Church’s Failure to Follow Bylaws Nullifies Actions

Court deems selection of a pastor, board member resignations, and special meeting null and void.

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State: Idaho
Categories: Clergy - Selection, Nonprofit Corporation Law, Officers, Directors, and Trustees

Key point 6-02.2. Churches are subject to the provisions of their governing documents, which generally include a charter and a constitution or bylaws (in some cases both). A charter is the state-approved articles of incorporation of an incorporated church. Most rules of internal church administration are contained in a constitution or bylaws. Specific and temporary matters often are addressed in resolutions. If a conflict develops among these documents, the order of priority generally is as follows—charter, constitution, bylaws, and resolutions.

Key point 6-06.4. Church officers and directors can be removed from office in the manner authorized by the church’s governing documents. It is common for church bylaws to give the membership the authority to remove officers and directors who engage in specified misconduct or change their doctrinal position.

Key point 6-12.1. Church membership meetings must be conducted in accordance with the procedural requirements ordinarily specified in the church’s governing documents. The most common requirements pertain to notice, quorum, and voting.

The Idaho Supreme Court ruled that a church’s failure to follow its bylaws in the selection of a pastor, the resignation of two board members, and the conduct of a specially called business meeting, rendered these actions null and void.

Selection of a pastor

A dispute arose in a church over the appointment of a pastor and the resignation of two board members. The church’s bylaws addressed the selection of a pastor as follows:

Section 4. Vacancy: In the event of a vacancy in the senior pastorate, a pastor shall be selected in the following manner:

The board of directors shall immediately convene and assign one of the associate pastors as a temporary replacement for the senior pastor. A roster of candidates shall be presented to the board of directors for review of their scriptural qualifications. Upon acceptance of qualification, each candidate will present themselves to the voting membership. After the voting membership has had an opportunity to review all candidates set forth by the board of directors, a special meeting will be called and a vote will be taken, with a majority vote required for the final appointment of the new senior pastor.

The court noted that there was no evidence that the pastor was ever voted on by the membership. Rather, the only evidence was that he had been asked when meeting with the church board if he would be interested in serving as pastor, and he replied that he was. The court concluded that “this was not sufficient evidence for a finding that he was properly appointed as the senior pastor.” Because there was no evidence that the bylaws were complied with, the pastor’s appointment was not valid.

The court stressed that the bylaws of a corporation are “equivalent to contracts among the members” and are binding on its members, and therefore “actions taken in violation of a corporation’s bylaws are void.”

Resignation of board members

Another issue before the court was whether two of the church’s three board members had effectively resigned their positions. The only evidence that one of these board members had resigned was his statements to the other board members, and some church members, that he “no longer wanted to be on the board.”

The court quoted the following provision in the state nonprofit corporation law: “A director may resign at any time by delivering written notice to the board of directors, its chairman, or the corporation.” I.C. § 30-3-69(1).

The court explained: “Although a director may resign at any time, the exclusive method for doing so is by delivering written notice… .” The court noted that neither of the two board members who allegedly resigned “ever submitted a written resignation. Accordingly, there is no evidence to support the … [conclusion that they had resigned.]”

The court then addressed the argument that these two board members had effectively resigned by absenting themselves from the board:

We note that absence from board meetings is only grounds for removal of a director when specifically provided for in the corporate documents. Here, there is no such provision in the bylaws or articles. The bylaws do, however, allow for removal of a director “by a unanimous vote of the remaining board members” regardless of whether the director has been absent from board meetings. However, there is no evidence in the record that such a vote took place.

Furthermore, the court found that no board meetings took place for the previous four months and so “there were no board meetings to be absent from.”

In conclusion, “because there was no evidence in the record to support a finding that [the two board members] ever tendered a written resignation or absented themselves from the board,” they did not cease to be members of the board.

Special meeting

Following the alleged “resignation” of two of the board’s three members, the remaining member called a special meeting of the church membership at which two new members were selected. The validity of this special meeting was contested on the ground that the meeting could not be called by one board member.

