Key point 10-16.7. Donors may be able to recover designated contributions to a church if their contributions were not applied to the designated purpose, so long as doing so would not implicate religious doctrine.
A Michigan appeals court ruled that the civil courts are not barred by the First Amendment's religion clauses from resolving a donor's claim that the church failed to apply his designated contribution to his designated purpose, so long as religious doctrine was not implicated. The chairman of a church's board of trustees (the "plaintiff") donated more than $41,000 into a restricted fund whose purpose "was to raise money to expand the church and build a fellowship hall." Several years later, the plaintiff sued the church, claiming that the donated funds had not been used to build a fellowship hall, that the funds were used for other purposes without plaintiff's permission, and that the plaintiff unsuccessfully asked for a return of the money numerous times.
The lawsuit claimed that the plaintiff was entitled to a refund of his donation on the basis of several grounds, including conversion, breach of contract, and fraud and misrepresentation.
A trial court dismissed the lawsuit, and the plaintiff appealed. A state appeals court began its opinion by noting:
It is well settled that courts, both federal and state, are severely circumscribed by the First and Fourteenth Amendments to the United States Constitution and … the Michigan Constitution in resolution of disputes between a church and its members… . Jurisdiction over disputes between churches and their members is limited to property rights which can be resolved by application of civil law. A court loses jurisdiction over disputes when resolution requires the court to entertain "questions of religious doctrine or ecclesiastical polity."