Some Factional Church Claims Subject To Ecclesiastical Abstention Doctrine

In El Pescador Church, Inc. v. Ferrero, (TX App., Nov. 25, 2019), a Texas state appeals court held that the ecclesiastical abstention doctrine requires dismissal of a claim by one church faction that defendants wrongfully exercised control over property of the non-denominational church by changing banks, changing locks, taking control of the tithe and "subjecting any and all parities [sic] that disagree with these actions to intimidation, ridicule, and humiliation directed from the pulpit to the faithful." The court said in part:

[T]he evidence that the Church used to respond to the motion for summary judgment shows how its case is inextricably intertwined with ecclesiastical issues. That evidence consists [in part of] ... meeting minutes [which] state that "the congregation requested to place in discipline the Treasurer--Armando Oaxaca and for him to be destitute of the position of Treasurer." The minutes conclude that "Oaxaca can't function as Treasurer since he is not attending services or tithing to the congregation." Discipline of church members, particularly based on a scriptural concept such as tithing, are uniquely ecclesiastical....

The other claims--fraud and breach of fiduciary duty, equally implicate facts that are inextricably intertwined with internal church governance, the role of the pastor in church affairs, membership in the congregation, and statements of the pastor from the pulpit....

 Certain other claims however are not subject to dismissal:

The Church also sued Nunez for advice that he gave to Hector Ferrero and the congregation. He is alleged to have provided accounting and legal advice while not being licensed in those occupations. There is no allegation or evidence that his advice was ecclesiastical in nature, but rather the pleading alleges it is related to corporate governance under the corporation's articles of incorporation and Texas law. We view those claims differently from the allegations against the church officers and congregants.....

Court Defers To Decisions of Parent Body In Dispute With Break-Away Presbyterian Congregation

In Presbytery of Seattle v. Schulz, (WA App., Oct. 7, 2019), a Washington state appellate court upheld a trial court's deference to decisions of the Administrative Commission set up by the Presbyterian Church USA's representative in connection with disputes regarding a break-away congregation.  Finding that the Presbyterian church is a hierarchical church, the court concluded that the trial court correctly deferred to the decisions of the Administrative Commission that the disaffiliation of the First Presbyterian Church of Seattle was invalid, any interest it had in church property was held in trust for the benefit of Presbyterian Church USA, and the church's severance agreements with its pastors were invalid.  The court rejected the argument by the local church that the national body no longer had ecclesiastical jurisdiction over it once it disaffiliated, so determinations after that date by the Administrative Commission should not binding.

Break-Away Diocese Cannot Use Former Trademarked Names

In vonRosenberg v. Lawrence, (D SC, Sept. 19, 2019), a South Carolina federal district court,in a 73-page opinion, resolved a trademark dispute between The Episcopal Church and a break-away diocese.  As summarize by World Intellectual Property Review:

A US judge has ordered a former South Carolina diocese of the Episcopal Church to change its name, after concluding the breakaway group was infringing the Episcopal Church’s trademark-protected diocesan shield.

On Thursday, September 19, District Judge Richard Gergel issued an injunction against the breakaway diocese, ordering the group not to use nine trademarks associated with the Episcopal Church and ... The Episcopal Church in South Carolina, an affiliate of the national church.

Battle For Control Over Christian Broadcasting and Relief Organization

An Indiana federal district court last week allowed plaintiffs to move ahead with most of their claims in a lawsuit between two cousins in their battle to control of LeSEA, described by the court as:

a Christian non-profit organization based in South Bend, Indiana and with wide-ranging operations. LeSEA was founded by Dr. Lester Frank Sumrall (grandfather of defendant Lester Sumrall) in 1957 and has grown to operate churches, bookstores, a Bible college, a large food and disaster relief operation, as well as a series of television and radio broadcast networks focused on religious programming.

In  LeSEA Inc. v. LeSEA Broadcasting Corp., (ND IN, May 10, 2019), the court described the legal issues involved:

The gist of the case involves allegations of a wide ranging attempt to steal trademarks and other intellectual property as well as a host of alleged state law violations sounding mostly in conversion and other intentional torts.

