To escape from the confines of the hierarchical church governing rules and documents a local church will often allege all sorts of things. In Alpine Methodist v New Jersey United Methodist Church, Slip. Op. (Sup. Court NJ App. 2017), the plaintiff alleged it pre-existed the existence of the denominational authority and therefore was not subject to the property reversionary requirement in the denominational manual. However, the Court found there was no evidence to explain that after the denominational authority was established the plaintiff had acted as anything other than a full member for many decades. The plaintiff also alleged that a retired pastor was guilty of misappropriation of funds. The denomination heard the allegation and refused to proceed with a disciplinary action. The plaintiff alleged that the failure to act left the plaintiff with no forum or relief. But, the Court held the refusal by the denomination to engage a disciplinary process was ecclesiastically binding.
Interesting in the case was that the Plaintiff, the local church, engaged a private investigator to conduct an inquiry into the alleged financial misconduct. The evidence of financial misconduct did not lead the local church to seek a criminal charge or to engage in its own disciplinary complaint with the denomination. Instead, the church sought relief in court. Interesting, too, was that the private detective admitted that the local church was subject to the denominational manual.
Retention of a licensed private detective, who in this case was also a retired police officer, was probably a good call in order to document what happened to the money. The best practice would be to have the detective report to the church legal counsel and work under the supervision of counsel. A certified public account should also have been consulted to review the opportunities for financial misconduct inhering in the church’s financial system and suggest reforms. If criminal charges, a collection action, or a disciplinary proceeding are not preferred, one or all three should only be deferred if the wrongdoer signs a written admission of all of the known facts about the financial misconduct. Wrongdoers are usually gone, dead or insolvent, so collection actions are typically pointless.
Hierarchical churches generally cannot divide and separate constituent entities in a manner that may shield one level from the damages allegedly caused by a different level. The hierarchical church is generally viewed as virtually or actually integrated such that a claim against one level can also be brought against another level. Indeed, it is rare to see an assertion that there is an actual barrier between one level and another of a hierarchical church.
In Clement v The Roman Catholic Diocese of Erie, Memorandum Opinion (WD Pa. 2017), the Plaintiff alleged sexual harassment by the priest supervising her work. The Diocese moved to dismiss the claims against the Diocese on the grounds the Diocese was not the employer and the Plaintiff was employed by the parish church. The Plaintiff also alleged that she complained to the monsignor that supervised the priest and even with the Bishop of the Diocese but that neither did anything. The Plaintiff claimed that there was “operational entanglement” between the Diocese and the parish. The parish, incidentally, alleged it should be dismissed because it did not employ fifteen individuals.
The Court overruled the motions to dismiss holding that to determine whether the Diocese and parish were “sufficiently interconnected” is an “open-ended, equitable inquiry.” The Court held this was a “fact-intensive inquiry.” These reasons make the outcome of overruling the motions to dismiss seem inevitable. Also, it seems like a different set of grounds for the motions to dismiss should have been presented because the hierarchical nature of the Diocese and parish relationship would seem to be too well known in that denomination to make such an alleged separation between the Diocese and parish seem realistic.
Of course, that a motion to dismiss is overruled is not uncommon and the case will proceed through discovery, dispositive motions, and possibly trial and appeal if it is not settled. Thus, a future opinion, verdict or appeal could dispose of the case. But, typically, the arguments raised before the Court are more usually made by connectional churches that are not hierarchical.
The local church existed for 163 years and had been voluntarily affiliated with five different denominational groups. Thus, this was not the situation often seen in which the local church was actually founded by the denomination. The local church decided to disaffiliate due to theological issues from the fifth but the denominational document imposed a property trust on the local church. The disaffiliation process led to a final break and the denomination sought foreclosure on the local church property pursuant to the property trust. However, a couple of years before commencement of the disaffiliation process, the local church amended its corporate bylaws and removed the property trust. Thus, in the foreclosure action, the local church submitted a defense based on the bylaws that contained no property trust clause. It worked.
In Presbytery of the Twin Cities Area v Eden Prairie Presbyterian Church, Inc., Slip Op. (unpublished) (Minn. App. 2017), the summary judgment for the local church was affirmed. The court noted that the denominational document only recently had been amended to claim that property “is a tool for the accomplishment of the mission” and based on that language the denomination claimed the property dispute was ecclesiastical and had to be resolved by the denomination. However, while the denominational document prohibited revocation of the property trust clause by the local church, it did not preclude bylaws amendments by the local church. Therefore, because the trust language was erased from the local church bylaws by an amendment that was not prohibited, it was valid.
The court held there was no proof that the hierarchical “ruling” of the denomination in support of the property trust was inviolate because it did not appear to be a matter of “polity or faith.” There was no proof it was a matter of “polity or faith” because the local church was not prohibited by the denominational document from amending its bylaws. Thus, without an ecclesiastical issue the neutral principles doctrine looked at the applicable church bylaws, found no remaining property trust after the amendment of the bylaws, and entered judgment for the local church.
The court also rejected “this notion” that property was a “temporal tool for the accomplishment of the mission of Jesus Christ in the temporal world” that would always be an ecclesiastical issue. Even if it was true, the local church had been paying for its property for a century before it joined the fifth denomination and the denomination could not claim it was acting as trustee for the contributions of denominational members except in the last third of the local church’s existence.
For local churches considering severing denominational ties, the lesson is that the foundational documents of the local church may still be lawfully amended in some instances. A denominational property trust might be neutralized. For denominations, the lesson is to limit unapproved local church bylaws amendments. Another technique is to make sure the title documents reflect the property trust. However, a notation on title documents might impair credit worthiness for future refinancing or under an existing mortgage may not be possible.
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.