Jump directly to the content

Recent DevelopmentsRecent Developments

Issues that affect ministers and churches
Mosque Members’ Lawsuit Concerning Financial Improprieties Must Be Resolved By Binding Arbitration Due to Mosque Bylaws’ Arbitration Clause
New Jersey
Key point 10-16.8. Churches have various defenses available to them if they are sued as a result of a personal injury. One such defense is an arbitration policy. By adopting an arbitration policy, a church can compel members to arbitrate specified disputes with their church rather than pursue their claim in the civil courts.

A New Jersey court ruled that a lawsuit that members of a mosque brought against other members as a result of alleged financial improprieties had to be resolved by binding arbitration as a result of an arbitration clause in the mosque's bylaws. In 1989, a mosque was incorporated under the New Jersey Nonprofit Corporation Act. The mosque is a nonprofit charitable, religious, and educational organization. Its certificate of incorporation asserts its purpose is, among other things, to serve members of the Islamic faith by providing a house of worship, and its bylaws provide the different types of membership one may have in the mosque. One type is to be a member of the general assembly. The general assembly is composed of all "active members," defined as those who attend prayers regularly, participate "actively" in mosque "activities," abide by the bylaws, pay dues, and practice Islam daily. The general assembly is the highest authority in the mosque, although the Board of Trustees (board), which represents the general assembly, is the highest policy-making authority.

Several members of the mosque's general assembly sued the mosque and other members (the "defendants") alleging mishandling of mosque funds. Specifically, the lawsuit alleged that one defendant used the mosque's credit cards to pay for some of his personal expenses and the legal expenses of the mosque's imam. The plaintiffs also claim that the mosque retained a member as an insured on its health insurance plan after he ceased working for the mosque, and arranged to have the mosque pay for his children's school tuition.

Article Preview

This article is currently available to ChurchLawAndTax.com subscribers only. To continue reading:

Related Topics:
From Issue:
View All
from our store
Avoiding Church Lawsuits

Avoiding Church Lawsuits

Create proactive procedures to avoid common reasons why churches most often go to court.
Internal Controls for Church Finances

Internal Controls for Church Finances

Learn how to protect your church's money.
Essential Guide to Money for Church Boards

Essential Guide to Money for Church Boards

Church board members should have a basic understanding of these financial issues.

Receive a customized salary report for up to 18 different ministry positions. Learn how your church should compensate based on size, budget, location, and employee work experience.