Zoning Ordianance Ruled Unconstitutional

A court recently made an important ruling.

Richard R. Hammar, Attorney, CPA

Bio

State: Alabama
Categories: Church Property, Zoning

Church Law and Tax 1991-03-01 Recent Developments

Zoning

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

• Does a county’s practice of prohibiting churches from building new facilities if neighboring residents object violate the churches’ constitutional right of religious freedom? Yes, concluded a federal district court in Alabama in an important ruling. A county adopted a new zoning ordinance that limited churches to “institutional districts.” The ordinance purposely failed to recognize any land as an institutional district, so that churches would be forced to seek a zoning variance before purchasing property for church use. This procedure was designed to give the county “better site development controls over institutional construction.” A Mormon congregation that had outgrown its existing facility attempted to purchase land on which it proposed to construct a new sanctuary. It filed an application to have the property rezoned as an “institutional district,” but its application was denied by the county following a hearing in which several neighboring residents expressed “vociferous opposition.” The residents lived in an affluent residential district adjacent to the church’s proposed building site, and they were horrified by the impact the church would have on the “aesthetics” of the community and the value of existing homes. The county commission based its denial of the church’s application on the basis of the “will of the people.” One commissioner stated that churches should not locate anywhere that they are not wanted. The court noted that the church had outgrown its present facility, and that the church had “as a central tenet of its faith the need to assemble together and strengthen the faith of each other and to partake of communion.” The court concluded that the church’s constitutional right to exercise its religion was violated by the county’s procedure: “It is undisputed that the primary, if not the sole, policy reason for establishing the [county’s institutional district] system was to give it ‘site control’ …. The court recognizes that the [county is] allowed to consider … neighborhood aesthetics. On the other hand, it is too great a burden on religious interests to allow this to be determined [in each case] based upon neighborhood opposition …. Allowing churches to go only where they are welcome smacks of an unreasonable burden, even if the opposition is not related to the denomination of the church …. The court’s primary conclusion is that the burden here on religion is that the ability of a church to locate or not is dependent on the acceptability of that church, or any church, to the surrounding community, without there having been any predetermination that churches are allowed to go in any area.” This case will lend support to the right of churches to acquire land for church use if (1) no land is zoned for church use, and churches are required to apply for a zoning variance for any land that they purchase for church use, and (2) the decision whether or not to grant the zoning variance depends on opposition or support by neighboring residents. Church of Jesus Christ of Latter-Day Saints v. Jefferson County, 741 F. Supp. 1522 (N.D. Ala. 1990).

© Copyright 1991, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m82 m47 c0291

Legal Developments

Failure to Pay Property Taxes

Churches that fail to pay taxes may lose property in a tax sale.

Richard R. Hammar, Attorney, CPA

Bio

State: Maryland
Categories: Church Property

Church Law and Tax 1991-03-01 Recent Developments

Church Property

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

• Can a church lose a portion of its property in a tax sale because of its failure to pay property taxes? Yes, said a Maryland state appeals court. A church received a parcel of vacant land as a gift. Church officials did not believe that the church was required to pay property taxes on the land. They assumed that the land had tax-exempt status, and they had no knowledge of taxes assessed against the property by the county. Tax bills were sent to the title insurance company that provided the church with an insurance policy on the donated land, since its address was the only address listed on the deed to the property. The tax collector assumed that this was the church’s address. The legal name of the church that appeared on the deed and in the recorder’s office was different from the name the church used in the telephone directory and on its church sign, and so the collector had no way of knowing that the address on the deed was not the church’s address. Eventually, the tax collector sold the property at a tax sale. The church was unaware that the tax sale was occurring, since it never received notice of the sale. The only notice of the sale appeared in a newspaper. The church challenged the sale of its property on the grounds that it had innocently assumed that the property was tax-exempt, that it never received a tax bill, and that it never received actual notice of the tax sale. All of these grounds were rejected by the state appeals court, which upheld the sale of the church’s property. In rejecting the church’s claims that it was unaware of the property’s tax status, or of the tax sale, the court observed that vacant land is not tax-exempt under Maryland law and therefore the church’s assumptions regarding the donated property’s tax status were unreasonable. Further, the church had been “less than diligent in failing to ascertain that taxes were in default [and] that the sale had been made ….” The court emphasized that the notice in the newspaper was sufficient since there were no other reasonable means of contacting the church under the circumstances. In short, “the church enjoys no special status in relation to the property at issue because of the religious nature of its organization.” What is the significance of this case to local churches? Simply this—when acquiring real estate (whether by purchase or gift), be certain of two things. First, that the address of the church listed on the deed is correct. And second, if the legal name of the church as it appears on the deed is different from the name commonly used by the church (in the telephone directory, on the church sign, etc.), be sure to list both names. For example, if the legal name of a church is First Baptist Church and the commonly used name is “Baptist Temple,” then the deed should recite the church’s name as “First Baptist Church, also known as Baptist Temple.” Be sure to make the attorneys handling any acquisition of church property aware of both points. St. George Antiochian Orthodox Christian Church v. Aggarwal, 576 A.2d 224 (Md. App. 1990).

Legal Developments

Injuries Sustained on Church Property

A court ruled that a member of an unincorporated church could not sue.