The Indiana Lawyer, reporting on the decision, said in part:

Two “warring cousins” who each claim to be the rightful heir to the South Bend-based LeSEA Christian broadcasting network will continue to slug it out after a federal judge largely denied one cousin’s motion to dismiss.

Court Properly Applied Neutral Principles In Dealing With Factional Dispute In Church

Nelson v. Brewer, (IL App., May 10, 2019), involved a dispute between two factions of a congregational church over control of the church, identity of its pastor and control of its property. The appellate court upheld the trial court's action under Sec. 112.55 of the Illinois Non-Profit Corporation Act appointing a custodian to secure the church's property and bring the church's corporate governance documents in to compliance with law. The court also, through a series of orders, provided for selection of a 5-person board for the church. The appellate court said in part:

We find the circuit court in this case properly applied the neutral principles of law as it found both parties have an equal right to PTC property and carefully applied section 112.55 of the Act to remediate the church’s corporate governance. The court specifically refused to issue an opinion as to who is the rightful pastor because that question is religious in nature. Instead the court limited its findings to corporate reorganization by examining PTC’s articles of incorporation, bylaws, other corporate governing documents, the land trust, and pertinent state statutes to resolve the matter.

Episcopal Parish's Suit Against Its Rector Is Dismissed

In Parish of St. Paul's Episcopal Church v. Kovoor, 2019 Conn. Super. LEXIS 714 (CT Super. Ct., April 10, 2019), a Connecticut state trial court dismissed a lawsuit brought by a Darien, Connecticut parish which was seeking to remove its Rector, Rev. George Kovoor, on the ground that he made material misrepresentations of his credentials when he applied for employment.  Prior to the filing of the lawsuit, the parent church had stepped in and attempted to resolve the dispute between the parish and Kavoor, ordering that each party take certain steps. When the parish failed to take the steps called for, the parent church dissolved the parish and converted it into a Worshiping Community under direct supervision of the Bishop. The court held that it must defer to the decisions of the parent Episcopal Church:

Neutral principals of law can be applied to church disputes. Herein the plaintiffs claim common-law employment contract law is such a neutral principle of law that should be applied. Applying those provisions would relitigate the three decisions already issued by the Episcopal Church as to the St. Paul's/Kovoor Rector situation. In this court's opinion that would cause the Superior Court to examine the internal workings and polity of the Episcopal Church in Connecticut....

The court finds the March 2016 employment relationship... is religious in nature. The court finds that adjudicating the particular claims and defenses in this case will require the court to intervene into a religious institution's exclusive right to decide matters pertaining to doctrine and/or its internal governance or organization.... 

This court finds that the nature of a relief being sought in this case would entangle the Superior Court of the State of Connecticut into matters of religious hiring, religious practices and church polity. The court notes that there is no claim in this litigation concerning the title to the real property currently occupied by the Worshipping Community and formerly by St. Paul's Parish of Darien, Connecticut.

Reporting on the decision Virture Online says that St. Paul's is now operating as a state-chartered ecclesiastical society, unconnected to the Episcopal Church.

Break-Away Moves By Methodist Congregation Are Invalid

In Laumalie Ma'oni'oni Free Wesleyan Church of Tonga v. Ma'afu, (UT App, March 21, 2019), a Utah state appellate court held that a mail-in vote to change the articles of incorporation of the Tongan United Methodist Church (TUMC) was invalid.  The amendments purported to break the congregation away from the parent United Methodist Church (UMC). The mail vote did not comply with the governance requirement of UMC's Book of Discipline which was incorporated by reference into TUMC's articles of incorporation.  Rejecting constitutional challenges, the court said in part:

[T]he district court’s interpretation and application of the Discipline was constitutionally sound. In resolving the dispute, the court looked to the corporation’s governing documents, “without inquiring into matters of church doctrine.” The Discipline requires any meeting of the Charge Conference or the Church Conference to be presided over and called by the district superintendent. The Discipline does not authorize mail-in voting....

Free Wesleyan argues that these matters relate to “faith and doctrine.” We disagree. Whether a corporate meeting must be called and presided over by a certain person and whether voting members must be present at a meeting are not matters of religious doctrine or faith.

