The announcement came September 9 that Highland Park Presbyterian Church and Grace Presbytery had reached a $7.8 million settlement agreement ending their legal dispute over the denomination’s assertion of trust and the congregation’s assertion of ownership of church property. Almost immediately my phone started ring, “After the Masterson decision why did Highland Park settle?”
To answer that question we must distill what the Texas Supreme Court said in Masterson and what it did not say.
- Masterson did not say that all denominational property trust clauses are nullified.
- Masterson said that in every case, the state would rely on neutral principles of law when resolving disputes between local congregations and denominations that assert a trust over all property.
In short, Masterson said that in disputes over church property ownership, neutral principles of law will be applied. That means that the Masterson case gives churches the ability to leave whether the denomination dismisses them or not. But it does not mean that, in every case, the local church will prevail in court over property disputes. It allows local churches to negotiate on a level playing field with their ecclesiastical bodies, but the outcome of every case is very fact specific.
Lloyd Lunceford, an attorney familiar with the case and a member of the board of directors of The Presbyterian Lay Committee, said, “The law gives an opportunity but not a guarantee. How great an opportunity depends on the facts of a particular case and the nuances of the state law.” He then added, “No set of facts is all black or all white.”
So, what were the relevant facts and the calculus of those involved in making the decision to settle?
- Property and asset valuations in the Highland Park case vary from $30 million to $120 million but the consensus number used in mediation was $70 million.
- The vote of the congregation was 89 percent to realign the denominational affiliation of HPPC.
- The cost of litigation over a protracted trial was projected at an additional $2 million beyond what the church has already spent on attorneys.
- In 1991, in a successful bid to keep HPPC in the PCUSA, the presbytery sent a letter to the church in which it “promises to work with you to make an equitable division of property,” should the church ever determine to leave “in the future.”
- HPPC leadership had been advised that they had a strong chance of prevailing but given the nature of the litigation that left open the risk of losing everything.
So, 11 percent of HPPC members want to remain in the PCUSA and $7.8 is a neat 11 percent of $70 million. That’s one way to look at it.
Lunceford said that “Highland Park’s mediation team made what it judged to be a prudent decision considering the specific facts and the risks. But for the Masterson case, Highland Park probably would not have been dismissed for something less than $20 million, if at all.”
So, although $7.8 million seems outrageous, it is considered a reasonable deal for this particular church in this particular state taking into account the specific facts.
It is fair to say that the Menlo Park settlement several months ago created a whole new range of expectations for presbyteries dealing with large, affluent, well-endowed congregations that want to leave the PCUSA. We will now see how the Highland Park settlement affects those in states where neutral principles of law are applied where, to this point, congregations have held out the expectation that they could leave with impunity.
Click here for Highland Park’s own FAQ about their settlement.
I eagerly await getting home from work tonite to hear James H’s response to this.
Two questions for anyone who can answer:
1–What is First Presbyterian Houston attempting to do in the legal system right now ?
From what little I’ve read, it seems to be trying to legally establish it owns its property. Is that correct ?
2–My understanding is, prior to 1983, southern Presbyterian churches that merged into the PCUSA did own their property. The northern ones did not, and the northern position was the one that was adopted with an implied ownership clause after 7 years. Is that correct ?
I can’t answer number 2, but as to question 1:
FPC wants the courts to decide who owns the property. They are not currently trying to leave the denomination (having failed in their attempt earlier this year) so they have no incentive to drop the case. It may take some time, but I do believe that we will get a definitive ruling from the State as to how they view Church ownership in Texas.
Is there any information available as to what percentage of the HPPC membership actually left that congregation after the vote to affiliate with ECO? Eleven percent voted to not disaffiliate with the PCUSA but did all of that group actually leave the congregation?
That question occurred to me, too. I don’t have the answer, but my guess is that most of them stayed put — while the money supposedly representing their share of HPPC’s assets (a dubious idea in itself) is now in presbytery’s bank account. So that justification for the large settlement was badly flawed.
