Ohio Appeals Court: Congregants' Claims For Accounting for Church Funds Properly Dismissed

Smith v. White, (OH App., Jan. 17, 2014) is a suit by 36 members of the Mt. Carmel Baptist Missionary Church (including deacons and trustees) charging the pastor with breach of fiduciary duty and charging the pastor along with other church officials with conversion; civil conspiracy; unjust enrichment; fraud; and breach of contract. The suit alleged  wrongful concealment of the misappropriation of church funds, including those in the pastor's retirement account, and sought an accounting. In this opinion by an Ohio appellate court the majority affirmed the trial court's conclusion that it lacked jurisdiction over the claims because of 1st Amendment considerations, saying:

Although we have some doubt that a request for an accounting of finances necessarily implicates whether a pastor should be removed for misconduct, we are required to follow our prior decision on the basis of stare decisis, which “is designed to provide continuity and predictability in our legal system.” ...Matters of ecclesiastical abstention are often not clear-cut, and the depositions of the parties (although not cited by the trial court) do indicate a desire to remove the pastor – which implicates an ecclesiastical decision.

The majority also refused to apply a fraud or collusion exception, and concluded as well that plaintiffs had failed to follow internal church procedures to deal with their complaints.

Judge Froelich dissented in part concluding that the court should hear the claims for fraud and for an accounting because "an accounting and whether certain defendants subjectively sought to defraud the plaintiffs are impartial, objective concepts, detached from any ecclesiastical concerns."