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.