Church Property

Legal Developments

Defamation: Statements of Opinion

Statements of opinion are generally not considered defamatory.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Defamation: Statements of Opinion

Statements of opinion are generally not considered defamatory.

Richard R. Hammar, J.D., LL.M., CPA

Key Point 4-02. Defamation consists of (1) oral or written statements about another person; (2) that are false; (3) that are “published” (that is, communicated to other persons); and (4) that injure the other person’s reputation.

Key Point 7-17. Churches do not have to tolerate persons who disrupt religious services. Church leaders can ask a court to issue an order barring the disruptive person from the church’s premises. If the person violates the order, he or she may be removed from church premises by the police, and may be found to be in contempt of court.

A Tennessee court ruled that a statement made by a church member to police officers to the effect that another church member intended to kill someone was not defamatory since it was a statement of opinion rather than fact. A male church member (the “plaintiff”) claimed that a female pastor at his church made unfounded accusations of sexual harassment against him. The plaintiff filed a complaint with the church’s Staff-Parish Relations Committee against the pastor. He also wrote a poem, entitled “Assumptions,” which he sent via e-mail to the pastor. The poem tells a story in sixteen rhymed couplets of the arrival of “an attractive young lady” at the heavenly gates. She asks St. Peter if she can enter, and he offers her a hug “with arms opened wide.” She rejects the hug, and St. Peter rebukes her for her distrust and prejudice. He then pulls a chain, opening a door beneath the woman’s feet, with the result that “the devil embraced this woman on the other side.”

Shortly after composing this poem, the plaintiff arrived at church an hour before a scheduled worship service, and attached a copy of his poem to a bulletin board. A prefatory note attached to the poem stated that it was “One Christian’s Response to Allegations of Sexual Harassment.” A member of the Staff-Parish Relations Committee (Susan) was nearby, and as soon as the plaintiff left the hallway where the bulletin board was located, she removed the poem.

When the plaintiff returned to the hallway, an argument broke out between him and two other church members. Susan overheard the confrontation, and called the police. A police officer arrived promptly, and Susan allegedly blurted out, in the presence of her husband and the two other church members, that “he wrote a poem that threatened the life of one of our members.” The police officer escorted the plaintiff from the church premises, and the church trustees later told him not to return.

The plaintiff sued Susan for defamation, claiming that her statement spread through the congregation “like a wildfire,” that it caused him great mental anguish and emotional suffering, and that it was defamatory. He asked the court to award him $100,000 in compensatory damages, $50,000 for emotional pain and suffering, and $150,000 in punitive damages. A trial court dismissed the lawsuit and issued an injunction barring the plaintiff from entering church property or having contact with any church member. The plaintiff appealed.

A state appeals court noted that defamation consists of a false statement about another person that is publicized and injures the victim’s reputation. The court concluded that Susan’s statement to the police officer was not defamatory since it was a statement of opinion:

We consider [Susan’s] statement that [the plaintiff’s] poem amounts to a threat on someone’s life to be a matter of opinion, which should not be confused with a statement of fact. This distinction is important because a statement of opinion does not usually constitute actionable defamation, while a false statement of fact may do so …. It appears to us that she was not accusing [him] of committing a crime, but was merely giving excited expression to her opinion of the underlying meaning of his poem.

The court stressed that there was no “wholesale defamation exemption” for all statements of opinion, and that a statement of opinion can be defamatory if it “implies the allegation of undisclosed defamatory facts as the basis for the opinion.” But, “where there is no false representation of fact, one may not recover in actions for defamation merely upon the expression of an opinion which is based upon disclosed, non-defamatory facts, no matter how derogatory it may be.”

The court concluded: “[Susan] has been accused of saying that the plaintiff ‘wrote a poem that threatened the life of one of our members.’ We do not believe that such a statement is equivalent to saying that he threatened someone’s life, which under the circumstances might have amounted to an allegation of fact. Nor does it carry an implication that he threatened anyone at any other time or in any other manner than by writing a poem. The alleged statement is clearly opinion only, and we therefore agree with the trial court that it is not defamatory.”

The court agreed with the plaintiff, however, that the trial court’s injunction was too broad: “If strictly followed it would prevent him from associating with any church members for any purpose whatsoever, even if the other person agreed to or welcomed that contact.” The court limited the injunction to a ban on the plaintiff’s presence on church property. Kersey v. Wilson, 2006 WL 3952899 (Tenn. App. 2007).

This Recent Development first appeared in Church Law & Tax Report, July/August 2008.

Legal Developments

Church Disaffiliation Property Dispute

Court rules that national church holds title to local church’s property.

Richard R. Hammar, Attorney, CPA
Bio

Key Point 7-03.2 Some courts apply the "compulsory deference" rule in resolving disputes over the ownership and control of property in "hierarchical" churches. Under this rule, the civil courts defer to the determinations of denominational agencies in resolving such disputes.

A California appeals court ruled that a national church held title to the property of a local church that had voted to disaffiliate.

A local Episcopal church voted to disaffiliate from the national church in 2004 and take the local church property with it. The church amended its articles of incorporation to delete all references to the national church. A majority of the congregation voted to support the decision, but a minority of 12 members voted against it. The national church, along with other plaintiffs, filed a lawsuit in which they asked a court to rule that the local church property was held in trust for the local diocese.

A state appeals court, in one of the most lengthy discussions of church property disputes, ruled that the local church property was held in trust for the diocese. It based this conclusion on the following considerations:

1. Six rulings by the California Supreme Court, spanning the years from 1889 to 1952, "consistently used a 'highest church judicatory' approach to resolve disputes over church property, an approach it applied to hierarchically organized churches and nonhierarchically organized churches alike." Under this approach, the civil courts must follow the rulings of the highest church tribunal as to the use and ownership of the property. The court quoted from a landmark 1871 decision by the United States Supreme Court: "Whenever the questions of discipline, or of faith, or ecclesiastical rule, custom or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them, in their application to the case before them." Watson v. Jones, 80 U.S. 679 (1871). This approach, which is sometimes referred to as the "compulsory deference" or "hierarchical" rule, has been adopted in a few other states.

2. In 1969, the United States Supreme Court ruled that church property disputes also may be resolved on the basis of "neutral principles of law." Presbyterian Church in the United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U.S. 440 (1969). The Court observed:

It is obvious, however, that not every civil court decision as to property claimed by a religious organization jeopardizes values protected by the First Amendment. Civil courts do not inhibit free exercise of religion merely by opening their doors to disputes involving church property. And there are neutral principles of law, developed for use in all property disputes, which can be applied without "establishing" churches to which property is awarded. But First Amendment values are plainly jeopardized when church property litigation is made to turn on the resolution by civil courts of controversies over religious doctrine and practice.

In 1970, the Supreme Court defined "neutral principles of law" to include nondoctrinal provisions in (1) state statutes governing the holding of property by religious corporations; (2) language in the deed conveying property to the local church; (3) language in the charter of the local church; and (4) provisions in the constitution of a parent denomination relating to the ownership and control of church property.

The California court noted that several California appeals court rulings, since 1970, had resolved church property disputes on the basis of neutral principles of law, without an adequate explanation of how such rulings were possible in light of the previous decisions by the state supreme court. The court stressed that the United States Supreme Court's rulings in 1969 and 1970 did not mandate use of the neutral principles of law approach, and therefore the previous state supreme court rulings required that the compulsory deference rule be applied and that the rulings of national church bodies be recognized and enforced by the civil courts.

3. In 1982, the California legislature enacted section 9142 to the Corporations Code. This section specifies that "no assets of a religious corporation are or shall be deemed to be impressed with any trust, express or implied, statutory or at common law unless one of the following applies … (2) the articles or bylaws of the corporation, or the governing instruments of a superior religious body or general church of which the corporation is a member, so expressly provide …. "The court concluded that this language permitted national churches to adopt a provision in their governing instrument imposing a trust on all local church property in favor of the national church. And this is exactly what the national Episcopal Church did in 1979 when it enacted Canon I.7(4). This Canon provides:

All real and personal property held by or for the benefit of any parish, mission or congregation is held in trust for [the national church] and the Diocese thereof in which such parish, mission or 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 [national church] and its constitution and canons.

The court concluded: "What is abundantly clear … is that in a hierarchically organized church, the 'general church' can impress a trust on a local religious corporation of which the local corporation is a 'member' if the governing instruments of that superior religious body so provide. In the case before us, the enactment by the national Episcopal Church in 1979 of Canon I.7(4) readily qualifies as a governing instrument expressly providing for a trust on property held by local church corporations."

4. The court concluded its opinion with the following observation: "To be plain: Under [prior] California Supreme Court cases … the right of the general church in this case to enforce a trust on the local parish property is clear, and that right has not been affected by intervening United States Supreme Court decisions or any statute enacted by the legislature. To the degree that [the state statute] alters the common law rule enunciated by these cases, that alteration duplicates the result required under the common law given the facts of this case."

What this means for churches

On September 12, 2007, the California Supreme Court agreed to review the appeals court's decision, and ruled that its acceptance of the appeal "superseded" the appeals court's ruling. The decision of the California Supreme Court will be reviewed in a future edition of this newsletter. In re Episcopal Church Cases, 61 Cal.Rptr.3d 845 (Cal. App. 2007).

Legal Developments

Church Property and Denominational Ownership

A California court ruled that a provision in a church’s deed that required church property to revert to a denominational agency was legally enforceable by the civil courts.

Richard R. Hammar, Attorney, CPA
Bio

Key point 7-04. Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws .

A California court ruled that a provision in a church's deed that required church property to revert to a denominational agency in the event that the agency determined that the church no longer was in fellowship with it, was legally enforceable by the civil courts.

For many years, a church was affiliated with the Church of God denomination, and one of its regional associations ("regional church"). The church acquired property by a deed containing the following provision: "To have and to hold, so long as [the church] maintains fellowship and doctrinal unity with [the regional church] and the property remains in use by said church. If this property falls into disuse or, if in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity with the [denomination] this property shall go to, vest in and become the property, in fee simple, of the [regional church]."

In 2004, the regional church revoked the ordination of the church's senior pastor. The regional church's administrative board adopted a resolution stating that: (1) the pastor's credentials had been revoked; (2) the church's board of trustees had voted to retain him as pastor, despite his removal from the approved list of ministers; and (3) therefore, the church no longer was in fellowship and doctrinal unity with the denomination. As a result, the regional church filed a lawsuit in which it asked a court to rule that it was the lawful owner of the church's property by reason of the above-quoted clause in the church's deed.

The church claimed that the deed restriction was "no longer in accord with the policies or best interests" of the church since its board of directors have "ratified the use of the property for the general purposes of the corporation as an independent church rather than for the specific purpose for which it was [acquired]."

The regional church presented evidence that the church intended to include the reverter clause in the deed. It introduced an affidavit signed by the previous pastor, who was employed by the church for 27 years. The former pastor's affidavit established the church's lengthy affiliation with the regional church and the history of its governing documents.

