Tag: church splits

HYBRID CHURCH ADMINISTRATIONS

Whether a church is governed by a hierarchy or governed by the congregation determines who has the right to control church property.  Typically, hierarchical churches are denominational.  Independent churches are typically congregational.  In the hierarchical church, the hierarchy controls the property.  In a congregational church, the congregation controls the property.  Some churches may have aspects of both categories.

In Tom Slagle v Church of the First Born, Slip Op. (Tenn. App., August 2017) (Slagle II), the appellate court sent the case back to the trial court for a trial on the issue of whether the church was hierarchical or congregational respecting its property and regardless of how it might be classified on any other issue.  Based on the record, the appellate court could not determine as to property ownership and control whether the Deacons controlled the property or whether congregational voting governed the property.  In our post of June 20, 2017, we analyzed Slagle I, a prior decision in the case which is the subject of this post.

In Slagle II, the Court listed “a six factor test” for determining whether a church is hierarchical.  The factors listed were:  (1) the affiliation of the local church with a parent church, (2) an ascending order of ecclesiastical judicatories in which the government of the local church is subject to review and control by higher authorities, (3) subjugation of the local church to the jurisdiction of a parent church or to a constitution and canons promulgated by the parent church, (4) a charter from the parent church governing the affairs of the local church and specifying ownership of local church property, (5) the repository of legal title, and (6) the licensing or ordination of local ministers by the parent church.

After the church split occurred (or while it was developing), there was a vote to adopt bylaws.  Had this been done earlier in the history of the church, the question of control of property might not have required litigation, and if it did, shorter and cheaper litigation.  Slagle I and Slagle II, did not finally resolve the case because it was remanded for trial, as noted above.  The litigation nightmare of this church, and its cost in money, time and distraction from mission, was made inevitable by the failure of a founder to have a succession plan and the failure of the church to incorporate or adopt bylaws during a time of peace.

CHURCH SPLIT PURGATORY

Church splits that spill out into the street and the Courts often lead people that have never been through one to react with judgmental disdain.  The lesson of these conflicts, however, should not be missed.  First, very often, “but for the grace of God go I,” is usually true of those who react with judgmental disdain whether they admit it or know it.  Second, a church split often resembles, at least to this observer, a divorce with some of the same or very similar emotional drives and fallout.  Third, the causes of a church split are from the outside often incomprehensible; they seem irrational.  Fourth, on the inside, the irrationality of the church split is not apparent because convoluted emotional reasoning has often replaced reason and unthinkable motives like greed, lust for power, or primal fear threat reactions run rampant.

While the summer production of court opinions is often slower, this summer the Supreme Court of Alabama has issued, subject to revision, an opinion over 11,000 words long about church splits.  Taylor v Paradise Missionary Baptist Church, Slip. Op. (Ala. 2017). The opinion is notable because Alabama has declared that the Ecclesiastical Abstention Doctrine deprived the Alabama courts of jurisdiction to resolve a church split by declaring who was the elected pastor of the congregation.  The congregation was left to resolve the church split without resolution of the dispute by a Court.  Legal fees and five years of litigation ended with a dismissal of the case and no verdict.

The stupendous effort of the Alabama Supreme Court to “get it right” in this lengthy opinion was necessitated because a church with sixteen (16) members fractured into two (2) groups.  One group favored terminating and replacing the pastor.  The pastor led the resistance group.  Although the church was congregational, it belonged to an association and engaged a mediator from the association.  But, the failure to settle led to litigation in 2012 that resulted in five years of employment for lawyers and the Supreme Court opinion summarized herein.

Structurally, while the church had bylaws, it had not adjusted the bylaws to its diminutive size and did not elect the boards called for in their own bylaws.  Thus, the church learned the cost of operating like a rabble.  There appears to be a lack of convention speakers on the dangers of mob rule and no course in bible colleges in church administration.

No doubt, normal economic forces will resolve a church split, e.g., foreclosure, inability to pay the pastor, that cannot be resolved in Court.  If normal economic forces do not resolve it, other events in the lives of the disputants inevitably will resolve the church split, e.g., death, divorce, retirement, illness, loss of interest.  Rarely, a mediator will be engaged to resolve it.  Nevertheless, most church splits end by one of these means rather than by Court judgment.  In most states, a Court will finally resolve it by employing neutral principles of law.  But, not in Alabama if the result is the appointment of the pastor.  If the result is control of property, the result might be different, because the Court stated:  “As discussed above, the removal of Taylor as the pastor of PMBC was purely an ecclesiastical matter not involving a property right and the trial court lacked the jurisdiction to consider it.”

The Alabama Supreme Court opinion is also notable, and long, because of its recital of the century long history of church split litigation in Alabama.  This by itself made the opinion interesting.

