In Fifth Avenue United Methodist Church of Wilmington v. North Carolina Conference, Southeastern Jurisdiction, of the United Methodist Church, Inc., (NC App., Dec. 31, 2024), a North Carolina appellate court, in a 2-1 decision, held that the trial court had improperly dismissed a number of claims by a church whose parent body closed its down and seized its property while the church was seeking to disaffiliate from the parent body. The majority said in part:
... Fifth Avenue contends that the trial court has subject matter jurisdiction to consider its property and trust claims because there remains a genuine, secular question of whether it was in a connectional relationship with the UMC concerning the Property. Fifth Avenue maintains as such because none of the deeds pertaining to the Property refer to the trust clauses contained in the BOD [Book of Discipline], “save one green space parcel conveyed in 1986.” After carefully considering our precedents resolving similar disputes, we agree....
Fifth Avenue next argues that even if the Property is subject to a trust under the BOD, the trial court erred in dismissing its claim arising from its right to disaffiliate and retain the Property free of the trust clause under paragraph 2553. Fifth Avenue contends that its breach of contract claim survives dismissal at this stage because it does not require a determination of ecclesiastical issues and can be settled by neutral principles of contract law. Fifth Avenue maintains that Defendants failed to follow the disaffiliation procedures set out in paragraph 2553 by not allowing a church conference vote within 120 days... [W]e agree and hold that the trial court committed error by dismissing Fifth Avenue’s breach of contract claim because determining whether Defendants “acted within the scope of their authority” and “observed the organization’s own organic forms and rules is founded in neutral principles of secular law.” ...
Fifth Avenue next submits that the trial court committed error by dismissing its claims for fraud and constructive fraud because they do not require the court to examine or determine ecclesiastical issues. More precisely, Fifth Avenue contends that whether Defendants colluded to take the Property “under the guise of legitimate action can be determined without delving into the validity of the reasons” provided for closure. After scrutinizing the record and applicable law, we agree....
Judge Arrowood filed an opinion dissenting from much of the majority's holdings, saying in part:
I believe the trial court is permitted to assess whether Fifth Avenue is contractually entitled to disaffiliate following closure, as this can be decided under neutral principles of law. However, I respectfully dissent from the remainder of the majority opinion. I believe the First Amendment church doctrine warrants dismissal of Fifth Avenue’s claims apart from the breach of contract claim and would affirm the trial court’s judgment in those respects.