Richard R. Hammar, Attorney, CPA

Bio

State: Pennsylvania
Categories: Church Property, Personal Injuries on Church Property or During Church Activities

Church Law and Tax 1991-03-01 Recent Developments

Unincorporated Churches

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

• A Pennsylvania court ruled that a member of an unincorporated church cannot sue the church for injuries sustained on church property. A church member was injured when she slipped and fell while leaving Christmas services. She sued her church, alleging that the church board had been negligent in failing to provide adequate lighting, handrails, and stripes on the stairs where the accident occurred. In dismissing the lawsuit, the court observed: “The law in Pennsylvania is clear: the members of an unincorporated association are engaged in a joint enterprise, and the negligence of each member in the prosecution of that enterprise is imputable to each and every other member, so that the member who has suffered damages through the tortious conduct of another member of the association may not recover from the association for such damages.” The court concluded that the victim “was a member of the association and thus any negligence of her fellow members is imputed to her and she cannot recover in tort …. [The victim] was a member of the church, an unincorporated association, at all times material to this case. As a member of the association … the decision not to place a handrail, lights, and stripes on the stairway is attributed to her. She cannot recover in tort because any negligence of the board is attributable to her.” What is the significance of this case? It illustrates that members of unincorporated churches may not be able to sue their church for injuries they sustain on church property or during church activities. Zehner v. Wilkinson Memorial United Methodist Church, 581 A.2d 1388 (Pa. Super. 1990).

Legal Developments

Churches and Zoning Law

A court ruled that a law prohibiting churches from meeting in commercial zones does not violate the Constitution.

Richard R. Hammar, Attorney, CPA

Bio

State: Federal
Categories: Church Property, Zoning

Church Law and Tax 1991-03-01 Recent Developments

Zoning

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

• A federal district court in Minnesota ruled that a city’s refusal to allow a church to operate in a commercial zone did not violate the church’s constitutional rights. A city zoning ordinance permitted churches in residential zones, but not in commercial or industrial zones. A new church congregation began meeting in a pastor’s home. As the congregation grew, it began meeting in a public school building, and then in a commercial building. Eventually, the city notified the church that use of the commercial building violated city zoning law. The church unsuccessfully sought to amend the zoning ordinance to permit churches in commercial zones, and then it sought to locate other sites for church services. The church was not able to find suitable accommodations in a residential zone, and continued to meet in the commercial building. When the city ordered the church to vacate the building, the church filed a lawsuit alleging that the city’s actions violated the constitutional guaranty of religious freedom. The court rejected the church’s position. It noted the constitutional guaranty of religious freedom is not violated unless “something is prohibited because of its religious affiliation or its display of religious belief.” This was not the case here, the court concluded, since the city had not barred churches from commercial zones because of their religious character: “The zoning ordinance neither excludes only churches from the commercial and industrial zones nor reveals an anti-religious intent.” The court also rejected the church’s claim that the city’s actions violated the constitutional guaranty of the “equal protection of the laws.” This guaranty ensures that “all persons similarly situated should be treated alike.” The church pointed out that a number of other charitable organizations (including Alcoholics Anonymous and the Masonic Lodge) were permitted to operate in commercial zones, and thus the exclusion of churches was unconstitutional. The court observed that “what the church cannot deny, however, is that the church describes itself precisely as a ‘church’ while Alcoholics Anonymous and the Masonic Lodge cannot be so defined.” This ruling is clearly erroneous, and hopefully will be reversed on appeal. The court’s rejection of the church’s “equal protection” argument on the ground that Alcoholics Anonymous and the Masonic Lodge are not “churches” defies belief. Such an interpretation would virtually write this protection out of the constitution. The court’s cavalier treatment of religious liberty is equally disturbing. What would violate the constitutional guaranty of religious liberty according to this court? It gave two examples—a state law “banning the casting of statues that are to be used for worship purposes,” or “prohibiting bowing down before a golden calf.” Any further developments will be reported in future issues of this newsletter. Cornerstone Bible Church v. City of Hastings, 740 F. Supp. 654 (D. Minn. 1990).

Legal Developments

Counseling Center’s Request for Building Permit Denied

The services offered would not have been for “religious purposes” as required by zoning law.

Richard R. Hammar, Attorney, CPA

Bio

State: Massachusetts
Categories: Church Property, Counseling, Zoning

Church Law and Tax 1991-01-01 Recent Developments

Zoning

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

• A Massachusetts appeals court upheld a city’s denial of a pastoral counseling center’s application for a building permit to convert space in a church building into a counseling center. A Congregational church opened a pastoral counseling center in 1976. To extend its reach beyond the immediate congregation to the broader community, the center relocated to the Andover-Newton Theological School and became an ecumenical practice. To emphasize the continuity between pastoral counseling and church activity, the center later decided to relocate in a local church. It made arrangements with a Baptist church to rent a portion of its facilities for a ten-year term. The counseling center planned to use 6 pastoral counselors who would see about 120 clients per week. Counseling sessions would last about fifty minutes, for which a fee of $35 to $50 would be charged. The counselors were prepared to treat a variety of problems, including depression, grief, marital difficulties, substance abuse, job stress, and loneliness. The counseling center is open to the general public, and its clientele is not limited to Baptists, Christians, or even believers in God. Further, the counselors do not proselytize. The city denied the center’s application for a permit to remodel a portion of the church into a counseling center, since this activity would not be for “religious purposes” as required by the zoning law. The court noted that “the services offered by the center, and its method of delivering them are not significantly different from what a neutral observer coming upon the scene would size up as a mental health center applying standard psychological and psychiatric techniques.” The court acknowledged that “religious activity, to be sure, may involve more than prayer and worship.” However, on the other hand, “some theological, inspirational or spiritual content does not automatically imbue an activity with a religious purpose.” The court emphasized that the center would be operated by a tenant rather than by the church itself, and “is not designed primarily for parishioners of that church. Specific religious doctrine is subordinated, and the doctrinal faith of the counselors is to play no role in the counseling sessions. The readiness to give psychological counseling to nonbelievers illustrates that, depending on the reaction of the particular client, religion may be absent from certain counseling sessions altogether.” Under these circumstances, the court agreed with the city’s conclusion that the center would not be operated for a “religious purpose” as required by law. The court did acknowledge that a pastoral counseling center located in a church building and operated by the church primarily for its own members would be a religious purpose. Such was not the case here. Needham Pastoral Counseling Center, Inc. v. Board of Appeals, 557 N.E.2d 43 (Mass. App. 1990).