The court quoted the state nonprofit corporation law regarding the calling of special membership meetings:

(1) A corporation with members shall hold a special meeting of members: (a) On call of its board or the person or persons authorized to do so by the articles or bylaws; or (b) Except as provided in the articles or bylaws of a religious corporation if the holders of at least ten percent (10%) of the voting power of any corporation sign, date and deliver to any corporate officer one (1) or more written demands for the meeting describing the purpose or purposes for which it is to be held. I.C. § 30-3-47.

The church’s bylaws address special meetings as follows: “Special meetings of the voting membership may be called by or at the request of two-thirds (2/3) of the voting membership… . Notice of the annual, regular, or and (sic) special meeting of the voting membership shall be given by oral notice at three consecutive Sunday services. The business to be transacted at the meeting need not be specified in the notice, unless specifically required by law or these bylaws.”

In this case, the court noted, “no membership roster was kept… . Thus, calling the special meeting at the request of two-thirds of the voting membership was not possible. Consequently, the only method available to call the special meeting was on call of [the church’s] board as provided under” state law (quoted above). And, while the church’s bylaws were silent as to what constitutes an act of the board, the nonprofit corporation law specifies that “an act of the board occurs when a quorum is present and the majority of directors vote in favor of such act.” Since two of the church’s three board members had not resigned, a “majority of directors” consisted of two or three of the board’s three members. Therefore, the special meeting of the church membership could not be lawfully called by one board member. The court concluded: “Here … the meeting was not called by the majority of directors in office and therefore was improperly called [and consequently] any action taken at the special meeting, including the election of new directors, was void.”

What this means for churches

This case raises the following important points.

First, a church’s governing documents must be followed in the selection of pastors. The court concluded that the church’s failure to follow its bylaws in the selection of its senior pastor rendered his selection invalid. While not all courts would agree with this conclusion, it is not without precedent, and at a minimum should encourage church leaders to be sure that all pastoral selections comply with the church’s governing documents.

Second, and perhaps most importantly, the court ruled that board members do not cease to be members of the board by informing others that they no longer want to serve in that capacity. Rather, board members remain on the board until they cease to be members pursuant to the terms of the church’s governing documents, or the provisions of the nonprofit corporation law under which the church is incorporated. But nonprofit corporation law generally applies to issues of church administration only with respect to matters not addressed in the church’s governing documents, as was the case here. The court concluded that the procedure for a board member’s resignation described in the state nonprofit corporation law had not been followed, and so the two members who allegedly had resigned had not done so and remained on the board.

Knowing with certainty when a board member ceases to be a member of the board is of utmost importance, since board members generally cease to be liable for the actions of the board after they have resigned. If there is doubt or ambiguity regarding a board member’s status, this means that such a person may be exposed to continuing liability for board decisions over which he or she exercised no control. As a result, church leaders should review their governing documents to see if the procedure for resignation is clearly specified so there is no ambiguity regarding the timing of a board member’s resignation. The same goes for the end of a term of office. If a church’s governing documents are clear, then nonprofit corporation law will not be invoked.

Third, the court concluded that actions taken at a special business meeting that was not called according to the procedure described in a church’s governing documents are null and void. The court concluded: “Here … the meeting was not called by the majority of directors in office and therefore was improperly called [and consequently] any action taken at the special meeting, including the election of new directors, was void.” Again, the failure of church leaders to ensure that the church’s governing documents are followed in the notice and conduct of a membership meeting can lead to the invalidation of actions taken. Kemmer v. Newman, 387 P.3d 131 (Ida. 2017).

Legal Developments

Ecclesiastical Abstention Doctrine Bars Court from Intervention in Dispute over Church Bylaw Compliance

Court could not adjudicate this case without interfering in inherently ecclesiastical matters of pastoral selection and church discipline.

Richard R. Hammar, Attorney, CPA

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State: Texas
Categories: Church Members, Clergy - Selection, Judicial Resolution of Church Disputes

Key point 2-01.4. The selection of a minister is an ecclesiastical decision that the civil courts ordinarily will not review—even when it is alleged that a church failed to follow its own internal procedures in the selection of a minister, or the selection process was discriminatory.

Key point 6-10.1. According to the majority view, the civil courts will not resolve disputes challenging a church’s discipline of a member since the First Amendment guaranty of religious freedom prevents them from deciding who are members in good standing of a church.

Key point 9-07. The First Amendment allows civil courts to resolve internal church disputes so long as they can do so without interpreting doctrine or polity.

