Thursday, August 03, 2017

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.]