Colonial Presbyterian Church v. Heartland Presbytery
Court of Appeals rules in favor of Missouri congregation
The Layman, June 27, 2012
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The Missouri Court of Appeals (Western District) has upheld a lower court’s decision that will allow a 1,700-member congregation to keep its property following its 2010 departure from the Presbyterian Church (USA).
In its opinion – filed June 26 – the court said that it applied Missouri law and affirmed the lower court’s ruling that Colonial Presbyterian Church of Kansas City, Mo., is the legal owner of all church property, valued at just over $15 million.
Heartland Presbytery had appealed a July 10 summary judgment filed in the Circuit Court of Jackson County, Mo., by Judge Justine E. Del Muro, which recognized Colonial as the legal owner of the church property, despite Heartland’s claim that according to the denomination’s constitution, a trust existed between the church and the PCUSA.
Judges Karen King Mitchell, Victor C. Howard and Mark D. Pfeiffer said that “under the neutral principles approach, the disputed property was never conveyed in trust, and therefore title remains in Colonial. The situs of the parties’ relationship is Missouri, and therefore Missouri law applies to how that relationship is governed. Accordingly, the trial court’s judgment is affirmed.”
The judges noted that “Colonial is the sole titleholder of all of the property that is disputed in this lawsuit. All of the relevant acts of conveyance list Colonial, and only Colonial, as the grantee. Colonial never signed any deed purporting to grant (or convey in trust) the disputed property to the national church or Heartland.”
In its appeal, Heartland argued that lower court was wrong since Colonial’s articles of incorporation and bylaws, along with the denomination’s constitution, created a trust in the national church’s favor with respect to the disputed property.
In 1983, the denomination added a property trust clause to the PCUSA’s constitution that stated “All property held by or for a particular church, a presbytery, a synod, the General Assembly, or the Presbyterian Church (USA) … is held in trust nevertheless for the use and benefit of the Presbyterian Church (USA).”
The three judges disagreed with the presbytery’s argument, saying, “Under Missouri law, the national church’s constitution was insufficient to convey the disputed property in express trust because the alleged settler – Colonial – did not sign it … Heartland concedes that Colonial never signed the national church’s constitution, and therefore the constitution did not create an express trust over the disputed property.”
The judges also referred to its January 2012 decision, when it ruled that Gashland Presbyterian Church was not bound by the denomination’s property-trust clause and that it held clear title to its property, and thereby affirmed a 2009 lower-court dismissal of a lawsuit also filed by Heartland Presbytery.
In the Gashland decision, Appeals Court Judge Alok Ahuja said the congregation had never expressly agreed to the trust clause. In such property disputes, Missouri property law trumped any denominational trust claims.
“Given the specific property provisions of Gashland’s Articles of Agreement, we would be hard-pressed to find that [Gashland’s] By-Laws’ general statements concerning subordination to the PCUSA’s Constitution establish a trust by clear, cogent and convincing evidence, dispelling all doubt as to whether Gashland intended a trust relationship,” the judge added.
In the Colonial ruling, the judges wrote, “we applied the neutral principles method in Gashland, and Heartland concedes that we would have to overrule that case in order to rule in its favor while applying the ‘neutral principles’ method. … Heartland was the party representing the national church in Gashland, and it relied upon the exact same clause in the national church’s constitution… We agree that ruling in Heartland’s favor on Points I and II would require us to reverse Gashland, and we decline to do so. We explained the ‘neutral principles’ method at length in that case, and it would serve no purpose to reiterate our reasoning here.”
In the Colonial case, Heartland argued that the appeals court was wrong in its Gashland decision and that the court only had to determine the parties’ intent, not to strictly apply Missouri trust law.
The judges called that line of reasoning false. “Missouri trust law is designed to affect the settlor’s intent. … Our laws are based on the reasonable assumption that a party would not intend to convey its property (in this case, worth millions of dollars) in trust without signing the writing purporting to create the trust, identifying the property to be conveyed, and expressing a definite intention to create a trust. Heartland contends only that the documents themselves (the articles of incorporation, the bylaws and the constitution) create a trust. Applying the neutral principles of Missouri law, which are designed to effect the settlor’s intent, those documents do not form a trust, and therefore Heartland’s argument is meritless.”
Heartland Presbytery also argued that the trial court was wrong in not applying Kansas law to the parcel of Colonial’s property that is located in that state and in not deciding that Kansas law would “recognize a trust in Heartland’s favor with respect to the Kansas property.”
However, the Missouri judges wrote, “Colonial is a Missouri church, and Heartland is a Missouri Presbytery. The Supreme Court of Missouri has adopted the neutral principles approach in deciding how disputes between local churches and national churches should be resolved, and, since we have two Missouri religious organizations before the court, that is the approach that governs.”
“Therefore, we hold that Missouri law applies to the question of whether the neutral principles approach applies to the relationship between Colonial and Heartland, the national church’s representative here,” the opinion stated.