Court Decides Dispute Over Proceeds From Sale of Church Property

In Pacific Southwest District of the Church of the Brethren v. Church of the Brethren, Inc., (CA App., June 23, 2014), a California appeals court dealt with a dispute over sharing of the proceeds from the sale of church property.  The court summarized its holding:

Pacific Southwest District of the Church of the Brethren (PSWD) ... appeal from a judgment in favor of respondents Central Korean Evangelical Church (CKEC) and its pastor Jang Kyun Park. The judgment gave CKEC an 86-percent share and gave PSWD a 14-percent share in the proceeds from any sale of CKEC’s real property, which consists of three lots in the Koreatown neighborhood of Los Angeles. Appellants argue CKEC holds the property in trust for the Church of the Brethren. We conclude that PSWD is estopped from asserting a trust over the entire property because CKEC joined the denomination on assurances by church representatives that a trust would not apply to property it owned at the time of affiliation, and at that time it already owned two of the three lots. We also conclude that PSWD may assert a trust over the after-acquired third lot. We affirm the judgment to the extent it ordered partition of the property by sale, but reverse and remand for a redetermination of each party’s share in the proceeds from any sale.