New year sees no let up in Episcopal Church lawsuits

The Rt. Rev. George Councell, Bishop of New Jersey

A new year has brought new twists and turns to the Episcopal Church’s legal wars.  The national church beat back the secession of a West Texas congregation from the Diocese of the Rio Grande, saw reasons for optimism and gloom from Presbyterian property cases in Georgia, Indiana and Missouri, found its lawyer in the Fort Worth cases accused of professional misconduct, and witnessed the amicable settlement of a church property split in New Jersey.

On Dec 16 the 210 District Court of Texas issued judgment in favor of the Diocese of the Rio Grande against St Francis on-the-Hill Anglican Church in El Paso.

The congregation of St. Francis on-the-Hill Episcopal Church on Oct 21, 2008, voted to secede.  Litigation commenced and on Feb 10, 2010 Judge Gonzalo Garcia granted summary judgment in favor of the diocese.

However, on Feb 26 the judge reconsidered his ruling and rescinded his order, asking for further pleadings.  In his Dec 16 ruling, effectively reinstating his Feb 10 decision, the judge held that as the “Episcopal Church is a hierarchical church as a matter of law,” the congregation was subordinate to the diocese and did not have the power to alter its parish by-laws to withdraw from the diocese absent the diocese’s permission.

While the order gives possession of the multi-million dollar property to the diocese, the parish has thirty days to appeal the order.

The Indiana Court of Appeals in December struck down a lower court ruling that granted a Presbyterian congregation ownership of its property in a dispute with its presbytery.  In 2006 the Olivet Evangelical Presbyterian Church in Evansville, Indiana withdrew from the Presbyterian Church (PCUSA) to join the Evangelical Presbyterian Church (EPC).  The Ohio Valley Presbytery declined to allow the congregation to leave with its property and litigation commenced.  Earlier this year the trial court awarded ownership of the property to the congregation saying that under neutral principles of law, whereby the court looks only at the property deeds, the presbytery had no claim on the land.

However, the Indiana Appeals Court applied a different interpretation of neutral principles of law and ruled in favor of the presbytery.  As the congregation accepted the benefits of being part of a national organization and acknowledged in its bylaws that it was bound by the national church constitution, which contains a clause providing all property titled to local congregations is held in trust for the benefit of the national church, the property of congregations were bound by the national church rules, even if there was no language of subordination found on the title deeds, the court concluded.

A Missouri court came to an opposite conclusion on the same legal principles in the case of Gashland Presbyterian Church and the Heartland Presbytery.  A Clay County circuit court ruled the congregation was entitled to keep its property when it quit the PCUSA for the EPC in 2008 as Missouri church property cases were governed by the neutral principles of law, rather than the hierarchical-based argument that church property is held in trust for the denomination.

“The trust provision” in the PCUSA’s Book of Order was “insufficient as a declaration of trust under Missouri law” to give the national church control over local properties, the court held.   “Mere participation and cooperation in denominational affairs alone does not demonstrate a church’s intent to be bound by a denominational trust clause,” Judge Lawrence Harmon found.

On Nov 30 a Georgia Court of Appeal reversed a lower court ruling that awarded the property of an Atlanta Presbyterian congregation to its presbytery.  The appellate court found that Timber Ridge Presbyterian Church was free to leave the PCUSA with its property under the neutral principles of law theory.  The absence of trust language in favor of the national church or presbytery in the property deeds and articles of incorporation defeated the national church’s arguments that an implied trust in the property was created by virtue of membership in the denomination.

“In applying neutral principles of law as required by the United States Supreme Court and the Supreme Court of Georgia, we cannot ignore relevant statutes, documents of the local body, or the actual language of the relevant deeds, in favor … of the rules of the national body,” the court held.

The Timber Ridge court came to the opposite conclusion of law from the appellate court that heard the case of Christ Church in Savannah, the Episcopal congregation that quit the Diocese of Georgia.  Christ Church has appealed that ruling,  and as the appellate courts in Georgia have now entered contradictory rulings on the same point of church property law the state’s Supreme Court will take up the issue.  On Jan 14, the state supreme court said it would hear oral arguments on the Christ Church dispute in April.

Parish council president David Reeves said he was “gratified” the court would hear their appeal.   “Since this case will have ramifications for all Georgia churches, regardless of denomination, we think it is appropriate for the highest court in our state to rule on these issues,” he said.

In the Fort Worth cases, attorneys for the majority faction led by Bishop Jack L. Iker filed pleadings on Jan 7 in opposition to the national church faction’s motions for partial summary judgment.  A hearing on the issue was held on Jan 14.  The court has taken the matter under advisement and is expected to rule shortly.

In its pleadings, Bishop Iker’s attorneys noted that the attorney for the national church faction, Jonathan Nelson, in 1993 had represented the Diocese of Fort Worth in a lawsuit with a congregation that had attempted to quit the diocese to join the Antiochian Orthodox Church.

Those pleadings and affidavits prepared for Bishop Iker and the diocese by Mr. Nelson were now being offered by Mr. Nelson on behalf of his new clients against the interests of his former clients.

“This is an unsavory attempt by an attorney to use words he drafted for a client against that very same client and in favor of a new one,” Bishop Iker’s attorneys said, adding that “having been paid [in 1993/1994] to draft documents for them, he now attempts to use his own words against those he used to represent.”

Bishop Iker’s attorneys stated the argument proffered by Mr. Nelson that the relationship of a parish to the diocese was akin to that of the diocese to the national church “takes a lot of nerve, as it is based on documents drafted by Plaintiffs’ counsel back when he was counsel for the Defendants.”

They further added that the legal conclusions drawn by Mr. Nelson from his 1993 legal work, did not favor the national church’s arguments but those of the diocese.  They urged the court to strike the new claims.

The Anglican Church in North America (ACNA) and the Diocese of New Jersey have come to an amicable resolution of the status of a former Episcopal congregation that quit the diocese for the Convocation of Anglicans in North American (CANA).

On Nov 23 the diocese agreed to sell the property of St. George’s Episcopal Church in Helmetta, NJ to St. Georges Anglican Church.  In Feb 2008, the congregation and its rector voted to secede from the Episcopal Church.  Negotiations began over the fate of the congregations building in 2009 and a settlement satisfactory to both sides was reached late last year.

The decision to sell the church buildings to the breakaway group by the diocese places it at odds with the wishes of Presiding Bishop Katharine Jefferts Schori, who has called for a ban on sales of parish properties to breakaway groups.  Testifying in the Virginia cases in 2007, Bishop Jefferts Schori stated that had the buildings of breakaway congregati0ons been offered to sale to Methodist or Baptist groups, she would not object, but “the Episcopal Church, for matters of its own integrity, cannot encourage other parts of the Anglican Communion to set up shop within its jurisdiction.”

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