Tag: church splits

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.

CORPORATE FORMS – FOLLOW THEM

Especially local congregational churches, but even denominational connectional churches, seem to adopt a corporate Constitution and Bylaws only to ignore them.  When a church split arises, it may become a subject of secular litigation to identify the actual qualified voting members and the actually elected officers.  A court will not select a Pastor, but sometimes the identification of the voting members or the officers has that indirect effect.

In Victory Valley Church, Inc. v Purported Victory Valley Church, Slip Op. (Wis. App. 2017) (unpublished subject to further editing)(Per Curiam), both sides in the church split had the right to resort to an “ecclesiastical court” under the church Bylaws, but neither did.  Instead, both sides submitted the identification of voting members and officers to the court to decide, but one side was not happy with the decision and tried to demand a “do over” arguing the Ecclesiastical Abstention Doctrine.  Once submitted by both parties, however, the court could, and did, decide the issue presented pursuant to Neutral Principles of Law, i.e., according to the church Bylaws that were adopted but not substantially followed.  The court had to hold a trial to identify qualified voters and elected officers because the church had not kept its corporate minutes updated, had not kept its election(s), if it had any, recorded, and had not kept updated voting membership rolls (which should be done at least annually).  Most churches do these things autonomically and quite simply.  Even done sloppily would be better than not done at all.

The other problem was that the Bylaws envisioned removal of an officer but required the officers to preside over the removal, creating an inescapable conflict of interest because the officer to be removed would be part of the decision.  The Court decided because of the inherent conflict the Bylaws were not workable in this instance and resorted to the state corporations statute which was the default rule if corporate Bylaws were silent or ambiguous.  Thus, the other lesson of the case opinion was that churches should make sure the Constitution and Bylaws adopted by the church cover all foreseeable contingencies.  Homemade foundational documents of this type, usually drafted by an interested party trying to protect their own interest, can and do backfire.

CHURCH PLANTING BY FISSION

 

Many of the churches that dot the North American cultural landscape were founded due to a church split.  It does not matter whether the split was equal or left only a remnant in the original church or in the new church.  This method of church planting is messy and painful, and does not always result in the survival of the older or the newer church.  It happens, it seems, in every “religion” and in every type of religious group, including independent churches and denominations.

 

 In Sentinel Insurance Company v Shaarei Tzion; Ahavat Israel, Slip Op. (D. Az., 2017), it was a “synagogue split” that created the property issues that led to a declaratory judgment action by the property insurer for Shaarei Tzion.  Shaarei Tzion made a claim for $176,040 regarding property allegedly taken by former members when they left to form Ahavat Israel.  The property included “several Torahs, prayer books, books, other religious artifacts, tables, chairs, and bookcases.”  Of course, Shaarei Tzion and Ahavat Israel, both corporations, were suing each other.  The opinion carefully untangles the competing claims and is a textbook example of how not to divide a congregation’s property in a church fission.

 

 One argument that Ahavat Israel made was both unique and clever.  Ahavat Israel could not deny that the property taken was in the possession of Shaarei Tzion.  But, Ahavat Israel asserted Shaarei Tzion did not own the property because the property belonged to the “greater “Bucharian Jewish Community.””  The Court recognized that was an ecclesiastical argument it could not address but noted under neutral principles of law the Court did not need to resolve that issue and that the claim did not deflect Shaarei Tzion’s claim to possession.  The Court noted that Shaarei Tzion, whether as custodian or permissive user of the property, if not outright owner, had a right to possession that Ahavat Israel did not have and that Ahavat Israel had committed conversion to take the property.

 

 The lesson from this is that unless the fission creates a financial need great enough to force both entities to negotiate property divisions, the departing founders of the new church should simply leave all the property behind and invest their resources not in legal fees but in their own heritage and its material manifestations.  Among some religious groups, the religious artifacts and worship tools are admittedly difficult to replace, but the alternative is protracted legal problems and protracted resentments.