Uganda's Jewish Community Is Split Over Financial Charges and Religious Differences

Haaretz yesterday reported on the controversy-- which has now made its way into the courts-- between factions in Uganda's Jewish community, known as the Abayudaya.  The community's rabbi, Rabbi Gershom Sizomu, has been charged by his half-brother, Joab Jonadab Keki, with mismanagement of the community's funds and property.  Keki has asked a Ugandan court to remove Sizomu as rabbi, claiming he has taken community funds for himself and his family.  Sizomu's supporters deny the charges and have filed a counter-claim. Apparently the controversy also has roots in the attempt by Keki to move the community toward Orthodox Judaism.  Rzbbi Siaomu has completed his rabbinic studies in Los Angeles at the Conservative Jewish seminary, the Ziegler School.  The Orthodox rabbinate in Israel refuses to recognize the Abayudaya as Jewish because the community was converted by Conservative rabbis.

Deacon's Suit Dismissed On Ecclesiastical Abstention Grounds

According to yesterday's News-Gazette, a Champaign, Illinois state trial court has dismissed on ecclesiastical abstention grounds a lawsuit by a former church deacon of the Jericho Missionary Baptist Church.  As described in the news report:

Formerly the chairman of the deacon board that hired Johnson as pastor in 2009, Halcrombe was seeking to fire Johnson some five years later after he and other former church leaders took another look at Johnson's credentials.

Johnson continues to be pastor of the church, but Halcrombe was dismissed as a deacon and removed from his post as registered agent of the church.

Halcrombe's lawsuit set out the details of what became a several-years-long conflict within the church over leadership, membership and money issues, and it sought a judgment to clarify who current church members are, the constitution and bylaws of the church and the authority and employment of Johnson.

More Rulings In South Carolina Episcopal Church Split

Earlier this week, a South Carolina federal district court issued another opinion in the long-running battle between competing Episcopal Church factions in South Carolina.  While the underlying dispute over which faction owns church property has been litigated in state court, a federal court suit was filed alleging a false advertising claim under the Lanham Act. Episcopal Bishop Charles von Rosenberg who heads the minority of congregations in South Carolina that remain loyal to The Episcopal Church sued Bishop Mark Lawrence who heads the larger portion of the congregations that in 2012 broke away from the national church. Von Rosenberg alleged that Lawrence engaged in false advertising by asserting that he remained the Bishop of the Diocese.  In vonRosenberg v. Lawrence, (D SC, April 16, 2018), the court allowed plaintiffs to add as defendants the Diocese, parishes and trustee corporation affiliated with Bishop Lawrence.

In a perhaps more interesting second part of the opinion, the court refused to allow the suit to be expanded to assert a novel breach of trust claim.  Last year, the South Carolina Supreme Court decided the property issue largely in favor of those who remained loyal to The Episcopal Church. (See prior posting.)  Plaintiffs sought to add a claim that "the parishes have breached their fiduciary duties by allowing property held in trust for TEC to be used 'in connection with a denomination' other than TEC."  They sought an order against 28 Parishes "to remove from their vestries any persons who cannot demonstrate to this Court's satisfaction that they are capable of and willing to carry out their fiduciary obligations to The Episcopal Church...."  The court held that it is not "free to use trust law entangle itself with religion like a fly in a spider web."  It continued:

Entry of a judicial order telling 28 congregations whom they may or may not elect to their respective parish vestries would foster excessive judicial entanglement with religion....

Of course, there are other ways for TEC to enforce its property rights. For example, TEC could take legal possession of the parish property held in trust for its benefit, rather than asking a federal court to supervise the local congregation's use the property. 

Charleston Regional Business Journal reports on the decision.

DC Appeals Court Remands In Controversy Over Outreach To GW Jewish Students

In Steiner v. American Friends of Lubavitch (Chabad), (DC Ct. App., Feb. 1, 2018), the District of Columbia Court of Appeals found no absolute bar to enforcement of a non-compete clause in a contract of a Chabad rabbi who had been popular with Jewish students at George Washington University. However the court held that the trial court had enforced the clause too broadly.  At issue are tensions that have extended for many years between the Chabad organization and Rabbi Yehuda Steiner who had been employed to engage in campus outreach for Chabad.  After Steiner was fired, he continued his religious outreach to students. The Chabad organization brought a breach of contract action. The trial court applied the doctrine of equitable reformation to issue an injunction against Steiner, but limited non-competition to two years, to serving currently enrolled students, and to an area within one mile from campus. In this appeal, the court held:

Here, neither the noncompete as originally drafted nor the clause as reformed in the trial court‘s modified preliminary injunction contains terms that would require religious interpretation and therefore preclude a civil court‘s review of this dispute.