I never go to, for example, PCUSA.org, to post comments on their articles and stories, or to engage in back-and-forth arguments with readers of that web site. Such behavior would make me a troll, one of the more unpleasant internet phenomena. Unfortunately, a few such people do comment regularly on this web site, including in this thread. The best advice is: Don’t feed the trolls (that is, don’t get sucked into those back-and-forth arguments by responding to their comments).
Thanks for that superb analysis, Carmen. Courts in states like Texas which follow the neutral principles approach to church property disputes decide the case in the same way they look at any case in which two parties claim ownership of the same property. The court looks at deeds, insurance policies, construction and maintenance contracts, etc. and that methodology favors the congregation. So there has been a lot of consternation over HPPC’s settlement because most congregations in neutral principles states like Texas have been leaving with their property while paying presbyteries little or nothing. But Mr. Lunceford is probably right that nothing is certain in litigation and that HPPC was better off settling rather than run the risk of an unexpected loss at trial which would have been catastrophic. The only consolation for congregations is that the behavior of presbyteries and Episcopal dioceses in this era of realignment in old line denominations sounds the death knell of this kind of “connectionalism.” Never again will Christians build buildings which end up owned by some denomination.
David is correct, Tome, with his explanation. And because Texas is a neutral principles state on matters of church property disputes, the legal climate is very favorable for FPC Houston. The Episcopal denomination has been losing cases against departing churches in Texas.
There was a question about property ownership prior to re-union. The original Old School/New School split that simmered through the 1840’s and ’50’s, and eventually came to a head in 1861 involved, among other things, property ownership. The New School in New England was courting the congregationalists with an eye toward a grand union; but the congregationalists maintained local ownership of church property, and did not want their property to be absorbed into the denomination as a whole – as it was in the Presbyterian Church. So the New School northern states wanted to do away with the trust clause, to be more attractive to the congregationalists. The South was mostly Old School, and held to the trust clause and common property. So the old southern Presbyterian Church (pcus) did have property ownership vested in the denomination as a whole, and the northern church (UPC) had property ownership vested in the congregation. At reunion, the new book of order was shuffled together like a deck of cards from the two denominations, and the (southern) property trust became the law for the whole. The subsequent irony is that most southern churches assumed the trust clause came from the northern church, not from them!
Theologically, the trust clause makes perfect sense in that the money and things we give, we give to Christ and the (whole) Church – otherwise it’s like we are simply taking money out of our front pocket and slipping it into our back pocket in the name of Jesus. Like we want to give…but maintain control. Practically, however, the trust clause has always been a nightmare, and has served as a pressure point to coerce disgruntled congregations to stay put and not depart: it works okay in a happy union, it does not work in an unhappy one. Now I fear it is merely becoming a tool for vicious vindictiveness, cloaked with the sanctity of church unity. Despite its theological validity, it is being abused to inflict far too much damage and needs to go. At least, that’s how it looks to me.
Ben, Thanks very much for the detailed explanation. I had it backwards then on which branch included the trust clause and which did not. I do hope FPC Houston is successful in the courts and establishes clear ownership of its property under neutral principles in Texas. It would be a useful precedent for other Texas congregations, even those not considering leaving PCUSA. And might engender more generous, thoughtful, loving (Christian ?) behavior in some presbytery offices
Concerning Benjamin Williams’s comment about PCUS churches not owning their property but UPC churches owning theirs, prior to reunion: That is exactly opposite of my memory from the time. In fact, the idea that southern churches WOULDN’T own their own property after reunion was a major sticking point, so much so that a provision was written into the Book of Order to allow PCUS churches to claim ownership (but not UPC churches) for a certain number of years. If the southern churches wanted to establish that they owned the property, they could, but since the northern churches didn’t have the tradition of owing their property, they were not given the same opportunity to establish church ownership.
Thus I am confused by Mr. Williams’s explanation. I have been a pastor since 1975, so I lived through the reunion and the tensions around it. Is my memory completely wrong?
