Counting the Cost: (Legal) Consequences of a Split in the United Methodist Church (in Texas)

As both theologian and lawyer, I tend to view the threatened (or impending, depending upon how fatalistic you’d like to be) split in the Methodist Church from a number of angles–but no single thread (to mix my metaphors) can easily be untangled from the others.

The report of the Commission on a Way Forward has beed released–though not officially by the Council of Bishops as translation has not been completed. I’ll discuss that in a separate post.

For now, I want to talk about the legal landscape, particularly in Texas, and what that might mean if the UMC does split after the General Conference in February. I’ll try not to get too much into the details (though feel free to post comments or send me a message and I can point you to some resources) and to keep things on a relatively-plain-English tone.

Preface and Disclaimer

This post is for informational purposes only and is not intended as legal advice. I make no claim to be familiar with the current state of law regarding church property disputes in its entirety–with ongoing litigation across the nation, such a comprehensive approach would be extremely time-consuming at best.

This post is instead meant to provide some background information to support the exhortation and conclusion that follows.

Lessons from the Past

In a recent opinion from the Fort Worth Court of Appeals (Episcopal Church v. Salazar, to which I’ll return shortly), the Court noted that “church property disputes [and schisms] are as old as any church.”

Recent memory has given us the split in the Presbyterian Church and the Episcopal Church (over similar issues to those currently facing the UMC). As the styling of the case betrays, Salazar involves the dispute between The Episcopal Church and local parish churches arising out of the split within that denomination.

Salazar is emblematic of the cost of church disputes over property that spill into the courts for resolution. The initial litigation in the Salazar appeal began in 2009! The most recent opinion in the case (given in April of this year) is on the second appeal from the trial court–the case was heard by Supreme Court of Texas in 2014, the United States Supreme Court declined to hear appeal from that court, and the case returned for new procedings in the trial court before being appealed again (resulting in the opinion to which I’ll refer in this post).

That alone is indicative of the cost–in money, time, effort, heartache and reputation–that has accompanied the Episcopal Church’s litigation in the aftermath of its split. Nine years without a decisive resolution, the attorney’s fees quickly stacking up against the value of the properties in dispute (though, given the number of properties involved in this case and a lack of access to attorney billing records, it’s impossible to know exactly how much has been spent and how that compares to the value of the things in dispute). And Salazar is hardly alone; it is but one of similar cases tracking through the legal system across the country.

Why Does the Episcopal Church Example Matter to Methodists?

The answer here is relatively simple: both the Episcopal Church and the Methodist Church have, within the documents that constitute the church law of each, a “trust clause” that essentially indicates that the local churches hold their property in trust for the greater denomination. In the Episcopal Church’s case, the diocese in which the church sits; for the Methodists, the conference of which the church is a member.

For reasons I’ll describe below, the Episcopal Church’s trust clause makes for a simpler legal case than the Methodist clause–though I do not dare say that it is a simple case for the Episcopal Church, as the breadth of litigation clearly demonstrates.

The Law of Decision – Up for Grabs

The nation’s courts tend to be split between two approaches to handling church property disputes. The first is called the neutral principles of law doctrine. Under this approach, the court looks solely to state property (and business/trust) law and secular records of ownership to determine the “rightful” owner of any particular property. Currently, this is what the Texas Supreme Court has determined is the proper approach.

The alternative approach, given various names but which we’ll call the deferential approach, is a result of the First Amendment of the United States Constitution. Under long-established First Amendment principles, the Courts must refrain from interfering in or determining the internal affairs of a religious institution (this itself called the ecclesiastical abstention doctrine).

Under ecclesiastical abstention, a Court must not take any part in a dispute that arises out of doctrine, theology, internal matters of faith or leadership and governance issues within the religious organization, because doing so could be the state “establishing” a government-sponsored religion by approving one side over the other. This is, rightly, I believe, a core component of freedom of religion in this nation.

The important thing to understand about the ecclesiastical abstention doctrine, and thus the deferential approach, is that it means that the court must defer to the determination of the higher denominational authority as the deciding factor in disputes where the court’s involvement would infringe upon First Amendment rights. Essentially, this means that the denomination gets what it wants when there is a dispute with a local church. In the case of trust clause litigation, it means that the denomination wins issues of property ownership against local churches nearly every time.