However the appellate court held that the trial court's injunction was too broad insofar as it limits activities that Rabbi Steiner and his wife can continue in their personal capacities, rather than through a competing organization. the court added:

More than 100 GW students signed a petition attesting to the special personal relationship they shared with their religious leader, Rabbi Steiner.  In such circumstances, the public interest may bear on the level of scrutiny we will apply to a decision to judicially modify a restrictive covenant.....

In this same vein, the profession of religious minister or rabbi is unique in that the tasks performed in an employment context overlap to a large extent with actions such a professional might undertake in his or her free time, without expectation of payment, as a member of the community engaging in religious practice or dialogue. It is thus imperative that an employer wishing to prohibit certain behavior post-termination narrowly tailor with specific language a restrictive covenant....

The court also remanded for clarification of a non-interference provision, and for a determination of whether the non-compete applies to Rabbi Steiner's wife as well.

PCUSA's Trust Clause Keeps Property of Breakaway Church For National Body

In Lehigh Presbytery v. First Presbyterian Church of  Bethlehem, Pennsylvania, (PA Com Pl., Dec. 12, 2017), a Pennsylvania trial court in a 43-page opinion held that the property of a break-away congregation belongs to the Presbyterian Church (USA) because of the trust clause in the PCUSA's Book of Order.  The court concluded its opinion as follows:

Since its inception, the congregational generations of FPCB have consistently expressed allegiance, fidelity, and adherence to the national denomination now known as PCUSA.  However, rather than leaving the Church to join a different religious denomination, the majority of the congregants wish to evict the national denomination from the church; thereby repudiating the intent of those who founded FPCB and extinguishing the sacrifices, contribution, and hard work of many prior generations of congregants who built FPCB with the expectation that FPCB would remain affiliated with the national denomination of Presbyterian Churches (USA).  Thus, although we have resolved this issue under neutral principles of law, we were also struck that to do otherwise, we would ignore the express intention of those who built this congregation with the expectation that those founding principles should forever direct its mission.

The Morning Call reports on the decision.

Massachusetts Court Will Hear Conservative Synagogue Suit Alleging Chabad Takeover

JTA reports on a lawsuit brought by members of a Sharon, Massachusetts Conservative Jewish synagogue that will be heard today in a  Massachusetts trial court.  Members of Temple Adath Sharon, in a lawsuit filed in November 2015, allege that Chabad of Sharon, which was experiencing financial difficulties, worked to have its members elected to the Conservative synagogue's board and as its officers in order to obtain a transfer of the synagogue's building and assets to Chabad.  It also claims that the April 2015 meeting that elected the board and officers was not properly announced and conducted. Chabad denies the allegations.

Court Resolves Factional Religious Split Using "Neutral Principles" Approach

In Kelley v. Garuda, (Nassau Cty. NY Sup. Ct., Oct. 2, 2017), a New York trial court, deferring to resolutions passed by the Governing Body Commission of the International Society of Krishna Consciousness ("GBC") and applying neutral principles of law, resolved a factional theological split within the Freeport, New York ISKCON Temple. The court upheld a default judgment against defendants who had taken control of the Temple, saying in part:

Plaintiffs' purchased the property well before the Defendants' arrival and interference with the Plaintiffs' use and enjoyment of the property. Prior to the 2005 "election" where Gupta and his adherents purportedly changed the leadership of the Freeport Temple, the Plaintiffs sufficiently established that all financial and ecclesiastical issues regarding the Freeport Temple were decided and/or approved by the GBC or its chosen delegates....

Further evidence of the Plaintiffs' ownership and control over the Freeport Temple is their constitution, the ISKCON Law Book, which creates an express trust in favor of the Society at large under the control of the GBC....

The Founder also established a Trust in the second Article of his Will which declared that each ISKCON temple would be held for the benefit of the ISKCON Society at large. The language of the Trust provision specifies that the GBC would continue to manage the ISKCON Society in perpetuity.