A Texas court ruled that the “ecclesiastical abstention” doctrine prevented it from resolving an internal church dispute regarding a church’s compliance with its bylaws in selecting a new pastor and dismissing several dissident members.

In January 2012, a pastor died and a dispute arose over the church’s efforts to fill the pastoral vacancy. With respect to a vacancy, the church’s bylaws provided:

In the event of a vacancy, a pulpit committee composed of Deacons and members (five people on the committee) shall be appointed by the church to seek out a suitable Pastor and their recommendations will constitute a nomination though any member has the privilege of naming other nominations according to the policy established by the church. The committee shall bring to the consideration of the church one minister at a time. Elections shall be by secret ballot; an affirmative vote of three-fourth of those present being necessary for a choice. The Chairman of Deacons and Trustees shall have the right to meet with the Pulpit Committee at any time.

The secretary of the church board convened a meeting to elect a pulpit committee. The pulpit committee was comprised of the board secretary and other individuals and eventually selected a nominee for pastor. However, other members of the church, including the Chairman of the Deacons and the Chairman of the Trustees, opposed the actions of the pulpit committee.

On October 13, 2012, a meeting was held at which the deacons, trustees, and congregation voted to adopt a “resolution to restore order in the church.” The resolution found that the pulpit committee “has engaged in a campaign of intimidation, threats, assault, falsehoods, and manipulation.” The resolution expelled from church membership persons involved with the pulpit committee on the grounds that they “have hurt the Church, decreased its membership, distracted from its Christian mission, and continue to cause damage to the Church.” A new pastor was elected and installed a month later, on November 17, 2012.

The dismissed members (the “plaintiffs”) sued the church and sought monetary damages based on their expulsion. They argued that the church had failed to follow its bylaws in selecting a new pastor. The church claimed that the pulpit committee was properly constituted under the church’s bylaws and that the dismissed members had violated the church’s bylaws by interfering with the pulpit committee; holding unauthorized meetings; expelling the dismissed members from membership and changing the locks so that they could not access the church; and selecting the new pastor.

The church asked the court to dismiss the lawsuit on the ground that it lacked jurisdiction over the plaintiffs’ claims under the ecclesiastical abstention doctrine because adjudicating the claims would require the trial court to review the church’s discipline of the dismissed members and to impermissibly involve itself in the pastoral selection process. After a hearing, the court dismissed the case.

A state appeals court affirmed the trial court’s ruling. It began its decision by noting that the First Amendment’s guaranty of religious freedom “precludes civil courts from delving into matters focused on theological controversy, church discipline, ecclesiastical government, or the conformity of the members of a church to the standard of morals required of them.” The court continued: “Courts do not have jurisdiction to decide questions of an ecclesiastical or inherently religious nature, so as to those questions they must defer to decisions of appropriate ecclesiastical decision makers.”

The courts are not precluded from resolving all church disputes. They may, for example, “apply neutral principles of law to non-ecclesiastical issues involving religious entities in the same manner as they apply those principles to other entities and issues… . Thus, courts are to apply neutral principles of law to issues such as land titles, trusts, and corporate formation, governance, and dissolution, even when religious entities are involved.”

The court conceded that “the line between required judicial action and forbidden judicial intrusion will not always be distinct because many disputes require courts to analyze church documents and organizational structures to some degree.

The plaintiffs insisted that their claims arose solely from “the church’s failure to abide by non-ecclesiastical terms of the church’s bylaws and, therefore, the trial court had jurisdiction to adjudicate the case under neutral principles of law.” According to the plaintiffs, the questions they raised—including whether the church complied with church bylaws in electing the new pastor and whether the church acted properly in dismissing the plaintiffs—”were non-ecclesiastical because they are governed by non-ecclesiastical provisions in the church’s corporate documents.” The court disagreed:

The mere fact that a church’s corporate documents—here, its bylaws—prescribe a pastoral selection process does not make cases involving a pastoral selection dispute categorically reviewable by a civil court. Instead, whether neutral principles may be applied to a claim turns on the substance of the issues it raises. Consequently, the fact that the church’s bylaws in this case contain provisions governing the process for pastoral selection does not compel the conclusion that a dispute over that process is reviewable …. Here … [the plaintiffs’] claims are inextricably intertwined with the selection of the church’s new pastor and the church’s expulsion of members—two issues long recognized to be inherently ecclesiastical and of prime importance to the exercise of religious liberty ….

