Indiana court decision overturned
The Layman, December 17, 2010
The Appeals Court of Indiana has struck down an earlier ruling that had awarded church property to Olivet Evangelical Presbyterian Church in Evansville, Ind., following its split with the Presbyterian Church (USA).
Declaring that Olivet’s participation in the denomination equates to compliance with the so-called trust clause – specifically its remaining in the PCUSA at reunion and agreeing to participate in Ohio Valley Presbytery’s dismissal process – the appeals court favored the presbytery based on its interpretation of the same neutral principles of law that often favors congregations.
In 2006, the Olivet congregation asked the presbytery to release it with property and finances to the Evangelical Presbyterian Church (EPC). The presbytery, which approved a dismissal but without property and offered a lease to Olivet. In mid-2007 the congregation declined the lease and further property negotiations, and the presbytery countered by taking Olivet to court.
Earlier this year, a local circuit court rejected claims by the presbytery and Synod of Lincoln Trails on Olivet’s property, awarding ownership to Olivet. That decision was based on applying the neutral principles of law to the deed and documents of ownership. The trial court also ruled that upon leaving the PCUSA Olivet was no longer bound by its rules, including the so-called trust clause.
But the appeals court applied the neutral principles of law differently than the trial court.
According to the ruling, the national church was favored because Olivet accepted the benefits of being part of a national organization and acknowledged in its bylaws that it was bound by the national church constitution, which contains a clause providing all property titled to local congregations is held in trust for the benefit of the national church.
“In this case, the trial court focused nearly exclusively on the language of the deed to the Oak Hill Property consideration, that is not the end of our inquiry,” the appeals court decision states. “Although the deed language is certainly a relevant consideration, that is not the end of our inquiry. … Inasmuch as courts are required to go beyond the language of the deed itself to resolve a church property dispute – assuming, of course, that ecclesiastical inquiries are not required – we turn to the language of the Property Trust Clause.”
Calling the trust clause language plain and unambiguous, the appeals court argues that even though Olivet never titled its property to the denomination, the congregation has no right, title or interest in the disputed property.
“Olivet agreed to be a part of the PCUSA when it was formed in 1983,” the decision states. “By so agreeing, Olivet reaped the myriad benefits of being affiliated with a national organization. … When Olivet decided to leave the PCUSA, it did so by following the procedures set forth in the PCUSA Constitution – at least until the presbytery indicated that it might not permit Olivet to retain the Oak Hill property. At that point, Olivet truncated the process, indicated its refusal to abide by the presbytery’s decision, and forced the Appellants to turn to the judicial system to resolve the dispute. Under these circumstances, having applied neutral principles of law and treated these parties and their property dispute as any other corporate entities who appear before us, we can only conclude that the trial court erred by entering summary judgment in Olivet’s favor.”
It is not yet known if Olivet Evangelical Presbyterian Church will appeal the decision.