Fired Pastor's Contract Suit Dismissed Under Ministerial Exception and Excessive Entanglement Doctrines

In Lee v. Sixth Mount Zion Baptist Church of Pittsburg, (WD PA, Aug. 22, 2017), a Pennsylvania federal district court dismissed a breach of contract claim brought by a pastor against the church that had terminated his employment.  Rev. William Lee claims that the church breached his contract by not compensating him under the clause relating to termination without cause. the church argued that Lee was terminated for failing to fulfill his duties and responsibilities under the contract. The court dismissed on ministerial exception and excessive entanglement grounds, saying in part:

[T]he “ministerial exception” recognizes the right of a religious institution in exercising its First Amendment guarantee of religious liberty and autonomy in matters ecclesiastical to terminate from employment a Pastor such as Rev. Lee. Rev. Lee’s dispute with the Church regarding his termination from employment fully implicates such rights....

The Church argues that where Rev. Lee failed in spiritual stewardship, financial stewardship and responsiveness to Church leadership, as determined by the Church and its Congregation, his termination was for cause under § 12.3.... 

[T]he Court concludes that any determination whether Rev. Lee failed in his spiritual and financial stewardship and responsiveness to Church leaders is a matter best left to the Church alone. Otherwise, the Court and jury would need to probe how the Church evaluated spiritual success and leadership under its doctrine.... Prohibited considerations of ecclesiastical hierarchy are directly implicated in the assessment that Rev. Lee did not adequately respond to Church leadership.

Court Refuses To Enforce Arbitration Award In Church Control Dispute

In Patterson v. Shelton, (ED PA, Aug. 11, 2017), a Pennsylvania federal district court dismissed an attempt to obtain enforcement of an arbitration award entered over ten years ago in a dispute over control of the General Assembly of the Church of the Lord Jesus Christ.  The underlying litigation began 22 years ago.  the court said in part:

Petitioner seeks to have this Court adjudicate a church controversy by confirming an Arbitration Award, albeit one that was vacated, which would require extensive inquiry into church matters. A solution to the parties’ problems involves more than mere application of neutral principles of law. It involves a deeper look into the church’s control over its leaders, how they acquire and maintain authority, and how the church is being managed.... Probing deeper into these matters would do exactly what the law prohibits courts from doing: becoming entangled in church issues.

The court also relied on several other grounds in dismissing the case.

South Carolina Supreme Court Resolves Property Dispute In Episcopal Church

In The Protestant Episcopal Church in the Diocese of South Carolina v. The Episcopal Church, (SC Sup. Ct., Aug. 2, 2017), the 5-member South Carolina Supreme Court in 5 separate opinions spanning 77 pages resolved a property dispute that arose after a split in the Episcopal Church in South Carolina. AP summarized the background:

The conservative Diocese of South Carolina, dating to 1785 and one of the original dioceses that joined to form the Episcopal Church, left the national church in 2012 amid differences over theological issues, including the authority of Scripture and the ordination of gays. The group has since affiliated with the Anglican Church in North America, a group that formed in 2009.

Parishes in the region that didn’t leave the national church formed a diocese now known as The Episcopal Church in South Carolina.

The conservative diocese sued in efforts to protect its identity, the diocesan seal and other symbols it uses, and $500 million in church property, including the individual parishes’ holdings, as well as large properties including an Episcopal church camp in the Charleston area.

While the Supreme Court's opinions are complex, Acting Justice Toal in her dissenting opinion summarized the resulting holdings:

