Court Says Disaffiliated Church's Property Belongs To Local Congregation, Not PCUSA

In Presbytery of the Twin Cities Area v. Eden Prairie Presbyterian Church, Inc., (MN Ct. App., April 24, 2017), a Minnesota state appeals court held that it was proper to apply the "neutral principles of law"approach, rather than applying the ecclesiastical abstention doctrine, to decide ownership of property of a congregation which had disaffiliated from the Presbyterian Church USA.  Affirming the trial court, the Court of Appeals held that the property belongs to the local congregation despite the trust clause in PCUSA's Book of Order.

European Court Finds Lack of Fair Hearing For Church Over Expropriation

In Lupeni Greek Catholic Parish v. Romania, (ECHR, Nov. 29, 2016), the Grand Chamber of the European Court of Human Rights held that a Greek Catholic church had been denied a fair hearing in Romania on its claim for compensation for the expropriation by Romania's former Communist government of the church's property followed by its transfer to the Greek Orthodox Church. The court said in part:

The protection of minorities is almost always unpopular and the protection of religious minorities is even more so. Europe has a long history of religious majorities disregarding the rights of religious minorities. This is an area where present-day democratic standards oblige a majority to show restraint, for the sake of respecting minorities. Unfortunately this case shows that States are often reluctant to undo the injustice committed to religious minorities when the interest of the religious majority is at stake.

Law & Religion UK has an extensive discussion of the case.

Judgment For Return of Pastor's Salary Is Not Dischargeable in Bankruptcy

In In re Andrews, 2016 Bankr. LEXIS 3786 (SD MI Bankr., Oct 20, 2016), a Mississippi federal bankruptcy judge held that amounts the former pastor of a break-away church owed to the parent body of the denomination are not dischargeable in a Chapter 13 bankruptcy proceeding.  Robert Andrews was the long-time pastor of Cross Point Church, a church under the ecclesiastical jurisdiction of the Mississippi Conference of the Methodist Protestant Church.  While pastors are paid by local congregations, they are appointed and removed by the parent Conference. Andrews and the Board  of Cross Point Church voted to break away from its parent Conference. The district president of the Conference in response removed Andrews as Cross Point's pastor. The Board of Cross Point nevertheless entered a one-year employment contract with Andrews, including a provision that if the Conference removed Andrews, the pastor would be entitled to his full year's salary.

When the Conference then voted to reject Cross Point's attempted withdrawal, Cross Point's treasurer gave Andrews a check for his remaining yearly salary of $69,505. Andrews and his backers on the Board also locked the church building, took the keys and church records with them and formed a new congregation. In a suit by the remaining members of Cross Point, a state court issued a preliminary injunction requiring Andrews and his backers to return the keys and records. In a subsequent jury trial, the state court awarded Cross Point a judgment of $69,505 against Andrews, finding that Andrews had converted funds belonging to the Church. When Cross Point attempted to garnish Andrew's checking account to recover the funds, Andrews filed for Chapter 13 bankruptcy protection.

Cross Point claimed that the debt owed to it is not dischargeable.  The bankruptcy court agreed.  It first held that the ecclesiastical abstention doctrine precludes it from revisiting the question of Andrews' removal as pastor of Cross Point. It held that under Sec. 523(a)(4) of the Bankruptcy Code, the debt is not dischargeable because it involved "defalcation while acting in a fiduciary capacity" and "embezzlement."  The court said in part:

Andrews admitted at Trial that as pastor, officer, and Board member, he owed a fiduciary duty to Cross Point Church to safeguard its funds.

Defrauded Church's Conversion Claim Against Bank Is Dismissed

In Mt. Hope Universal Baptist Church, Inc. v. Bowen, (NY Kings Cty. Sup. Ct., Oct. 14, 2016), a New York state trial court dismissed a conversion claim brought by a church that was defrauded out of the proceeds of a life insurance policy.  In 1976, Rosetta Goodridge was the founding member of Mt. Hope Baptist Church.  She died in 2009, leaving a life insurance policy that named the church as beneficiary.  Goodridge's daughters and granddaughters fraudulently opened a bank account at Citibank in the name of Mt. Hope.  They then filed a claim with the insurance company and received the proceeds of the policy.  Among other claims, the church sued Citibank for conversion.  The court dismissed the action, holding that because Mt. Hope never had actual or constructive possession of the check, it had no cause of action for conversion. The court also held that the insurance company does not have a valid claim against Citibank for contribution.