Right before reunion in 1984, the PCUS adopted a trust clause. The argument made by those who argue the validity of such trust clauses is that the PCUS trust was implicit before that time. At reunion, many PCUS congregations availed themselves of their right to remain under PCUS-property rules rather than new Plan of Reunion property rules. But since the PCUS Book of Church Order at reunion did assert a trust, these former PCUS churches that stayed under PCUS property rules were still in an environment where the existence of a trust was asserted. But one difference for those who stayed under PCUS property rules was that, for example, they could mortgage their property without presbytery approval, and one wonders if that would be kosher for property that was really in trust…
But the real question in Texas, as I understand it, is whether the denomination’s assertion that a trust exists necessarily means that what would be necessary under Texas law to establish a trust has been done. Here’s are two illustrations: The Book of Order talks about how a marriage may be established, but if the participants do not fulfill Texas law in securing a marriage licence and a recognized officiant, there is no marriage under Texas law. Similarly, the Book of Order may say congregations shall be incorporated, but if Texas law is not followed, there is not a legally recognized corporation.
Similarly, the Book of Order clearly asserts that all property is in trust for the PCUSA, but is that bare assertion, enough to establish a legally binding trust in Texas? I think that is the question.
I am a 60+ year member of HPPC. Yes, 11% of those present and voting voted to remain in PCUSA. Almost one year after the vote, I am aware of only 25 former HPPC members who have left HPPC or are in the process of leaving. Several of those who left have been Important and Tenured HPPC members, including a retired PCUSA minister who served as HPPC Youth Minister in the 60’s and as interim minister 13 years ago, and a couple who have both been elders, Chancel Choir members and generous donors. Everyone who leaves will be missed.
Given the numbers of those who voted to remain in PCUSA, the VAST majority have opted to remain at HPPC. I have talked informally to several whom I suspect voted to remain in PCUSA. Most have said they would have preferred remaining in PCUSA but that HPPC is their “Church home” and they have voiced no reason to dislike or fear ECO. Others have said that, as in normal Presbyterian style (and which ordained officers agree to), their side did not prevail and they have chosen to remain with the majority. In this group are several members whose adult offspring are or have served in PCUSA missions, on Presbytery, or who are extremely close with one or more HPPC alums (ie Hunter Ferrell who heads PCUSA Missions) and were afraid the flow of funds to certain missions would cease. I have observed yet a third group that voted to leave but which are staying, largely because they really like our dynamic new minister. God has blessed HPPC that we were able to go through this “vote” without the rancor from the 1991 vote that shortened the lives of 2 of our 6 ministers, divided families and left bad blood in this community for years and years.
Don, I am a60+ year member of HPPC and Reserve Elder, having served in the mid 90’s immediately after HPPC lost 1/3 of its members on the Article XIII vote. I want to emphasize that I have neither participated in the settlement discussions nor heard our current officers’ explanation of why the settlement….. at all, and at $7+ million.
But I am EXTREMELY disappointed that the current officers and trustees (and I know many of them well) appear to have opted to cut short a mess by generously filling the coffers of our local Presbytery.
My parents were Southern to the core and in their mid 80’s at the time of the Article XIII vote. I can tell you with 100% certainty that they and their friends held back until the 11th hour to vote………..and their #1 issue was that HPPC did and would always and forever own its property………..with NO offsets (for future increase in value, etc). ONLY after several of the best attorneys in Dallas who were their colleagues and fellow HPPC officers secured a letter from Presbytery stating same did they vote for the Union with PCUSA.
Through the years since the painful split that alienated so many families and former friends, HPPC has been generous to a fault on Presbytery and Presbyterian causes. We have supplied innumerable dollars and hours to PCUSA causes and denominational efforts. Meanwhile, we have kept our large and aging facility in safe operating condition and started several Citywide ministries. As a congregation we have struggled through 2-3 severe recessions since the Artlcle XIII vote, often drastically delaying necessary repairs (i.e.replacing rotting window sills, kitchen equipment that no longer passed City inspection, and Fire Dept. mandates for enhanced security and fire monitoring equipment). When the budget well was dry for 3 years in a row, we sold the Senior Minister’s manse.. We have had to lay off people and cease important ministries when the money just wasn’t there. Eventually, we were able to restore our facility, only to have the same cutbacks during the next recession.