Legal Developments

Designation of a Church as a Historical Landmark

This designation may violate churches’ constitutional rights.

Richard R. Hammar, Attorney, CPA

Bio

State: Washington
Categories: Church Property

Can a city prevent a church from altering its sanctuary by designating it a "landmark"?

That was the issue before the Washington Supreme Court in an important ruling. The city of Seattle adopted an ordinance giving the city authority to declare any building to be a landmark. The ordinance was designed to preserve and protect those sites reflecting significant elements of the city's cultural or historic heritage. Buildings designated as a landmark by the city could not be structurally altered without city approval.

The city designated a church to be a landmark, and the church sued the city arguing that the landmarks ordinance violated the church's constitutional right to freely exercise its religion.

Specifically, the church claimed that its designation as a landmark impaired its religious freedom in the following ways: (1) city approval and bureaucratic "red tape" would be required prior to making any structural alterations in the sanctuary; (2) a secular government had the authority to grant or deny a church's request to develop its worship facility; (3) the value of the church property was decreased significantly by the landmark designation; and (4) the ability of the church to sell its property was diminished. A trial court rejected the church's claims, but the case was then appealed directly to the state supreme court which agreed with the church's position.

The supreme court began its opinion by emphasizing that its decision "will be welcomed throughout the United States" since it would be the first decision to address the application of city landmark laws to churches. The court noted that for a church to establish a violation of its constitutional right to freely exercise its religion, it must demonstrate that "the government has placed a substantial burden on the observation of a central religious belief or practice" and that the government's conduct is not justified by a "compelling governmental interest."

The court concluded that the city's landmark law did place a substantial burden on the church's religious practices, and that no compelling governmental interest justified the burden: "The practical effect of the [ordinance] is to require a religious organization to seek secular approval of matters potentially affecting the church's practice of its religion." This "creates unjustified governmental interference in religious matters of the church and thereby creates an infringement on the church's constitutional right of free exercise."

The court concluded: "We hold that the preservation of historical landmarks is not a compelling state interest. Balancing the right of free exercise [of religion] with the aesthetic and community values associated with landmark preservation, we find that the latter is clearly outweighed by the constitutional protection of free exercise of religion and the public benefits associated with the practice of religious worship within the community."

What this means for churches

What is the significance of this case? An increasing number of cities are adopting landmark laws, and it is certain that many churches will be designated "landmarks." Churches that at first are honored to be designated "landmarks" often come to regret the designation when they realize the substantial decrease in the value of their property and the legal restrictions that apply to the alteration, demolition, or sale of their property. There is now an important legal precedent available to churches wishing to avoid these negative consequences. First Covenant Church v. City of Seattle, 787 P. 2d 1352 (Wash. 1990).

Legal Developments

Construction

Projects

Richard R. Hammar, Attorney, CPA

Bio

State: Florida
Categories: Church Property

Church Law and Tax 1990-09-01 Recent Developments

Construction Projects

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

• A Florida state appeals court ruled that a church was not liable on a mechanic’s lien filed by a company that supplied materials to a subcontractor working on a church construction project. The supplier filed the lien against the church’s property when it was not paid for materials that it supplied. The court ruled that the church was exempt from any mechanic’s lien arising out of the construction project since the general contractor (pursuant to the construction contract) had obtained a “payment bond” in favor of the church from a bond company that insured payment of all subcontractors and material suppliers on the job. Under Florida law, a payment bond exempts a property owner from liens of subcontractors and material suppliers, who must proceed directly against the bond company for payment. This case illustrates a very important point—churches may be liable for “double payment” of some construction expenses if subcontractors or suppliers are not paid. In many states, this risk can be eliminated by purchasing a payment bond. Such bonds should be considered prior to the beginning of any construction project. The risk of double payment also can be reduced by withholding progress payments until “lien waivers” are obtained from subcontractors and material suppliers. The risk of double payment is a real one that should be considered by church leaders prior to any construction project. Corporation of the President of the Latter Day Church or Jesus Christ v. Seymour Electric Supply, Inc., 558 So.2d 88 (Fl. App. 1990).

© Copyright 1990, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m35 m86 m35 c0690

Legal Developments

Wills, Trusts and Estates

Church Law and Tax 1990-09-01 Recent Developments Wills, Trusts, and Estates Richard R. Hammar, J.D.,