He testified that the church's board of trustees intended to protect its property from unscrupulous church leaders and groups within the church by preventing them from taking control of the church's property. Indeed, he testified the purpose of the deed was to prevent the very situation that had occurred in this case.

A trial court ruled in favor of the regional church on the ground that it had established that the parties had intended to create a reversionary interest that was triggered by the church's acts. The church appealed.

A state appeals court affirmed the trial court's ruling in favor of the regional church. It began its opinion by noting that "the deed's language provided that the property was to go to the [regional church] upon the happening of a certain event subsequent to the deed's recordation." Specifically, if in the opinion of the regional church, the church was no longer in fellowship and doctrinal unity with the parent denomination, the property would revert to the regional church. The court concluded that this language created a "power of termination."

The church claimed that the language in the deed regarding "fellowship and doctrinal unity" is too ambiguous to be enforceable. The court agreed that it would be "both improper and impossible" for it to determine whether the church remained in "fellowship and doctrinal unity," but it concluded that the deed did not require such a determination.

Under the deed's plain language, this issue was clearly left in the hands of the regional church: "If in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity …." The court noted that "just as a contract that permits a buyer to unilaterally determine whether goods are of a sufficient quality is proper, so is the language of the deed. Its language places the issue squarely in the hands of the regional church, and as it offered evidence that it reached a determination on this matter, that opinion is sufficient to invoke the termination clause. We therefore find that the regional church established by sufficient evidence that under the deed, it was the legal owner of the property."

The court also addressed the church's argument that the trial court wrongfully interjected itself into ecclesiastical matters in violation of the First Amendment. Specifically, the church claimed that the trial court considered whether or not the church and regional church were in fellowship or doctrinal unity with each other. The court found this argument to be "an improper attempt to create a constitutional issue where none exists.

The trial court was not required to, and did not, make any factual finding as to whether it believed the church and regional church continued to be in fellowship or doctrinal unity. Under the plain language of the deed, all the trial court was required to find was whether the regional church believed that was no longer the case: "If in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity with the [denomination] this property shall go to, vest in and become the property, in fee simple, of the [regional church]."

As a result, the trial court "had no reason to determine whether the parties were in fellowship and doctrinal unity. It made no such finding, which would have been legally improper and irrelevant in any event. The terms of the deed did not call for the court to determine that issue; it was the regional church's opinion that mattered." New Hope Community Church of God v. Association of Church of God Southern California, 2007 WL 1493806 (Cal. App. 2007).

Legal Developments

Off-Property Injuries

A New York court ruled that a public high school cannot be liable for injuries occurring to students after they leave school property.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Off-Property Injuries

A New York court ruled that a public high school cannot be liable for injuries occurring to students after they leave school property.

Richard R. Hammar, J.D., LL.M., CPA

Key point 10-11. A church may be legally responsible on the basis of negligent supervision for injuries resulting from a failure to exercise adequate supervision of its programs and activities.

* A New York court ruled that a public high school cannot be liable for injuries occurring to students after they leave school property. A 15-year-old boy was on his way home from school when he was assaulted by a fellow high school student while exiting a subway. The boy’s parents sued the high school their son attended, as well as the board of education, claiming that they were negligent in failing to provide “adequate security and to protect students from foreseeable criminal activity.” In dismissing the parents’ lawsuit, the court observed: “A school’s duty is coextensive with, and concomitant with, its physical custody and control over a child. When that custody ceases because the child has passed out of the orbit of its authority in such a way that the parent is perfectly free to reassume control over the child’s protection, the school’s custodial duty also ceases. As a result, where a student is injured off school premises, there can generally be no [negligence, since a school’s duty of care] extends only to the boundaries of school property.”

Application. Many adolescents have been injured after leaving church property. A common example is a car accident involving a car containing one or more members of a church youth group. This case suggests that a church may not be liable for such injuries since the church’s duty of care extends only to its own property or, presumably, to off-campus church-sponsored activities. Note that this case represents a decision by a New York appellate court that may or may not be followed in other jurisdictions. Stagg v. City of New York, 833 N.Y.S.2d 188 (N.Y.A.D. 2007).

Legal Developments

Risk of Injury on Church Property

A variety of defenses are available to a church that is sued as a result of an injury occurring on its premises.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Risk of Injury on Church Property

A variety of defenses are available to a church that is sued as a result of an injury occurring on its premises.

Richard R. Hammar, J.D., LL.M., CPA

Key point 7-20.4. A variety of defenses are available to a church that is sued as a result of an injury occurring on its premises.

* A New York court ruled that a boy who was injured when a large hole on a schoolyard basketball court caused him to fall and injure himself could not sue the school because the danger was open and obvious. Many churches have basketball courts or recreational equipment on their property that is used by neighborhood children during the week. Church leaders often are concerned about potential liability to the church for injuries that occur to minors using the church’s facilities, and wonder how this risk may be reduced or eliminated. Some wonder if the risk is too great to justify the use of recreational facilities. A recent case in New York is instructive. A 14-year-old boy was injured while playing basketball with several friends at a schoolyard owned by a public school. A hole in the surface of the basketball court caused him to fall. The boy estimated that the hole was two feet wide and two inches deep. He testified that he generally played basketball twice a week at one of several locations including the location where he was injured. He further testified that he had been playing basketball at the schoolyard where the injury occurred for approximately 40 minutes prior to the accident. The boy’s parents sued the school, claiming that it was responsible for their son’s injuries on the basis of negligence.

A trial court rejected the school’s request that the case be dismissed, and the school appealed. A state appeals court ruled that the trial court erred in not dismissing the case. It concluded: “A person who voluntarily participates in a sport or recreational activity is deemed to consent to those commonly appreciated risks which are inherent in and arise out of the nature of the sport generally and flow from such participation. This includes those risks associated with the construction of the playing surface and any open and obvious condition on it …. [The school established that it was entitled to have the case against it dismissed] by demonstrating that the victim voluntarily participated in the basketball game and that the hole in the surface of the court constituted an open and obvious condition.” Casey v. Garden City Park-New Hyde Park School District, 837 N.Y.S.2d 186 (N.Y.A.D. 2007).

Legal Developments

Property Disputes and Bylaws

Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws.

Richard R. Hammar, Attorney, CPA
Bio

Key point 7-04. Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws.

A South Carolina court ruled that the property of a church that voted to disaffiliate from a parent denomination belonged to the denomination as a result of provisions in the denomination's bylaws.

In 1988 an Assembly of God church established a mission church (the "church") as an outreach to another area of the community. The church initially met in various locations, including a daycare center and theater. It purchased property in 1994 on which it later built a worship facility. According to the Article XI, section 2(a) of the Constitution of the South Carolina District Council of the Assemblies of God, "groups of believers which are still in the formative stages shall be recognized as District Affiliated Assemblies" and "shall be under the supervision of the District Presbytery which shall serve as trustees thereof."

This section further provides that "District Affiliated Assemblies which have matured sufficiently to accept their full share of responsibility for the maintenance of scriptural order, shall be entitled to recognition as autonomous General Council affiliated churches." The term "General Council" refers to the national Assemblies of God church.

In 1999, the church, having formerly been under the supervision of the South Carolina District Council of the Assemblies of God successfully applied for affiliation with the General Council.

While the church initially supported district-wide activities sponsored and planned by the District Council, its involvement in these programs began to decline in 2002. In 2003, the District Superintendent wrote the church expressing his concerns about the decreased participation. The church responded with a letter renouncing all ties to the Assemblies of God. The letter stated that the church would hold a business meeting to discuss changes in its bylaws, including a vote by the congregation regarding a proposed change in affiliation. With this letter the pastor enclosed his license as an Assemblies of God minister.

Before the District Council received this letter, however, the pastor had already met with members of the church board about his intended change in affiliation, consulted a lawyer about whether the congregation could keep the worship facility if they followed him, and announced to the congregation that he was leaving the Assemblies of God to join another group. He assured the congregation that "this building belongs to us. The district had nothing to do with this."

After reviewing the pastor's actions, the District Council no longer considered him to be "a credentialed minister in good standing," a condition necessary for the church's continued affiliation with the General Council. Several current and former church members sent letters to the District Council expressing their dismay about the pastor's plans to disaffiliate the church from the Assemblies of God. Notwithstanding these complaints, the pastor convened a business meeting at which the congregation voted sixty-three to three to leave the Assemblies of God. Thereafter, the District Council initiated formal disciplinary proceedings against the pastor; and the General Council stripped him of his credentials to serve as a minister in the Assemblies of God.

Since the vote to disaffiliate, the church continued to occupy and possess the property. The District Council and three members of the congregation who remained loyal to the Assemblies of God (the "plaintiffs") asked a court to determine the status of the church's property in light of its purported disaffiliation. A trial court ruled that the District Council controlled the church property. It relied on Article VI, Section 5 of the General Council bylaws, which provides:

If a General Council affiliated church is unable to meet any of the criteria for affiliation as set forth in the Constitution, Article XI, Section 1, paragraph a, it shall seek the assistance of the District officers for help in maintaining the minimal requirement for General Council affiliation. The District may use any means prescribed by its bylaws to assist the church in returning to a position of strength. If the minimal requirements have not been attained, the church shall revert to District affiliated status until the minimal requirements for General Council affiliation have been attained.

The court noted that one of the criteria for affiliation spelled out in the constitution was "a credentialed minister in good standing" with the Assemblies of God. Since this requirement was no longer met after the District Council revoked the pastor's credentials, the church automatically reverted to District affiliated status, meaning that the District Council was in charge of church property and governance. The court stressed that Article VI, Section 5, states that "if the minimal requirements [for affiliation of a local church with the General Council] have not been attained, the church shall revert to District affiliated status until the minimal requirements for General Council affiliation have been attained."

A state appeals court agreed with the trial court's conclusions: "Based on [Article VI, Section 5, of the General Council bylaws] and the absence of 'a credentialed minister in good standing' with the General Council, we hold the trial court correctly found [the church] had reverted to district-affiliated status and, pursuant to Article VII, section 1(b) of the bylaws of the South Carolina District Council, was thus required to 'conduct all its business in accordance with the Constitution and Bylaws for District Affiliated Assemblies as provided by the South Carolina District Council.'" Because the church had become a district-affiliated church, the District Council was entitled to its assets upon the congregation's decision to leave the Assemblies of God. In support of its finding, the court cited Article XI, section 1(b) of the Constitution and Bylaws for District Affiliated Assemblies in Affiliation with the South Carolina District Council of the Assemblies of God, which provides as follows:

In the event this local assembly should at any time cease to function as an Assemblies of God church under the jurisdiction of the South Carolina District Council of the Assemblies of God … then the tangible property belonging to said church, real or personal, and all the interest of said church, real or equitable, in any and all property shall be and thereupon become the property of the South Carolina District of the Assemblies of God.