GROWTH BY FISSION THROUGH LITIGATION

From the outside looking in, many church splits seem driven by primal urges rather than any spiritual forces.  Admittedly, to those involved in the dispute, spiritual or doctrinal issues might seem to be driving the clash, but from the outside, those issues may not be visible or understood.  A Court cannot become entangled in the spiritual or doctrinal issues, if there are any, and even if the Court understands the spiritual or doctrinal issue.  Thus, that may leave a Court using secular law, neutral principles of law, to settle a church split.

In Brother Alger Mullins v Jim Wicker, 2017 Ohio 5663 (Ohio App., 4th Dist., 2017), on a split decision, 2-1, the appellate court affirmed the trial court’s Judgment which had the effect of acknowledging the two factions had, indeed, split the church into two separate churches.  Both sides were enjoined from interfering with the use of the church property by the opponent.  One group had the church property on even weekends and the other had the property on odd weekends.  Each became responsible for half of the expenses and no expenses could be incurred on behalf of both without consent from both.  The church was congregation, i.e., self-governing.

The appellate opinion also was interesting because of its recital of other court resolved church splits in other cases that resulted in published or otherwise available opinions. Further, the appellate opinion was a split decision because one of the three judges on the panel dissented on Ecclesiastical Abstention Doctrine grounds.  The result of a decision based on the dissent would have been to leave the factions stuck in their dispute until they either resolved it, one party finally drove off the other, or an unpaid church vendor or property mishap ended the congregation’s ownership of the property.  Of course, arguably, the mutual injunctions might have the same effect.  The dispute between the factions also involved whether adult female members could vote and whether the congregation should be a member of an association of congregations.

One other interesting fact that might have accounted for the outcome was that the church held a monthly business meeting and maintained meetings of those minutes, but otherwise there were no bylaws or other governing documents.  The governance through the monthly church business meeting broke down when each side decided to expel the other and each side began to conduct business meetings without inviting all of the members of the church.  The meeting minutes were the governance documents for decades until the minutes were no longer recognized by both sides.

CORPORATE DEATH PENALTY

There is a corporate death penalty.  Religious organizations can be sentenced to oblivion.

Typically, a non-profit corporation ends up forcibly terminated because it failed to follow the corporate forms.  Usually, the failure to follow is not sporadic or just sloppiness but an abandonment.  The abandonment of the corporate life usually includes failure to maintain membership records, failure to define voting membership qualifications, failure to elect directors or other officers in accord with bylaws, failure to maintain proper financial records and controls, failure to conduct regular board meetings, and an inability by application of neutral principles for a court or court appointed receiver to identify those with a right to make decisions about the assets of the non-profit corporation.

In Ohio v Omar Ibn Khattab Mosque, Inc., 2017 Ohio 4453 (Ohio App. 10th Dist. 2017), the Attorney General of Ohio sought dissolution of the non-profit corporation and appointment of a receiver to form a successor non-profit corporation that would own the assets of Khattab Mosque, Inc.  The court affirmed a magistrate’s findings that board members were attempting to hold office beyond their terms, multiple efforts to elect successors had merely multiplied disputes and claims, the mosque’s bank froze its accounts so it could not pay its bills because of competing claims, each faction before the court wanted control of church assets and ouster of the board members representing the opposite faction, and each side was attempting to drag the Attorney General into ecclesiastical disputes over qualifications of board members.  The court refused to resolve any of the disputes, noting that years of litigation had already failed to do so, and simply granted the Attorney General’s petition to dissolve the corporation and appoint a receiver to supervise creation of a successor entity and all in only 40 pages.

Too often, such calamities arise from building programs.  The Khattab Mosque collapse began in a building program that may have resulted in a battle for control.  Churches, mosques, synagogues and para-church organizations that assume everyone will remain loyal, honest, and accommodating throughout the years will see no need for organizational documents, rules of corporate governance, and otherwise documented elections and regular meetings.  Strong leadership that seemed to make such things unnecessary will retire or die.  New members will sometimes become disenfranchised with the old ways.  These are the reasons corporate forms matter.

FINDING A BURNING BUSH — CHURCH DOCUMENT AUTHENTICATION

When a church split spills out into the street and ends up in court in a jurisdiction that will apply neutral principles to decide the case, each side should be prepared to provide authenticated documentation of their right to own the church property or rule the church.

Church property title can often be established by documents publicly filed or denominational documents owned by many different people.  But, when church property ownership turns on identification of the church leadership, especially on the local church level, church document authentication can become a challenging issue because many local churches are not good record keepers and not all foundational documents are filed in the public record.  Getting a volunteer church officer or a part-time secretary to timely find and authenticate a document can be a challenge.  Finding a corporate seal or encouraging those volunteers to appear before a notary can be a challenge, too.  Local churches often do not have and cannot find corporate minutes for the current year, much less years past.  Finding a burning bush is sometimes less stressful.