Appeals Court Refuses To Dismiss Suit Over Entitlement To Mosque Property

In United Islamic Society v. Masjed Abubakr Al-Seddiq, Inc., (MN App. Aug. 29, 2016), a Minnesota state appellate court affirmed a trial court's refusal to dismiss a suit over ownership of mosque property because "it is premature to decide that resolution of this case will necessarily involve improper government entanglement with religion."  The suit involves a dispute between two non-profit corporations over which one is is the rightful beneficiary of properties held in trust for the benefit of the Rochester, Minnesota Muslim community.  The court said in part:

A determination of whether this case can be resolved using neutral principles of law depends upon a close reading of UIS’s civil complaint and trust petition. In its civil complaint, UIS makes no mention of any religious doctrine and does not request relief for religious reasons. UIS instead requests a determination that it is the intended beneficiary of the trust based on the lease, warranty deeds, meeting minutes, and MAAS resolution....

Defendants argued that because the transfer of the properties to the North American Islamic Trust included a requirement that the properties are to be held in "waqf," the court will need to interpret the meaning of waqf, a religious term, to resolve the dispute.  The appellate court however disagreed, saying:

If the district court declares the declaration of trust valid, there appears to be no reason to interpret or analyze “waqf.” Similarly, if the district court declares the declaration of trust invalid ... a beneficiary determination likely depends on testimony and the documents in the record regarding the parties’ intent, which may include, among others, the warranty deeds that reference “Waqf (Islamic trust).” ...The limited information in the record about “waqf” simply does not suggest that a doctrinal analysis of “waqf” will be necessary to or dispositive of a beneficiary determination.

The court also rejected the argument that the case should be dismissed because of an arbitration clause in the declaration of trust, saying:

Because appellants did not invoke the arbitration clause in the declaration of trust until MAAS and NAIT’s summary-judgment motion, which was filed more than two years after the start of UIS’s civil action and after extensive litigation in both cases, we conclude that the district court’s finding that appellants waived their right to invoke the arbitration clause is not clearly erroneous.

Suit Seeks Control of Church Building Taken Over By Rival Pastor

In Ruskin, Florida, the pastor of the Church of Christ Christian Church and some of his handful of members have filed suit against 80-year old Shirley Dail who in June changed the locks on the church's doors to take possession of it in order to revitalize the congregation. The suit seeks to get back control of the church from Dail (who is also a pastor).  Yesterday's Tampa Bay Times reports:

While maintaining she's been a lifelong member of the church, Dail said she had only attended sporadically since starting a mission, the Church Along the Way, in her Ruskin barn 16 years ago.

She brought that group to the Church of Christ building this summer....

A church volunteer for 35 years, Dail said she was among its founding members in the 1960s and made a personal loan to help build the church.

In May ... Dail said the church was not running "as it was conceived" and that she had been "called home" to make the fixes she wanted.

Dail's goal was to increase the church's flock. Dail said she couldn't sit by and watch her church dwindle like so many others throughout the country.

Supreme Court Denies Review In Two Cases of Interest

The U.S. Supreme Court today denied certiorari in two cases of interest (Order List):

Chabad-Lubavitch of Michigan v. Schuchman, (Docket No. 15-1005, cert. denied 5/23/2016). In the case, the Michigan Supreme Court found that the statute of limitations had run in a dispute between Chabad-Lubavitch of Michigan and a local Chabad organization over ownership of a Chabad center. (See prior posting.)

Sunrise Children's Services v. Glisson, (Docket No. 15-1021, cert. denied 5/23/2016).  In the case decided below under the name Pedreira v. Sunrise Children's Services, Inc., the 6th Circuit essentially reopened a long-running Establishment Clause dispute over Kentucky state funding  of treatment for abused and neglected children in facilities operated by Sunrise Children's Services, a Baptist organization. (See prior posting.) The cert. petition (full text) focuses on standing questions.

Supreme Court Denies Review In Two Religious Rights Cases

The U.S. Supreme Court today denied certiorari in Wayne County v. Bible Believers, (Docket No. 15-1090, cert. denied 5/16/2016) (Order List).  In the case, the U.S. 6th Circuit Court of Appeals, sitting en banc, upheld the right of Bible Believers, a Christian group, to engage in provocative and offensive proselytizing of Muslims at the annual Dearborn, Michigan Arab International Festival. (See prior posting.)

