Texas Supreme Court rules in favor of neutral principles

On Friday, the Texas Supreme Court released two rulings on Episcopal Church property cases declaring that Texas courts must follow neutral principles of law when deciding church property cases.

Decisions were handed down in the cases of Robert Masterson, et al. v. Diocese of Northwest Texas, et al.and Episcopal Diocese of Fort Worth, et al. v. Episcopal Church, et al.

 

Masterson case

In the Masterson case, the opinion read, “We join the majority of states that have considered the matter. We hold that Texas courts should use the neutral principles methodology to determine property interests when religious organizations are involved. Further, to reduce confusion and increase predictability in this area of the law where the issues are difficult to begin with, Texas courts must use only the neutral principles construct.”

The opinions stated that the courts have no jurisdiction on ecclesiastical matters or those of inherently religious nature, so “as to those questions they must defer to decisions of appropriate ecclesiastical decision makers. But Texas courts are bound to exercise jurisdiction vested in them by the Texas Constitution and cannot delegate their judicial prerogative where jurisdiction exists. Properly exercising jurisdiction requires courts to apply neutral principles of law to non-ecclesiastical issues involving religious entities in the same manner as they apply those principles to other entities and issues. Thus, courts are to apply neutral principles of law to issues such as land titles, trusts, and corporate formation, governance, and dissolution, even when religious entities are involved.”

The case involved the Church of the Good Shepherd in San Angelo, Texas. The parish voted 53-30 on Nov. 12, 2006, to:

1. amend its corporate bylaws to remove all references to the Episcopal Church (TEC);
2. withdraw the congregation’s membership in TEC;
3. revoke any trusts that may have been imposed on its property by TEC; and
4. form a new church named Anglican Church of the Good Shepherd and change the name of the corporation to that name.

Following the vote, the Rev. Wallis Ohl, bishop of the Diocese of Northwest Texas, met with those loyal to the TEC, appointed the Rev. Celia Ellery as the priest in charge of the parish and recognized that group as the “continuing Episcopal Parish operating Good Shepherd.”

Since the Anglican parish was using the property, two church members who remained loyal to the Episcopal Church, Ellery and the Diocese of Northwest Texas, filed a civil court case against the Anglican church, stating among other things that “all the parish property was held in trust for TEC and the diocese and the Episcopal Leaders were entitled to possess and control it.”

The trial court and the court of appeals ruled in favor of the Episcopal Church, but the Supreme Court reversed the judgment of the appeals court and remanded the case back to the trial court for “further proceedings consistent with this opinion.”

According to the Supreme Court, “Ohl could, as an ecclesiastical matter, determine which faction of believers was recognized by and was the ‘true’ church loyal to the diocese and TEC. Courts must defer to such ecclesiastical decisions. But under neutral principles, any decisions he made about the secular legal questions of whether the vote by the parish members to amend the bylaws and articles of incorporation was valid under Texas law and whether the bylaws and articles of incorporation were validly amended, are not entitled to deference. Nor does his decision identifying the loyal faction as the continuing Episcopal parish operating Good Shepherd church determine the property ownership issue under this record, as it might under the deference or identity methodology.”

Scott Mayer, bishop of the Episcopal Diocese of North West Texas, commented on the ruling, saying, “We are disappointed that the court did not uphold the original summary judgment ruling, but we’re also evaluating our options to determine what our next steps will be. For now, nothing has changed as far as the Episcopal Church of the Good Shepherd is concerned. Good Shepherd will continue to be church together with our Lutheran friends and continue in our common mission of spreading the Good News of Jesus Christ to the world.”

The Presbyterian Lay Committee filed an amicus curiae brief in the Masterson case, on behalf of the congregation.

Fort Worth case

Again, in the Fort Worth case, the Supreme Court reversed the judgment of the trial court and remanded the case to that court for “further proceedings consistent with this opinion.”

The Episcopal Diocese of Fort Worth was formed in 1982 after the Episcopal Diocese of Dallas voted to divide. Following doctrinal controversies with the denomination, the Fort Worth Diocese voted in 2006 to amend its articles of incorporation to remove all references to the Episcopal Church.

Conventions of the diocese in 2007 and 2008 voted to withdraw from the Episcopal Church and become a member of the Anglican Province of the Southern Cone.

The Episcopal Church, along with those who remained loyal to TEC, filed a lawsuit against the new diocese, “seeking title to and possession of the property held in the name of the diocese and the Fort Worth corporation.”

The trial court decided that deference principles should apply, applied them and granted summary judgment to the TEC. The diocese then appealed directly to the Supreme Court.

“Based on our decision in Masterson, we hold that the trial court erred by granting summary judgment to TEC on the basis of deference principles,” the opinion read.

The court’s opinion continued that “Under the neutral principles methodology, ownership of disputed property is to be determined by considering evidence such as deeds to the properties, terms of the local church charter (including articles of incorporation and bylaws, if any), and relevant provisions of governing documents of the general church.”

Since the deeds to the properties were not part of the summary judgment record when the trial court ruled, the Supreme Court agreed with the TEC argument that “if we do not sustain the summary judgment in its favor, we should remand the case so the trial court may consider the record on the basis of neutral principles and the four factors referenced in Jones: (1) governing documents of the general church, (2) governing documents of the local church entities, (3) deeds, and (4) state statutes governing church property.”

The opinion stated that “Upon remand the parties will have the opportunity to develop the record as necessary and present these arguments for the trial court to consider in determining the rights of the parties according to neutral principles of law. But regarding the trial court’s consideration of the issue, we note that in Masterson we addressed the Dennis Canon and Texas law. There we said that even assuming a trust was created as to parish property by the Dennis Canon and the bylaws and actions of a parish nonprofit corporation holding title to the property, the Dennis Canon “simply does not contain language making the trust expressly irrevocable…Even if the Canon could be read to imply the trust was irrevocable, that is not good enough under Texas law.”

The Rev. Jack Leo Iker, bishop of a group that left the national Episcopal church, told the Star Telegram that his members were glad to learn of the ruling. “In sum, while today’s opinions are not a final victory, they indicate that a final victory is only a matter of time,” Iker said in the statement.

The Rt. Rev. Rayford B. High, Jr., bishop of Fort Worth, released a letter in response to the ruling, saying in part “Presiding Bishop Katharine Jefferts Schori joins me in acknowledging our disappointment and urging all of us to be gentle with one another during this trying time, with the important goal of continuing our worship of God and our ministries in this community in as uninterrupted a manner as possible. Now I, other diocesan leaders, and our legal team, including representatives of the Church and its legal team, have to make decisions about our next steps. … remain convinced that we are right in our affirmation that we are the continuing Diocese of Fort Worth and that I am its bishop.”