Injured Board Member Sues Church

A court allowed the case to proceed.

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Personal Injuries on Church Property or During Church Activities

Church Law and Tax 1991-05-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

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

• A church board member who was seriously injured when he fell off a ladder while installing a ceiling fan in the church sued both the pastor and church. The board member agreed to donate and install ceiling fans at the church free of charge when it became apparent that the air conditioning system no longer worked. While installing a fan at an elevation of more than 20 feet, he fell of the ladder and was injured permanently. The board member claimed that the pastor and church were legally responsible for his injuries under Illinois law. A trial court dismissed the lawsuit, and the board member appealed. A state appeals court rejected the board member’s claim that the church and its pastor were negligent in inadequately supervising the work or failing to provide proper equipment. The court observed: “[I]t is well-established that a landowner is not liable for injuries resulting from open and obvious dangers on the premises, including the open and obvious danger of falling from high places. We determine that [the board member’s] attempt to install the ceiling fans in the church’s high ceiling by positioning his ladder in the church pews was an open and obvious danger, and his injuries are therefore not recoverable from the defendants under the Premises Liability Act.” However, the court concluded that the board member had presented enough evidence to sue the church for a violation of the state “Structural Work Act,” which protects any person employed or engaged on a ladder while undertaking the repair of a building. The court ordered the case to proceed to trial on this basis. Coates v. W.W. Babcock Co., 560 N.E.2d 1099 (Ill. App. 1990).

Negligent Supervision

© 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: m58 m86 m29 c0391

Legal Developments

City Limits Number of Students at Church-Run School

A court ruled that this restriction does not violate the First Amendment.

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Schools, Zoning

Church Law and Tax 1991-05-01 Recent Developments

Zoning

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

• An Illinois state appeals court ruled that a city could limit the number of children attending a church-operated elementary school. A Lutheran church established an elementary school in 1983, receiving a special use permit from the city subject to an enrollment cap of 60 students. The permit was modified in 1987 to permit up to 75 students. The school soon exceeded this limit, and the church sought another modification allowing unlimited enrollment. The city rejected this request, and the church filed a lawsuit claiming that the city’s action violated parents’ first amendment right to freely exercise their religion. A trial court rejected the church’s argument, but did raise the enrollment limit to 105 students. The church appealed this ruling to a state appeals court, which affirmed the trial court’s decision. The court noted that the first amendment guaranty of religious freedom would be violated only if the church (or parents) could demonstrate that maintaining the school on the current premises was a “fundamental tenet” of its religion rather than a mere “preference.” The court emphasized that the church had “put forth no more than the abstract notion that this particular school is fundamental to its religious tenets let alone fundamental at this particular location.” The court acknowledged that the church would incur additional costs in relocating the school to a site where more students could be accommodated, but this fact alone did not demonstrate a violation of the first amendment guaranty of religious freedom. In conclusion, the court observed that “the first amendment does not require the city to make all land or even the cheapest or most beautiful land available to churches,” since “a church has no constitutional right to be free from reasonable zoning regulation nor does a church have a constitutional right to build its house of worship where it pleases.” Bethel Lutheran Church v. Morton, 559 N.E.2d 533 (Ill. App. 1990).

Miscellaneous Considerations

Legal Developments

Regulations for Church Child Care Programs

Court rules that church-run child care programs must comply with regulations.