The Supreme Court also denied certiorari in Rogers v. Roman Catholic Archbishop, (Docket No. 15-1105, cert. denied 5/16/2016) (Order List).  In the case, the Appeals Court of Massachusetts upheld an injunction against former parishioners of Frances X. Cabrini Church in Scituate who have held a 24-hour vigil in the church for over ten years in order to protest plans to close it. (See prior posting.)

Break-Away Presbyterian Church Settles Suit By Paying $1.1M For Its Building

According to yesterday's St. Louis Post Dispatch, a break-away Presbyterian congregation in Chesterfield, Missouri has settled a lawsuit against it by the Giddings-Lovejoy Presbytery.  When Bonhomme Presbyterian Church broke away from the Presbyterian Church (USA) to join the more conservative Covenant Order of Evangelical Presbyterians, the Presbytery sued claiming that the congregation's property belongs to the Presbytery.  In the settlement, Bonhomme paid the Presbytery $1.1 million for the church building and property.

Episcopal Church Still Holds Title To Property of Break-Away Diocese

In Diocese of San Joaquin v. Gunner, (CA App., April 5, 2016), a California state appeals court held that applying neutral principles of law, the property of a break-away diocese still belongs to the Episcopal Church. It held that while the trial court wrongly held that diocese held the property in trust for the Episcopal Church, nevertheless the property still belongs to the Episcopal Church because the purported transfer of the property to the break-away diocese was invalid:

Schofield [bishop of the break-away diocese] was attempting to change the title holder of the property in dispute from the corporation sole known as The Protestant Episcopal Bishop of San Joaquin to the corporation sole known as The Anglican Bishop of San Joaquin. However, because the amendment changing the name of the corporation sole to The Anglican Bishop of San Joaquin was invalid, no corporation sole known as The Anglican Bishop of San Joaquin existed when these deeds were executed and recorded. 

Fired Pastor and His Followers Lose Suit To Reclaim Their Former Church Building

In St. Mark Baptist Church of Pittsburg v. Saint Mark at Bethel Missionary Baptist Church, (CA App., Dec. 18, 2015), a California state appellate court upheld a trial court's decision in a dispute over control of church property.  Two Baptist churches merged, but the arrangement went sour after two years.  Under the merger agreement,  Pastor McNab from St. Mark Pittsburg was to be the pastor of the merged church, but the church was to meet in the building used by St. Mark at Bethel. When trustees of the merged church voted to terminate Pastor McNab, he and some of his followers left the church and attempted to return to their original building which had by now been rented out to an unrelated church. They sued seeking a ruling that they, not the merged church, still owned their original building.  In this decision, the Court of Appeals upheld the trial court's denial of a preliminary injunction to prevent sale of the St. Mark Pittsburg church building by the merged church, and also upheld the trial court's removal of a lis pendis notice-- a notice that litigation impacting the property was pending. It held that there was substantial evidence that McNab and his current followers were not the rightful leaders of St. Mark Pittsburg even if it continues to exist as a separate entity.

Trial Court Rules In Factional Dispute In California Church

In a long-running case on remand from a California appellate court (see prior posting), a Los Angeles trial court judge yesterday entered a final judgment giving possession of the church and a commercial building it owns to one of the two competing factions in the St. Mary of the Angels Church in Los Feliz, California.  The Los Feliz Register reports that the court ruled in favor of Father Christopher Kelley and his followers.  An earlier Los Feliz Register report provided background:

Father Christopher Kelley—the rector from 2007 until his firing in 2012—and his supporters took sanctuary in the basement and celebrated mass, while the anti-Kelley faction used the church’s regular first floor offices and held mass in its tiny, but lovely chancel.

After three years and reams of legal documents filed by both sides with allegations hurled both ways, if you attended a mass today at weary St. Mary’s, you would be among only a dozen or so parishioners left from its once healthy congregation.

The dispute was complicated by the vote of the congregation's parishioners in 2012 to end affiliation with the Anglican Church and join the Catholic Church.  The losing faction in yesterday's decision said an appeal will be filed.

