Key point 7-03.3. Most courts apply the “neutral principles of law” rule in resolving disputes over the ownership and control of property in “hierarchical” churches. Under this rule, the civil courts apply neutral principles of law, involving no inquiry into church doctrine, in resolving church property disputes. Generally, this means applying neutral legal principles to nondoctrinal language in any one or more of the following documents: (1) deeds to church property; (2) a church’s corporate charter; (3) a state law addressing the resolution of church property disputes; (4) church bylaws; or (5) a parent denomination’s bylaws.
The Georgia Supreme Court issued two rulings addressing the control of church property when churches disaffiliate from a parent denomination. The two cases, involving an Episcopal and a Presbyterian church, are summarized below.
Case #1: Rector, Wardens, Vestrymen of Christ Church in Savannah v. Bishop of Episcopal Diocese of Georgia, Inc., 718 S.E.2d 237 (Ga. 2011)
This case involved a dispute over control of property belonging to the oldest church in Georgia, Christ Church in Savannah (“Christ Church”), with a history spanning almost three centuries. As with so many hierarchical church property disputes that end up in court, this case had its genesis in doctrinal positions taken by the general denomination—the Protestant Episcopal Church in the United States of America (“Episcopal Church”)—that were opposed by a majority faction of the local congregation. In March 2006, the leadership of the majority faction voted to sever Christ Church’s 180-year-old ties with the Episcopal Church and the Episcopal Diocese of Georgia (“Georgia Diocese”) without advance notice to the Bishop of the Georgia Diocese. The congregation voted to denounce the Episcopal Church for “abandoning the faith,” and join the Diocese of Soroti in the Anglican Province of Uganda.
The minority faction, which remained loyal to the Episcopal Church, had to find another place to worship. The Georgia Bishop recognized the minority faction as the true Christ Church entitled to control of the church property. The Bishop also recognized the rector, wardens, and vestry elected by the minority faction as the rightful leaders of Christ Church. However, the majority faction refused to surrender the church property, prompting the Georgia Diocese to ask a court to declare that all property of Christ Church is held in trust for the Episcopal Church. The trial court granted summary judgment in favor of the Episcopal Church and Georgia Diocese, and a state appeals court affirmed this ruling. The majority faction appealed to the state supreme court.
Having reviewed the governing documents of the local church and the general church, we concluded … that a trust on Christ Church’s property in favor of the Episcopal Church existed well before the dispute erupted.
The Georgia Supreme Court began its opinion by noting that “secular courts may resolve church property disputes,” and “to avoid First Amendment concerns, Georgia courts apply neutral principles of law to determine whether the local congregation or the parent, or general, church in a hierarchical denomination like the Episcopal Church has the right to control local church property, while avoiding any inquiry into religious doctrine.” These neutral principles include “deeds and other instruments of title, state statutes, and documents regarding local and general church government.”
The court quoted from a 1979 ruling of the United States Supreme Court, which approved the “neutral principles” approach to resolving church property disputes. Jones v. Wolfe, 443 U.S. 595 (1979). The Supreme Court said:
Under the neutral-principles approach, the outcome of a church property dispute is not foreordained. At any time before the dispute erupts, the parties can ensure, if they so desire, that the faction loyal to the hierarchical church will retain the church property. They can modify the deeds or the corporate charter to include a right of reversion or trust in favor of the general church. Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church. The burden involved in taking such steps will be minimal. And the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form.
Two months after this ruling, at the Episcopal Church’s 1979 General Convention, the House of Bishops passed the following amendment to Title I, Canon 6 of the Canons of the Episcopal Church:
All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission on Congregation is located. The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.
The amendment, along with others that were enacted at the same time, became known as the “Dennis Canon.”