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois

Church Law and Tax 1991-03-01 Recent Developments

Child Care

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

• Is it legally permissible for a city ordinance regulating child care facilities to exempt from regulation only those child care programs conducted in churches? No, said a federal district court in Illinois. A city ordinance required child care providers to comply with a substantial number of regulations designed to assure the safety of children. The ordinance exempted child care programs conducted in any church building. This exemption was challenged by a person whose application for a child care license was denied by the city. The court agreed that the ordinance’s exemption of church-operated child care programs violated the constitutional guaranty of the “equal protection of the laws” and in addition violated the first amendment’s prohibition of any “establishment of religion.” With regard to the “equal protection” claim, the court noted that a law is invalid if it treats groups differently without any rational basis. The court concluded that there was no rational basis for the ordinance’s exemption of church-operated child care programs from any regulation. The city’s reason for treating church-operated programs more favorably than other programs was that “child care programs located in church buildings will be operated in a sufficiently noncommercial manner so as not to work a detrimental alteration of the surrounding single family neighborhood.” In rejecting this claim, the court noted that several child care programs operated in churches were commercial activities that charged fees, advertised publicly, and offered no religious teaching whatever. The court concluded: “Nothing suggests that such facilities, merely because they are housed in buildings that are used for church purposes at some times, will at other times engage in their commercial activities with any less rigor than would any facility lacking an alternate religious use.” The court also ruled that the ordinance’s wholesale exemption of church-operated child care programs violated the first amendment’s prohibition of any establishment of religion. In concluding that the ordinance’s exemption provided churches with a significant benefit that was not available to others, the court observed: “A religious facility is able to enroll many more children in a much smaller facility than its nonreligious counterpart. These benefits not only increase the religious facility’s ability to generate revenues, but also reduce its costs of operation, particularly the cost of maintaining a larger facility. These factors, when added to the already substantial advantage of not being required to pay taxes on either the land or the income of the day care operation, significantly benefit the facility.” Making such a benefit available to churches, the court concluded, is precisely the type of activity that the first amendment forbids, since it “provides unjustifiable awards of assistance to religious organizations and cannot but convey a message of endorsement to slighted members of the community.” On the other hand, the court suggested that an ordinance may well be valid if it only exempted those church-operated child care programs that actively taught religion and that were “pastoral.” But exempting all church-operated child care programs from regulation, whether or not they are “an integral part” of a church’s educational function, is too broad. Cohen v. City of Des Plaines, 742 F. Supp. 458 (N.D. Ill. 1990).

Legal Developments

Personal Injuries – Part 1

On Church Property or During Church Activities

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Personal Injuries on Church Property or During Church Activities

Church Law and Tax 1990-09-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

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

• An Illinois state appeals court ruled that a church and a parent denomination were not legally responsible for a pastor’s homosexual assault of three boys. A Methodist pastor allegedly molested three boys. The boys’ parents sued the pastor, his church, and the Central Illinois Annual Conference of the United Methodist Church, claiming that the boys had suffered severe emotional damage. The parents claimed that the church and the president of the church board were liable for the pastor’s conduct on the basis of “respondeat superior” (a legal theory under which an employer generally is legally responsible for the misconduct of employees committed within the course of their employment). The parents claimed that the Conference negligently assigned the pastor to the church, knowing of a prior homosexual assault on another boy several years earlier. A trial court dismissed the “respondeat superior” claims against the church, president of the church board, and the Conference, but it allowed the case to proceed to trial on other theories of liability. The pastor settled with the victims for $225,000, and jury returned a verdict against the Conference in the amount of $450,000 ($150,000 per boy) on the basis of its alleged negligence. The parents and the Conference appealed. The parents claimed that the respondeat superior claim against the Conference should not have been dismissed, and the Conference claimed that the verdict against it should be reversed. A state appeals court affirmed the trial court’s dismissal of the respondeat superior claim against the Conference, agreeing that the pastor’s assault constituted a deviation from the pastor’s “scope of employment” with the Conference. Since the assault did not occur within the scope or course of the pastor’s employment, it could not be imputed to the Conference. The court also dismissed the negligence verdict against the Conference, but ordered a new trial on this issue. It is significant to note that the court observed that “the jury could well have determined that the Conference took adequate precaution in having [the pastor] counseled and should not have been held to have reasonably foreseen that [he] would be likely to commit the acts of sexual assault.” What is the significance of this case to churches and denominations? First, it is another in a long line of court rulings that have summarily concluded that churches and denominations are not liable on the basis of “respondeat superior” for the sexual misconduct of clergy, since such conduct is clearly outside the scope of any employment or agency relationship. Second, the case suggests that churches and denominations may be legally responsible on the basis of “negligent hiring” or “negligent retention” if they hire or retain a minister after learning that he or she was guilty of sexual misconduct in the past. However, the court emphasized that mere knowledge of previous incidents of sexual misconduct does not automatically create legal liability. Liability for negligent hiring or retention requires that the actions of the church or denomination created a foreseeable and unreasonable risk of harm to others. For example, if there is knowledge of only an isolated incident many years before, without any known repetition, then a jury might conclude that a church or denomination was not “negligent” in hiring or retaining such a person. Similarly, a jury might conclude that a minister who has undergone extensive counseling for previous incidents of sexual misconduct does not present a foreseeable and unreasonable risk of harm to others. Of course, a jury might also conclude that the church or denomination was negligent under such circumstances. Obviously, a church or denomination that has no knowledge of a minister’s previous misconduct ordinarily cannot be legally responsible on the basis of negligent hiring or retention for injuries that he inflicts. Churches and denominations that are considering hiring a minister after learning of previous incidents of sexual misconduct must consider several factors, including (1) the nature and severity of the previous misconduct; (2) the frequency of the previous misconduct; (3) how long ago the misconduct occurred; (4) whether the minister received counseling; (5) the competency and effectiveness of any counseling received; (6) the likelihood that the minister will repeat the same type of misconduct now; (7) the possibility of legal liability if a jury concludes, on the basis of all the evidence, that the church or denomination was negligent in hiring the minister. The same considerations apply if a church or denomination learns of previous incidents of misconduct after hiring a minister, since a jury might conclude that the organization was negligent in retaining the individual. Churches and denominations that decide, after evaluating the evidence, to hire or retain clergy after learning of previous incidents of sexual misconduct must recognize that they are assuming a significant legal risk. They should take steps to reduce the risk of repeat behavior. Such steps might include professional counseling and assessment, periodic evaluation by church officials, and limiting certain “high-risk” activities. Mt. Zion State Bank v. Central Illinois Conference of the United Methodist Church, 556 N.E.2d 1270 (Ill. 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: m58 m86 m40 c0690