So for Presbytery — or anyone else — to show up on our doorstep, having made ZERO financial contributions to help us maintain our facility or our ministries, and advance that THEY own ANY percent of HPPC is unethical and downright immoral in my non lawyer’s conscience.
Indeed, a money grab by PCUSA thru Presbytery seemed exactly where HPPC’s discussions about leaving the denomination were headed, HPPC Trustees wisely and pre-emptively filed the lawsuit. One thing they ardently wanted was to separate in HPPC members’ minds the property versus the polity issues of remaining in PCUSA. Then we watched in sheer horror at the actions taken against other PCUSA churches prayerfully contemplating their future within PCUSA. Honestly, I believe the vote to remain in PCUSA might have been as high as 35%-40% had HPPC members not seen the actions PCUSA was taking against Churches contemplating leaving. Tragically, the effects of their actions shamen either our Presbytery nor PCUSA, which in hindsight further convinces me that both entities were FAR more interested in getting a $$ settlement than in trying to keep the family together. Golddiggers they are, and indeed, this final standoff with PCUSA fairly convinces me that we made a $7 million mistake back in 1991 by voting to align with PCUSA.
I am, at this point, very disappointed at the generosity we have shown our non-deservant denomination. Indeed, we are an affluent Church that can afford to pay to get rid of a mess. But I do worry that we have erected such a high bar for other churches contemplating leaving. Personally, I wish we had used our resources to either significantly reduce ANY payment made or had the settlement amount and details sealed so that it could not be used in future Denominational dealings.
But the decision has been made by the officers ordained by us. It was a bad marriage and an ill-spirited divorce. One always learns more about a person during the testy, difficult times. What I have seen of how PCUSA has morphed in the 23 years we were with them, I would call ours an annulment and wish it had happened years ago..
Marty, perhaps we met when I was a member for a few years in the early ’80s. My wife and I were married at HPPC, so it remains an important place for us.
Anyway, I appreciate your summary of the situation, and I’m in complete agreement with you regarding the immorality of what Grace Presbytery has done. Jim Caraher, who has made comments in this thread, is right that these ugly incidents will ensure that churches will never again agree to anything like the trust clause. But in the meantime, the clause is doing immense damage, and continues to virtually imprison congregations whose consciences call them to leave. That’s why I’m so disappointed in the HPPC session’s decision to settle; it means that Grace continues to control the fate of 140 other congregations.
I was a teaching elder in Grace until 2002. I retired in 2000 and moved to the Presbytery of Philadelphia where my membership now resides.
I recall the year that HPPC came close to leaving when the late Clayton Bell was pastor of HPPC.
The vote fell just shy of the majority that was needed. The end result, however, is that HPPC
lost half of its budget and membership to a new congregation. HPPC executive minister Harry Hassel told me that with the departures and loss of funds, HPPC had to redraft a new budget that reflected about a $2 million drop in funds.
I also recall that HPPC funded a spacious cabin at Camp Argyle, north of Dallas. I am sure there were other significant contributions that HPPC made to Grace Presbytery over the years.
If the truth be known, Grace benefitted magnificantly from the largess of HPPC.
Since HPPC was originally a Southern Presbyterian Church [PCUS} congregation, the Northern Church or its successor PC[USA] made little significant monetary contribution to
Highland Park Presbyterian Church.
It takes naked greed of a Presbyery to agree to a $7.8 windfall
for a very modest investment of an insignificant sum in a big steeple church.
However, I understand the powers that be in most presbyteries. They recognize the annual windfall from per capita and other gifts will no longer be theirs to collect. Consequently, the only way to sustain the Prebytery – or its so-called mission – is to tap departing wealth.
Yet I wonder if the money will be invested wisely or spend with reckless abandon or flittered away on worth projects call mission
In my experience in most presbytery committees and meetings, sound business practices were dismissed and only emotional
uses of money carried the day. All in the name of mission.
