Tag: conversion

CHURCH FINANCIAL CLAIMS

It seemed to the author that financial claims, called various things in various jurisdictions, such as embezzlement, conversion, theft, and breach of fiduciary duty, would not likely be shielded by the Ecclesiastical Abstention Doctrine.  Such claims can almost always be decided by Neutral Principles of Law.  A church, like any other recognized entity in American law, owns its own property and accounts.  People, regardless of their title or general authorization as an account signatory, must respect that the church property is owned by the church.  Use of that property, or cash, must be authorized by the governing body of the church and documented.  Sometimes, with the passage of years, bad practices creep in, but that is rarely the subject of a claim.

In the interlocutory appeal of In Re Munger Avenue Baptist Church, Davis, and Ward, Opinion (Tex. Civ. App. 5th, 2022), the claims against the pastor included “breach of fiduciary duty, conversion, fraud by nondisclosure, theft of property, conspiracy, and certain declaratory relief.”  The Defendants moved for dismissal of the case alleging the trial court had no jurisdiction under the Ecclesiastical Abstention Doctrine.  The trial court refused.  The appeal followed and the Texas appellate court denied the writ.  The appellate court made no ruling on whether any of the allegations were true.  But, the appellate court affirmed the trial court’s refusal to dismiss the case based on a lack of jurisdiction because of the Ecclesiastical Abstention Doctrine.  The appellate court’s opinion relied on procedural grounds and was not a finding of jurisdiction.

As a result, the author will continue to believe financial claims, called various things in various jurisdictions, such as embezzlement, conversion, theft, and breach of fiduciary duty, would not likely be shielded by the Ecclesiastical Abstention Doctrine.  Wrongdoers, embezzlers, and thieves should likewise believe that a church has a civil remedy.  Criminal prosecution is not the subject of this report.  Very often churches will not call the police, or if the church does call the police, they get a cool response.  In order to press for an investigation by law enforcement, the church (and most businesses) need to approach the police on an appointment basis, not just a phone call, and to that appointment take the report of a CPA, an affidavit of a church officer or complainant, and financial documents from which the defalcation is apparent.