Legal Developments

Zoning – Part 4

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: Federal
Categories: Zoning

Church Law and Tax 1990-09-01 Recent Developments

Zoning

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

• A New York state appeals court ruled that a city acted improperly in denying a synagogue’s application for a special use permit without making any attempt to accommodate the proposed religious use. The synagogue applied for a special use permit that would have allowed it to operate in a residential property. The city council rejected the permit application, and the synagogue appealed. An appeals court concluded that the city’s denial of the permit was “arbitrary, capricious, and an abuse of discretion.” The court acknowledged that “there is no exemption from zoning rules for religious uses, nor is there any conclusive presumption that any religious use automatically outweighs its ill effects.” However, “where the applicant is a religious institution, more flexibility is required and efforts must be made to accommodate the religious use, if possible.” In fact, “every effort must be made to accommodate the religious use subject to conditions reasonably related to land use.” The court noted that the city council rejected the synagogue’s permit application “without making any attempt to accommodate the proposed religious use.” Such an act, concluded the court, was improper. The city had “an affirmative duty to suggest measures to accommodate the proposes religious use.” The court found that the synagogue’s proposed religious use could have been accommodated by the city: “For example, we observe that the accommodation of the religious use and maintenance of the public’s safety, health, and welfare could have been achieved by limiting the number of persons who could attend services or meetings at any given time, and by posting ‘no parking’ signs along the street to prevent hazardous road conditions, and by limiting the hours during which meetings or instruction could be held ….” The court ordered the city council “to issue the permit upon such reasonable conditions as will allow the [synagogue] to establish its house of worship, while mitigating any detrimental or adverse effects on the surrounding community.” This case will be helpful to any church or religious congregation that is seeking a zoning permit. Harrison Orthodox Minyan v. Town Board, 552 N.Y.S.2d 434 (N.Y. App. 1990).

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

Child Can Choose Own Religious Training

An Illinois appeals court ruled that a minor who had been placed in a foster

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Child Abuse, Freedom of Religion

An Illinois appeals court ruled that a minor who had been placed in a foster home could choose her own religious training even though it was against the wishes of her natural parents.

