Calif. Supreme court sends church
property case back to lower court
By Jason P. Reagan, The Layman, May 17, 2011
An Episcopal church in California, beleaguered by a denominational property dispute, will have its day in court thanks to a recent state Supreme Court ruling.
On May 5, the California Supreme Court ruled that St. James Anglican Church of Newport Beach will get the opportunity to present evidence in a new trial before the Orange County Superior court – yet another chapter in a six-year battle with the Episcopal Diocese of Los Angeles in which the denomination claims ownership of St. James’ property after the congregation left the diocese in 2004.
Although the state Supreme Court ruled in favor of the diocese in 2009, the recent decision will allow the congregation to support their claim that St. James’ beachfront property belongs to the church. According to the Orange County Treasurer’s office, the property in question is valued at $4.2 million.
Because the case bounced back and forth among the superior, appeals and Supreme courts between 2004 and 2010, St. James never received an opportunity to present evidence to vindicate their claim, according to Karen Bro, communications director for St. James.
“The court confirmed that its 2009 … decision did not end the property dispute in the Episcopal Church’s favor as it had claimed,” she said in a released statement.
St. James’ lead attorney Eric Sohlgren said the court made it clear that its previous decision in favor of the diocese did not mean the congregation must move off the property and with the new ruling could now mount an evidence-based claim.
“St. James has been vindicated,” he said.
In the 6-1 ruling, the court stated, “Further proceedings are still necessary to finally decide the dispute” – the first step in those future proceedings will see the case head back to where it all started at the local level.
Back to the future
Following the 2003 ordination of the Episcopal Church’s first openly gay bishop, the congregation, along with two local Episcopal churches and several more nationwide, split from the denomination, citing, according to Bro, issues related to “authority of Holy Scripture and the lordship of Jesus Christ,” including Biblical mandates governing the ordination of ministers and bishops.
The Diocese of Los Angeles responded in September 2004 by suing the three churches as well as the congregations’ board members, who serve on a voluntary basis. Later, the national denomination joined the lawsuit.
The Orange County Superior Court struck down the diocese’s complaint in 2005 against all three churches but since the ruling came before a trial actually took place, St. James never defended the claims.
Following an appeal by the diocese in 2007, the California Court of Appeals reversed the trial court’s decision and sent the case back to Orange County, citing a legal standard in church-property cases — hierarchical-deference – in allowing the Episcopal Church to claim property ownership under denominational laws rather than under civil property contract law.
“By disregarding almost 30 years of California law where local church property rights and donations of local church members are respected, [the ruling] adopted a throwback theory where local church property could be confiscated by a large institutional church simply by passing a rule,” Sohlgren said at the time of the decision.
The California Supreme Court heard the appeal in 2009 and proclaimed that such cases must be decided based on neutral-principles of law — legal, civil documents that have been executed according to state property law rather than ecclesiastical rules. However, the court ruled that the Episcopal Church’s claim that it holds a legal trust over the property was valid under law.
“The court made its ruling despite the fact that St. James purchased and maintained its property with its own funds and has held clear record title to its property for over 50 years,” Bro said.
“St. James believes that this ruling overlooked decades of trust law in California that only allows the owner of property to create a trust in favor of someone else, and will as a result have wide impact for local church property owners throughout California that seek to change their religious affiliation,” she added.
Since St. James had never been allowed to present a defense in the original lawsuit, the Supreme Court had no evidence from the church to consider, including a letter from the Bishop of Los Angeles, the Rev. Frederick H. Borsch, which gave the church permission to own the property and stated it was “not held in trust for the Diocese of Los Angeles.”
In 2009, the Supreme Court, at the church’s request, confirmed the suit had not been definitively resolved since no decisions on its merits were ever made.
The case returned to Orange County Superior Court where the court dismissed two dismissal motions by the diocese. Later that year, the U.S. Supreme Court denied a request by St. James to hear the case.
The church was dealt a heavy legal blow in 2010 when the state Court of Appeals ruled that the diocese’s allegations were sufficient to grant property rights without allowing St. James the chance to offer a defense to the original suit. The congregation appealed to the Supreme Court, leading to the most recent decision. The church now plans to make a motion to dismiss the church’s volunteer board members from the lawsuit in addition to defending their property claim.
St. James church leadership is optimistic that the congregation will prevail since it will be allowed to present evidence at trial court.
“I’m thankful and grateful for this opinion,” St. James senior pastor Richard Crocker said in a statement.
“We are looking forward to having our day in court.”