Court Resolves Lawsuit Addressing Pastor's Financial Mismanagement

Key point 9-07. The First Amendment allows civil courts to resolve internal church disputes so long as they can do so without interpreting doctrine or polity.

* A Louisiana court ruled that the First Amendment guaranty of religious freedom did not prevent it from resolving a lawsuit brought by former board members of a church seeking redress for the pastor's financial mismanagement. A church's governing board (its "board of deacons") passed a resolution calling for the pastor's termination. In response, the pastor called a special meeting of the congregation to elect a new board of deacons. At the meeting, the pastor's slate of proposed deacons was elected and the dissidents were voted off the board. The dissidents filed a lawsuit claiming that the pastor had mismanaged church property and had misused church funds by, among other things, using church funds for his own personal gain. The dissidents also alleged that the pastor had destroyed some of the church's financial records in order to conceal his wrongdoing.

The dissidents asked the court to issue an order (1) barring the pastor from accessing any of the church's financial records; (2) freezing the disposition church property pending a hearing; (3) calling for an accounting of the church's bank accounts from the time that the pastor gained control over the accounts; (4) appointing a trustee to protect and preserve church property; (5) holding the pastor liable for any expenditures of church funds that were not related to church business; (6) ordering the pastor to comply with the subpoena; and (7) requiring the pastor to resign.

The pastor asked the trial court to dismiss the lawsuit on the ground that each of the dissidents' claims implicated internal church governance. The court ruled that the congregation's decision to retain the pastor and oust the board was legally valid, but it agreed with the pastor that any resolution of the dissidents' claims pertaining to church finances would violate the First Amendment. A state appeals court agreed. It concluded:

We are limited in our authority to interfere with the internal matters of a church …. The courts will not assume jurisdiction, in fact has none, to resolve disputes regarding their spiritual or ecclesiastical affairs. However, there is jurisdiction to resolve questions of civil or property rights …. [The dissidents] allege that the pastor mismanaged the financial assets and the property of the church. Their allegations that the pastor had used church funds for personal gain, that he had mismanaged church property, that he had destroyed church records, and that he had refused to comply with a subpoena do not involve any ecclesiastical or spiritual matters …. Neither side seeks to raise [theological] questions. They argue no issues of differences in religious faith or creed, and argue no spiritual conflicts, or ecclesiastical doctrine. Rather, the underlying dispute revolves around the property of the Church—control over its financial assets and affairs—and not God. Because this case does not involve any ecclesiastical or spiritual issues and is instead focused solely on issues involving the financial affairs and property rights of the church, we hold that the trial court had jurisdiction to consider the merits of the contestants' complaint. McClendon v. Pugh, 49 So.3d 1238 (Ala. App. 2010).

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