When a church fight spills into the street, and by the time the matter reaches court, usually all that is left is the dispute over control of the church assets and especially its land. Buildings and land have most of the secular value. However, if a church split reaches court before the spiritual issues are stripped away, a court is unlikely to intervene.
In the Texas Court of Appeals, 7th District, the case of In Re Jorge Torres and Templo Bautista, Slip Op. (Tex. Civ. App. 7th, 2019) is unusual because none of the allegations concerned the church property. The trial court originally granted a Plea to the Jurisdiction on Ecclesiastical Abstention Doctrine grounds, dismissing the case, but later reconsidered the decision to dismiss. That might have led to discovery through document demands and depositions. It might have ended by summary judgment. Or, it might have led to an actual trial before the bench or a jury. However, the case was taken by one party to the appellate level seeking a writ of mandamus to order the trial court to reinstate its original decision dismissing the case. The appellate court granted the writ ordering the trial court to dismiss the case. The appellate court noted that although the litigants alluded to the church property, all their claims were regarding alleged impropriety in selecting a pastor and excluding dissenting members. Such issues are almost uniformly beyond resolution by a court because of the entanglement with ecclesiastical issues that is nearly always unavoidable.
As we have often seen in these reports, a church fighting over who should lead it might still be a living church but a church salvaging its assets is very far gone. Litigation is in most cases only symptomatic of a church salvage operation, regardless of which side might be in the “right.” Factional church litigation is usually driven by emotions or motives that an outsider cannot truly appreciate, much like most family law cases. However, if a cooler head can prevail, before such litigation is paid for with offering dollars, a clinical review of the likely outcomes and their respective cost effectiveness should be conducted.
In order to plead fraud in most jurisdictions, the fraud must be set forth in the pleadings with particularity. Generally, conclusory allegations will not get through the pleading stage. Sloppy court systems may allow discovery to be conducted on conclusory allegations but that now seems to be the exception rather than the rule. If money was improperly taken, then the amounts, dates, persons and means should be set forth specifically. Rumors will not typically get it done. Many churches, especially small and larger independent ones, will tend toward loose financial practices even in the absence of culpable impropriety that does not amount to fraud. A broken promise is by itself not a fraud. “Scheming” is both legal and illegal so by itself amounts to nothing in legal terms.
In Ambellu v Ethiopian Orthodox Church, Memorandum Opinion (D DC, 2019), the federal trial court dismissed the lawsuit because the allegation requirements of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) were not met. As a practical matter, RICO cases are very difficult to pursue because the allegation and proof standards are not easily met. RICO was designed to address organized crime, not church splits and not the occasional defalcation. Likely, the Plaintiffs in this case were trying to engage federal court jurisdiction by using a federal statute like RICO because of some perceived advantage not thought to be available in the DC Superior Court. Federal judges are not typically willing to tolerate loose pleading practices that might escape the notice of less well funded and understaffed state court systems. The Plaintiffs, indeed, alleged the Defendants publicly proclaimed their intention to take over the church in community radio broadcasts. Actions out in the open are usually harder to qualify as fraud because fraud usually only succeeds because some or all of the actions are “done in a corner.” Even a fraudulent act or series of acts in a local church will not likely threaten no future criminal conduct or enterprise as required to make a RICO claim. The allegation that church board elections were not conducted might be addressed pursuant to the non-profit corporations statute. But, as a state level legal issue, the federal court cannot be forced to consider it if there is no basis for federal court jurisdiction. That the Plaintiffs were seeking money damages via RICO but not reinstatement of the former church board was specifically noted by the Court. The Court also noted that the right to be a member and to worship at a church is an ecclesiastical issue. The Court also noted that mere financial questions, how the church spent its money, are also ecclesiastical.
If a church split must spill out into the street and into a court, the most likely allegation that will survive, absent actual fraud that can be proven from the start or breach of contract, is that the ownership and control of the property of the church has been brought into question by a violation of the bylaws or the non-profit corporation statute. Both can usually be addressed by application of neutral principles and not run afoul of the Ecclesiastical Abstention Doctrine. Indeed, church board members probably have a fiduciary duty to the church corporation that can be enforced. To guard against such problems, a clear set of bylaws should be adopted and preserved.
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.
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.”