Richard R. Hammar, Attorney, CPA

Bio

Church Law and Tax 1990-09-01 Recent Developments

Wills, Trusts, and Estates

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

• Can a provision in a decedent’s will leaving the bulk of his estate to a church “solely for the building of a new church” be honored if the church has no plans to build a new facility? That was the issue before the Iowa Supreme Court in an important case. An elderly man drafted a will in 1971 that left most of his estate “in trust” to his sisters, and upon the death of the surviving sister, to a local Congregational church with the stipulation that the funds be used “solely for the building of a new church.” The man died in 1981, and his surviving sister died in 1988. Since the Congregational church had no plans to build a new sanctuary, it asked a local court to interpret the will to permit the church to use the trust fund not only for construction of a new facility but also “for the remodeling, improvement, or expansion of the existing church facilities” and for the purchase of real estate that may be needed for future church construction. The church also asked the court for permission to use income from the trust fund for any purposes that the church board wanted. The state attorney general, pursuant to state law, reviewed the church’s petition and asked the court to grant the church’s requests. However, a number of heirs opposed the church’s position, and insisted that the decedent’s will was clear, and that the church was attempting to use the trust funds “for purposes other than building a new church.” They asked the court to distribute the trust fund to the decedent’s lawful heirs. The local court agreed with the church on the ground that “gifts to charitable uses and purposes are highly favored in law and will be most liberally construed to make effectual the intended purpose of the donor.” The trial court’s ruling was appealed by the heirs, and the state supreme court agreed with the trial court and ruled in favor of the church. The supreme court began its opinion by observing that “it is contrary to the public policy of this state to indulge in strained construction of the provisions of a will in order to seek out and discover a basis for avoiding the primary purpose of the [decedent] to bestow a charitable trust.” The court emphasized that the “cy pres” doctrine clearly required it to rule in favor of the church. The “cy pres” doctrine (which has been adopted by most states) provides that “if property is given in trust to be applied to a particular charitable purpose, and it is or becomes impossible or impracticable or illegal to carry out the particular purpose, and if the [decedent] manifested a more general intention to devote the property to charitable purposes, the trust will not fail but the court will direct the application of the property to some charitable purpose which falls within the general charitable intention of the [decedent].” Applying the cy pres rule, the court concluded: “The will gave the property in trust for a particular charitable purpose, the building of a new church. The evidence clearly indicated that it was impractical to carry out this particular purpose. Furthermore, the [decedent] did not provide that the trust should terminate if the purpose failed. A trust is not forfeited when it becomes impossible to carry out its specific purpose, and there is no forfeiture or reversion clause.” The court concluded that the trial court’s decision to permit the church to use the trust fund for the remodeling, improvement, or expansion of the existing church facilities “falls within the [decedent’s] general charitable intention.” Accordingly, the trial court’s decision represented a proper application of the cy pres rule. Churches leaders should be aware of the cy pres rule, for it often has resulted in gifts to churches being upheld despite the contention of heirs that the precise purpose of the gift is not possible. Matter of Trust of Rothrock, 452 N.W.2d 403 (Iowa 1990).

Legal Developments

Zoning – Part 2

Church Law and Tax 1990-09-01 Recent Developments Zoning Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: California
Categories: Church Property

Church Law and Tax 1990-09-01 Recent Developments

Zoning

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

• A New Jersey state appeals court rejected an effort by concerned citizens to prevent a Jewish congregation from constructing a synagogue in their residential neighborhood. The congregation proposed to construct a 2,000 square-foot sanctuary with 120 seats and a parking lot with room for 20 vehicles. The congregation claimed that it had to construct its building in a residential area, since most of its members were Orthodox Jews who had to walk to services on the Sabbath. The 20 parking spaces satisfied the local zoning law which required 1 parking space for every 6 sanctuary seats. The neighboring residents conceded that the planned synagogue met the technical requirements of the zoning ordinance, but they argued that the ordinance was invalid since it did not require adequate parking for houses of religious worship. A state appeals court rejected the neighbors’ position, and allowed the congregation to proceed with construction. The court acknowledged that zoning laws must advance the “public morals and the general welfare,” but it noted that “the courts have held that religious activity itself is in furtherance of public morals and the general welfare, and that religious institutions enjoy a highly-favored and protected status, which severely curtails the permissible extent of governmental regulation.” For a zoning law to be invalid, it must be arbitrary or not reasonably designed to advance public morals or the general welfare. The court concluded that the neighboring residents had failed to satisfy this test. While the court agreed that more parking spaces might be desirable, it could not agree that the zoning ordinance was “arbitrary.” It noted that the congregation’s members were forbidden to drive to religious services on the Sabbath, and that off-street parking was available to accommodate vehicles during occasional social events occurring during the week. The court also quoted with approval from rulings of the United States Supreme Court that have found that “the Constitution affirmatively mandates accommodation, not merely tolerance, of all religions, and forbids hostility toward any,” and that “[w]e are a religious people whose institutions presuppose a Supreme Being.” It concluded that “our branches of government have a right, indeed an obligation, to recognize the freedom of all to worship and to do that which is reasonable to respect this essential freedom.” The court acknowledged that “it was probably impossible” for a growing congregation to build a sanctuary in a residential neighborhood “without offending some residents.” However, “the law cannot expect the impossible.” Lakewood Residents Association v. Congregation Zichron Schneur, 570 A.2d 1032 (N.J. Super. 1989).

Legal Developments

Zoning – Part 1

Church Law and Tax 1990-09-01 Recent Developments Zoning Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: New York
Categories: Church Property, Zoning