The minor had been raised according to strict religious tenets, and had experienced excessive beatings, severe restrictions, and sexual abuse. She was declared an abused child by the state and was placed in a foster home. After her placement in the foster home, the minor immediately rebelled against the religious teachings of her natural parents, and severed all ties with her parents and their church.

The natural parents were upset that their daughter was not attending a church of their choosing, and they insisted that they had a constitutional right to determine the religious training of their child. The appeals court conceded that "freedom of religion and the right of parents to [determine] the care and training of their children are to be accorded the highest possible respect." However, neither right is beyond limitation. The court concluded that allowing the minor to choose the church she would attend was appropriate because of the "exceptional circumstances" of this case. In the Interest of C.L.T., 540 N.E.2d 1043 (Ill. App. 4th Dist. 1989).

Legal Developments

Employee Relations

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

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Criminal Liability

Church Law and Tax 1990-01-01 Recent Developments

Employee Relations

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

• Can church employees who are fired for refusing to “backdate” or otherwise falsify records sue the church? A recent Illinois appeals court ruling suggests that they can. Occasionally, a church with poor recordkeeping procedures will ask a bookkeeper or other church employee to backdate a document. Examples include a contribution receipts (to assure a deduction in a prior year), or a housing allowance designation (which must be declared in advance to be effective). If an employee refuses to backdate such a document, the church should recognize that it may be legally liable for firing the employee. The Illinois case involved an employee of a pension consulting firm who allegedly was fired when he refused to backdate certain documents in order to provide clients with tax advantages that otherwise would not have been available. The court observed that the fired employee could sue his former employer for “retaliatory discharge” if he could prove “(1) that he was discharged; (2) in retaliation for his activities; and (3) the discharge violates a clear mandate of public policy.” There was no doubt, the court observed, that the fired employee had properly alleged the first two requirements. The court also found that discharging an employee for failure to violate federal tax law (by backdating documents) violated a “clear mandate of public policy.” The court noted that federal law imposes criminal liability on any person who “aids or abets” in the preparation of a knowingly false or fraudulent tax return or related document, and that “the backdating of documents for the fraudulent purpose of obtaining a deduction constitutes an offense.” Accordingly, a church employee who complies with a request to backdate a contribution receipt or housing allowance designation may be criminally liable. Clearly, requests to “backdate” documents are not only unethical, but they may result in civil or criminal liability. Russ v. Pension Consultants Company, Inc., 538 N.E.2d 693 (Ill. App. 1989).

Legal Developments

Church Property

School board seeks to cancel church’s contract to buy abandoned property.

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Church Property, Contracts

Can a school board cancel a contract to sell an abandoned public school building to a predominantly black church because of opposition by neighboring landowners?

No, concluded a federal district court in Illinois. Under Illinois law, school boards are authorized to sell unused school buildings at public sales. In 1987, an unused school building was offered for sale by a school board, and the church was the high bidder. A contract was executed, and a closing date was set. Between the sale and closing date, there was a public outcry by many white residents because the school building was being sold to a black church.

A few days prior to the closing date, the church presented to the school board the cash amount due at closing under the sales contract, but the school board refused to accept it. A few weeks later the school board attempted to "null and void" its contract with the church, and the church immediately filed a lawsuit charging the school board with breach of contract and violations of civil rights laws.

The school board asked the court to dismiss the lawsuit, and the court declined. It ruled that the school board could be sued on account of the alleged breach of contract and violations of civil rights laws, and that the individual members of the school board could be sued as well.

It observed that "[a] plaintiff may pursue damages against a defendant in his individual capacity by alleging that the defendant acted or failed to act with a deliberate or reckless disregard of the plaintiff's constitutional rights or that the conduct causing the deprivation occurred at his direction or with his knowledge and consent." New Christian Valley M.B. Church v. School District 149, 704 F. Supp. 868 (N.D. Ill. 1989).

See also Personal injuries—on church property or during church activities, Clark v. Moore Memorial United Methodist Church, 538 So.2d 760 (Miss. 1989); Employment practices, Senate Bill 933.

