California’s high court says church can keep its property after leaving the denomination
By Craig M. Kibler, The Layman Online, December 3, 2004
The California Supreme Court, in a case that could test the validity of the property clause in the Constitution of the Presbyterian Church (USA), has let stand a lower court’s ruling allowing a congregation that severed its ties with the United Methodist Church to retain its property.
In a case involving St. Luke’s Community Church in west-central Fresno, the court denied a petition for review filed by the California-Nevada Annual Conference, The Fresno Bee reported Friday. The action let stand an August ruling by the state’s 5th District Court of Appeal that said St. Luke’s can retain its property.
The Rev. Kevin Smith, pastor of St. Luke’s, told The Fresno Bee, “We’re just excited. The Lord has done a really great thing; it’s his property.”
United Methodist Church officials are considering an appeal to federal courts. Robert M. Shannon, a lawyer for the California-Nevada Annual Conference, told the newspaper, “It is a very disappointing situation,” adding that the court’s action could have an effect on the relationship between congregations and their denominations:
“This case not only impacts the UMC, but other mainline denominations with similar methods of holding property. These other denominations could potentially see their own trust clauses challenged and invalidated using the St. Luke’s case.”
Many denominations, including the PCUSA, have property trust clauses in their constitutions. The U.S. Supreme Court has not invalidated any of the clauses, although state courts and lower federal courts occasionally have ruled in favor of the dissident congregations.
Wednesday’s action, the second involving St. Luke’s, was the third ruling in four years by a secular state court that awarded property to a congregation that had renounced the jurisdiction of its denomination. In September 2000, the Maryland Court of Appeals rendered a decision in favor of the dissenting congregation in a dispute within the AME Zion Church.
In each case, denominational officials were asserting their claim to the property under constitutional provisions that say all church property – although paid for by the members of the congregation through their gifts – is held in trust for the denomination.
In addition, the Supreme Court of Pennsylvania has agreed to hear an appeal in an Episcopal property dispute that could test the validity of the property clause in the PCUSA’s constitution.
The Presbyterian law – G-8.0200 in the Book of Order – says all property held by local congregations, presbyteries or the PCUSA is “held in trust nevertheless for the use and benefit of the Presbyterian Church (USA).”
The application of that church law means that congregations that choose to leave the denomination must either forfeit their property to the PCUSA or negotiate settlements with their presbyteries. In the last two years, five congregations have left the PCUSA, paying as much as $1.2 million to retain their property. In one case, the presbytery confiscated the property without a settlement.
In the California case, St. Luke’s severed ties with the United Methodist Church over disagreements about same-sex union ceremonies and rewrote its articles of incorporation. In 2002, a Superior Court judge ruled that St. Luke’s could not remove the trust provisions from its deeds and that the denomination controlled the property.
On Aug. 13, the state’s 5th District Court of Appeal overturned the decision, ruling that St. Luke’s acted legally in changing the terms of trust language in its deeds that allowed the congregation to hold the property in trust for itself and remove the trust language that favored the denomination. Wednesday’s action let stay that ruling.