Church Law and Tax 1990-09-01 Recent Developments

Zoning

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

• A federal appeals court ruled that a municipal zoning ordinance prohibiting churches in single-family residential areas without a conditional use permit did not violate the constitutional guaranty of religious freedom. The San Francisco City Code prohibits churches in residential districts unless a conditional use permit is granted. Before granting a permit, the city must determine that the proposed use is necessary, and compatible with the neighborhood, and will not be detrimental to the health, safety, convenience or general welfare of persons residing in the vicinity. A church desiring to establish a church in a single-family residence applied to the city for a permit. A group of 190 neighboring residents signed a petition in opposition to the permit, based on the following considerations: (1) there already are too many churches in the neighborhood; (2) the church would not maintain neighborhood characteristics; (3) there is a housing shortage in the neighborhood; (4) an additional church would create additional traffic that would create safety hazards for neighbors; (5) inadequate parking spaces; and (6) excessive noise. A city zoning commission denied the church’s permit request, and the church filed a lawsuit claiming that the city’s actions violated its constitutional rights. A federal district court ruled in favor of the city, and the church appealed. A federal appeals court also ruled in favor of the city. The appeals court based its decision on a 3-part test that it created. The court ruled that in evaluating whether a city’s denial of a church’s zoning permit application violates the constitutional guaranty of religious freedom, the following three factors must be considered: (1) the magnitude of the impact on the exercise of religious beliefs; (2) the existence of a compelling governmental interest justifying the burden on the exercise of religious belief; and (3) the extent to which recognition of an exemption from the permit procedure would interfere with the objectives sought to be advanced by the city. With regard to the first factor, the court rejected the church’s claim that the city’s denial of the permit exerted a significant impact on its religious beliefs. The court, noting that the church had been meeting in a rented hotel banquet room, observed that “it is difficult for us to find a significant burden on religious practice if the church had not previously been practicing home worship. The burden on religious practice is not great when the government action, in this case the denial of a use permit, does not restrict current religious practice but rather prevents a change in religious practice.” Further, the court emphasized that the city’s denial “did not prevent all home worship,” but rather a “denial to worship in this specific home. The burdens imposed by this action are therefore of convenience and expense, requiring [the church] to find another home or another forum for worship. We find that the burden on religious practice in this zoning scheme is minimal.” With regard to the second factor, the court observed that the city has an interest in protecting the interests of neighboring property owners, and that this interest is “particularly strong” when a church is applying for a nonresidential use in a residential neighborhood. With regard to the third factor, the court concluded that the “minimal” burden on the church’s religious practices and beliefs was clearly outweighed by the city’s “strong” interest in preserving the character and welfare of its neighborhoods. The court rejected the church’s contention that the city’s application of its zoning laws discriminated against churches generally, or that the city and the neighboring residents “conspired” to deprive the church of its constitutional rights. Christian Gospel Church, Inc. v. San Francisco, 896 F.2d 1221 (9th Cir. 1990).

Legal Developments

Zoning

Church Law and Tax 1990-07-01 Recent Developments Zoning Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: New York
Categories: Church Property, Zoning

Church Law and Tax 1990-07-01 Recent Developments

Zoning

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

• Can neighboring property owners prevent a church from operating a shelter for the homeless on its property? The was the issue before a New York court. In response to a citywide need for emergency shelters for thousands of homeless, an Episcopal church in New York City opened its doors to groups of 10 homeless men for temporary emergency shelter 3 nights each week. The church was part of a network of some 380 churches and synagogues in the city that provide more than 400,000 individual nights of temporary shelter annually. The city provides the churches and synagogues with beds, linens, clothing, toiletries, and cleaning supplies, and inspects shelters for compliance with health and safety regulations. Homeless men are transported to the church from a “drop-in center,” and arrive at 9:30 PM. They are picked up by bus the following morning at 6:00 AM. From the time of their arrival until their departure the next morning, the men are continually supervised and are not allowed to congregate in the street. The church’s minister asserted that sheltering the homeless is an important part of the church’s religious mission. Neighboring luxury condominium owners sought a court order preventing the church from continuing its homeless shelter. They complained that the shelter violated city zoning laws, and constituted a public nuisance. The court began its opinion by observing that the lawsuit “concerns the extent, if any, to which the court may or should be brought in as arbiter of a dispute involving the right of a church and its parishioners to exercise their religion and to practice Christian charity by temporarily sheltering the homeless and the rights of some adjacent property [owners] who fear crime, drug sales, prostitution and a [decrease] in their property values.” The court acknowledged that churches may only be used for religious and social purposes, but it noted that “it has long been held that a church or synagogue may be used for accessory uses and activities which go beyond just prayer and worship.” The court concluded that a church’s operation of a shelter for the homeless is a legitimate “accessory use” of a church, since it “is a use which is clearly incidental to, and customarily found in connection with,” a church. Therefore, a church’s operation of a homeless shelter did not violate the city’s zoning laws. Could the shelter be shut down on the ground that it constituted a nuisance? No, concluded the court. It observed that a nuisance involves an intentional, unreasonable, and substantial interference with another’s right to use and enjoy his property. The court concluded that the shelter was not a nuisance, since it was not an intentional, unreasonable, or substantial interference with neighboring landowners’ use or enjoyment of their properties. Greentree at Murray Hill Condominium v. Good Shepherd Episcopal Church, 550 N.Y.S.2d 981 (Sup. 1989).

Legal Developments

Church Property

A North Carolina appeals court refused to intervene in a church property dispute. A group

Richard R. Hammar, Attorney, CPA

Bio

State: North Carolina
Categories: Church Property

A North Carolina appeals court refused to intervene in a church property dispute. A group of church trustees asked a court to declare them the rightful owners of the church's property, and to order the pastor and his followers to vacate the premises.

The trustees alleged that for many years the church had recognized the authority of the Church of God denomination; that the pastor and his followers have refused to comply with the teachings or authority of the Church of God, and have not made required financial contributions to the denomination; that the pastor and his followers "seized" the church property and "converted it to their own personal use;" and, that in 1988 the state overseer of the Church of God intervened and appointed them as the "successor trustees" of the church and transferred title of all church properties to them.

The pastor and his followers maintained that the church had been organized many years before its affiliation with the Church of God; that it received no denominational assistance in constructing its sanctuary; and, that the church membership had voted to disaffiliate from the denomination at a duly called business meeting in 1988, at which time the church's property was conveyed to the successor church. A trial court agreed with the trustees, and ordered the pastor and his followers to vacate the property.