Legal Developments

Freedom of Religion – Part 3

Church Law and Tax 1989-09-01 Recent Developments Freedom of Religion Richard R. Hammar, J.D., LL.M.,

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Freedom of Religion, Schools

Church Law and Tax 1989-09-01 Recent Developments

Freedom of Religion

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

• Can Gideon Bibles be handed out to students on a sidewalk in front of a public high school? Yes, concluded a federal district court in Illinois. Several adults who handed out Gideon Bibles on the sidewalk were informed by school officials that their conduct “would not be permitted.” A lawsuit was filed to determine whether the school could stop the Bibles from being distributed. The court ruled that a sidewalk in front of a public school is a “public forum,” and as such it can be used for distributing literature unless the school can demonstrate that such an activity materially interferes with public safety or order. The court concluded that it would be “nonsense” to say that a sidewalk in front of a public high school is not a public forum. If further ruled that the school had failed to demonstrate that the practice of distributing Bibles would in any way interfere with public safety or order. Finally, the court rejected as “patently absurd” the school’s claim that permitting the distribution of Bibles on the sidewalk would violate the first amendment’s nonestablishment of religion clause. Bacon v. Bradley-Bourbonnais High School, 707 F. Supp. 1005 (C.D. Ill. 1989).

© Copyright 1989, 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: m47 c0589

Legal Developments

Clergy – Part 5

Removal

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Contracts

Church Law and Tax 1989-07-01 Recent Developments

Clergy – Removal

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

• An Illinois appeals court dismissed a lawsuit brought by a Methodist minister against a Methodist conference for breach of contract and wrongful interference with contractual relations. The minister claimed that despite his “good and satisfactory work” as pastor of a local church, he was assigned by the conference to another church which constituted “a severe demotion in terms of the number of church members, compensation, and opportunity for service.” He further claimed that the conference ordered his transfer without a “consultation” with the churches involved (as required by the Methodist “Book of Discipline”) and therefore amounted to a breach of contract. The conference claimed that the dispute was a purely ecclesiastical matter over which the civil courts had no jurisdiction, and accordingly asked the trial court to dismiss the lawsuit. The trial court agreed with the conference, and the case was appealed to a state appeals court which also agreed with the conference. The appeals court emphasized that the constitutional guaranty of religious freedom “prohibits secular authorities from interfering with internal ecclesiastical workings and discipline of religious bodies.” In dismissing the minister’s lawsuit, the court observed: “[The minister] is asking the court to award damages for breach of contract because of [the] conference’s action of appointing [him] to a different post without providing a consultation—a process wherein the bishop and/or district superintendent of the church organization confer with the pastor and pastor-parish relations committee about the appointment of the particular pastor in question, taking into consideration certain criteria as outlined in the Book of Discipline …. When making appointments, the empowered bishop of the conference is to take into account, among other things, the unique needs of the charge in a particular setting, as well as the gifts and graces of the particular pastor. In other words, the appointment of a pastor is a purely subjective decision to be made by the empowered bishop to advance the purpose of the church organization. Appointment is undoubtedly an ecclesiastical matter to which judicial deference is mandated by the first amendment. Whether or not the conference followed required procedure in appointing [the minister] is not for a civil court to consider, because it would entail scrutinizing the appointment decision-making process and reviewing the subjective criteria used by the church organization in reaching its decision.” The court noted that the appropriate remedy for the minister was “to higher judicial tribunals within the church hierarchy,” and if the minister “has made such appeal and been denied relief, this court must defer to the decision of the church.” It also rejected the minister’s contention that the so-called “neutral principles of law” approach gave the civil courts jurisdiction over this kind of dispute, since the neutral principles approach “has been used primarily for disputes over ownership of church property.” Williams v. Palmer, 532 N.E.2d 1061 (Ill. App. 3rd Dist. 1988).