Appeals Court Affirms Archdiocese's Right To Close Local Church

In Roman Catholic Archbishop of Boston v. Rogers, (MA App., Oct. 14, 2015), the Appeals Court of Massachusetts affirmed the trial court's entry of an injunction against former parishioners of Frances X. Cabrini Church in Scituate. (See prior posting.) The Archdiocese had announced plans to close the church and deconsecrate it.  Parishioners who object to those plans have conducted a 24-hour vigil in the church building for over ten years.  The court affirmed the trial court's findings that the parishioners are intentionally trespassing in the church which, under principles of secular law, is owned by the Archdiocese. The court refused to consider defendant's claim that they are equitable owners of the church under canon law.  Boston Globe reports on the decision. [Thanks to Tom Rutledge for the lead.]

South Carolina Supreme Court Hears Oral Arguments In Episcopal Church Split

Yesterday, the South Carolina Supreme Court heard oral arguments in Protestant Episcopal Church In The Diocese of South Carolina v. Episcopal Church.  In the case, a state trial court held that 38 break-away Episcopal parishes in South Carolina retain ownership of their real, personal and intellectual property. It rejected claims by The Episcopal Church that an express or a constructive trust existed under which it could claim the property. (See prior posting.)  Both The State and the Post and Courier have reports on the arguments.  Also available online are the Appellants' Brief and Respondents' Brief to the state Supreme Court.  A related case is winding its way through federal courts. (See prior posting.)

Court Says Sale of Boston Church Was Invalid

In First Bostonview Management, LLC v. Bostonview Corp., (MA App., Aug. 19, 2015), the Massachusetts Appeals Court held the purported sale of the property of Boston's Swedenborgian Church on the Hill invalid.  The court said in part:

[T]he sale of substantially all of the Bostonview church property (consisting of a church sanctuary, a parish meeting hall, a large apartment complex, offices, and parking spaces on prime land on Beacon Hill near the Massachusetts State House) was indisputably an "extraordinary transaction," and, if completed to the end would have stripped Bostonview of the very essence of its existence as a charitable corporation.... We conclude that the authority to make such a divesting asset/property sale contract ... was beyond the power of the charitable corporate board to delegate to two of its officers. The contract was void. The "shady" nature of the underlying prenegotiations to sell the church's very valuable (but sole) asset for $30 million -- including combined cash payments of close to $100,000 to two of the executive officers, and the purchase of the $94,000 luxury car for the church secretary -- only serves to demonstrate why restrictions on "extraordinary transactions" must be closely scrutinized by the charity's corporate board. 

The court also held that: "subsequent approval or other conduct by the board of directors of a charitable corporation will not substitute for prior specific authorization to commit the charity to an extraordinary transaction."

Boston Business Journal gives additional background:

The case centered on developer Michael Perry’s 2004 agreement to pay $30 million to purchase the property....  Perry struck the agreement with Thomas J. Kennedy and Edward J. MacKenzie Jr., who were then officials at Bostonview Corp., the charitable organization that conducted business on behalf of the Swedenborgian church. MacKenzie, who has claimed he was an enforcer for incarcerated mobster Whitey Bulger, was later sentenced to 12 years in prison for allegedly stealing millions from the church.

Kansas Trial Court Applies Neutral Principles Approach In Suit Over Presbyterian Church Property

KCTV News reports on a decision handed down this week by the Kansas 10th Judicial District trial court in a dispute between two factions of the Presbyterian Church of Stanley over ownership of church property. Last year, the pastor and 300 parishioners of the Overland Park, Kansas congregation broke away from the Presbyterian Church (USA) and affiliated with the more conservative Evangelical Covenant Order of Presbyterians. The parent body, Heartland Presbytery, filed suit over ownership. The court ordered the two factions to pray in separate rooms in the church while the case was in litigation. Wednesday the court issued a ruling, holding that the property does not belong to the Presbytery, but does belong to the local congregation that remains with the PCUSA. The court used a "neutral principles" approach, even though traditionally Kansas courts have deferred to the decision of the parent body in churches with a hierarchical structure.

In its decision, the court rejected the argument that under church law the property is held in trust for the regional Presbytery.  Because the deed and mortgages are in the name of the local congregation, it is the owner. However on the question of which faction constitutes the local congregation, the court deferred to the PCUSA Constitution finding that the faction remaining loyal to it was entitled to ownership rights. The court gave the parties ten days to work out building occupancy arrangements.

