Litigation Involving Disaffiliating Parishes and Dioceses: A View from 30,000 feet with Some Commentary on the Landscape

Although the subject isn’t the most edifying one to contemplate, litigationinvolving disaffiliating dioceses and parishes is with us and the frequency of newsdevelopments on the subject seems to be increasing. It is hard to keep track of, not tomention account for in a coherent way, these developments. Nonetheless, we are goingto attempt here to make some connections and draw some distinctions about what isgoing on in some of the different cases, and offer some observations along the way.

Overview of some recent parish cases.

In the South Carolina case,

All Saints Parish Waccamaw v. Protestant Episcopal Church in the Diocese of SouthCarolina,

the South Carolina Supreme Court’s September 2009 ruling was in favor of thedisaffiliated parish on three important issues common to cases involving EpiscopalChurch parishes. First, it endorsed neutral principles of law as the method of resolvingchurch property disputes, instead of the “deference approach” applied in some jurisdictions. Second, it held that the 1979 Dennis canon, which purports to create a trustinterest in all parish property in favor of TEC and the applicable diocese, did not affectthe parish’s title because only the owner of the property can create a trust. And finally, itfound that the parish could, and did, validly adopt amendments to its incorporationdocuments that had the effect of disaffiliating the parish from TEC and the diocese.It has been suggested that the South Carolina case has limited applicability because the property had been acquired in colonial times before TEC was organized.While it is true that the court’s opinion analyzed the evolution of title to the parish property from the colonial period forward and reached the conclusion that title was nowheld by the congregation’s corporate entity, the three important conclusions referred to inthe preceding paragraph are not dependent on the colonial history.A case in which historical factors are perhaps more significant is

In reMulti-Circuit Episcopal Church Property Litigation,

the Virginia case in which TruroChurch, The Falls Church and other parishes were successful at the trial court level. (Thecase has been accepted for review by the Virginia Supreme Court.) In order todisaffiliate, the parishes availed themselves of an 1867 state “division statute.” Thisstatute provides that if there is a division in a church in which congregational property isheld by trustees, the congregation may by majority vote determine to which branchresulting from the division it will belong, and that property ownership will follow thatdetermination.Although the Virginia division statute is itself unique, the Virginia casehas more factors in common with other cases than might appear. In the Virginialitigation, the efficacy of the Dennis canon and whether parish entities are allowed todisaffiliate were at issue just as they were in South Carolina and other cases. Thedifference in the Virginia case was that the parishes were arguing for their right todisaffiliate under a specific state statute applicable to divisions within churches rather than on the normal state law rules relating to property, trusts and legal entities. It seems

2quite possible that the trial court would have reached the same result if those normal statelaw rules had been applied instead of the division statute.The California case involving St. James, Newport Beach also involved aunique state statute, but here the statute was used against the disaffiliating parish rather than in its favor. TEC and the Los Angeles diocese have argued, so far successfully up tothe California Supreme Court on an incomplete record, that the statute endorsed the useof denominational trust clauses such as the Dennis canon, and were also successful inmaking constitutional arguments that were not successful in South Carolina or, to date, inVirginia. Following the California Supreme Court decision, the case is now back to thetrial court for further proceedings.A recent trial court decision in Georgia (

Bishop of the Episcopal Dioceseof Georgia v. Rector, Wardens and Vestrymen of Christ Church in Savannah

) found thatthe property of historic Christ Church reverted to the control of the Bishop of Georgiawhen the parish disaffiliated. Distinguishing the unwillingness of the Supreme Court of South Carolina to give effect to the Dennis canon, the court found that an “implied trust”over Christ Church’s property already existed, which the Dennis canon only madeexplicit. The case is being appealed to the Georgia Supreme Court, where the parish will presumably argue in part that the trial court’s implied trust analysis is based not onaccepted principles of trust law but on a limited number of cases that give specialtreatment to churches considered hierarchical. This issue of special treatment will bereferred to again below.

Overview of diocesan cases.

