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Associated Press/Photo by Jae C. Hong

Day in court

Religion | Churches facing legal battles over property remain dependent on state-by-state rulings

Issue: "Save the unions," Oct. 24, 2009

If your denomination-affiliated congregation bought land, erected a church building, and maintained it for years, all with its own money, but has decided to withdraw from its denomination to join another or none, who owns the church property now?

It depends on which state and which denomination your church is in- even if your church's name is on the property title deed and everything is in order.

Some denominations have imposed a unilateral trust on the property of their member churches: If a congregation leaves, the property stays with the denomination.

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Denominations like The Episcopal Church (TEC) and the Presbyterian Church (USA) have been hauling an increasing number of dissident congregations into court. They are spending millions and going to the mat to protect their trust-clause franchises. TEC's Colorado diocese alone spent $2.9 million battling successfully for the property of just a single church in Colorado Springs, according to a diocesan report.

In California, your church likely would lose its property. In South Carolina, however, your church is safe. That's because the California Supreme Court in January and the South Carolina Supreme Court in September chose opposing methods for their respective lower courts to use in judging church property disputes. (Declared the South Carolina court: "It is an axiomatic principle of law that a person or entity must hold title to property in order to declare that it is held in trust for the benefit of another.")

The U.S. Supreme Court is partly to blame for the confusion. Traditionally, property matters are a state, not federal, legal matter. Many states historically allowed an exception to laws governing property. They deferred instead to rules set by certain "hierarchical" denominations in property issues of their member churches. As the 20th century deepened, scattered courts became more willing to listen to appeals of congregations deprived of their property and to apply "neutral principles" of state law in resolving disputes. In Jones v. Wolf in 1979, the U.S. Supreme Court said courts were free to use "either approach: deference to the hierarchy" or neutral principles of law.

That led to results like these in California: An appeals court in Fresno in 2004, using neutral principles of corporate law, said a former United Methodist congregation could keep its property. It questioned the denomination's understanding of the trust clause, saying the law recognizes the title-deed owner of the property as the primary party in creation of a trust, and the owner has the right to revoke it. The decision was in line with a decades-long trend making California a "neutral principles" state. However, an appeals court in Orange County in an Episcopal case in 2007 overturned a lower court ruling based on that approach, saying that trial courts must defer to rules set by the denomination. It ordered St. James Anglican Church of fashionable Newport Beach to vacate the property it had owned for some 30 years.

St. James appealed to the California Supreme Court. That court last January issued a decision that confounded many legal experts. It declared California to be a neutral principles state in resolving church property disputes. But it deferred to TEC's hurriedly passed 1979 trust clause.

St. James persuaded the justices a day later to send the case back to the trial court to hear further evidence. But the church also asked the U.S. Supreme Court to review the California decision: Under the U.S. Constitution, can certain religious denominations disregard the normal rules of property ownership that apply to everyone else? Giving a preference to certain kinds of churches that claim to be hierarchical, that other churches and nonreligious associations are not entitled to, violates the establishment clause, St. James contended. It also cited religious-freedom concerns.

The high court on Oct. 5 denied the petition for review. Sooner or later, though, the court will have to address the equal-justice and other issues begging to be heard. And to remind the California Supremes that neutral principles is not a synonym for deference.

Edward E. Plowman
Edward E. Plowman

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