Michigan Supreme Court Dismisses Chabad Property Dispute On Statute of Limitations Grounds

In Chabad-Lubavitch of Michigan v. Schuchman, (MI Sup. Ct., May 20, 2015), the Michigan Supreme Court in a brief opinion reversed the state court of appeals in a dispute between Chabad-Lubavitch of Michigan and a local Chabad organization over ownership of a Chabad center in West Bloomfield. The parent organization claimed that the property should have been titled in its name. In the case, the appeals court had rejected defendants' statute of limitations defense, holding that the statute was equitably tolled during the time that the parties were engaged in Chabad's mandatory ecclesiastical dispute resolution process. (See prior posting.)  Reversing, the Michigan Supreme Court said "there are no grounds on which to equitably toll the statute of limitations."

Appeals Court Affirms Decision On Ownership of Buddhist Pagoda

As reported by the Salt Lake Tribune, in Dao Trang Phap Hoa v. Vietnamese Unified Buddhist Association of Utah, (UT App., May 21, 2015), a Utah state appeals court upheld a trial court's decision that a Salt Lake City Buddhist temple-- the Pho Quang Pagoda-- is owned by a local affiliate of the California-based Vietnamese-American Unified Buddhist Congress.  Some members of the temple claimed that the Congress held the Pagoda in trust for the local Vietnamese Buddhist Alliance Society of Utah.  The appeals court held that even if there were questions of fact on that issue, the plaintiff in this case, the  Vietnamese Unified Buddhist Association of Utah, lacked standing to assert the claim on behalf of the Society because the two groups are separate corporations, even though they have overlapping membership.

Court Orders Parishioners To End 10+ Year Vigil Protesting Church Closure

A Massachusetts trial court yesterday granted the Boston Catholic Archdiocese an injunction to end the ten and one-half year vigil that parishioners of the now-closed St. Frances X. Cabrini Church in Scituate (MA) have been maintaining inside the church.  On the website of the Friends organization supporting the vigil, parishioners say:

The members of St. Frances believe that we have been unjustly shuttered via the flawed process of reconfiguration introduced by the Archdiocese of Boston and that this misguided decision was based solely on the value of our parish property - 30.3 acres of prime coastal real estate.

In Roman Catholic Archbishop of Boston v. Rogers, (MA Super. Ct., May 14, 2015), the court held that the former parishioners "are unlawfully and intentionally committing a trespass by the continuation of the protest vigil on the premises of the church."  The court rejected defendants' arguments that it lacks jurisdiction over the suit because the claims require the interpretation of ecclesiastical principles. saying:

defendants' argument conflates the issues of whether the parish may be closed (an eccleisastical question) with whether an owner in control of property may determine when individuals may be on property (a civil law question).  Because the latter may be decided by neutral principles of property law, this court may proceed to hear the facts and decide whether defendants' vigil is a trespass and whether an injunction should issue.

The court also rejected parishioners' defense of laches, and their $37,000 counterclaim for amount spent on upkeep and maintenance during the vigil. AP reports on the decision.  The Quincy Patriot Ledger reports that defendants plan an appeal and plan to ask the trial court to suspend the injunction pending appeal.  Otherwise it will take effect on May 29.

Suit Filed Over Sale of Lower East Side Synagogue To Developer

The New York Post reported on April 10 that congregants at the Home of the Sages synagogue of the Ger Hasidic sect on New York City's Lower East Side are suing to invalidate the $13 million sale of their building to developer Peter Fine.  $10 million from the sale will be used to build a Ger synagogue in Israel, while the other $3 million will go to the synagogue's president, Rabbi Samuel Ashkenazi. The April 16 Jewish Business News has more on the story:

[S]ince the synagogue is a non-profit a court must sign off its sale. The sale price is well below market value for the area which set off a lot of red flags.... The synagogue allegedly had a member meeting to pass this deal — even though the ‘members’ were people from Queens who had never stepped foot in the synagogue to worship there.”...

Now here’s where things get complicated. Rabbi Ashkenazi has also been accused by ... [the congregants' lawyer] of using funds from the sale to in effect pay himself $45,000 a year to lease space in his Queens home to the congregation. Apparently, Ashkenazi’s wife was the one who signed the new lease with the synagogue.

In another strange twist the judge, Arthur Engoron, who was set to preside over the preliminary court hearing in New York yesterday, recused himself from the case without saying why.