Legal Developments

Freedom of Religion – Part 5

Church Law and Tax 1989-05-01 Recent Developments Freedom of Religion Richard R. Hammar, J.D., LL.M.,

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois

Church Law and Tax 1989-05-01 Recent Developments

Freedom of Religion

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

• The legal validity of nativity scenes on public property continues to be a source of controversy. A federal district court in Illinois ruled that a nativity scene on city hall property violated the first amendment’s nonestablishment of religion clause despite the fact that the display was part of a larger display that contained several traditional (and secular) symbols of Christmas and was accompanied by a written notice in which the city disclaimed any endorsement of Christianity or any other religion. The court acknowledged that the United States Supreme Court had upheld the constitutionality of a nativity scene in a 1984 ruling, but it emphasized that the Supreme Court’s decision, unlike the present case, involved a nativity scene that was located in a private park rather than at the official headquarters of a city government. The court noted that the United States Supreme Court has agreed to review again the constitutionality of nativity scenes, and that a decision is expected later in 1989 that hopefully will provide clarification to lower courts throughout the nation. Mather v. Village of Mundelein, 699 F. Supp. 1300 (N.D. Ill. 1988).

Legal Developments

Wills, Trusts, and Estates – Part 3

Church Law and Tax 1989-03-01 Recent Developments Wills, Trusts, and Estates Richard R. Hammar, J.D.,

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Wills, Trusts, and Estates

Church Law and Tax 1989-03-01 Recent Developments

Wills, Trusts, and Estates

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

• Are $525,000 in attorneys’ and executor fees incurred on behalf of an estate benefiting several charities excessive? That was the question before an Illinois state appeals court in a recent case. A decedent died in 1983, leaving a will that distributed her estate to various charities by means of a charitable trust. The estate was submitted to probate, and a lawsuit was filed seeking an interpretation of the will. The lawsuit eventually was settled out of court. Attorneys demanded $400,000 in fees, and the executor demanded an additional $125,000. The charities who were named as beneficiaries under the will, as well as the state attorney general, challenged the fees as “wasteful, duplicative, and unjustifiable,” and based on “inadequate itemization of work performed” and for “services not compensable by the estate.” The charities later agreed to settle the fee dispute, but the state attorney general refused to do so. The attorney general demanded a hearing to determine the reasonableness of the fees, but a trial court rejected this request on the ground that the attorney general did not have a sufficient interest in the case. A state appeals court reversed the trial court’s decision, voided the fee agreement, and ordered a hearing to determine the reasonableness of the fees. Under Illinois law, concluded the court, the attorney general “is the ultimate [beneficiary] to any charitable bequest in all actions concerning the enforcement or administration of a charitable trust,” and can intervene in any case where it appears necessary to preserve the assets of a charitable trust. Matter of the Estate of Laas, 525 N.E.2d 1089 (Ill. App. 1st Dist. 1988).

Legal Developments

Court Ruled That a Salvation Army Thrift Store Was Not Exempt From State Property Taxation

An Illinois state appeals court ruled that a Salvation Army thrift store was not exempt

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Tax Exemption, Taxation - Church Property

An Illinois state appeals court ruled that a Salvation Army thrift store was not exempt from state property taxation under a state law exempting property used exclusively for religious or charitable purposes.

The court observed that "whether the thrift store is exempt depends solely upon whether the property is primarily used for charitable purposes." It concluded that the thrift store was not exempt, since the primary purpose of the store (according to the testimony of Salvation Army officers) was to generate income to fund adult rehabilitation activities. The fact that income "is ultimately put to charitable uses … does not entitle the property to a charitable use exemption, as it has long been held that the use to which property is devoted is decisive rather than the use to which the income derived from the property is employed."

The court distinguished an earlier Illinois appeals court decision upholding the tax-exempt status of a Catholic thrift store, on the ground that the primary purpose of the Catholic facility was "to provide means for persons to donate goods for the needy, and to allow for a networking or centralization of these activities. No profit was generated as a result of the thrift store's activities, and thus, generating income was not the primary goal of the thrift store."