A majority of the Court ... agree that ... in secular church disputes, our state courts should apply neutral principles of law to resolve the case....  [T]he same majority would find this is a secular church dispute, and the Court must therefore apply longstanding trust law to resolve the questions before us. I would find the parties' actions did not comply with the formalities required to create a trust in this state....  Justice Kittredge would find the parties created a revocable trust in favor of the national church, but the plaintiffs later took steps to revoke their accession to the trust.... However ... a ... majority of the Court ... would ... transfer title of all but eight of the plaintiffs' properties to the defendants. While [2 justices] ... would do so because they believe this is an ecclesiastical dispute and the Court must therefore defer to the national church's decision on the matter, [another] would do so because he believes all but eight of the plaintiffs acceded to the Dennis Canon in a manner recognizable under South Carolina's trust law. Thus, the result reached on title is: 1) with regard to the eight church organizations which did not accede to the Dennis Canon, [3 justices] ... would hold that title remains in the eight plaintiff church organizations; 2) with regard to the twenty-eight church organizations which acceded to the Dennis Canon, [3 justices]... would hold that a trust in favor of the national church is imposed on the property and therefore, title is in the national church; and 3) with regard to Camp St. Christopher, [3 justices] would hold title is in the trustee corporation for the benefit of the associated diocese, whereas [2 others] ... would hold that the trustee corporation holds title for the benefit of the disassociated diocese. 

As to the second issue on appeal, involving the plaintiffs' claims for service mark infringement, [3 justices] ... would find the marks are validly registered under state law, but leave the ultimate resolution of the parties' conflicting claims to the pending federal case.

[Thanks to Tom Rutledge for the lead.]

Court Issues Detailed Instructions For Church Board Election

In Rock Church, Inc. v. Bristulf, (NY Cty. Sup. Ct., June 28, 2017), a New York trial court ordered a special meeting for an election of a church board of trustees, setting out detailed instructions for conducting the election.  The order came after three earlier court orders, each of which ordered a special meeting to elect a board, failed to result in a successful election. Part of the detailed instructions provided:

As the meeting is not the Annual Business Meeting, Section 5.7 of the By-laws (allowing all members the "right to express their opinion on any matter relating to the Church at the Annual Business Meeting") shall not apply. The only business to be conducted at the meeting shall be the voting to elect the Board of Trustees and such vote shall be conducted without prior discussion.

In Mosque's Factional Dispute, Ohio Court Orders Dissolution and Reincorporation

In State of Ohio ex. rel. DeWine v. Omar Ibn El Khattab Mosque, Inc., (OH App., June 22, 2017), an Ohio appeals court exercising its original jurisdiction in quo warranto actions granted the state attorney general a writ allowing him to pursue the dissolution of the non-profit corporation which operates a Columbus, Ohio mosque. The court further granted the attorney general authority to oversee the creation of a successor entity to take over the mosque.  Two factions had both claimed to represent the mosque, and were involved in five years of litigation over which of the successive boards is the legitimate governing body of the mosque. The court agreed with a magistrate who initially heard the case, saying:

Omar Mosque, Inc. has violated many statutory requirements of [the Ohio Non-Profit Corporation Law] ... in failing to maintain a record of its members from the period of 2007 through 2011... [and] the failure to conduct an annual or special meeting of voting members for the election of directors in either 2009 or 2010.

These basic statutory requirements that Omar Mosque, Inc. violated would protect a corporation from the confusion and internal paralysis that this case has shown resulted when an internal division arose. Without a defined voting membership, regular meetings, and up-to-date membership roster, the authority of the board, and thus the legitimacy of the corporation itself, is no longer supported through recordable action.

The court added:

In light of the stable management provided by the Reash/Brey respondents, and the Khan/Ball board's willingness to efface itself from the day-to-day operation of the mosque, the oversight of the trustees or a receiver in this case may be limited to resolution of the current corporate dysfunction and need not intrude into the religious affairs of the mosque.

Appeals Court OK's Court-Ordered Meeting of Church Members

In Hawkins v. St. John Missionary Baptist Church of Bakersfield, California, (CA App., March 15, 2017), a California state appellate court upheld a trial court's determination that it could use neutral principles of state non-profit corporation law to order a church's Board of Deacons to call a meeting of members to vote on whether to remove the church's pastor. The appeals court said in part:

[T]he court may apply neutral principles of law based on the church’s own constitution, bylaws and rules, and relevant California statutes.... Thus, a court may determine whether an election in which a pastor was removed was properly conducted according to the church’s bylaws, rules and regulations. In other words, the court may assist the church in acting within its proper sphere under its own rules and regulations to protect civil and property rights.

At the meeting, overseen by a court-appointed referee, those favoring removal of the pastor prevailed by 1 vote. The appeals court concluded that the referee had wrongly excluded the votes of 3 members, and remanded the case for the trial court to redetermine the election results after counting those votes.