This ruling was appealed, and a state appeals court ruled in favor of the pastor and his followers. The court observed: "[O]ur review of the evidence indicates that [the pastor and his followers] have possessed and used the church property for many years, during a significant portion of which time [the pastor] served the church as its pastor and occupied the parsonage. This evidence does not indicate that [the pastor and his followers] have seized the church property or converted it to their own use as alleged in the complaint. Rather, the evidence tends to show that [they] are continuing in conditions of occupancy and use which have existed over a substantial period of time and that greater harm shall inure to [them] rather than [the successor trustees] as a result of the issuance of a preliminary injunction." Looney v. Wilson, 388 S.E.2d 142 (N.C. App. 1990).

Legal Developments

Zoning

A Pennsylvania state court ruled that a local zoning board acted improperly in refusing to

Richard R. Hammar, Attorney, CPA

Bio

State: Pennsylvania
Categories: Church Property, Zoning

A Pennsylvania state court ruled that a local zoning board acted improperly in refusing to allow a church to use a portion of its property for counseling services.

The church sought a permit allowing it to convert a building containing the church offices into a counseling center. The church offered extensive pastoral counseling services to members and non-members alike.

A zoning board denied the church's request on the ground that professional counseling was not a permitted use in a residential district (in which the church was located). The board expressed the view that "the counseling sought to be offered was of a secular nature and not directly related to the church's function."

The church challenged this ruling in court, and won. The court ruled that the church's properties could lawfully be used for counseling since "counseling is an integral part of the church's activities" and therefore was a permissible "church use." Church of the Saviour v. Zoning Hearing Board, 568 A.2d 1336 (Pa. Common. 1989).

Legal Developments

Church Property – Part 2

Church Law and Tax 1990-05-01 Recent Developments Church Property Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA

Bio

State: Alabama
Categories: Church Property

Church Law and Tax 1990-05-01 Recent Developments

Church Property

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

• Churches may obtain ownership of property through “adverse possession.” That was the conclusion of the Alabama Supreme Court in a recent decision. A property owner executed a deed transferring a tract of property to his son in 1958. This deed was not recorded until 1985. In 1960, the original owner conveyed the same property to a church, which promptly recorded its deed and used the property openly and without interruption until the original owner’s son claimed title to the property in 1986. The church rejected the son’s claim of ownership, and a lawsuit ensued. The court ruled that the church owned the property through “adverse possession.” It observed that “to obtain title by adverse possession, a claimant must prove possession of the land, openness, notoriety and exclusiveness of possession under claim of right … and continuity for the statutory period of ten years. These elements must be proven by clear and convincing evidence.” The court concluded that the church satisfied this definition since it “has been in actual, open, notorious, hostile, continuous, and exclusive possession of the disputed property for over 39 years.” Pogue v. White Stone Baptist Church, 554 So.2d 981 (Ala. 1989).

Legal Developments

Personal Injuries – Part 1

On Church Property or During Church Activities

Richard R. Hammar, Attorney, CPA

Bio

State: Ohio
Categories: Church Property, Personal Injuries on Church Property or During Church Activities

Church Law and Tax 1990-05-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

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

• Is a church responsible for the homosexual rape of a 6-year-old boy occurring on church property during Sunday School? That was the issue before an Ohio state appeals court in a significant ruling. The boy attended a Sunday School class of about 45 first and second graders at a Nazarene church. One adult female teacher was present on the day of the rape along with two teenage volunteers (one male and one female). During “story time,” the victim became disruptive, and the teacher allowed the male volunteer to “take him back and color” in an unused room. The adult teacher did not check on the boy for the remainder of the Sunday School session. The boy’s mother alleged that the male volunteer took her son to an unused room, slapped him into submission, raped him, and threatened to hurt or kill him if he “told anyone.” The boy and his mother later sued the church, the pastor, the Sunday School teacher, and the alleged rapist and his parents. The lawsuit sought money damages for personal injuries, emotional distress to the mother, loss of services, and medical and psychological expenses. With regard to the church, the lawsuit alleged that the boy’s injuries were a result of the church’s “negligent supervision” of its agents, and that the church had “willfully, wantonly and recklessly placed [the alleged rapist] in a position of control and supervision of the child, causing the aforesaid injuries.” The pastor and Sunday School teacher were sued personally for negligent supervision and negligently allowing the alleged rapist to have custody of the boy. A trial court awarded a “summary judgment” in favor of the church, and its pastor and Sunday School teacher. The victim and his mother appealed this judgment, and a state appeals court affirmed the trial court’s ruling. The appeals court noted that the church and its pastor and teacher were being sued for negligence, and it observed that “legal liability for negligence is based upon conduct involving unreasonable risk to another, which must be established by affirmative evidence tending to show that such conduct falls below the standard represented by the conduct of reasonable men under the same or similar circumstances. The established test of negligence is the conduct of a reasonably prudent man in like circumstances. [N]egligence does not consist of failing to take extraordinary measures which hindsight demonstrates would have been helpful.” The court further observed that a church is “not an insurer of the safety” of persons on its premises, but rather has only a “duty of ordinary care to avoid injury consistent with [existing] facts and circumstances.” Did the church and its pastor and teacher violate this duty of ordinary care toward the victim and his mother? No, the court concluded. It emphasized that the victim and his mother “have presented no evidence that [the church or its pastor or teacher] knew, or in the exercise of reasonable diligence should have known of or anticipated a criminal sexual assault by [the alleged rapist] upon another.” The victim and his mother placed great significance upon evidence that “a similar incident had occurred several years earlier.” In rejecting the relevance of this evidence the court observed simply that “there is no evidence that the church or its agents knew, or in the exercise of diligence, should have known of such prior activity.” Finally, the court noted that the victim and his mother cited no legal authority in support of their position. As a result, the appeals court upheld the summary judgment in favor of the church and its pastor and teacher. This ruling is significant for a number of reasons. First, it illustrates that churches are not “guarantors” or insurers of the safety of children (or adults) on their premises. They are legally responsible only for those injuries caused by a breach of their duty or ordinary care. Second, the appeals court’s ruling affirmed the trial court’s summary judgment in favor of the church and its pastor and teacher. The significance of a summary judgment cannot be overstated, since it represents a decision that the prevailing party is entitled to win as a matter of law without the necessity of a jury trial. The court in essence says that reasonable minds could not disagree as to the outcome of the case, and therefore it should be disposed of summarily. Such a ruling is an especially strong statement of the merits of the prevailing parties’ position. Clearly, it is a much stronger vindication of the position of the church and its pastor and teacher than a jury verdict in their favor. Third, the court hinted that its decision might have been different had the church (or its pastor or teacher) been aware of prior incidents of molestation by the alleged rapist. The court’s ruling was based squarely on the assumption that no such knowledge existed. Fourth, it is interesting that the church was not found negligent in having only one adult supervisor for a class of 45 first and second graders. Other churches should not take comfort in this aspect of the court’s ruling, for it is entirely possible that courts in other states would find such a low teacher-pupil ratio to be evidence of negligence. Finally, note that the court did not rule in favor of the alleged rapist or his parents. The liability of these persons will be decided by a jury. It will be interesting to see if the jury finds the alleged rapist’s parents responsible for the boy’s injuries. Any further developments in this case will be reported in future editions of Church Law & Tax Report. Bender v. First Church of the Nazarene (Ohio App. unpublished opinion 1989).

