the appellate court was not itself unanimous, demonstrated the factual uncertainty that might have led the trial court to decide it should proceed. The allegations of the disparaged person seemed from the appellate majority opinion more certain regarding internal church disciplinary disparagement but less so with regard to intentional or reckless dispersal beyond the confines of the church. Mere slight “leakage,” my words for brevity and not the court’s, did not seem sufficient to the majority to mutate the internal disparagement inherent in disciplinary matters, true or not and with or without malice, to defamation outside the shield of the First Amendment.

Discipline is inherently disparaging, at least to certain hearers. It is always based on an alleged violation of church procedure, church law, or morality endorsed by the church in some manner. Thus, church leadership should carefully keep such matters confidential even as to members that do not need to be informed. Greater still should be the confidentiality maintained with regard to non-members. The only exception to either should be in those rare instances when a governmental law enforcement agency must be involved, e.g., child abuse, child pornography, child neglect and offenses requiring registration as a sex offender. Even then, a church should engage legal counsel to determine what is safe to report or shield from the public and or the membership. The test is legal; it is no longer based on a belief or lack thereof in “guilt.”

THE REACH OF DENOMINATIONAL AUTHORITY

Denominational authority over a local congregation or its property is rarely extinguishable at the local level. If it is severable, the process is likely long and arduous. The process often depends upon unilateral agreement by the denomination which is historically unlikely to be obtained for any reason. Indeed, it is so unlikely the better plan is simply to develop external resources and then quietly exit the denominational local church, leaving behind a shell.

In Cedar Grove Baptist Church v Barnham, Slip Op. (Unpublished) (NJ App Div., 2019), the pastor advised the denomination he was leaving the denomination and taking the church with him. Apparently, however, his plan was not known, and later not supported, by the church he served. Indeed, in the ensuing battle over the local church property, the church leadership appointed a new pastor and then sued to enjoin the former pastor from control or presence on the church property. The trial court granted the injunction and the appellate court affirmed.

While instinctively church members think of the local church and its property as “theirs” and not the denomination’s property, this is rarely totally true. If a church has been a member of a denomination for many decades generations of the faithful have contributed to its existence. While the current generation may disdain the denominational roots, the denomination speaks for the generations that went before that now have no other voice. However that may be, denominations that themselves “go rogue” or no longer meet the need of a particular local church cannot stop a group of members from leaving and organizing under a different banner using their own resources. While growth by fission is painful, it is not illegal.

MANDATORY CHURCH MEDIATIONS

While placing a church under external supervision is a rare exercise in judicial power, it is not unheard of. We have reported on imposition of Special Masters, especially to determine membership or supervise elections. Mediators and Special Masters are not always different species. Also, mediators sometimes do not use shuttle diplomacy between striving factions but rather impose procedures, as do sometimes Special Masters, so that the resolution process may advance. If a church split is bad enough, and cannot be resolved merely by reviewing organizational documents, then a mediator or Special Master may be appointed.

In Eskridge v Peacock, Slip Op. (Miss. App. 2018), after the death of a pastor, two striving factions emerged each attempting to appoint the next pastor. There appeared to also be a fracture in recognized church leadership that made congregational rule either a stalemate or problematic. To resolve the impasse, the trial court appointed a mediator with instructions to conduct a congregational election. The mediator appointed was the denominational authority to which the church appeared to belong. Indeed, the court had to take testimony to confirm the church was part of the denomination appointed to mediate. A new pastor was elected under the supervision of the mediator but the losing faction appealed. The appellate court held that appointment of a mediator to supervise the congregational vote and ordering enforcement of the result, but not otherwise dictating the choice of pastor, did not entangle the trial court in ecclesiastical matters so the trial court was affirmed.

Churches may wish to contemplate in their bylaws mandating the appointment of an identified mediator in to be used in the event of court action. Possible mediators could include denominational authority, bible college faculty, or a particular accounting or lawfirm. Indeed, the language of the appointment could also include mandatory pre-litigation requirements that such a process be undertaken. The language should also specify the powers of the mediator or Special Master. A funding mechanism should also be spelled out. Demanding the challenger pay half or all of the cost may keep out all but serious challengers.

PASTOR VERSUS PASTOR

Mad Magazine has for many years published a comic strip entitled “Spy v. Spy.” It has since spread to YouTube videos and a video game. While that comic strip may have been inspired in 1961 by the Cold War, other famous small conflicts included the Hatfields and McCoys, which also spawned a US Supreme Court case in the 19th century and various dramatic interpretations. Like all such feuds, the factual history of any feud is winding and complex and not nearly as funny as “Spy v. Spy.” Unraveling the motives behind the ongoing feud is usually impossible.

