Church Sues JPMorgan For $13 Million In Losses From Bad Trust Investments

This week, Christ Church, an Episcopal Church in Indianapolis, Indiana, filed suit against JP Morgan Chase alleging mishandling of the church's $35 million trust whose assets came originally from gifts from Eli Lilly, Jr. The complaint (full text) in Rector, Wardens and Vestrymen of Christ Church Cathedral of Indianapolis v. JPMorgan Chase & Co., (SD IN, filed 8/13/2014), alleges that securities law violations, fraud and breach of trust led to losses of $13 million from 2004-2013.  It claims that defendants selected "high-risk, high-cost, opaque, unsuitable and poorly performing investments in order to further their own financial interests to the detriment of Christ Church." BNA Daily Report for Executives [subscription required] reports on the lawsuit.

$3.5 Million Belongs To Break-Away Episcopal Diocese

In Diocese of Quincy v. The Episcopal Church, (IL App., July 24, 2014), an Illinois state appellate court applied the "neutral principles" approach to hold that over $3.5 million in funds and title to a Diocesan House belong to the break-away Diocese of Quincy and were not held in trust for The Episcopal Church.  The court observed that the Episcopal Church's Dennis Canon applies to parish property, but not to property belonging to a diocese.

Episcopal Diocese Settles With Break-Away Congregations Without Lawsuit

Episcopal News Service yesterday reported on the final steps in an amicable settlement between the Episcopal Diocese of Olympia, Washington and two break-away congregations that ultimately joined the more conservative Anglican Church In North America. (Background.)  Unusual in this time of litigation, the settlement was reached over ten years without any lawsuits being filed.  Two years after the 2004 split, the parties signed a covenant agreement that called for no legal action to be taken before 2014, and for the break-away congregations to temporarily continue to meet in the meantime in their traditional buildings. Now those properties have been returned fully to the Episcopal Diocese, and the break-away congregations have found worship space elsewhere.

Episcopal Church Wins Lawsuit Over San Joaquin Diocese Property

A California state trial court this week released a Tentative and Proposed Statement of Decision giving a victory to The Episcopal Church (TEC) in its property-ownership dispute with the break-away Diocese of San Joaquin. The decision comes after a trial. (In an earlier decision the court concluded that there was not evidence that would allow adjudication on summary judgment.) In Diocese of San Joaquin v. Schofield, (CA Super. Ct., May 5, 2014), the court held that the purported transfer of property to the Anglican Diocese Holding Corporation, affiliated with the Province of the Southern Cone instead of TEC, was invalid because the transfers were made by Bishop John David Schofield after he was removed as an Episcopal bishop by TEC. It went on to hold that the Diocese could not "leave" the Church because it is a geographical construct of the Church. The Church's governing documents "make clear that a local parish owns local church property in trust for the greater church and may use that property only so long as the local church remains part of the greater church." Anglican Curmudgeon blog comments on the ruling from the perspective of the break-away Diocese.

Court Dismisses Episcopal Priest's Suit Against Bishop Who Fired Him

In Warnick v. All Saints Episcopal Church, (PA Com. Pl., April 15, 2014), a Pennsylvania trial court dismissed a suit brought by Episcopal priest Jeremy Warnick against All Saints Episcopal Church (his former parish), the Episcopal Bishop of Pennsylvania and three All Saints congregants.  The suit, alleging contract and defamation claims, challenges Bishop Charles Bennison's revocation of Warnick's license to minister in Pennsylvania, the Bishop's letter to the congregation explaining the decision and statements made by three congregants at a church meeting. The controversy revolved around Warnick's proposal for a radical restructuring of the parish.  It also involved complaints that Warnick was living on week ends with a woman (who he then married in a Methodist ceremony) before his divorce from his wife was finalized, and Warnick had posted answers to a "sexual position quiz" on Facebook.

After Warnick unsuccessfully pursued a canonical complaint against Bennison, he filed this civil lawsuit. The court held that both the First Amendment requirement of deference to ecclesiastical courts and the ministerial exception doctrine require dismissal of the complaint. The court added that even if all the claims were not barred by the First Amendment, "Father Warnick’s claims fail as a matter
of law because the undisputed evidence shows that necessary elements have
not been shown for defamation, contract and civil conspiracy claims."