JIm, I agree. My father-in-law, who was an Elder in his local PCUS church (as was his father before him) told me that there was NO trust clause in the PCUS until the final 1982 Book of Church Order, where it was slipped in there just prior to the merger. And remember, the PCUS had LIFETIME elders, they took their stewardship and spiritual leadership of their congregation seriously.
The UPCUSA had a trust clause in its BOO since the mid-50 or 60’s when a SCOTUS ruling on church property included an opinion from a Justice that denominations should legally create a trust for property.
The Justice was implying that the denominations go about the proper way to assign a trust, that is both parties sign legal papers, with each party agreeing to the terms of the trust by the signatures of the church Trustees/Session on one hand, and those of the presbytery’s Stated Clerk.
However the UPCUSA (as did other mainlines like The Episcopal Church) decided to incorporate such a trust by the simple expediency of including it in the Book of Order (or in TEC’s case, in its Canons). Many states are showing TEC and the PC(USA) how legal that trust is by ruling that the property is owned by the congregation.
I just left a pcusa church which has been completely rebuilt, everything is new. This being the case, am I to believe this church will have to pay extortion money to the crooks of the pcusa when this church leaves??? God in Christ owns the property lent to the congregation for HIS glory, and
what business does the trust clause have to do with the church??
FPC Houston wants the court to rule the property is their’s, so they can leave w/o having to honor the commitment they made during the discernment process that it takes a 2/3 vote to leave the denomination. They promise not to now, but they’re waiting for the PCUSA to drift one inch further to the left and use that as their “when we made our promise we didn’t know THAT would happen” excuse.
Wonderful insights, Marty. Thank you. The behavior of Grace presbytery is shamed by the majority of presbyteries which are treating departing churches in gracious, Christ-honoring ways. And there may be some consolation in the complete certainty that the PC(USA) will continue to shrink to its rightful place on the far left wing fringe of Presbyterianism while the broad middle of the spectrum being vacated by the PC(USA) is back filled by vital, high impact groups like EPC, PCA and ECO.
And you know this how? Are you a member there, do you have some insights that the rest of us don’t have?
Maybe, just maybe, FPC Houston wants to have the title free and clear so that even if it doesn’t leave now, perhaps in future if the congregation gets to the point where they can no longer be affiliated with the PC(USA) that there will be no doubt on the property.
However, I wonder why the bitterness toward another congregation?
This makes me wonder how the ~10.75%, who voted to remain in the PCUSA but continued as congregants in HPPC, now feel about the financial ramifications of their vote. I am sure many sincerely saw their vote as merely symbolic. It became anything but that.
Personal experience with FPC. I doubt the people who run The Layman want me to name names here. I can prove my doubts about their honesty have quite a bit of validity if we’re in the same room and I can show you documentation, but that isn’t really possible posting comments here.
Let’s just leave it as “personal experience”.
“perhaps in future if the congregation gets to the point where they can no longer be affiliated with the PC(USA) that there will be no doubt on the property.”
Isn’t that basically the same thing I said, other than my expectation they will do that within a year or so?
Looking forward to seeing what hppc does to make impact in Dallas and the world. That church has huge potential to be used to make major things happen. God I pray for them and their influence. May they help your kingdom grow.
It seemed to me that the session of Highland Park Presbyterian Church went about this with a very poor strategy. It seemed to me that they should have settled the property issue before taking a vote to leave.
George, They would have ended up in exactly the same position if they had done what you suggest–paying the Presbytery a 10% tax to leave–but it would have been a protracted process. They decided on a “burn the bridge” strategy–leave first and quickly, then settle the property issue second–with the thought they might not have to pay. My guess is they simply decided there was a risk the courts might not rule exactly as they wanted and decided to take the easy route–pay and be done with it.
“In my experience in most presbytery committees and meetings, sound business practices were dismissed and only emotional uses of money carried the day. All in the name of mission.” Yes, my local PCUSA congregation has been brought to its financial knees due to this kind of thinking on the part of the leadership, specifically on what it imagines is mission spending.