As an aside, I should note that we’re only discussing matters of civil (as opposed to criminal) law here–the legal history of criminalization (or not) of religious behavior is another long story best kept discrete from this issue.

For the neutral principles of law approach to be applicable, a Court must determine that the dispute does not involve the sorts of internal religious matters that require obeisance to the ecclesiastical abstention doctrine.

Other cases resulting from the dissolution of the Episcopal Church will be heard by the Supreme Court in the near future (though probably not before the UMC’s called General Conference). While this should provide some guidance for the resolution of future church property disputes, that also means that the ultimate decision will be determined in part by the current politics affecting SCOTUS. With the loss of Justice Kennedy and his likely replacement by a staunchly conservative judge, I think it’s likely that the United States Supreme Court will favor the deferential approach, though the opinion that comes down will ideally also include guidance as to when the netural principles approach may be safely employed. Of course, I have no crystal ball, and my own legal practice does not involve the close tracking of Supreme Court politics, so this is merely speculation.

The bigger issue (for local churches, at least) in the case of the Methodist Church is just how much our trust clause seems to mandate the deferential approach.

Comparing Clauses

The Episcopal Church’s trust clause (known popularly as the Dennis Canon) is a mere two sentences that simply states that local churches hold their property in trust for the greater Episcopal Church. This plain language allowed Texas courts to apply the neutral principles of law approach to disputes over property ownership without fear of First Amendment infringements (though it should be noted that the courts have abstained from addressing certain subissues briefed by the parties because they do involve internal church affairs).

The United Methodist Book of Discipline’s trust clause (Paragraph 2501) describes our trust clause as “an essential element of the historic polity” of the UMC and a “fundamental expression of United Methodism.” These phrases, along with the rest of the language of the UMC trust clause, quite firmly push our property ownership issues into grounds of doctrine and polity that may not be interfered with by the courts.

It is one thing to say that this simply means that the greater UMC will win against local churches in property disputes, but it also means that the courts will only reluctantly interject themselves in the dispute at all (though when they do, if my assessment is correct, they will ultimately side with the enforcement of the trust clause).

Thinking About Salazar

When I was first made aware of the Salazar case, it was described to me as indicating that “Texas had found the Episcopal Church’s trust clause to be unenforceable.”

That is partially correct, but only partially. The steps go like this: (1) The Court determined that the neutral principles of law approach applied. (2) Turning to Texas trust law, the Court determined that only the settlor (the grantor of property to a trust) may establish a trust relationship–a declaration by a putative beneficiary of the trust (as in the Dennis Canon) is not alone sufficient to create a trust relationship. (3) Thus, the Court stated that it must look to the language of the deeds conveying the property and to the governing documents of an intermediary non-profit organization that held some of the property to determine if a trust relationship had been properly created under Texas law. (4) In some cases, the Court determined that it had and property was awarded to the Episcopal Church; in others, the Court found no such trust relationship and awarded property to the local church(es). (5) In giving the Salazar opinion, the appellate Court did not reach certain additional issues that might change the distribution of property after the initial legal determinations described in (4). In particular, the Court did not reach teh Episcopal Church’s argument for constructive trust, a remedy that a court may apply under the right circumstances to deem that a bad actor, though having legal title to property, is really holding that property in trust for the plaintiff as matter of equity, thus transferring ownership to the plaintiff.

So, the following points are important to consider when we Methodists look to Salazar and other Episcopal Church litigation in trying to determine the future in the tragic event that our own church splits: (1) The issues in the Salazar case have not been fully litigated. (2) The U.S. Supreme Court has not yet weighed in. (3) The UMC’s trust clause is likely different enough than the Episcopal Church’s trust clause to lead to a different result. (4) In the event that the neutral principles approach is applied to the UMC, then additional factual determinations must be made to reach a conclusion (i.e. what is the language in the deeds to church properties?).

Conclusion

There is one thing that is certain from all of this. If the UMC splits–and I would urge that our current focus should be on finding a just and theologically-sound way to prevent a split rather than on any of the above–any legal conflict over successorship, use of names, and property ownership will be prolonged, expensive, and–most important–an extremely poor witness for Christ. Thus, should that situation present itself, laity and clergy alike at all levels of authority in the UMC must be willing to make sacrifices for and compromises with one another to quickly resolve such disputes without a need for litigation so that we can all keep our focus on making disciples for Jesus Christ for the transformation of the world.

 

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