Legal Developments

Church Property – Part 1

Church Law and Tax 1990-05-01 Recent Developments Church Property Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA

Bio

State: New York
Categories: Church Property

Church Law and Tax 1990-05-01 Recent Developments

Church Property

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

• A New York court ruled that a local church had the authority to withdraw from a Methodist conference. A Korean congregation was organized in New York City in 1972 as an independent church. In 1985, the church agreed to join the New York Annual Conference of the Methodist Church. A “joinder agreement” was signed that gave the local church the right to withdraw from the conference and retain title to its properties “if in three years there is unhappiness with being a United Methodist Church.” Soon after the agreement was signed, dissension broke out among church members and the church voted by a two-thirds majority to withdraw from the conference. The conference dismissed the pastor of the congregation, and demanded that the church turn over all property to the conference. It then filed a lawsuit seeking a legal determination of the rights of the parties. A state appellate court ruled that the joinder agreement was a valid legal document that gave the local congregation the right to withdraw from the conference within three years and retain its properties. The court further ruled that whether or not the right to withdraw from the conference was properly exercised would be determined by that section of the state religious corporations law that governs independent churches (and not the Methodist Church), since “for the purpose of exercising its contractual right to withdraw [the local church] must be considered an [independent] church.” New York Annual Conference of the Methodist Church v. Nam Un Cho, 548 N.Y.S.2d 577 (1989).

Legal Developments

Zoning – Part 1

Church Law and Tax 1990-03-01 Recent Developments Zoning Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Church Property, Zoning

Church Law and Tax 1990-03-01 Recent Developments

Zoning

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

• An Illinois state appeals court ruled that a city’s refusal to grant a church’s application for a “conditional use permit” violated the church’s first amendment guaranty of religious freedom. Here are the facts. A Lutheran church in a Chicago suburb experienced explosive growth, but was left with inadequate parking space. To help solve its parking problem, the church sought permission from the city to convert two private residences that it owned on adjoining property into 57 additional parking spaces. The city denied this request on the grounds that the proposed parking lots would adversely affect the value of neighboring properties (the church was located at the entrance to a residential subdivision), and would “injure the use and enjoyment” of the neighborhood. It rejected the church’s claim that a limitation on the number of its parking spaces would interfere with the free exercise of its religion. The court concluded that the city had not given due weight to the church’s constitutional right to freely exercise its religion. While conceding that city zoning ordinances are presumed to be valid, the court observed that this presumption “diminishes” when an ordinance “limits the free exercise of religion.” Significantly, the court concluded: “The location of a church can be regulated by zoning ordinances in proper cases; however, in determining whether this is a proper case for such a restriction, we must take into account that the freedom of religion, and other first amendment freedoms, rise above mere property rights. In addition, first amendment rights and freedoms outweigh considerations of public convenience, annoyance, or unrest.” The court concluded that the city had erred in denying the church’s request for a permit to convert the two residential properties into additional parking spaces. It rejected the city’s claim that the “parking needs of a church should be considered on different legal principles than those applied to the church building itself.” This decision represents one of the strongest statements by a court of the right of a church to develop its property despite the complaints of neighboring landowners. There will always be neighbors who will oppose development of church property on the grounds of noise, traffic congestion and safety concerns, pollution, lighting, reduction in property values, and similar concerns. Some courts have let these considerations outweigh a church’s right to build or expand. The Illinois court’s decision will be useful legal authority for any church whose building plans trigger opposition from neighbors or a city government. Our Saviour’s Evangelical Lutheran Church of Naperville v. City of Naperville, 542 N.E.2d 1158 (Ill. App. 2nd Cir. 1989).

