Property dispute continues
Olivet, Ohio Valley Presbytery
argue before Indiana Supreme Court
By Jason P. Reagan, The Layman, September 7, 2011
A presbytery and one of its former member churches volleyed some pointed questions by the Indiana Supreme Court as both sides pleaded their case on Thursday in a protracted property dispute.
Olivet Evangelical Presbyterian Church of Evansville, Ind. and the Presbytery of Ohio Valley presented oral arguments to the court on Sept. 1 in an exchange that was broadcast live on the court’s website.
At issue is an 11-acre tract valued at $2.45 million.
Olivet appealed the case to the Indiana’s highest court after the state appellate court ruled in favor of Ohio Valley in 2010, claiming Olivet agreed to be governed by the Presbyterian Church (USA)’s controversial property trust clause even after the church left the denomination in 2006.
Although most Supreme Court appeals are decided upon using written briefs, the court sometimes listens to oral arguments by both sides so that justices may ask questions. In Indiana, oral arguments may be viewed live via webcast.
For the Ohio Valley
Representing the Presbytery of Ohio Valley, attorney Judy L. Woods attempted to defend the appellate court’s decision to grant the presbytery’s trust claim on the property.
“The law regarding religious freedom, the law regarding the means and basis for deciding a church property dispute, is well settled,” she said. “Churches in all their forms of polity and government — they form their own rules … for deciding disputes,” she added. “Courts may not interpret these or interfere with their administration if it involves delving into ecclesiastical or doctrinal matters.”
“That is not so,” Justice Brent E. Dickson pointed out, citing a 1979 U.S. Supreme Court decision in Jones v. Wolf in which the court stated that “courts may use neutral principles of law to adjudicate these property rights and they don’t have to look at the hierarchical documents.”
Woods admitted the court does not have to use the hierarchical deference standard under which courts defer to the decisions or precedents of a denomination’s highest governing body. However, Woods said that states may use it and that Indiana has in the past.
Indiana courts have also applied, however, the neutral principles standard under which courts evaluate property disputes using secular legal documents such as deeds and trust documents that have been executed according to state law without regard for denominational policies.
“States may use a number of approaches to decide church property disputes,” Woods said, admitting that neutral principles had become a preferred method.
Justice Robert R. Rucker told Wells: “The problem I’m having with this is that, in our property law arena, there are ways you establish who owns what property and there are ways in which you establish trust – that’s a matter of state trust law.”
“It doesn’t appear to me that the court of appeals applied those rules in this case and that’s bothersome,” he added, asking Woods if principles of trust law had been abandoned.
Woods countered that the court appeals looked at the “bylaws and other documents under neutral principles applicable to standard corporate documents.”
Woods claimed that the documents and bylaws established under PCUSA polity should be reviewed in the sense of a state-sanctioned legal document.
“[The appellate decision] did not get into whether these particular documents formed a trust,” she said.
“That’s my problem right there,” Dickson said. “Jones instructs us that the neutral principles approach relies exclusively on objective, well-established concepts of trust and property law familiar to lawyers and judges,” he said, adding, “You’re saying the court of appeals didn’t look to those familiar principles of trust and property law.”
Woods disagreed and said the court looked at trust law as it applied to Olivet’s bylaws.
“Where did Olivet ever expressly create a trust on its own property?” Dickson said.
“A trust does not require any specific language,” Woods said, adding that she believed trusts can be inferred based on the intent and conduct of Olivet.
“When Olivet joined the PCUSA in 1983, it was bound by the denomination’s trust clause even though the church’s name is on the deed,” she said.
For Olivet
Brian Williams, representing Olivet, said the church purchased the property with their own funds in 1968 and that there is no trust provision on the property deed.
“Clearly, Olivet’s [land purchase] predates the formation of the PCUSA,” Williams said, adding that the law is well settled under neutral principles.
“The only authority or jurisdiction the PCUSA had with Olivet was ecclesiastical,” Williams argued, adding “that authority was gone upon disaffiliation in 2006.”
Chief Justice Randall Shepard asked “What does it mean to say there’s a clause that says that when [Olivet] ceases to be used as a church of the PCUSA that property will be held, used and applied in accordance with the presbytery’s decision?, referring to the disputed Book of Order provision.
“They put that provision in there looking for, hoping, that the congregational churches will somehow consent to that,” Williams said, adding that the Book of Order dealt with ecclesiastical rules and had no authority to override secular, civil law.
“What can, within the structure of the church, a local body do if it disagrees with a specific provision of the constitution of the higher body?” Rucker asked.
Williams answered that Olivet never agreed to extend a trust agreement in the first place.
“The Book of Order allows individual churches to have their own authority,” he said.
Friend of the court
Attorney Forrest A. Norman III, representing the Presbyterian Lay Committee (PLC), spoke in support of Olivet following Williams’ presentation. The PLC filed an amicus (friend of the court) brief in January in support of the church’s appeal. Norman is the chairman of the PLC’s board of directors.
Norman bolstered Williams’ argument that ecclesiastical rules cannot be used to circumvent civil law.
“Were the PCUSA to pass a regulation that said ‘There shall be no fire-suppression equipment in our building,’ that could not override the civil law requirements of those building codes,” Norman said.
Justice Frank Sullivan Jr. asked if the Catholic Church’s ritual of allowing children to take sacramental wine at Mass could be overridden by secular drinking laws.
Norman countered that civil law has recognized that right only in the specific instance of Mass.
In terms of applying neutral principles, Norman said the key question must be “Who owns the property?”
“The title holder,” he answered. “Who is that? In this case, it’s Olivet, the local congregation. They held it beforehand and they have held it ever since.”
No express trust had ever been given to the presbytery, Norman argued, adding that the disputed trust clause in the Book of Order “fails to satisfy the civil law recognition of trust e
stablishment.”
Norman laid out the reasons the PCUSA constitution fails by stating:
· There is no consideration given for the alleged trust’s imposition.
· The clause violates state statutes in that it is not a signed document by property- law standards.
· It was unilaterally asserted by an outside entity.
· Property was never actually transferred into a trust.
· There was no opportunity to opt out.
Rucker asked Norman if the PCUSA was in fact a hierarchical body.
“It’s a presbyterial body, which is a blending of the two,” he said.
Presbytery rebuttal
During rebuttal, Woods reiterated her earlier argument that trusts can be created under Indiana law without specific documents expressly stating such, claiming that Olivet created a trust simply by belonging to the PCUSA from 1983 to 2006.
“In 1983, it said it wanted to adopt the new Book of Order, including the property trust clause. In 1994, it incorporated … and said it was subject to the entire [PCUSA] constitution,” Woods said.
“If the [PCUSA] General Assembly were to amend the Book of Order and say ‘Divorces in this congregation will be governed by sharia law,’ would the members of all the member churches getting divorced have to follow those property divisions and divide their property according to that or not?” Dickson asked.
Sharia is a form of religious law in Islam that can be binding as authoritative civil law in some countries. Under some forms of sharia, men may unilaterally divorce their wives simply by telling them, without regards to her wishes.
Woods admitted that such a law could only be governed by ecclesiastical rules and would have no standing under secular authority.
“Churches do have to adhere to civil law,” she said.
“You just don’t have to abide by property law, huh?” Dickson asked.
“We would have to,” Woods said, maintaining that the PCUSA nevertheless possessed a trust under secular law.
Sources close to the case say a decision by the Indiana Supreme Court could take as long as two-three months.
The oral arguments can be accessed in the court’s archives. To listen to the audio file, users must have Windows Media Player installed (click here to download).