In a bankruptcy adversary proceeding, First Korean Christian Church v DW Kim, Memorandum Decision (Bankr. ND CA, 2017), in order to rebut a claim he had been defrocked by the denomination, the former pastor submitted an unsigned and unauthenticated document.  The unauthenticated document purportedly indicated a reversal of the decision of the disciplinary authority of the denomination to strip the pastor of his credentials.  The former pastor also claimed the court did not have jurisdiction to decide the question of his denominational credentialing or whether he could serve as pastor of the local congregation.  The Court rejected the unauthenticated document and based on the authenticated documents granted judgment to the local church and the denomination.

In many cases, if a contested document is not authenticated, it can be rejected as proof by a court without anything further.  Also, a document that is not authenticated will typically not provide the basis for a challenge to an authenticated document.

In a church or denomination, sometimes the proof has to be marshalled as to whether the authenticating or endorsing witness actually has the authority to authenticate or endorse a document because to an outsider the authority may not be readily apparent or identifiable.  This is especially true of denominations that have governing boards that meet infrequently if such a board is the only authority that can authenticate or delegate the authority to do so.  In other words, sometimes a witness must be found that can testify truthfully that the authenticating or endorsing witness actually has authority to do so.  Sometimes, as noted above, it is the burning bush one must find.

HIERARCHIAL DEFERENCE DOCTRINE AND NEUTRAL PRINCIPLES DOCTRINE – HAS THERE BEEN A MERGER?

 

Splitting churches sometimes leave to courts the decision as to property ownership between the factions.  If the church is part of a hierarchical denomination, typically the court will give deference to the ecclesiastical authority’s decision making as to ownership.  If the church is part of a denomination that is not hierarchical, or the church is independent of any denomination, then to award clear title to the church property the court will under the neutral principles doctrine review the foundational documents of the church from a secular view point to decide which faction has ownership, or the right to vote on leadership that might control ownership.

 

The hierarchical deference doctrine is used by a minority of states to decide contested church property ownership issues.  The calculation of that minority seems to be further impaired by the drift of the doctrine toward and into the neutral principles doctrine.  The cause of this is that to determine if there is a binding hierarchical relationship, foundational documents usually have to be carefully reviewed to establish that the hierarchy exists and its authority over local church property.  As a practical matter, the neutral principles doctrine must do the same.

 

 In this case both doctrines led to the same conclusion.  In Heartland Presbytery v The Presbyterian Church of Stanley, Inc., Slip Op. (KS App. 2017), the court decided ownership between two factions by invoking the hierarchical deference doctrine.  The denomination awarded the church property to the “staying faction.”  However, just to cover all the bases, it seemed, the court went on to decide the case under the neutral principles doctrine and reached the same result.  The court’s opinion is a lengthy primer on both doctrines.

 

 However, the “departing faction” decided to depart the church and form a new church affiliated with a new denomination a few days after the trial court judgment against them.  The “staying faction” argued the “departing faction” by their departure from the church abandoned the appeal basing their argument on the “judgment acquiescence” doctrine.  The factions both used the church property for worship albeit at different times.  The court rejected the abandonment argument.

It is not the place of the courts, or this blog, to decide the theological controversy that led to the church split.  A “leaving faction” or “dissenting group” should make an early determination as to whether it is reasonably probable to prevail if the local church is part of a hierarchical denomination.  The same is true in a neutral principles jurisdiction.  Such an early determination may allow a “leaving faction” to spend its resources on a new church work rather than a legal battle.

YOU CAN’T FIGHT CITY HALL – OR THE BANK

A church split of “longstanding” resulted at the end in an interpleader action brought by a bank.  The bank paid the proceeds of the church accounts into the registry of the court.  For the interpleader action, the bank sought attorney fees, expenses, and a reservation of some of the proceeds (and maybe all of the remainder to be reserved) for future legal expenses.  One of the parties objected and alleged the bank was not an impartial stakeholder, and counterclaimed against the bank.  However, the court awarded legal fees and expenses to the bank.  Bank of America, NA v Jericho Baptist Church Ministries, Inc., Memorandum Opinion, (D. Maryland 2017).

A short Memorandum Opinion of this type does not usually contain detailed recitations of facts.  Thus, the actual fury of the church split was not detailed.  Resolution of the church split by the court, if the court did so, is not detailed in this opinion.

The only lesson that should starkly leap from the opinion is that a church split that results in litigation will not stay between the parties and will lead to legal expenses of substantial amounts in many instances.  Certainly, if the dispute forces a bank to choose sides, it will usually not do so and will usually ask a court to resolve its role.  If the parties resist, the bank will seek and typically obtain legal fees and expenses.  Although typically interpleader legal fee awards are modest, as such things go, but often they are not the only awards of legal fees possible.