The court concluded: "Under the above-quoted provisions, when the congregation voted to disaffiliate from the Assemblies of God, it ceased to function as an Assemblies of God church under the jurisdiction of the District Council and the church property thereupon [became] the property of the South Carolina District of the Assemblies of God."

The church argued that according to Article VI, Section 5, of the General Council bylaws, a reversion did not immediately follow from a church's failure to meet the affiliation requirements. The court disagreed: "The plain and unambiguous language of the bylaw, however, undermines that argument. Nowhere does the bylaw prescribe an amount of time that must pass before a reversion can occur."

Finally, the church contended that the court should have resolved this dispute on the basis of a "neutral principles of law" analysis that is commonly used in the resolution of church property disputes. Under this analysis, 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 court noted that "to the extent this argument applies to the trial court's determination that the church's property reverted to the District Council upon its attempted secession from the Assemblies of God, we note that under the neutral principles of law doctrine, if the resolution of a church property dispute requires the interpretation of a religious doctrine as stated in a constitution, then a civil court hearing the case must defer to the authoritative ecclesiastical body's interpretation of that doctrine. Because the dispute in this case required such an interpretation, the trial court properly deferred to the opinions of the officials of the District Council and the General Council about the changes in the status of the church and the pastor's status as a credentialed minister in good standing." South Carolina District Council of Assemblies of God v. River of Life International Worship Center, 643 S.E.2d 104 (S.C. App. 2007).

Legal Developments

Zoning and Substantial Burden

An Oregon court ruled that a county did not violate RLUIPA by denying a church permission to construct a parochial school on its premises.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Zoning and Substantial Burden

An Oregon court ruled that a county did not violate RLUIPA by denying a church permission to construct a parochial school on its premises.

Richard R. Hammar, J.D., LL.M., CPA

Key point. The federal Religious Land Use and Institutionalized Persons Act prohibits state and local governments from imposing a land use regulation in a manner that imposes a substantial burden on the exercise of religion unless the regulation is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest.

* An Oregon court ruled that a county did not violate RLUIPA by denying a church permission to construct a parochial school on its premises. A Baptist church was founded in 2001. The church used a converted single-family dwelling for its offices and for small meetings and rented space in the local high school and in other churches for Sunday and midweek services. In 2005, the church began operating a school for the congregation’s children in a separate leased facility; the school had 19 students.

In 2004, the church purchased seven acres of property for $500,000. The property is zoned AF-5 (Agriculture-Forest, 5-acre minimum lot size). The following year the church sought approval to build a 20,000-square-foot, single-story building that would serve as a combined church sanctuary, day care facility, and school. The church represented that the school would serve 50 children from kindergarten through grade 12, would have five staff members, would be housed in a large multipurpose room within the proposed church building, and would operate from Monday through Friday, from 8:00 a.m. to 4:00 p.m. A county zoning board (the “county”) recommended approval of special uses of the property for a church and a day care facility. However, it recommended denial of the school use since the students did not come predominantly from rural areas as required by the zoning ordinance. The county concluded that its decision did not violate the Religious Land Use and Institutionalized Persons Act (RLUIPA) since it did not impose a “substantial burden” on the church’s religious practice. The county based this conclusion on the fact that the church had not made a “sufficiently diligent effort” to locate suitable property within the area where school use would be permitted. The county also concluded that the church failed to show that operating the school on a site separate from the church imposed a substantial burden on its religious practice, because evidence in the record showed that the church and the school currently were operating in separate locations.

The church appealed, claiming that the county’s refusal to allow the school violated RLUIPA, which provides: “No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a … religious assembly or institution, unless the government demonstrates that imposition of the burden … (A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.”

“Substantial burden on religious exercise”

The court concluded that the central question was whether the county’s refusal to allow the church to use its property for school purposes imposed a “substantial burden on religious exercise.” It reviewed several of the leading definitions of “substantial burden,” and concluded that the courts have reached two conclusions: “On the one hand, courts routinely find substantial burdens where compliance with a statute itself violates the individual’s religious beliefs and noncompliance may subject him or her to criminal sanctions or the loss of a significant government privilege or benefit. On the other hand, courts often have been more reluctant to find a violation where compliance with the challenged regulation makes the practice of one’s religion more difficult or expensive, but the regulation is not inherently inconsistent with the litigant’s beliefs.” The court summarized several prior cases defining this important term in the context of zoning laws:

  • Westchester Day v. Village of Mamaroneck, 386 F.3d 183 (2d Cir. 2004). A religiously affiliated school challenged, on RLUIPA grounds, a city’s denial of a permit that would allow the school to construct a new building and renovate others. A federal appeals court found that the denial did not create a substantial burden on the school’s religious exercise because the village “did not purport to pronounce the death knell of the school’s proposed renovations in their entirety, but rather to deny only the application submitted, leaving open the possibility that a modification of the proposal, coupled with the submission of satisfactory data found to have been lacking in the earlier proceedings, would result in approval.” The court conceded that the denial of a specific proposal may constitute a substantial burden when curing the problems that formed the basis for the denial “would impose so great an economic burden as to make amendment unworkable,” or when the cure itself directly affected religious exercise. However, the court found that in that case a mere denial, without more, did not constitute a substantial burden.
  • Corporation of Presiding Bishop v. City of West Linn, 111 P.3d 1123 (Ore. 2005). The Oregon Supreme Court ruled that “a government regulation imposes a substantial burden on religious exercise only if it pressures or forces a choice between following religious precepts and forfeiting certain benefits, on the one hand, and abandoning one or more of those precepts in order to obtain the benefits, on the other. The court determined that further applications for special use permits were not foreclosed but were, indeed, encouraged by the city. However, the court’s formulation of the substantial burden standard suggests that, at the least, it would require a church to demonstrate that it could not reasonably locate and acquire an alternative site for its desired uses.
  • Lakewood, Ohio Cong. of Jehovah’s Witnesses, Inc. v. City of Lakewood, 699 F.2d 303, 306 (6th Cir. 1983). A federal appeals court addressed a congregation’s challenge to its city’s comprehensive zoning plan, which prohibited the congregation from constructing a place of worship on land owned by the congregation. Under the zoning plan, only 10 percent of the city’s property was designated as land on which a church could be built. The court observed that the zoning ordinance did not prohibit the congregation, or any other faith, from worshiping in the city altogether. The congregation remained free to practice its faith through worship “whether the worship be in homes, schools, other churches, or meeting halls throughout the city.” The court also rejected the congregation’s claim that the zoning ordinance imposed a substantial burden because land in commercial zoning districts (in which churches were permitted uses) was more expensive and less conducive to worship than the lot owned by the church. Although the “lots available to the congregation may not meet its budget or satisfy its tastes,” the court held that the First Amendment “does not require the city to make all land or even the cheapest or most beautiful land available to churches.” The court summarized its conclusion that the zoning ordinance did not impose a substantial burden on the congregation’s free exercise by stating: “[The ordinance] does not pressure the congregation to abandon its religious beliefs through financial or criminal penalties. Neither does the ordinance tax the congregation’s exercise of its religion. Despite the ordinance’s financial and aesthetical imposition on the congregation, we hold that the congregation’s freedom of religion … has not been infringed.”
  • Christian Methodist Episcopal Church v. Montgomery, 2007 WL 172496 (D.S.C. 2007). A federal court in South Carolina held that a municipal zoning ordinance that required a property owner or its tenant assignee to apply for a special land use approval did not impose a substantial burden under RLUIPA. In reaching its conclusion, the court relied on a Fourth Circuit decision that was decided under the First Amendment before the passage of RLUIPA. Christ College, Inc. v. Board of Supervisors, 944 F.2d 901 (4th Cir. 1991). The court in the Christ College case acknowledged that the county zoning laws made it more difficult for a religious college “to be located on the property of its choice; however the fact that local regulations limit the geographical options of a religious school … does not prove that any party’s right to free exercise is thereby burdened. There must at least be some nexus between the government regulation (here, a zoning law) and impairment of ability to carry out a religious mission. It is not enough that an entity conducting a religious program of mission would prefer to be located on residential property. That preference must be linked to religious imperative. No such link was proven here and the court was correct in concluding the zoning regulations did not burden appellants’ free exercise of religion.”
  • Civil Lib. for Urban Believers v. City of Chicago, 342 F.3d 752, 761 (7th Cir. 2003). An association of area churches challenged a city ordinance, alleging that it violated RLUIPA. The court decided that the plaintiffs had not met the requirement of showing a substantial burden and held that a regulation must bear “direct, primary, and fundamental responsibility for rendering religious exercise … effectively impracticable” in order to impose a substantial burden.
  • Petra Presbyterian Church v. Village of Northbrook, 409 F.Supp.2d 1001 (N.D. Ill. 2006). A church was not permitted to open in an industrial area because that was prohibited by the zoning laws of the city. The church sued the city under RLUIPA. A federal district court in Illinois, in concluding that the city had not violated RLUIPA, noted that the church had failed to “account for other areas [in the city] where churches are allowed,” including the “availability of land in … commercial districts where churches are allowed with a permit.”
  • Lighthouse for Evangelism v. City of Long Branch, 406 F.Supp.2d 507 (D.N.J. 2005). A federal district court in New Jersey ruled that there is no substantial burden on religious exercise if a church is not completely excluded from a city and could have operated in other districts within the city by right, such as in a commercially zoned district.

The court concluded that the availability of other land in the area was a significant factor in determining whether a substantial burden exists. However, addressing this issue was difficult in this case because the church “made little effort to clearly define its property selection criteria or to explain how the failure to satisfy those criteria would require it to forgo its religious precepts.” For example, there was no evidence that, in the absence of access to particular property the church “would be required to forgo its religious precepts. Said another way, there was insufficient evidence that the church’s religious exercise would have been substantially burdened by buying one of the 29 properties on the market.”

The court acknowledged that requiring a church to find and purchase alternative property would constitute a substantial burden on religious exercise if doing so would create an “unreasonable economic burden.” It cited the following cases for this conclusion: (1) Living Water Church v. Charter Township, 384 F.Supp.2d 1123 (W.D. Mich. 2005) (substantial burden found where the church was “a small church with limited funds”); (2) Greater Bible Way Temple v. Jackson, 708 N.W.2d 756 (Mich. 2005) (substantial burden found where a church submitted evidence showing that it could not afford to purchase different property).

The court concluded that the church had taken the position that “the need to look for and acquire other property is itself a substantial burden, because such a search would be time consuming and costly.” The court rejected this argument since there was no evidence that “a reasonable search and acquisition would have required the interruption or cessation of the church’s present activities; it merely would have required a delay and some unknown expense.”

The court concluded, “Because the church failed to demonstrate that upholding the county’s land use decision would force it to forgo its religious precepts, we conclude that it failed to show that the county has imposed a substantial burden under RLUIPA.”

