Georgia Supremes reverse Timberridge victory
By Parker T. Williamson, The Layman, November 30, 2011
In a sharply divided 4-3 opinion, the Georgia Supreme Court has reversed an appellate court ruling that declared the Presbyterian Church (USA)’s property trust clause null and void with respect to property owned by the Timberridge Presbyterian Church.
The Georgia Court of Appeals had based its judgment favoring Timberridge on “neutral principles of law.” On that basis, it found no evidence that property owner Timberridge had ever agreed to place its property in trust for the denomination. The appellate court said: “In the absence of some showing of intention and assent on the part of Timberridge, neutral principles of law cannot support the unilateral imposition of a trust provision drafted by the purported beneficiary of the trust and the resulting deprivation of the opposing party’s property rights.”
Reading between the lines
The Georgia Supreme Court’s majority agreed with the appellate court’s finding that Timberridge’s deeds and other documents do not contain trust language. “It is true,” said the high court, “that neither the 1970-1987 deeds nor the 1999 deeds show an intent by the grantors to create a trust. But they also do not expressly preclude the creation of one.”
The majority’s reasoning on this point was vigorously challenged in a dissent by Justice Deborah Benefield who said that any purported trust, “was either created or it was not, and a review of the deed would quickly demonstrate which was true.” Answering the majority’s view that a trust could be assumed simply by the deed’s absence of language denying a trust, Benefield said, “It would seem just as easily to follow that Timberridge had no intention of creating a trust since they did not provide one in the deeds as they easily could have. What would be the purpose of including language ‘this instrument does not create a trust’ in a deed?”
Hailing the hierarchy
The controlling argument for the Supreme Court’s majority appeared to be its assumption that Timberridge was a part of a “hierarchical denomination” whose constitution includes a “trust clause.” The court then concluded that mere membership in such a denomination implies that a local church has consented to placing his property in trust, even if the local church never explicitly expressed such consent.
The majority opinion said “… Timberridge’s act of affiliating with the PCUSA in 1983 with the trust provision already in its governing constitution demonstrated that Timberridge assented to that relinquishment of its property rights – rights it then chose not to reassert by leaving the new national church during the next eight years.”
A ‘contrived’ opinion
The majority opinion received a sharply worded dissent from Presiding Justice Carley and Chief Justice Hunstein who wrote that the majority’s opinion was “contrived” and that it “virtually ignores a necessary element of trusts.” The dissent continued, “That element is the intent of the settler, which must be ascertained with reasonable certainty for an express trust to exist.”
Carley and Hunstein cited Jones v. Wolf, the U.S. Supreme Court’s neutral principles of law requirement. That requirement specifies that both parties (not merely one party) “have the requisite intent to create a trust.” Carley and Hunstein said the Georgia Supreme Court’s majority “seriously errs by failing to apply that requirement in its examination of the relevant documents.”
‘A remarkably slender reed’
The dissenting justices took umbrage at the majority’s view that by adopting its Articles of Incorporation as a congregation associated with the PCUSA, Timberridge had relinquished its property rights. “The Articles of Incorporation for Timberridge Presbyterian Church, Inc. (TPC Inc.) are a remarkably slender reed on which to hang the weight of the majority opinion,” Carley and Hunstein said. “Nothing in the Articles of Incorporation states or implies any intent or consent that Timberridge’s property be held in trust for the general church.”
In addition to the fact that Timberridge’s deeds contain no trust language, the Court of Appeals cited Georgia statutes that specify requirements for the establishment of a trust, e.g., “An express trust shall be created or declared in writing and signed by the settlor.” The Court of Appeals found that the PCUSA’s purported trust failed to comply with those requirements, and the Supreme Court majority agreed that this was so. But the Supremes went on to opine that to require a denomination to meet the statute’s requirements – namely, giving each property owning local church an opportunity to consent to or dissent from placing their property in trust – would be excessively and unnecessarily burdensome to the denomination. In effect, this opinion granted hierarchical denominations an exemption from Georgia property law.
A ‘self serving document’
Benefield, whose dissent called for a jury rather than a panel of judges to decide such cases, summarized her opposition to the majority opinion by asking, “In what non-church property case is the grantor’s intent found solely in a self serving document created by the grantee determined to be a ‘legally cognizable form’?”
“By implementing the neutral principles of law in this way,” continued Benefield, “we have not earnestly looked for the intent of both parties. And if we have not, then we have failed not only the pew sitters in the particular churches, but also the overriding directive of Jones v. Wolf to resolve church property disputes by ascertaining ‘the intention of the parties’ … regarding beneficial ownership of the property at issue as expressed … in a ‘legally cognizable form.’”