Over the next two decades, Christ Church continued to obtain property without making any effort to avoid the general church’s control and otherwise continued to function as a constituent member of the general church, complying with the constitution and canons of the Episcopal Church and the Georgia Diocese. This changed in 2003 when the Episcopal Church General Convention approved the election of a non-celibate gay person, and the recognition that same-sex unions are a part of our “common life.” The dispute deepened in 2004 and 2005, as representatives of Christ Church continued to express concerns to the Georgia Bishop about the theological direction of the general church. In 2007, the board of Christ Church adopted a resolution, later approved by a 172-24 vote of the congregation, which denounced the Episcopal Church and the Georgia Diocese as having abandoned the faith and purported to place Christ Church under the ecclesiastical authority of the Anglican Province of Uganda and the Diocese of Soroti.
The Georgia Supreme Court, based on a neutral principles of law analysis that relied primarily on the Dennis Canon, concluded that the property of Christ Church was held in trust for the benefit of the general church and the Georgia Diocese:
Having reviewed the governing documents of the local church and the general church, we conclude … that a trust on Christ Church’s property in favor of the Episcopal Church existed well before the dispute erupted that resulted in this litigation …. Like the highest courts of other states, we view the Dennis Canon as making explicit that which had always been implicit in the discipline of the Episcopal Church (and the Church of England before it), as shown in the documents setting forth, in legally cognizable and nonreligious terms, the property-related rules and the relative authority of Christ Church, the Georgia Diocese, and the Episcopal Church, as well as the parties’ understanding of them as revealed by their course of conduct. The Dennis Canon adopted in 1979 merely codified in explicit terms a trust relationship that has been implicit in the relationship between local parishes and dioceses since the founding of [Episcopal Church] in 1789 ….
[The majority faction of Christ Church] characterizes this dispute as the Episcopal Church trying to take Christ Church’s property. We disagree with that view of the record and the law. The First Amendment allows [the majority faction] to leave the Episcopal Church and worship as they please, like all other Americans, but it does not allow them to take with them property that has for generations been accumulated and held by a constituent church of the Protestant Episcopal Church in the United States of America. Our conclusion regarding the effect of the governing documents of the local and general church in this case is consistent with U.S. Supreme Court precedent, this Court’s prior cases, and the decisions of several other state supreme courts ….
In the end, it is fair to say, as the trial court did, that Christ Church “can no more shrug off the trust, than the National Church could unilaterally impose it. The trust has historical roots going back to the English church and the founding of the Episcopal church in this country. Christ Church got the benefit of its bargain with the National Church for many years. The National Church has the right to insist on its part of the bargain as well.
Case #2: Presbytery of Greater Atlanta, Inc. v. Timberridge Presbyterian Church, Inc., 719 S.E.2d 446 (Ga. 2011)
A church affiliated with the Presbyterian Church (U.S.A.) in 1983. For the next several years the church functioned as a regular member of the national church. Its pastor from 1978 to 1984 stated that the church “took part in the governance of the denomination by regularly attending meetings of the Atlanta Presbytery” and “experienced benefits of being associated with the [PCUSA] such as participation in the representational governance … and the availability of the denomination’s resources.” Similarly, the church’s pastor from 1984 to 2003 stated that the church “actively participated in the governance of the denomination” and “experienced some of the benefits of being associated with the greater denomination, such as locating an Associate Pastor with the help of the [Presbytery] and taking advantage of a year round camp and conference center.”
By 2007, however, a dispute arose between the church, the Presbytery of Atlanta (the “Presbytery”), and PCUSA as to who controlled the church’s property. In 2007, the church asked a court to declare it the owner of all church property, and to affirm that it did not hold it in trust for the benefit of the PCUSA. The Presbytery filed a counterclaim in which it asserted that the church held the church property in trust for the benefit of the PCUSA and should be enjoined from transferring the property. In November 2007, a majority of the church congregation voted to disaffiliate from the PCUSA. A few months later, the church affiliated with the Evangelical Presbyterian Church, a separate denomination.
A trial court concluded, among other things, that Section G-8.0201 of the PCUSA Book of Order created a trust in favor of the PCUSA as to any property held by the church. A state appeals court reversed the trial court’s decision. It concluded that the Book of Order did not clearly impose a trust on all church properties in favor of the PCUSA. It concluded, “In the absence of some showing of intention and assent on the part of [the church], neutral principles of law cannot support the unilateral imposition of a trust provision drafted by the purported beneficiary of the trust and the resulting deprivation of the opposing party’s property rights.” The Presbytery appealed to the state supreme court.