Application. In many communities churches are required to obtain a special use permit in order to purchase and use property for religious purposes. When a local zoning board denies a church’s request for a special use permit, the church may be able to challenge the denial on the basis of RLUIPA if it is able to demonstrate that the denial imposed a substantial burden on its religious exercise that was not justified by a compelling governmental interest. In such cases, the key question often is whether the burden on the church’s religious exercise was “substantial.” This case contains an extensive discussion of this important issue. Note the following points:

1. This case represents a narrow interpretation of RLUIPA’s protections. The court relied on several cases for the proposition that zoning ordinances that restrict a church’s use of property do not violate RLUIPA if the church could reasonably locate and acquire an alternative site for its desired purposes. The court noted, for example, that there were 29 other properties available for sale that could have served as a location for the church’s school.

2. The court acknowledged that requiring a church to find and purchase alternative property would constitute a substantial burden on religious exercise if doing so would create an “unreasonable economic burden.”

3. The court stressed that the church “made little effort to clearly define its property selection criteria or to explain how the failure to satisfy those criteria would require it to forgo its religious precepts.” In other words, the church’s legal position would have been strengthened had it presented evidence that the county’s actions forced it to “forgo its religious precepts.”

4. One judge dissented from the court’s ruling. The dissenting judge argued that the county violated RLUIPA since the church was being “pressured” to give up the church and day care facility on the property it owns, or “abandon its religious precept of operating a church and religious school on the same property.” Timberline Baptist Church v. Washington County, 154 P.3d 759 (Ore. App. 2007).

Legal Developments

Land Use Regulations

A federal district court in Michigan ruled that a city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying a church the right to use its property for church purposes on the basis of a parking ordinance.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Land Use Regulations

A federal district court in Michigan ruled that a city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying a church the right to use its property for church purposes on the basis of a parking ordinance.

Richard R. Hammar, J.D., LL.M., CPA

Key point. The federal Religious Land Use and Institutionalized Persons Act prohibits state and local governments from imposing a land use regulation in a manner that imposes a substantial burden on the exercise of religion unless the regulation is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest.

* A federal district court in Michigan ruled that a city violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying a church the right to use its property for church purposes on the basis of a parking ordinance. A church congregation wanted to relocate because an increasing number of members lived in another part of town. The church found a two-story building in the target area and began considering its purchase for use as a church. The building was located in a zoning district in which churches were a permissible use. To operate as a church, however, a “certificate of occupancy” had to be obtained.

The church’s pastor began meeting with the city’s zoning director. The pastor claimed that the director welcomed the church’s purchase of the property and assured him that the building could be used as a church. Based on these representations, the church purchased the building. The pastor later alleged that the church would never have purchased the building if the zoning director had not represented that the building could be used as a church.

Several months later, after discovering that the building was being used for church services, the city sent a letter to the pastor indicating that the church would have to vacate the building because it did not have a certificate of occupancy permitting the use of the property as a church. A state trial court later issued an order requiring the church to cease and desist using the building.

The main reason the church was unable to obtain a certificate of occupancy was that the city required 95 parking spaces and the property only had 73.

The church filed suit in federal court, claiming that the city’s denial of the certificate of occupancy violated the Religious Land Use and Institutionalized Persons Act (RLUIPA). RLUIPA states:

No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly, or institution—(A) is in furtherance of a compelling governmental interest; and (B) is the least restrictive means of furthering that compelling governmental interest.

This subsection applies in any case in which … the substantial burden is imposed in the implementation of a land use regulation or system of land use regulations, under which a government makes, or has in place formal or informal procedures or practices that permit the government to make, individualized assessments of the proposed uses for the property involved. 42 U.S.C. § 2000cc.

RLUIPA defines a “land use regulation” as “a zoning or landmarking law, or the application of such a law, that limits or restricts a claimant’s use or development of land (including a structure affixed to land), if the claimant has an ownership, leasehold, easement, servitude, or other property interest in the regulated land or a contract or option to acquire such an interest.”

The court noted that are three steps in evaluating the application of RLUIPA to a particular case: (1) Does it apply? (2) Is there a substantial burden to religious exercise? (3) Does the government have a compelling interest that is achieved by the least restrictive means? The court’s analysis of each of these steps is summarized below.

(1) Does RLUIPA apply?

RLUIPA applies if a plaintiff can show that a substantial burden is imposed on religious exercise “in the implementation of a land use regulation under which the government makes … individualized assessments of the proposed uses of the property involved.” An individualized assessment involves a “case-by-case evaluation of the proposed activity.” The court concluded that this requirement was met since the city’s parking ordinance was a land use regulation that involved individualized assessments. While the application of the parking ordinance’s formula for determining the minimum number of parking spaces was “mechanistic” and involved no subjective element, it nonetheless permitted “variances” from the minimum parking space requirements, and the process of granting a variance could involve subjective judgments. As a result, the process was an individualized assessment of a land use regulation, triggering the application of RLUIPA.

(2) Substantial burden

The next issue to consider in a RLUIPA claim is whether the governmental action imposes a substantial burden on religious exercise. If a plaintiff can demonstrate a substantial burden on its religious exercise, then it establishes a prima facie case of a RLUIPA violation.

The church claimed that the city’s denial of the parking variance prevented it from obtaining a certificate of occupancy for the building, which in turn prevented it from use of the building for religious worship. The city argued that the church could not prove the existence of a substantial burden on religious exercise. It claimed that the parking ordinance was “blind” to the particular use of property, and simply considered the number of people on the property. The city further argued that the parking ordinance did not prohibit the building’s use as a church, but simply prohibited use if there was an inadequate number of parking spaces for the total number of people.

The Court disagreed with the city’s position:

Based on the language of RLUIPA, the land use regulation need not specifically target religious exercise. A land use regulation that is specifically blind to religious use of land can still substantially burden religious exercise …. It is undisputed that the parking ordinance prohibits the church from using its building, and that the church wants to use its building for religious exercise. The city had the power to grant a variance to the parking requirement currently barring the church from use of the building, but it did not do so. Therefore, there is an application of a land use regulation which prevents or burdens the church from using its building for religious exercise …. Here, it is undisputed that the church cannot use its building for worship purposes. Worship services are fundamental to the practice and exercise of one’s religious beliefs. Selling its current building and searching for another is not a mere inconvenience to the church. Instead, the court finds that the burden is substantial. Consequently, the court finds that the church has established a prima facie case of a RLUIPA violation by demonstrating that the application of the parking ordinance imposes a substantial burden on its religious exercise.

(3) A compelling government interest and least restrictive means

Once a church establishes a prima facie case of a RLUIPA violation by demonstrating that the land use regulation imposes a substantial burden on religious exercise, the burden shifts to the city to demonstrate that the land use regulation is the “least restrictive means” to further a “compelling government interest.”

The city insisted that regulating parking and traffic in order to protect the safety of citizens is a compelling government interest, and that the parking ordinance is the least restrictive means to achieve that interest. It also claimed that the church’s building had insufficient parking spaces for the intended use, and consequently the overflow parking would clog the surrounding streets endangering the public safety and welfare.

The court concluded that the city’s denial of a parking variance to the church was not supported by a compelling governmental interest, for two reasons. First, the city conceded that it could not explain why three worship space seats corresponded to one parking space, as opposed to four worship space seats to one parking space. As a result, the city failed to prove that “use of worship space will lead to a certain number of extra vehicles affecting parking and traffic.” Second, the city claimed that the parking ordinance was necessary to prevent off street parking along the major street on which the church property was located, thereby keeping the street free for residents’ and emergency vehicles. The court pointed out, however, that parking was already prohibited along the street in question and therefore “there is no possibility that the street will become clogged with parked vehicles.” Given the city’s “lack of evidence demonstrating that if the church used the building for worship there would be overflow parking that would hurt the local traffic situation, an outright prohibition of the use of the building for worship is simply an excessive means to accomplish the city’s stated traffic interest. Therefore … the court finds that the city has failed to show that prohibition of the use of the building for worship is the least restrictive means to accomplish its traffic and parking interests.” The court concluded that the city had failed to rebut the church’s prima facie case of a RLUIPA violation, and therefore the city’s denial of the parking variance and the application of the parking ordinance to bar the church from obtaining a certificate of occupancy violated RLUIPA.

(4) Constitutionality of RLUIPA

The city claimed that RLUIPA was an unconstitutional establishment of religion. The court rejected this claim, relying mostly on a 2005 ruling of the Supreme Court. Cutter v. Wilkinson, 544 U.S. 709 (2005). In the Cutter case, the Supreme Court upheld the constitutionality of a section in RLUIPA protecting the rights of institutionalized persons to exercise their religion. The Michigan court concluded that the Supreme Court’s reasoning in the Cutter case “can be equally applied to those provisions of RLUIPA involving land use regulations.”

Further, the court concluded that under Section V of the Fourteenth Amendment Congress has the power to enact legislation necessary to secure the First Amendment’s guarantee of religious freedom, including RLUIPA. The court noted that every federal appeals court, and almost all federal district courts which have considered this issue “have found that RLUIPA is a constitutional use of congressional power.”

(5) Equal protection claim

The church argued that the city’s denial of the certificate of occupancy was a violation of the Constitution’s guaranty of the equal protection of the laws, since there was evidence that the city had granted certificates to two other religious congregations that had used the property in the past. The court agreed: “The church has brought forward evidence showing that it has been treated differently than the two previous churches which had lawfully occupied the building and that it has been treated differently than the other city entities who did not need to go through the same administrative procedures as it did in order to receive a certificate of occupancy or site plan approval.”

Application. This case is important for three reasons. First, it represents an excellent analysis of the application of RLUIPA to a city land use regulation restricting a church’s ability to engage in worship. The three-step analysis, and the court’s rejection of each of the city’s predictable arguments, will be helpful to any other church that finds itself in a similar situation.

Second, the court upheld the constitutionality of RLUIPA. Significantly, it relied on the United States Supreme Court’s 2005 ruling upholding the constitutionality of RLUIPA’s “institutionalized persons” protections.

Third, the case demonstrates that the constitutional guaranty of the equal protection of the law bars a city from applying land use regulations to a church in a way that is inconsistent with the treatment of other churches in the community. Lighthouse Community Church of God v. City of Southfield, 2007 WL 30280 (E.D. Mich. 2007).

Legal Developments

Control of Church Property

An Iowa court ruled that a local church that was experiencing internal problems did not enter into an enforceable agreement to transfer governance responsibilities to a denominational agency.

Richard R. Hammar, Attorney, CPA
Bio

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 non-doctrinal 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.

An Iowa court ruled that a local church that was experiencing internal problems did not enter into an enforceable agreement to transfer governance responsibilities to a denominational agency. A church was founded in 1967, and became affiliated with the Evangelical Free Church of America (EFCA).