In sum, although plaintiffs characterize their claims as purely secular because they rest on provisions of the church’s corporate documents, the trial court could not adjudicate this case without interfering in inherently ecclesiastical matters of pastoral selection and church discipline. Therefore, we hold that the trial court correctly concluded that it lacked jurisdiction over the case under the ecclesiastical abstention doctrine.

What this means for churches

This case is important because of the court’s conclusion that the ecclesiastical abstention doctrine applies to the interpretation of a church’s governing documents if doing so would implicate “ecclesiastical matters of prime importance to the exercise of religious liberty,” which the court concluded, include pastoral selection and the discipline of members. Moultin v. Baptist Church, 498 S.W.3d 143 (Tex. App. 2016).

Legal Developments

Religious Freedom Prevents Court from Resolving Pastor/Agency Dispute

Pastor’s claim that a denominational agency acted unfairly in refusing to circulate his resume goes unresolved by court.

Richard R. Hammar, Attorney, CPA

Bio

State: Connecticut
Categories: Clergy - Selection

Church Law and Tax Report

Religious Freedom Prevents Court from Resolving Pastor/Agency Dispute

Pastor’s claim that a denominational agency acted unfairly in refusing to circulate his resume goes unresolved by court.

Richard R. Hammar

Key point 2-01.4. The selection of a minister is an ecclesiastical decision that the civil courts ordinarily will not review—even when it is alleged that a church failed to follow its own internal procedures in the selection of a minister, or the selection process was discriminatory.

* A Connecticut court ruled that the First Amendment guaranty of religious freedom prevented it from resolving a pastor’s claim that a denominational agency acted improperly in refusing to circulate his resume to churches in need of a pastor. An ordained pastor (the “plaintiff”) sought employment through the services of a regional denominational agency (the “regional church”). The regional church does not ordain ministers, but it recognizes ordinations performed by member churches. It also provides placement services for ordained ministers by enabling congregations in need of a pastor to obtain information on available ordained ministers. Over time, the regional church became concerned about the plaintiff’s fitness for the ministry. It decided to “flag” his profile and decided not to circulate it to congregations seeking ministers. The plaintiff sued the regional church on several theories of liability including breach of an implied contract, defamation, emotional distress, and fraud. A trial court dismissed the case on the basis of the First Amendment guaranty of religious freedom, and the plaintiff appealed. A state appeals court agreed that the case had to be dismissed. It noted:

In this case, each claim in the plaintiff’s complaint arises out of his relationship with a religious organization. The gravamen of each of the plaintiff’s claims is that the defendant did not assist him in obtaining employment as an ordained minister but rather harmed him by withdrawing its recognition of his ordination. The central question presented is whether the disputes require the court to interpret and to apply religious doctrine and practices or whether the dispute is simply a controversy that involves church officials but to which neutral principles of secular law can be applied without need to inquire into ecclesiastical matters. On a reading of the complaint, it is apparent that the plaintiff’s claims arise primarily from the defendant’s decision to withdraw its recognition of the plaintiff’s ordination and to refuse to circulate his resume to churches.

Actions based on contract law centering on employment disputes between clergy and religious institutions can be litigated in civil courts only if neutral principles of law can be applied without entanglement with religious considerations. A church may make enforceable promises. Courts, however, may not inquire into matters whose enforcement would require “a searching and therefore impermissible inquiry” into church doctrine. Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 723. In this case, the plaintiff’s claim centers around a dispute involving the regional church’s selection of candidates whom it will assist in obtaining ecclesiastical employment. The plaintiff contends that he satisfied the requirements set forth by the regional church and therefore was qualified to have the regional church assist him in obtaining ecclesiastical employment. He contends, however, that the regional church “blacklisted” him based on his theological perceptions. Resolution of this claim would involve an impermissible inquiry into the defendant’s internal procedures and its judgment regarding the qualifications of clergy, as well as the plaintiff’s objective qualifications for employment opportunities through the regional church. The reasonableness of alleged promises and reliance thereon cannot be decided without inquiry into such matters. The First Amendment precludes governmental interference with the selection of clergy.