Legal Developments

Construction Projects

Church Law and Tax 1990-03-01 Recent Developments Construction Projects Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA

Bio

State: North Carolina
Categories: Church Property

Church Law and Tax 1990-03-01 Recent Developments

Construction Projects

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

• In some states churches may have to pay for labor or materials twice if they fail to obtain “lien waivers” from subcontractors before paying their contractor. A North Carolina court recently addressed the issue of double payments for the same labor or materials. A Baptist church entered into a contract with a contractor for the purpose of constructing a driveway and parking lot on its property (at a total cost of $12,500, including all labor and materials). The church paid the contractor the full contract price, but the contractor failed to pay the concrete supplier for $6,500 worth of concrete. The concrete supplier sued the church, demanding payment for the concrete. The church in turn sued the contractor (who could not be located). A jury ordered the church to pay the concrete supplier for the concrete, and acknowledged that the church could sue the contractor if he ever was found. An appeals court observed that under North Carolina law the church’s full payment of the contract price to the contractor extinguished the concrete supplier’s right to a “materialmen’s lien” in the church’s property, but that the church had failed to raise this defense at either the trial court or on appeal. In many states, debts for subcontractor labor and materials can become a “lien” against church property despite the fact that the church has paid the contractor for such expenses. In other words, if an unscrupulous contractor pockets the money, the unpaid subcontractors can file a lien against the church’s property that can be satisfied by a sale of the property. This typically results in the church paying twice for the subcontractor expenses. Such an unpleasant result can be avoided by conditioning all payments to the contractor on receipt of authentic “lien waivers” from the subcontractors. Some states provide the property owner with greater protections. According to this case, a church in North Carolina that pays a contractor the full contract price may be able to extinguish the materialmen’s and mechanic’s liens of subcontractors. Concrete Supply Co. v. Ramseur Baptist Church, 383 S.E.2d 222 (N.C. 1989).

Legal Developments

Zoning – Part 2

Church Law and Tax 1990-03-01 Recent Developments Zoning Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: Arizona
Categories: Church Property, Zoning

Church Law and Tax 1990-03-01 Recent Developments

Zoning

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

• An Arizona state appeals court ruled that county officials acted properly in prohibiting a church from using a warehouse that it constructed without a special use permit. The church purchased 40 acres of land, obtained a valid building permit from the county and made various improvements. Later, without obtaining a building permit, the church constructed a large, steel-sided building for use in printing and distributing King James versions of the Bible to persons worldwide. The 40 acres were zoned for rural use, but one of the permitted uses of the land was as a “public assembly for religious worship.” The county claimed that the church’s warehouse was in essence a “manufacturing” operation which was allowable only upon the issuance of a special use permit, and that without a permit the warehouse was a “nuisance” and its use could be prohibited by law. A trial court upheld the county’s action, and the church appealed. The church raised three arguments on appeal: (1) the warehouse was a permitted “place of religious worship” rather than a manufacturing operation; (2) the warehouse was a permitted “accessory use” of the church; and (3) the county’s action violated the constitutional guaranty of religious freedom. The state appeals court rejected all three arguments. As to the first claim, the court concluded that the warehouse was not a “place of religious worship” according to the “common, plain, natural and accepted” meaning of those words, but rather was a manufacturing operation. As to the second claim, the court simply ruled that the church had failed to raise it in the trial court and therefore could not raise it on appeal. As to the third claim, the court observed that it the first amendment guaranty of religious freedom “does not preclude government activity such as building and zoning regulations as applied to religious organizations.” In responding to the church’s argument that its religious beliefs “prohibit it from seeking state permission to operate its God-commanded ministry,” the court noted that the church had obtained a permit to build its sanctuary. It observed: “We are at a loss to understand why such religious beliefs should not by the same token prohibit it from seeking state permission to build its place of worship, which is equally a ‘God-commanded ministry.'” Cochise County v. Broken Arrow Baptist Church, 778 P.2d 1302 (Ariz. App. 1989).

Legal Developments

Taxation – Part 3

Church Property

Richard R. Hammar, Attorney, CPA

Bio

State: Florida
Categories: Church Property

Church Law and Tax 1990-01-01 Recent Developments

Taxation – Church Property

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

• A Florida appeals court ruled that a nursing home operated by the Archdiocese of Miami is exempt from state property taxes. Since one-third of the residents at the facility are private paying patients (the remaining two-thirds are Medicare or Medicaid patients), a local tax appraiser argued that only two-thirds of the facility was entitled to exemption. In concluding that the entire property was entitled to exemption, the court cited the following considerations: (1) most of the residents are over sixty-five years of age (a majority are in their eighties); charges owed by private paying patients are routinely written off; patients are admitted on a first-come, first-serve basis, with no preference given to private paying patients; all patients (whether private paying, Medicare or Medicaid) receive the same quality facilities and services; private paying patients who become unable to pay may become Medicaid patients in which case they occupy the same bed and receive the same services; Medicaid and Medicare reimbursements were below the cost of caring for these patients; the home does not make a profit on its private paying patients. These factors, concluded the court, demonstrated the exempt status of the entire facility. The court rejected the tax appraiser’s position that “if there is any patient who somehow has enough income to pay for his or her bed at the home” then that bed must be removed from the exemption, since such an ‘income test’ has reference more to the personal economics of a resident or residents of an apartment or room in a home for the aged than to the overall purpose or use of a home as a religious or charitable institution.” In other words, the focus should be on the charitable object of the facility as a whole rather than on the ability of some patients to pay for their services. This certainly is a sensible conclusion, and one that will be helpful to church-operated nursing homes in Florida and in other states with similar exemption provisions. Markham v. Broward County Nursing Home, Inc., 540 So.2d 940 (Fla. App. 1989).