The EFCA is a national association of churches that is divided into regional districts that assist affiliated churches. By 2001, the church was suffering from internal problems and was in danger of closing. The church's congregation had dwindled to 35 members, and its pastor and three board members had resigned. The only remaining board member learned of a program in the EFCA to rescue struggling churches. The program involves transferring governance and control of church assets to a regional district of the EFCA for a period of time while the district assists the church in reorganizing and rebuilding. The board member was hopeful the same program could be implemented for his church, and so he contacted an official with the regional district for assistance.

The church had ongoing discussions with the district for several months regarding options for the church and the district's willingness to assist the church in rebuilding its congregation. These discussions culminated in a special congregational meeting at which the church members unanimously passed a resolution to "turn all governance, property and management over to the district" with the expectation that the district would be "responsible for the development of a healthy church." The resolution further provided that "as the church becomes healthy and viable again, all funds, property and governing authority will be returned to the church making it a healthy autonomous church."

The district sent a letter to the church indicating its willingness to "immediately begin the process of overseeing," governing, and managing the church's assets and property. The letter cautioned the church that "in turning over this ministry to us you are giving us full governing authority until we believe it is wise to return that authority to the local church." In response, the church conducted another meeting in which the members voted to amend the church's articles of incorporation to provide that all of the church's property would be transferred to district, but only in the event the corporation dissolved.

The church attempted to revitalize itself, and continued to conduct its own daily operations and exercise independent corporate functions. Updates on the church's progress occasionally were sent to the district.

It soon became evident that the church and district had different understandings of their relationship and different intentions regarding the future of the church. The congregation believed that the church would not close and that control of the church's property would be returned to them at some point. The district reminded the church that control of the church's property would be returned to the congregation only in the event it became a healthy church. The church held another meeting in which the members approved a resolution to "end our special relationship with the district and begin to manage our own affairs and assets."

A short time later, the district informed the church that it had determined that the church was "no longer a viable congregation and that efforts of the district to revitalize the same have failed." The district changed the locks on the church and indicated the property would be listed for sale. The church asked a court for relief, and the court issued an order prohibiting church members from having access to the church building. The court based its ruling on what it deemed an "enforceable agreement" between the church and district to transfer permanent control of the church's property to the district. The church appealed.

A state appeals court noted that the United States Supreme Court has recognized two primary methods for resolving church property disputes. The first is the "compulsory deference" rule. Under this rule, "the decision of the highest authority in a hierarchical church is conclusive on the civil courts in church property disputes." A hierarchical church exists where a local church is subordinate to the authority of a higher church tribunal or adjudicatory body. The second method is the "neutral principles approach" pursuant to which church property disputes are resolved through the use of neutral principles of law affecting ownership. The neutral principles approach promises neutrality in relying "exclusively on objective, well-established concepts of trust and property law."

The district argued that the compulsory deference approach should apply because the church's polity was converted to a hierarchical form when the church voted to transfer control of its assets to the district. The court rejected this argument, noting that the EFCA "is not a hierarchical church" but rather is "organized as an association of autonomous but interdependent congregations of like faith."

Its governing documents "reflect a congregational organization where each local church governs itself." The court found the neutral principles approach better-suited to the resolution of "the central question presented by this dispute: whether there was an enforceable agreement between the parties to transfer control of the church's property to the district."

The court noted that an enforceable agreement or contract requires an offer by one party and an acceptance of the offer by another party. It concluded that there was insufficient evidence that the district accepted the church's initial offer to transfer governance and control of the congregation. It based this conclusion on the following facts:

  1. After receiving the church's offer, the district authorized one of its officers to "further investigate and evaluate and bring a report to the district board whether we should take legal responsibility" for the church's property.
  2. A district officer informed the church that acceptance of the congregation's offer was contingent on a final vote at a district board meeting that would be conducted on a specified date. But, a final vote on the transfer did not occur at that meeting. Instead, the board noted that "details are being worked on."
  3. At one point, the church requested clarification from the district regarding their relationship due to the ambiguity of the arrangement.
  4. Church members assumed control of the church would be returned to them at some point, while the district believed it had the absolute right to control and dispose of the church's assets.
  5. The church continued to conduct its own daily operations, such as organizing church activities and services, paying bills, receiving donations, and accepting new members into the congregation, without interference from the district.
  6. The church continued to exercise independent corporate functions, such as refinancing a loan and amending its articles of incorporation. The congregation did not always request permission from the district before performing these tasks.

    7. These facts convinced the court that "although the church received assistance, control really never passed or was assumed by the district." As a result, the district did not "accept" the church's offer to transfer control of the congregation. At best, the parties "had an agreement to agree to enter into a contract with certain essential terms that were not agreed upon. An agreement to agree is not a binding contract. Therefore, the trial court erred in finding the parties had an enforceable agreement to transfer governance and control of the church to the district."

    The court granted the church's request for a permanent injunction enjoining the district from transferring and managing the assets of the church.

    What this means for churches

    The governing documents of many denominations authorize affiliated churches to transfer governance responsibilities to a denominational agency. This case demonstrates that such a transfer may be legally unenforceable without unequivocal evidence of an acceptance by the denominational agency of the transfer. Freedom Church v. Central District Conference of Evangelical Free Church of America, 2007 WL 914038 (Iowa App. 2007).

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Legal Developments

Determining Church Property Ownership

Most church property disputes are resolved on the basis of neutral principles of law contained in deeds, local church charters and bylaws, and denominational bylaws.

Richard R. Hammar, Attorney, CPA
Bio

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.

A New York court ruled that a local church retained ownership of its property following its disaffiliation from a parent denomination.

A church affiliated with the Presbyterian Church (U.S.A.) voted unanimously to disassociate from the parent denomination. A denominational agency (the "regional church") asked a court to declare that it was the lawful owner of the church's property including real estate, vehicles, investments, parishioner donations, furniture, ecclesiastical and sacramental items and church records and documents.

The court noted that it could resolve church property disputes without violating the First Amendment if it did so on the basis of neutral principles of law requiring no analysis of church doctrine. The court applied the following test announced by the New York Court of Appeals (the highest state court) in a previous case:

In applying neutral principles, the focus is on the language of the deeds, the terms of the deeds, the terms of the local church charter, the State statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property. The court must determine from them whether there is any basis for a trust or similar restriction in favor of the general church, taking special care to scrutinize the documents in purely secular terms and not to rely on religious precepts in determining whether they indicate that the parties have intended to create a trust or restriction. First Presbyterian Church of Schenectady v. United Presbyterian Church in the United States of America, 476 N.Y.S.2d 86 (N.Y. 1984).

The court examined the deeds to the church's property and noted that none of them contained any language vesting a present or future interest in the favor of the regional or national church. However, in 1981 the national church amended its constitution (Book of Order) to create an express trust provision for congregational property. It states that all property held by a local church "is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.)." It further provides, "Whenever property of, or held for, a particular church of the Presbyterian Church (U.S.A.) ceases to be used by that church as a particular church of the Presbyterian Church (U.S.A.) in accordance with this constitution, such property shall be held, used, applied, transferred, or sold as provided by the presbytery." Finally, under a provision entitled "Property of Church in Schism", the Book of Order provides that the relationship to the Presbyterian Church (U.S.A.) can only be severed by action by the presbytery.

The issue in this case, the court noted, was whether these provisions were binding on the church that voted to disassociate itself from the denomination. It concluded that they were not:

Only the owner of real property can convey an interest in the property; B can not create a future interest in A's property without A's consent …. In the absence of any language in the deed to [the church] indicating that title is held subject to the laws or discipline of the national church a change in the laws of the national church does not affect title to the property held by the local church. Moreover, when [the church] acquired the real property [the amendments to the Book of Order] did not exist.

The court distinguished several cases recognizing the legal validity of the so-called "Dennis Canon" adopted by the Episcopal Church in 1979. This canon specifically states that all real and personal property held by or for the benefit of a local parish or congregation is held in trust for the national church and the diocese in which the local church is located.

The New York court acknowledged that the courts have awarded title to the national Episcopal Church in several cases on the basis of this canon, but it stressed that the canon "codified a trust relationship which has implicitly existed between the local parishes and their dioceses throughout the history of the Protestant Episcopal Church."

Local churches, by accepting the principles of the Protestant Episcopal Church and the diocese, became subject to denominational canons, rules and practices. Such provisions "not only indicate that local church property was to be held for the benefit of the Protestant Episcopal Church and its dioceses, but they demonstrate the established customs of said church." In short, an implied trust was implicit in the polity of the Episcopal Church, but not the Presbyterian Church.

The national and regional churches argued that the local church was bound by the amendments to the Book of Order since it remained affiliated for 25 years after the amendments were adopted. The court disagreed, noting that "mere silence and continuing its membership in the denominational church, absent more, is an insufficient expression of an intent to create a trust."

What this means for churches

Most church property disputes are resolved on the basis of neutral principles of law contained in deeds, local church charters and bylaws, and denominational bylaws. So long as a civil court can resolve such a dispute by referring to neutral provisions in these documents, without any inquiry into doctrine or polity, it may do so.

The court in this case concluded that the local church had never ceded any control of its property to the national or regional churches in a deed, trust, or in its bylaws. Further, the church had never expressly recognized or adopted the amendments to the national church's Book of Order pertaining to church property, and therefore the national and regional churches had no claim to the church's property upon its withdrawal.

It is worth observing that the United States Supreme Court has noted that one of the principal advantages of the neutral principles of law approach to resolving church property disputes is that it permits religious organizations to "order their affairs" in advance of a property dispute through "appropriate reversionary clauses and trust provisions" that could reflect the intentions of a church and its members. Many churches and denominational agencies have done so. Several examples are cited in section 7-04 of Richard Hammar's, Pastor, Church & Law.

Presbytery v. Trustees of First Presbyterian Church, 821 N.Y.S.2d 834 (N.Y. App. 2006).

Legal Developments

Zoning Laws

The Vermont Supreme Court rejected an attempt by neighboring landowners to halt the construction of a cell phone tower on church property.

Richard R. Hammar, Attorney, CPA
Bio

Church Law & Tax Report

Zoning Laws

The Vermont Supreme Court rejected an attempt by neighboring landowners to halt the construction of a cell phone tower on church property.

Richard R. Hammar, J.D., LL.M., CPA

* The Vermont Supreme Court rejected an attempt by neighboring landowners to halt the construction of a cell phone tower on church property. Verizon Wireless reached an agreement with a church to install a cell phone tower on the church’s property. From the beginning, the plan met with intense opposition from neighboring landowners. The neighbors lost the first case in which they challenged the zoning permit Verizon Wireless received to implement the project. The neighbors then instituted a second lawsuit in which they claimed that even if Verizon Wireless had a valid zoning permit, the church should have obtained a conditional use permit in order to allow Verizon Wireless to modify the church’s parking lot. The neighbors pointed out that the installation of the cell phone tower would result in the elimination of five parking spaces in the church’s parking lot, and this constituted a “change” in the use of the parking lot that required a conditional use permit issued by the local zoning commission. The state supreme court rejected the neighbors’ argument. It concluded: “Courts have long recognized that public policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties …. We conclude that this is, in fact, the same case as [the previous lawsuit]. The question here, as in the first case, is whether the permit applicants have complied with the zoning law. The facts necessary to determine this case are nearly identical to the facts in the first.” In re St. Mary’s Church Cell Tower, 910 A.2d 925 (Vt. 2006).