In rejecting the plaintiff’s defamation claim, the court concluded: “Simply put, the gravamen of the dispute is the decision of a religious organization not to recommend the plaintiff for a position in the ministry. The defamation claim cannot be entertained in isolation from the dispute over fitness for the clergy, and there is no overwhelming counterbalancing consideration. The defamation claim was appropriately dismissed.”

In responding to the plaintiff’s assertion that the regional church’s failure to circulate his resume amounted to fraud, the court observed: “At the center of this count is the plaintiff’s claim that he was harmed by the regional church’s failure to circulate his resume and failure to assist him in procuring interviews for pastorate positions at churches affiliated with the regional church. Generally, courts will not interfere in canonical or ecclesiastical controversies regarding clergymen’s employment at a church. The selection or assignment of clergy, and the removal, termination, or suspension of a pastor or clergy member are generally ecclesiastical matters with which civil courts cannot interfere.”

The court also rejected the plaintiff’s emotional distress claim, noting that it could not be resolved without impermissibly delving into church doctrine and governance.

The court concluded:

In sum, this case implicates the ability of the regional church to operate within its own sphere, according to its own methods, and without judicial interference as to its employment recommendations for one of its ministers. The conduct complained of occurred in the context of, or was germane to, a dispute over the plaintiff’s fitness or suitability for his ordination to continue to be recognized and whether his resume should be circulated to churches associated with the regional church. If a court were to decide the issues raised in his complaint, it would necessarily inquire into the church’s decisions regarding its internal management and decisions as to whether a person is suited for the clergy. If a reviewing court did not agree with the procedure used and the effects therefrom in holding the church liable, the court would be imposing secular law and disciplinary action on church practice and procedure. If members of religious organizations could freely pursue their doctrinal grievances in civil courts, or legislatures could pass laws to inhibit or enhance religious activities, ecclesiastical liberty would be subjected to governmental interference and the unmolested and unobstructed development of opinion and belief which the First Amendment shield was designed to foster could be secularly undermined.

Application. Many national and regional denominational agencies have established placement services that typically involve the posting of resumes of ministers seeking employment on a dedicated website. Some denominational leaders have wondered if such services expose them to a risk of liability. There are two possible ways that such websites can expose the sponsoring denominational agency to liability. First, some may argue that the posting of a minister’s resume on a placement website amounts to an official “endorsement” of the minister that makes the sponsoring denomination liable for any misconduct the minister commits while serving a church that based its decision to employ the minister on his or her inclusion on the placement website. This risk is common to all professional organizations that provide a directory of professionals. Examples include bar and medical association websites. The risk in such cases can be managed by using a conspicuous and appropriate disclaimer which, among other things, identifies the service as a mere directory and not as an endorsement of listed individuals.

Second, as this case illustrates, denominational agencies that sponsor job placement websites may be sued if they refuse or fail to post the resume of a minister who is in good standing. This case suggests that this risk is reduced as a result of the First Amendment’s prohibition of civil court intervention in church employment decisions.

Note, however, that liability remains a possibility if a denominational agency posts the resume of a minister on a job placement website, or in any other manner circulates it among churches looking for a new pastor, without disclosing previous disciplinary action. For example, assume that an ordained minister is defrocked due to an incident of adultery, that his ordination was later reinstated following a restorative process, that the denomination’s placement service circulates the minister’s resume but fails to disclose the prior misconduct and termination of ordination, that a church employs the minister without knowledge of the prior misconduct, and that the minister later has a sexual affair with one of his parishioners in the course of a counseling relationship. The argument can be made in such a case that the denomination’s concealment of the minister’s prior misconduct amounts to negligence, and that the denomination would therefore be liable for future acts of sexual misconduct by this minister. This risk would be reduced if the denominational placement service’s posting for the minister noted that he had been defrocked for adultery, and was later reinstated in the ministry following a restorative process. Such disclosures should not be made without a minister’s consent, which can be obtained as a condition of the restoration of his or her status as an ordained minister. Thibodeau v. American Baptist Churches, 994 A.2d 212 (Conn. App. 2010).

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