Group Seeks Ecclesiastical Proceedings Against Episcopal Bishop For Her Civil Lawsuits Against Break-Away Parishes

Virtue Online reported yesterday that the American Anglican Fellowship (AAF), a group of current and former members of The Episcopal Church (TEC), filed a formal complaint last December with TEC's Intake Officer seeking to invoke formal ecclesiastical proceedings against Presiding Bishop Katherine Jefferts Schori because of the litigation in civil courts that she has undertaken against break-away parishes. AAF claims:

The litigation authorized by the Presiding Bishop and various bishops asks courts to interpret provisions of the Constitution and Canons. The litigation thus violates Canon IV.19.2, which provides that "No member of the Church, whether lay or ordained, may seek to have the Constitution and Canons interpreted by a secular court, or resort to a secular court to address a dispute arising under the Constitution and Canons, or for any purpose of delay, hindrance, review or otherwise affecting any proceeding under this Title." 

The litigation further violates Canon IV.4.1(e), which requires the Presiding Bishop and various bishops, as members of the Clergy, to "safeguard the property and funds of the Church and Community." The expense for litigation is a violation of the canon since other solutions with substantially less cost have been used in the past and today by TEC as well as the Presbyterian and Lutheran Churches. 

For failure to safeguard the property and funds of the Church, the Presiding Bishop "shall be accountable" (Canon IV.4.2).

The AAF complaint says: "We framed this document in a caring and loving way ... not to discipline, but to achieve an Accord of conciliation as Christ would have us do, to bring an end to this madness of Christians suing Christians," AAF has not yet received a formal response from TEC to its complaint.

Supreme Court Denies Review In Break-Away Church Property Dispute

The U.S. Supreme Court yesterday denied certiorari in Falls Church v. Protestant Episcopal Church, (Docket No. 13-449, cert. den. 3/10/2014). (Order List.) In the case, the Virginia Supreme Court ordered that a break-away local congregation must convey most of its property to The Episcopal Church by reason of TEC's "Dennis Canon," but remanded as to personal property acquired by the local congregation after its vote to disaffiliate from TEC. (See prior posting.) Religion News Service reports on the Court's denial of review. [Thanks to Bob Tuttle for the lead.]

Federal Court Refuses To Reconsider Abstention In South Carolina Episcopal Church Dispute

In vonRosenberg v. Lawrence, (D SC, Jan. 15, 2014), a South Carolina federal district court denied a motion for reconsideration of its August 2013 decision to abstain and decline jurisdiction over a trademark infringement case growing out of the controversy between a large break-away portion of the Episcopal Diocese of South Carolina and the smaller number of parishes that remain loyal to The Episcopal Church.  The court there held that the trademark dispute is part of a larger dispute over ownership of the Diocese's property being litigated in state court.  In denying reconsideration, the court said that the motion is based merely on disagreement with the court's earlier abstention ruling. TitusOneNine blog discusses this week's decision from the perspective of break-away churches. [Thanks to John Chilton for the lead.]

Insurance Company Must Defend South Carolina Episcopal Church In Trademark Suit By Breakaway Diocese

In The Episcopal Church in South Carolina v. Church Insurance Company of Vermont, (D SC, Jan. 6, 2014), a South Carolina federal district court held that an commercial liability insurance policy issued by Church Insurance Company of Vermont requires the insurance company to defend The Episcopal Church in South Carolina (TEC-SC) in a state court lawsuit against it by a break-away diocese over which group has the right to use the Episcopal Church trade names, trademarks, services, and emblems. (See prior posting.) The court also held that the insurance company had breached its contract in refusing to defend TEC-SC, but that bad faith had not been shown. TEC-SC issued a press release announcing the decision.

The Episcopal Church Sues Break-Away Illinois Diocese Over Property

The Episcopal Diocese of Chicago and The Episcopal Church last week filed a state court lawsuit claiming that property held by or for parishes and missions of the break-away Anglican Diocese of Quincy may only be used for the benefit of The Episcopal Church. (Press release). The complaint (full text) in The Episcopal Church v. Morales, (IL Cir Ct., filed 11/6/2013), seeks a declaratory judgment that the individual defendants do not hold any offices in the Episcopal Diocese of Quincy and that the parishes and missions are controlled by clergy and officers appointed or elected by The Episcopal Church.  In a case decided earlier this year, Diocese of Quincy v. The Episcopal Church, (IL Cir. Ct., Sept. 9, 2013), a different state trial court held that the break-away Anglican Diocese holds title to the bank account and administrative offices of the Diocese. The court held that the Dennis Canon on which The Episcopal Church in part relied relates to parish or mission properties and not to properties titled in the name of the Diocese. Anglican Curmudgeon blog discusses the background and strongly criticizes the Diocese of Chicago for the suit filed last week.