Legal Developments

Legal Owners of Church Property

A New York court ruled that a parent denomination held title to the property of a local church that voted to disaffiliate from the denomination.

Richard R. Hammar, Attorney, CPA
Bio

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.

A New York court ruled that a parent denomination held title to the property of a local church that voted to disaffiliate from the denomination.

The members of a Methodist church voted to withdraw from The United Methodist Church (UMC). The UMC asked a court for a declaration that it was the legal owner of the church's property. The court noted that it could resolve a property dispute between a local church and a parent denomination so long as it could do so by applying "neutral principles of law." The focus in resolving such a dispute is "on the language of the deeds, the terms of the local church charter, state statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property."

The court concluded:

Although nothing in the deeds, the certificate of incorporation of the church or the state statutes governing the holding of church property discusses the property rights of a member of the UMC, the Book of Discipline of the UMC, which binds [affiliated churches], states that all property deeded to a UMC church or its predecessor is required to be held in trust for the UMC or its predecessor. Absent an express trust provision in the deed, an implied trust is created where, as here, the property is conveyed to a local church of the UMC or any predecessor to the UMC; the name, customs and polity of the UMC or any predecessor to the UMC are used in such a way that the local church is known to the community as part of such denomination; and the congregation of the local church accepts the ordained ministers appointed by a bishop of the UMC or any predecessor to the UMC. We therefore conclude that Â… the [local church in this case] held its property in an implied trust for the UMC.

What this means for churches

Most church property disputes are resolved on the basis of neutral principles of law contained in deeds, local church charters and bylaws, and denominational bylaws. So long as a civil court can resolve such a dispute by referring to neutral provisions in these documents, without any inquiry into doctrine or polity, it may do so. The court in this case concluded that local churches affiliated with the UMC held their title in trust for the national church as a result of non-doctrinal provisions in the UMC Book of Discipline.

The United States Supreme Court has noted that one of the principal advantages of the neutral principles of law approach to resolving church property disputes is that it permits religious organizations to "order their affairs" in advance of a property dispute through "appropriate reversionary clauses and trust provisions" that could reflect the intentions of a church and its members. Many churches and denominational agencies have done so. Several examples are cited in section 7-04 of Richard Hammar's book, Pastor, Church & Law (3rd ed. 2000). North Central New York Annual Conference v. Felker, 816 N.Y.S.2d 775 (N.Y.A.D. 2006).

Legal Developments

Church Property Ownership

A denominational agency was entitled to the property of a local church following a vote to disaffiliate itself from the denomination.

Richard R. Hammar, Attorney, CPA
Bio

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 non-doctrinal 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.

A New York court ruled that a denominational agency was entitled to the property of a local church following a vote to disaffiliate itself from the denomination. A church which was originally incorporated as a Methodist Episcopal Church eventually became a member of the United Methodist Church (UMC) after a series of mergers. The church voted to withdraw from the UMC, and a denominational agency (the "regional church") voted to dismiss the church as a member of the UMC. The regional church asked a civil court to declare that it was the legal owner of the church's property. The court noted that the civil courts "may decide matters involving property disputes between local churches and the general church provided that resolution of the property dispute is possible by application of neutral principles of law." The focus in resolving such disputes is "on the language of the deeds, the terms of the local church charter, the state statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property."

The court noted that nothing in the deeds, the certificate of incorporation of the church or state statutes governing the holding of church property addressed the property rights of a member of the UMC. However, it noted that "the Book of Discipline of the UMC, which binds plaintiff, states that all property deeded to a UMC church or its predecessor is required to be held in trust for the UMC or its predecessor." It concluded that "an implied trust is created where, as here, the property is conveyed to a local church of the UMC; the name, customs and polity of the UMC or any predecessor to the UMC are used in such a way that the local church is known to the community as part of such denomination; and the congregation of the local church accepts the ordained ministers appointed by a bishop of the UMC or any predecessor to the UMC. We therefore conclude that the court properly determined that the church held its property in an implied trust for the UMC." North Central New York Annual Conference v. Felker, 816 N.Y.S.2d 775 (N.Y.A.D. 2006).

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Legal Developments

Personal Injuries on Church Property and During Church Activities

Key point 7-20.1. In most states, whether a church is liable for injuries occurring on

Richard R. Hammar, Attorney, CPA
Bio

Key point 7-20.1. In most states, whether a church is liable for injuries occurring on its premises will depend on the whether the victim is an invitee, a licensee, or a trespasser. Churches, like any property owner, owe the highest degree of care to invitees, a lesser degree of care to licensees, and a very minimal degree of care to trespassers. As a result, it is more likely that churches will be liable for injuries to persons who meet the definition of an 'invitee.'
Premises Liability

An Ohio court ruled that a church was not responsible for injuries sustained by a woman who slipped on a wet floor and broke her leg while attending a wedding reception on church property since the wet condition was an obvious risk. A woman (the 'victim') was seated with friends and family at a wedding reception in a church. While on her way to the restroom, she stepped in some liquid, slipped and fell. She did not see the liquid on the floor, but three witnesses did see it. No one saw an actual spill occur or any cup or ice discarded on the floor, but the area was wet from the spilling of beverages being carried from the serving area and had been wet for most of the evening. One witness claimed that she had seen liquid on the floor for 45 minutes to an hour before the victim slipped. However, no one suggested prior to the victim's fall that the wet condition was a hazard, or expressed any apprehension about passing through the area.

None of the witnesses informed anyone from the church of the wet condition, nor did they warn the victim of the wet floor when she set off for the restroom although they were aware of the condition. The victim claimed that she had not been looking where she was walking, but had been focused on the restroom. Therefore, she did not know what liquid she had slipped in, the size of the puddle, the exact location, how long it had been there, or if anyone from the church had been aware of it. In fact, she only believed it to be liquid because her dress was wet after the fall.

The victim sued the church, claiming that it was responsible for her injuries on the basis of negligence. A trial court dismissed the lawsuit, and the victim appealed. A state appeals court began its opinion by noting that the victim was a 'business invitee' since she was on church premises by the implied invitation of the church. In general, a landowner 'owes a duty to an invitee to use ordinary care for the invitee's safety, and to keep the premises in a reasonably safe condition (and to use ordinary care to provide notice of any concealed dangers of which the owner of the premises has knowledge, or which by using ordinary care should have been discovered).' However, 'an owner is under no duty to protect its customers from dangers known to the customer, or otherwise so obvious and apparent that a customer should reasonably be expected to discover them and protect herself from them.'

The rationale behind this 'open and obvious doctrine' is that 'the open and obvious nature of the hazard itself serves as a warning, and allows the owner to expect visitors to discover the danger and take appropriate actions to protect themselves.' The presence of wet floors 'is a frequently encountered condition that a reasonable person would be expected to recognize and exercise caution to protect herself from.' The court concluded, 'Although the room was darkened, the other [witnesses] spotted the liquid. The victim … conceded that her view was not obstructed and she merely failed to look where she was walking. Thus, she is alone among her witnesses in failing to observe this wet condition, and by her own admission, this was due to her own inattentiveness. Simply put, the fact that she stepped in an obviously wet spot because she was not looking makes it irrelevant whether the liquid had been on the floor for 45 minutes or 45 seconds, she would have slipped and fallen either way ….The open and obvious nature of the liquid obviates a duty.'


Application
. In many cases, a church's liability for injuries occurring on its premises will depend on the victim's status. It is more likely that a church will be found liable if the victim is an invitee, since a church owes a much greater duty of care to invitees than to either licensees or trespassers. However, this case demonstrates that churches generally will not be liable for injuries to invitees resulting from hazards that are 'open and obvious.' Andamasaris v. Annunciation Greek Orthodox Church, 2005 WL 313691 (Ohio App. 2005).

Legal Developments

Church Property

A clause in a church deed limiting any future conveyance of the property to “Protestant evangelical churches” was not enforceable.

Richard R. Hammar, Attorney, CPA
Bio

Key point 7-14. Some deeds to church property contain a 'reversion' clause stating that title will revert back to the previous owner in the event that a specified condition occurs. The courts will enforce such provisions, so long as they can do so without interpreting church doctrine.

The Washington Supreme Court ruled that a clause in a church deed limiting any future conveyance of the property to 'Protestant evangelical churches' was not enforceable. A church purchased property in 1956 and received a deed conveying the property 'for the perpetual use of Protestant Evangelical Churches' of the community. The church eventually outgrew its facilities, and the congregation voted to sell its property and relocate to a larger facility. The church's efforts to sell its property to another evangelical church were unsuccessful. As a result, the church wanted to sell its property on the 'open market' and build new facilities a few miles away. A church member filed a lawsuit in which she asked the court to enforce the 'restrictive covenant' in the deed that barred the church from selling its property to anyone other than a 'Protestant evangelical church.' A trial judge ruled that the restrictive covenant did not prevent the church from 'deviating from the trust terms to allow for the sale of the subject property to finance a new church building to serve the Protestant evangelical community.' The case was appealed to the state supreme court.

The supreme court began its opinion by observing, 'This case requires us to consider whether an alleged restrictive covenant in a deed … prevents the receiving church from selling [its property] in order to relocate to a larger, nearby property.' The court then reached the following conclusions:

Sale versus use

The court noted that 'whether the 1956 deed in fact restricts the sale of the property at all is questionable,' since 'a stipulation that the property be used for the stated purpose does not, unambiguously at least, prohibit the sale of the property and application of the funds to the stated purpose. This is exactly what the church proposes doing with the property. It does not propose using the funds generated by the sale of the property for any unrelated objective.'

Charitable trust

The court ruled that the 1956 deed created a charitable trust, and that the intent of the creator of the trust (the previous owner) had 'one overriding and dominant intent' in conveying the property to the church, and that was 'to benefit the church and to provide for its success, growth, and endurance as a church, in ministering and spreading the gospel to the evangelical Protestants of the community, regardless of where the ministries were specifically located.' The court concluded, 'The primary aspect of this purpose was to assist and ensure the continuation of the Protestant evangelical ministries of the community through the church, regardless of where they were specifically located and regardless of the name of that church and to see that ministry carried on.' While there was also an intent to ensure that the property would be available for the Protestant evangelical churches of the community, 'this purpose was secondary to the [prior owner's] overriding and dominant intent.'