The Georgia Supreme Court began its opinion by quoting section G-8.0201 of the Book of Order: “All property held by or for a particular church … whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association … is held in trust nevertheless for the use and benefit of the [PCUSA].” Section G-8.0301 provides that if a local church stops using its property as a church of the PCUSA, the property “shall be held, used, applied, transferred, or sold as provided by the presbytery.” Section G-8.0601 similarly provides that, in the event of a schism within the membership of a local church, “the presbytery shall determine if one of the factions is entitled to the property because it is identified by the presbytery as the true church within the Presbyterian Church (U.S.A.). This determination does not depend upon which faction received the majority vote within the particular church at the time of the schism.”
The court noted that the church’s corporate charter specified that the corporation’s purpose was “to be a church institution which is a member of the Presbytery of Atlanta of the [PCUSA] or any successor Presbytery thereof” and that its bylaws cannot conflict with the PCUSA Book of Order “as the same now exists or may hereafter from time to time be amended.”
The court noted that:
To avoid First Amendment concerns in resolving property disputes in hierarchical religious denominations, secular courts apply “neutral principles of law” to determine whether the local church or the parent church has the right to control local property, avoiding any inquiry into religious doctrine. These “neutral principles” include relevant deeds, state statutes, and the governing documents of the local and general churches …. We review all of these materials, keeping in mind that the outcome of these church property disputes usually turns on the specific facts presented in the record, that the neutral principle factors are interrelated, and that our ultimate goal is to determine “the intentions of the parties” at the local and national level regarding beneficial ownership of the property at issue as expressed “before the dispute erupted” in a “legally cognizable form.”
In concluding that the church held its property in trust for the Presbytery and PCUSA, the court observed:
The church joined the PCUSA … in 1983. There is no dispute that at that time the PCUSA’s governing constitution plainly stated that local churches hold their property in trust for the use and benefit of the general church, see Book of Order § G-8.0201 …. Moreover, when the church affiliated with the PCUSA, it agreed that it “was a local expression of the universal church,” Book of Order § G-4.0102, that it would be “governed by this Constitution,” § G-4.0104, that its active members have “voluntarily submitted to the government of this church,” § G-5.0202, and that it would “function under the provisions of this Constitution.” § G-7.0101 …. Thus, contrary to the [appellate court’s] view that the PCUSA “unilaterally imposed” the trust provision without any assent by the local church … the church’s act of affiliating with the PCUSA in 1983 with the trust provision already in its governing constitution demonstrated that it assented to that relinquishment of its property rights …. And the church’s continued membership in the PCUSA, for nearly a quarter of a century in all, with the trust provision always in full effect, further bolsters this conclusion ….
The neutral principles doctrine, as approved by the [United States Supreme Court’s 1979 ruling] in Jones v. Wolf and as applied by this court, allows hierarchical denominations to structure the property relationships between the general and local churches before disputes arise. The result is not pre-ordained; it depends on the deeds, statutes, and national and church governing documents. What has happened over the years since Jones v. Wolf is that many hierarchical denominations have added more explicit property provisions to their general and local church governing documents, as the Supreme Court said would be appropriate. Thus, instead of our finding no mention of property issues in those documents, we find provisions showing either that the general church does not control local church property or, as in this case and others, provisions showing that local church property is held in trust for the general church. Applying the neutral principles with an even hand, we simply enforce the intent of the parties as reflected in their own governing documents; to do anything else would raise serious First Amendment concerns.
In sum, the resolution of this church property dispute in the national church’s favor does not rest on the “mere connectional relationship between a local and general church.” Instead, our decision derives from the specific language of the governing documents adopted by the local and general churches …. Like the trial court, we conclude that neutral principles of law demonstrate that an implied trust in favor of the PCUSA exists on the local church’s property to which the church holds legal title.