In Fidelity National Title Insurance Company v New Haven Financial, Inc., Slip Op. (Cal. App. 2018), the death of the founding pastor in 2005 resulted in a power struggle between two rivals for the pastorate of the church. Several lawsuits resulted as each side in turn sought judicial relief against the other. Meanwhile, the denominational authority refused to accept the election of first one of the rivals and then the other. Further, one of the courts to hear one of the cases held the denominational authority was the only authority that could oversee an election and needed to do so because the church’s membership records were possibly unreliable. For no reason that was reported in the opinion, the denomination did not do so and the feuding continued in court. Eventually, one rival won a final judgment in a prior case. During the litigation, the rival that was later defeated in court, representing himself as pastor of the church, obtained a loan for $150,000 using church property as collateral. The foreclosure action was defeated by the winning rival and the title company had to pay the claim. The title company sought reparations from the rival, by then the losing rival, that took out the loan. The title company also sued the family of the defeated rival because the money was allegedly distributed to family members. The defeated rival filed a cross claim against the winning rival. The trial court dismissed the cross claim holding the prior ruling against the defeated rival barred further litigation of the issue by not only the defeated rival, but “parties in privity,” which included the family member that appealed in this case.

While church splits are not common enough to cause church members to even envision the possibility, church leaders should. Church and denominational documents should envision succession plans, election procedures and oversight, and membership roles should actually be kept by churches. Denominations should inspect membership lists, or require their submission at reasonable intervals, or at least require at reasonable intervals a certification in writing from the church that there is an actual membership list maintained. Denominations and church leaders may have to do more than pray for peace, they may have to impose it in extreme situations.

CHURCH SPLIT LAWSUIT TEMPTATION

Church split lawsuits will sometimes be cases that lack sustainable claims.  Courts will rarely be able to consider ecclesiastical matters or minister employment cases on the merits.  The lack of a sustainable claim does not mean the case was automatically frivolous.  A frivolous claim typically lacks any basis in law or fact.  Usually, church split lawsuits have a basis in fact or law but not enough to sustain a successful claim.  This is not unique to church lawsuits; cases are often dismissed in all areas of law.

In Cho v Choi, et al., Slip Op. (NJ Supp. App. 2018), it took the appellate court only two pages in a per curiam decision to affirm the motion to dismiss granted by the trial court.  The Plaintiff brought four defamation cases against fellow members and a lawsuit against the pastor.  The defamation claimed was that in a public congregational meeting the defendants allegedly stated the Plaintiff was “try to take over the church” and would foreclose on the church if it defaulted on the loan Plaintiff made to the church.  The Court held these statements were either true, and therefore not defamatory, or simply not defamatory.  The Court held the claim alleging the pastor was not qualified could not be reached by the Court because the credentialing of the pastor was ecclesiastical.  The Court held that whether the pastor’s credentialing complied with the denominational handbook was an ecclesiastical matter.

Defamation cases are difficult to pursue and usually the alleged wrongdoer would be insufficiently solvent to make a case economical.  Ministerial employment cases are sufficiently problematic that if the qualifications for office of the hiring board members can be challenged that approach would have a greater chance for success.

SOME LAW IS NOT ALWAYS BETTER THAN NONE

Courts often resolve disputes in ways that neither side wanted, liked, or ever believed was a possible outcome.  This is especially true in church litigation when courts find jurisdiction to decide one issue in a church split but lack jurisdiction to decide other issues.  The partial rulings that result may also leave some disputes only partly resolved.

In Davis v New Zion Baptist Church, Slip Op., (NC App. 2018), the church split spilled into the street resulting in trial court proceedings that led to an appeal in 2015, was remanded for additional proceedings, and appealed a second time.  The combatants in this church split certainly believed in full employment for lawyers.  The church bylaws were not followed in 2013 when the then church leadership attempted to amend them.  Further, the bylaws were so badly written there was no procedure for removal of church board members and no procedure for elections of replacements.  The trial court held the attempted bylaw amendments in 2013 were void based on “neutral principles of law.”  The trial court reasoned, as did the prior appeal ruling, that bylaws governed more than ecclesiastical matters, such as property, finances and contracts, and were subject to neutral principles of law.  The trial court refused to rule on whether the church board members were properly elected but ordered the church to hold general elections within 90 days.  The court of appeals affirmed the voiding of the bylaw amendments but reversed the election order, holding that because the bylaws were silent as to election procedure, that was solely an internal church matter.  The net result was that the church leadership remained in office pending future elections but the bylaw amendments would have to be resubmitted in accord with the bylaws.  Also, the church leadership decision to disfellowship the Plaintiffs did not impact the lawsuit because the alleged wrongs occurred while they were still members but the court did not reverse their loss of membership.

One lesson to be drawn is that bylaws matter and should be competently drafted and regularly updated with the help of a lawyer hired to assist.  The lawyer selected for the task should know something of the corporation laws of the state of incorporation of the church.  The adoption of bylaws and amendments should be carefully implemented using the language of the bylaws.  Bylaws should be considered regularly and not during controversy.  The temptation to tweak the bylaws for advantage becomes too strong at such times.  Another lesson is the “official” church membership rolls should be maintained and updated at least annually in congregation run churches.  Regular updates will mean that when they are needed to determine who can vote they will be available and most probably were last updated outside of the time when a controversy arose.  Both of these lessons, bylaws and membership rolls, are as important or more important for the church with one hundred members as the church with a thousand members.  Church split lawsuits usually involve smaller rather than larger churches.