The 'equitable deviation' doctrine

The 'equitable deviation' doctrine empowers the courts to approve deviations in the stated purposes of trusts under certain conditions. This doctrine is explained in a respected legal treatise as follows: 'The court may modify an administrative or distributive provision of a trust, or direct or permit the trustee to deviate from an administrative or distributive provision, if because of circumstances not anticipated by the grantor the modification or deviation will further the purposes of the trust.' Restatement (Third) of Trusts § 66(1). The court stressed that 'it is important to recognize that the objective of equitable deviation is not to disregard the intention of the grantor, but rather to give effect to what the grantor's intent probably would have been had the circumstances in question been anticipated.' However, the party 'seeking permission to deviate from the trust terms has the burden of showing either changed circumstances or that relevant circumstances were unknown to the grantor.' Upon a finding of unanticipated changed circumstances, the court must then determine whether a proposed modification or deviation 'would tend to advance (or, instead, possibly detract from) the trust purposes.'

In summary, the court concluded that the doctrine of equitable deviation allowed it to approve a deviation from the trust's original purpose if (1) changed, unanticipated circumstances occurred, and (2) a deviation would further the purposes of the trust. As to the first requirement, the court described 'present-day material circumstances not anticipated by the grantor' including significant congregational growth; limitations with the building and property; stricter development and building codes; drastic changes in the community; and changes in the attitudes, expectations, and needs of parishioners compared with the 1950s. These findings supported the conclusion that present-day conditions presented 'circumstances not anticipated by the grantor' in the maintenance of the church and its service to the community.

The court also concluded that the second requirement (deviation would further the purposes of the trust) was met. It pointed to testimony that 'the church's mission, and thus the trust's primary purpose, would in fact be substantially impaired by continued habitation of the specific parcel of property.' The court noted that 'growth is an essential and necessary part of a successful evangelical church,' that the previous owner 'subscribed to growth being one of the obligations placed upon an evangelical Christian church,' and that there was numerous problems with the current property making it impracticable for the church to carry out its mission. The court concluded that 'based on substantial evidence introduced at trial, we now find, as a matter of law, that changed, unanticipated circumstances exist that are material to the trust's purpose, and permitting deviation from the alleged restriction on alienation would in fact further the primary purpose of the trust. As such, the facts of this case permit deviation.'

The court made two final observations. First, any proceeds from the sale of the property 'shall remain subject to the charitable trust, and the church must use those proceeds to provide a new church facility serving the Protestant evangelical community.' Second, the claim that the church had breached its fiduciary duty as trustee of a charitable trust if permitted to sell the property 'is rendered moot by this opinion.'


Application . This case illustrates the importance of church leaders being aware of the existence of any restrictive covenants that apply to church property. A restrictive covenant is a restriction on the use of property. Usually, such covenants appear in deeds (as was true in this case). Property owners, including churches, generally are legally bound by such restrictions. Here are some practical tips that will assist church leaders in dealing with restrictive covenants:

  1. Never purchase property without a clear understanding of the existence of any restrictive covenants and how such covenants may limit the church's use of the property. The presence of a restrictive covenant can prevent a church from using property for its intended purpose. In most cases, restrictive covenants will be spelled out, or referenced, in the deeds to church property.
  2. If your church owns property, be sure you are familiar with any restrictive covenants before you plan any changes in the use of the property.
  3. In some cases, restrictive covenants can be modified or ignored because of widespread disregard by property owners, or because of substantial changes in the properties subject to the restrictions. However, as the church in this case learned, establishing such an exception can be a very costly legal battle that may take years. The attorneys fees you incur ordinarily will not be covered by any insurance policy, so they will be an expense the church must bear. Church leaders should never assume that a covenant can be ignored. Check with a real estate attorney for an opinion regarding the current viability of a covenant.
  4. Church leaders also should be aware that restrictive covenants often provide that a property owner who violates the restrictions is required to pay the legal fees incurred by other property owners in enforcing them. In other words, restrictive covenants not only may prevent a church from using property for a purpose that violates the covenant, but they also may force the church to incur an unbudgeted and possibly substantial expense in paying the legal fees of neighbors who successfully sue to enforce the covenant. Niemann v. Vaughn Community Church, 113 P.3d 463 (Wash. 2005).

Legal Developments

Personal Injuries on Church Property and During Church Activities – Part 1

The Colorado Supreme Court ruled that a small business owner was not liable on the basis of negligent supervision for an employee’s sexual molestation of a 12-year-old girl.

Richard R. Hammar, Attorney, CPA
Bio

The Colorado Supreme Court ruled that a small business owner was not liable on the basis of negligent supervision for an employee's sexual molestation of a 12-year-old girl occurring on business premises on a day when the business was closed. While this case did not involve a church, the court's conclusions will be instructive to any employer. An owner of a dry cleaning business (Josh) hired a male employee (Steve), and later promoted him to the position of manager. As manager, Steve had keys to the premises and was responsible for operating the business, which included opening and closing the store. However, Steve did not have authority to bring third parties to the business during non-working hours.

On a Sunday morning when the store was closed, Steve told a neighbor that he was going into work to provide a carpet cleaner with access to the premises, and he asked if the neighbor's 12-year-old girl (the "victim") could accompany him. The neighbor agreed, and Steve took the victim to the store. While there, he took the victim to a back office where he locked the door and sexually assaulted her. Steve was later prosecuted and convicted for felony child molestation, and was sentenced to prison. The victim's parents sued Josh, the owner of the store, claiming that he was liable for Steve's behavior on the basis of negligent supervision.

A trial court found that Josh was negligent in his supervision of Steve and awarded damages. The court cited testimony from three former women employees who told Josh that Steve had sexually harassed and fondled them during business hours. The young women related several instances where, during business hours, Steve asked them to perform sexual acts as well as touched their breasts and buttocks. All three quit their positions and told Josh of the episodes. Additionally, one of the employee's mothers called Josh and warned him of civil liability.

The state supreme court reversed the trial court's ruling, and dismissed the negligent supervision claim. The court noted that "to establish liability, the plaintiff must prove that the employer has a duty to prevent an unreasonable risk of harm to third persons to whom the employer knows or should have known that the employee would cause harm." The court conceded that an employer may be liable on the basis of negligent supervision for actions of an employee outside of the scope of employment, but it concluded that the employee's acts must be "so connected with the employment in time and place" that the employer "knows that harm may result from the employee's conduct and that the employer is given the opportunity to control such conduct." The court concluded that the victim failed to produce any evidence that Josh knew or should have known that Steve would bring a 12 year-old girl, with no connection to the dry cleaners, to the store when it was closed and then sexually assault her there. The court acknowledged that there was substantial evidence that Josh knew of Steve's proclivities to engage in lewd and sexual behavior with the female employees on the premises during business hours, but this knowledge did not suggest that he was a risk of molesting minors on store premises when the business was closed.

The court rejected the victim's claim that Josh's knowledge of Steve's lewd conduct with both employees and customers created a duty of care to all women and girls who came on the premises regardless of whether he could anticipate their presence. It noted, "The victim has undoubtedly suffered great harm from the assault in this case. However, we do not embrace a theory of negligent supervision that would be an open invitation to sue an employer for the intentional torts of an employee founded upon a generalized knowledge of that employee's prior conduct. We emphasize that an employer is not an insurer for violent acts committed by an employee against a third person."


Application
. This case is instructive for a couple of reasons. First, it illustrates that employers (including churches) have a duty to supervise any employee or volunteer whom they know to be a threat of harm to others. Church leaders should recognize that allowing a person who has engaged in sexual misconduct in the past to have unrestricted and unsupervised access to church property and activities exposes the church to possible liability in the event the person commits a similar act. Second, the case demonstrates that an employer, including a church, may be liable on the basis of negligent supervision for the sexual assaults of its employees that occur outside of the normal scope of employment if they are "so connected with the employment in time and place" that the employer "knows that harm may result from the employee's conduct and that the employer is given the opportunity to control such conduct." As this case illustrates, this liability may extend to acts committed on church property "after hours" or on days when the church is closed. Keller v. Koca, 111 P.3d 445 (Colo. 2005).

Legal Developments

Personal Injuries on Church Property and During Church Activities – Part 2

A North Carolina court ruled that the parents of a 12-year-old boy were not liable for injuries the youth director sustained.

Richard R. Hammar, Attorney, CPA
Bio

Key point 10-09.1. Some courts have found churches liable on the basis of negligent supervision for a worker's acts of child molestation on the ground that the church failed to exercise reasonable care in the supervision of the victim or of its own programs and activities.
Negligence as a Basis for Liability

A North Carolina court ruled that the parents of a 12-year-old boy who negligently collided with a church's youth director while skiing were not liable for injuries the youth director sustained.

A youth group from a Florida church went on a skiing trip to West Virginia. At the same time, a youth group from a North Carolina church was on a trip to the same ski resort. A 12-year-old boy (Nathaniel) with the North Carolina group had no previous skiing experience. Upon arriving at the ski slope, Nathaniel and a friend went skiing on a beginner slope. An experienced adult skier from the North Carolina church supervised the two boys. Later that day, an adult supervisor (Linda) of the Florida youth group was instructing an inexperienced teenage skier how to ski on the beginner slope. After Linda and the young skier reached the bottom of the beginners' slope, she gave the young lady the "thumbs up" sign indicating she had done a good job. As she was finishing the motion, Nathaniel skied into her from behind. Linda had not seen him coming.

Just prior to the accident, Nathaniel was skiing the beginners' slope with a friend. His adult supervisor was skiing behind them. While skiing the "bunny slope," Nathaniel hit an icy patch and became "out of control," which caused him to ski faster. Although Nathaniel tried to avoid hitting Linda, he collided with her. Linda suffered a broken leg and a displaced broken hip. She remained in the hospital for five days, underwent two surgeries, had a steel plate placed in her leg, attended a rehabilitation clinic for two weeks, had to have around the clock care for seven weeks, and had to use a walker, cane, or crutches for over a year.

Linda sued the Nathaniel's parents, claiming that their negligence, combined with Nathaniel's negligence, caused her injuries. She argued that the parents were negligent because they sent their child on a ski trip knowing that he had never skied, without providing him ski lessons that were available and would have made him a much safer skier. Had Nathaniel received ski lessons, he would have been taught to sit down when out of control and the collision would have been avoided. The trial court dismissed all claims against the parents, and Linda appealed.

The appeals court ruled that "the failure to take a ski lesson prior to skiing for the first time on the beginners' slope does not constitute negligence." It continued, "There are several ways in which a person may learn how to ski-trial and error or another person may provide instruction. Indeed, at the time of Linda's accident, she was instructing an inexperienced teenager on how to ski. Similarly, Nathaniel was skiing with an experienced adult skier on the beginner slope, who was also supervising the boys. Moreover, [the church's youth director] testified that upon their arrival at the ski resort, they had been instructed on safety and respect on the slopes by the company with whom the church contracted to coordinate the ski trip." Frank v. Funkhouser, 609 S.E.2d 788 (N.C. App. 2005).