The cases involving disaffiliating diocesesare different from the parish cases in significant respects. The Dennis canon is notimplicated, at least directly, because the Dennis canon applies to property held by parishes and missions but not to property owned by the diocese or other diocesaninstrumentalities in their own right. The diocesan cases inevitably bring a sharp focus towhat exactly it is that could prevent a diocese from withdrawing. Essentially, it isclaimed that a diocese is a “subordinate unit” of TEC that may not unilaterallydisaffiliate. But there is no provision in TEC’s constitution or canons that states that adiocese may not do so, and legal authorities establish that a member of an unincorporatednonprofit association such as TEC must, on constitutional and public policy grounds, beallowed to withdraw from membership.

Nor are terms like “subordinate” and other terms characteristic of a hierarchy used in the constitution and canons. The recitation of athree-tiered hierarchical structure (national organization, dioceses, and parishes andmissions) that frames TEC’s legal papers doesn’t reflect a view of TEC polity that isconsistent with its history or reflected in its constitution and canons. The Anglican

See

Revised Uniform Unincorporated Association Act, Section 20 and accompanyingcommentary. (“Preventing a member from voluntarily withdrawing from a UNA[unincorporated nonprofit association] would be unconstitutional and void on public policy grounds.”) The law regarding incorporated nonprofit associations is to the sameeffect.

See

Model Nonprofit Corporation Act Section 6.20(a) and accompanyingcomment. (“A nonprofit association generally cannot force a person to belong to it.”)

3Communion Institute has published papers on this subject.

Non-legal academiccommentary also illustrates the exaggeration in TEC’s hierarchical claims.

Many make the argument that accession clauses in diocesan constitutionsor canons result in subordination of the diocese to the national organization. Mark McCall deals with this idea (“Is the Episcopal Church Hierarchical?”) and hedemonstrates that there is no support for the idea that the presence of an accession clauseimplies a prohibition on withdrawal.

Arguing that accession to the association’s rulesimplies irrevocable subordination doesn’t succeed, because the very existence of theassociation is premised on agreement to be bound by its rules. The very sameunincorporated nonprofit associations, the members of which must be allowed towithdraw on constitutional and public policy grounds, typically have governingdocuments containing an agreement to be bound.The litigation concerning the ability of a diocese to withdraw shouldinvolve less variation in the relevant facts from case to case, because there is only oneorganization being withdrawn from, rather than one organization out of a universe of 111.The Pittsburgh case,

Calvary Episcopal Church v. Rt. Rev. Robert W. Duncan,

is uniquein that so far the dominant issues in play have been connected with the terms of an earlier stipulation (a form of settlement document) about ownership of diocesan property, rather than the legal ability of the diocese to withdraw. In the Fort Worth case,

The Episcopal Diocese of Fort Worth v. Salazar,

the judge has expressed skepticism from the benchabout claims that the Fort Worth diocese is prohibited from withdrawing, but at this earlystage of the proceedings involving preliminary motions he has been reluctant to followthe logic of his observations to their natural conclusions. In the San Joaquin case,

Diocese of San Joaquin v. David Mercer Schofield,

the trial judge has been much morereceptive to TEC’s arguments, a factor, perhaps, in the somewhat unusual decision of an

See

Mark McCall, Esq.,

Is the Episcopal Church Hierarchical

(Anglican CommunionInstitute Sept. 2008),http://anglicancommunioninstitute.com/wpcontent/uploads/2008/09/is_the_episcopal_church_hierdoc.pdf ;

Bishops’ Statement on the Polity of the Episcopal Church

(AnglicanCommunion Institute April 2009),http://www.anglicancommunioninstitute.com/2009/04/bishops-statement-on-the-polity-of-the-episcopal-church/

For example: “The denominations usually considered to have the most highlycentralized religious authority (

i.e

., denominations with Episcopal structures), actuallyhave religious authority that is only highly centralized at the regional level. Even in theEpiscopal Church or in the United Methodist Church, for example, religious authority ishighly decentralized from the national perspective. To say this another way, episcopaldenominations are like sets of relatively autonomous fiefdoms while the more unitarydenominations are like nascent nation-states in which a single king has establishedauthority over subordinate feudal lords.” Mark Chaves,

Denominations as Dual Structures: An Organizational Analysis

, Sociology of Religion, vol. 54, no. 2, Theory andHistory in the Study of Religion (Summer 1993), 147, 166.

Mark McCall,

supra

note 2, at 20-22.