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Legal Developments

Church Property – Part 2

A Texas court ruled that a church had to be evicted from its property because its use of the property for religious purposes violated a “restrictive covenant” in a prior deed.

Richard R. Hammar, Attorney, CPA
Bio

• Key point 7-13. A restrictive covenant is a restriction on the use of property. Such restrictions often are noted in deeds to property, but they may appear in other documents as well. Such restrictions apply to a church's use of its property.

* A Texas court ruled that a church had to be evicted from its property because its use of the property for religious purposes violated a "restrictive covenant" in a prior deed. An oil company owned and operated an oil pipeline terminal that served as a bulk fuel storage facility. Adjacent property owners complained about soil and groundwater contamination, and sued the oil company for damages. A settlement of these claims was reached that imposed on the oil company a duty to clean up the property and monitor the success of its efforts. The settlement agreement also required the creation of a "restrictive covenant" in the title to the property. The covenant stated that the property "shall be used for commercial/light industrial purposes only." The oil company eventually sold the property to a commercial company, which later sold the property to a church. The sale to the church involved a warranty deed that was "subject to any and all restrictions, encumbrances, easements, covenants and conditions" on the property.

Following its purchase of the property the church converted an existing building into a sanctuary where worship services were conducted four times each week. The oil company later learned of the church's purchase and use of the property, and it informed the church in writing that its use of the property for religious purposes violated the restrictive covenant in the deed. The oil company later asked a court to issue an order prohibiting the church from using the property "for church services or activities related to the church or anything else other than commercial or light industrial purposes." The court did so, and the church appealed. A state appeals court concluded:

The church is organized primarily for religious purposes. All other activity on the property is conducted for the purposes of supporting the church's religious mission. Church services may constitute only seventeen percent of the time the property is used for activities; however, they form the fundamental core of the church's use of the property. The issue we must address here is not, of course, whether these sorts of religious activities on property are generally permissible or desirable, but whether the church's use of the property is a distinct or substantial breach of the restrictive covenant's requirement that the property be used solely for "commercial/light industrial" purposes. Our resolution of this issue must rest not on any personal views regarding religious activities but on Texas law. Applying these principles, we conclude that the church's use of the property for church purposes is a distinct or substantial breach of the terms of the restrictive covenant.

The court rejected the church's argument that enforcing the restrictive covenant violated its right of religious freedom under the state constitution. It noted that the courts have "routinely rejected the notion that a neutral, otherwise valid restrictive covenant violates constitutional religious freedom protections if applied against a church." It cited an earlier case in which a church built a sanctuary and education building on property that was subject to a restrictive covenant prohibiting any structure except a single-family dwelling. Ireland v. Bible Baptist Church, 480 S.W.2d 467 (Tex. App. 1972). In ordering the church to demolish its buildings, a court rejected the church's claim that doing so would violate the constitutional guaranty of religious freedom.

The court acknowledged that restrictive covenants might be ignored if they "applied only to Baptist churches while permitting those of other denominations." But, because the covenant in this case "applied equally to the religious activities of all denominations and faiths," it was presumably valid.


Application
. Many churches have purchased property that contains one or more restrictive covenants that restrict a church's lawful use of its property. If church leaders are not aware of the existence of a covenant, they may inadvertently violate it. As this case demonstrates, this can compel the church to limit or even cease use of the property. Here are some points to note: (1) Carefully inspect the proposed deed to any property you are acquiring by purchase or gift. Does it contain one or more restrictive covenants that could hinder the church's use of the property? If so, this issue must be resolved before title to the property is transferred to the church. (2) Check out prior deeds in the "chain of title" of property prior to purchase, since restrictive covenants may be imposed in a prior deed. Such covenants "run with the land" because each subsequent deed, like the deed in this case, recites that it is "subject to any and all restrictions, encumbrances, easements, covenants and conditions" on the property. (3) Check out the deed to your current property to see if it contains one or more restrictive covenants. Do the same with prior deeds in the chain of title. A title company or real estate attorney can perform this task for you. Cornerstone Church Corporation v. Pizza Property Partners 160 S.W.3d 657 (Tex. App. 2005)

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Legal Developments

Personal Injuries on Church Property and During Church Activities – Part 1

A Michigan court ruled that a church was liable on the basis of negligent supervision for injuries sustained by a small boy.

Richard R. Hammar, Attorney, CPA
Bio

Key point 10-11. A church may be legally responsible on the basis of negligent supervision for injuries resulting from a failure to exercise adequate supervision of its programs and activities.
Negligence as a Basis for Liability

A Michigan court ruled that a church was liable on the basis of negligent supervision for injuries sustained by a small boy who slipped and fell off of a piece of exercise equipment on the church's property. A young boy (the "victim") attended a church-based head start program. One day, when the class was outdoors, the victim wandered away from the other children to play on the monkey bars. He was not noticed by the teacher's assistant assigned to his class. While playing on the monkey bars, the victim fell and broke his arm. His mother sued the church, claiming that her son's injury was caused by the church's negligent supervision. A trial court dismissed that case, concluding that the victim's fall and injury "did not occur as a result of any negligence of any individual." A state appeals court concluded that there was enough evidence of negligence that the case should not have been dismissed. The court observed, "A teacher owes a duty to exercise reasonable care over students in his or her charge …. The evidence showed that three teachers were on the playground. The victim wandered away from the group unnoticed by the assistant assigned to his class, climbed on the monkey bars, fell and was injured. There was no evidence that the other teachers were supervising him. Such evidence was sufficient to create a question as to the issue of negligent supervision. It is plausible that the victim would not have wandered off from the group or at least not gone on the monkey bars unsupervised had there been proper supervision."

One judge dissented from the court's ruling. Calling the case a "frivolous action," he observed, "Here, three adults were supervising fifteen children at the time of the accident. The ratio required by the state Department of Consumer and Industry Services is one caregiver present for every ten children …. The child's sudden and unexpected action of losing his grasp of the monkey bars was a true accident. The child fell off the playground equipment owned by the church. There's no allegation of any defect in the equipment. This is an accident. The incident did not occur as a result of any negligence of any individual." The dissenting judge also noted that the church was not guilty of negligence since "greater supervision would not have prevented the victim from losing his grasp of the monkey bars."


Application
. This case illustrates the difficulty often encountered by the courts in applying the principle of negligent supervision. It is true that churches have a duty to exercise reasonable care with regard to the supervision of minors in their custody, and a breach of that duty constitutes negligent supervision for which the church may be liable should an injury occur. However, it is often difficult to define the term "reasonable care." This case is a good example. The evidence showed that no amount of supervision would have prevented the victim from falling from the monkey bars, and so it is difficult to disagree with the trial court's conclusion that the church was not negligent. Daniels v. New St. Paul Tabernacle Church, 2003 WL 1984453 (Mich. App. 2003).

Legal Developments

Personal Injuries on Church Property and During Church Activities – Part 3

A California court ruled that a church was not responsible on the basis of either “premises liability” or negligent supervision for injuries suffered by a volunteer worker.

Richard R. Hammar, Attorney, CPA
Bio

Key point 10-11. A church may be legally responsible on the basis of negligent supervision for injuries resulting from a failure to exercise adequate supervision of its programs and activities.
Negligence as a Basis for Liability

A California court ruled that a church was not responsible on the basis of either "premises liability" or negligent supervision for injuries suffered by a volunteer worker who fell while on a ladder repainting the church.

A church building needed repainting. A church member ("Jerry") had been self-employed doing maintenance and repair work for many years, and had done previous maintenance work at the church on a volunteer basis. Because of Jerry's experience, the pastor asked him to repaint the building as an unpaid volunteer. Jerry agreed, but told the pastor that the building must first be sandblasted to remove the old paint. The pastor agreed to supply a sandblaster. Jerry, who had used a sandblaster more than 50 times in the past, asked the pastor to supply scaffolding for him to use while sandblasting. The pastor said the church could not afford scaffolding, but offered to provide a ladder instead. Jerry had never sandblasted from a ladder before, but knew other people safely did so, and agreed. Jerry informed the pastor that he would need assistants, including someone to hold the ladder, and asked the pastor for permission to hire the men who usually worked with him. The pastor again responded by saying that the church did not have the funds to pay for these workers, and said that he would ask fellow church members to help out. Jerry agreed to this arrangement. A short time later, Jerry showed up at the church to perform the sandblasting. The church supplied a sandblaster, ladder, and three workers. One worker put the sand in the sandblaster. The others were to hold the ladder. While Jerry was sandblasting the church building from atop the ladder, the pressure from the sandblaster moved the ladder away from the building and he fell, sustaining injuries. He assumed that the ladder fell because the two workers had let go of it.

Jerry sued his church claiming that it was liable for his injuries on two grounds: (1) "premises liability" (the church, as the owner of the premises, was liable for injuries caused by dangerous conditions on its property, and allowing unskilled workers to assist Jerry constituted a dangerous condition); and (2) negligent supervision. The trial court dismissed the case, concluding that there was no evidence that the church controlled the work and there was therefore no duty owed to Jerry to provide a safe worksite. The case was appealed.

premises liability

The appeals court concluded that the church could not be liable for Jerry's injuries on the basis of premises liability since it was Jerry, and not the church, that maintained control over the sandblasting operation. The court concluded,

It is undisputed that Jerry was an experienced sandblaster. It does not appear that the pastor even knew sandblasting was required. The pastor was not at the jobsite. Jerry admitted he was the only person at the jobsite who gave direction to [the two volunteers who were holding the ladder]. While Jerry may have believed he was not supervising the work of [the two volunteers], there is no dispute that he, and no one else, gave direction to [the volunteers] at the jobsite. Jerry, and no one else, told [them] to hold the ladder so he would not fall …. The pastor and Jerry agreed the work would be done with a church-provided sandblaster, on a church-provided ladder, with church-provided volunteer assistants. Jerry agreed to perform the work under those conditions and directed the assistants as he felt necessary at the worksite. The evidence is undisputed that the church did not control [the volunteers] at the worksite; Jerry did. Therefore, he cannot pursue a claim against the church for [premises liability] based on [the volunteers'] conduct at the worksite.

negligent supervision

Jerry alleged that the church was liable for his injuries on the basis of negligent supervision because it knew or should have known that the volunteers who held the ladder had poor judgment and would act with reckless disregard for his safety, and failed to sufficiently investigate the volunteers before assigning them to the work. The court rejected this basis of liability, noting that "holding a ladder is unskilled work" and that Jerry produced no evidence showing that the volunteers "were somehow incapable of properly holding the ladder." Further, Jerry admitted that the volunteers had held the ladder correctly for a significant length of time prior to the accident. The mere fact that Jerry fell "is not sufficient to show that the volunteers let go of the ladder because they were somehow incapable of the job and the church should have known it." Amarra v. International Church of the Foursquare Gospel, 2003 WL 254023 (Cal. App. 2003).

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