Salvation Army v. Department of Revenue, 524 N.E.2d 628 (Ill. App. 2nd Dist. 1988)

Legal Developments

Court Was Able to Rule in a Church Issue Involving Church Funds and the Appointment of a New Minister

Removal

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Charters, Constitutions, and Bylaws, Clergy - Removal

What legal recourse does a church have if a minister refuses to honor a congregational vote removing him from office? An Illinois appeals court addressed this difficult question.

Here are the facts. Rev. Smith started a church in 1937, and served as its pastor up until the time of her disability in 1985. In 1958, she appointed a Rev. Sims to serve as "financial secretary" and pulpit minister of the church. As pulpit minister, Rev. Sims sat on the pulpit during each service, and conducted services on the fourth Sunday of each month. Following Rev. Smith's disability in 1985, the church's board of trustees took action requiring two authorized signatures on church checks, and removed Rev. Sims' name from the list of authorized signers.

A few months later, the congregation elected Rev. Wing as pastor of the church. Rev. Sims refused to recognize Rev. Wing's appointment, or the authority of the church trustees, and began disrupting worship services. During one service the church was forced to contact the police, and Rev. Sims was physically evicted from the premises. The church later obtained a court order permanently prohibiting Rev. Sims from interfering with church services, publicly asserting her alleged authority to act as minister, or exercising any authority over the church's funds.

In direct violation of this order, Rev. Sims withdrew $25,000 from the church's bank account. The church sued to recover the money, and Rev. Sims responded by alleging that a civil court has no jurisdiction over "an ecclesiastical matter." The state appeals court agreed that "when matters of religious doctrine or practice are at issue in property disputes involving hierarchical church organizations, civil courts must defer to any resolution of those issues reached by the highest authority within the church organization." However, "as long as no consideration of doctrine is involved in the dispute," a civil court is free to intervene.

The issues involved in this case, observed the court, did not involve "matters of religious doctrine or practice," and so it was appropriate for a civil court to intervene. The only issues present were (1) whether the trustees had the authority to restrict access to church funds, and (2) whether the church followed its bylaws in the election of Rev. Wing. Such issues involved no impermissible inquiries into religious doctrine, the court concluded.

Finally, the court noted that Rev. Sims had a legal right to "lobby in a proper forum and speak to others regarding the church." Therefore, the lower court's injunction permanently forbidding her to speak out regarding her claimed authority to act as minister was overly broad. While such an order may have been appropriate if it limited Rev. Sims' activities only on the church's premises, it was not so limited. Accordingly, it had the effect of impermissibly restricting Rev. Sims' right of free speech in forums other than the church.

The appeals court sent the case back to the trial court with instructions to rewrite the injunction so as to recognize Rev. Sims' legal right "to lobby in a proper forum and speak to others regarding the church."

This case illustrates that (1) the power of the state is available to assist a church in dealing with disruptive behavior, even if such behavior is on the part of a former minister, and (2) church officers can be held accountable in the civil courts for misappropriation of church funds.

Lily of the Valley Spiritual Church v. Sims, 523 N.E.2d 999 (Ill. App. 1st Dist. 1988)

Legal Developments

Schools

Church Law and Tax 1988-09-01 Recent Developments Schools Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA

Bio

State: Connecticut
Categories: Schools

Church Law and Tax 1988-09-01 Recent Developments

Schools

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

• Private schools may be eligible to seek a deferral until May 9, 1989 of the October 12, 1988 deadline for submitting an asbestos management plan to their state government. Deferrals will only be granted if several conditions are satisfied. First, a school must submit an application for deferral to the appropriate state office. Second, the application must explain why, despite good faith efforts, the school will not be able to meet the original October 12, 1988 deadline for submitting an asbestos management plan. Third, the application must indicate that one of the following documents is available for inspection at the school: (1) a solicitation by the school to contract with an accredited asbestos contractor for inspection or management plan development; (2) a letter certifying that school district personnel are enrolled in an EPA-approved training course for inspection and management plan development; or (3) documentation showing that suspected asbestos-containing material from the school is being analyzed at an accredited laboratory. Fourth, the application must indicate that the school has notified affected parent, teacher, and employee organizations of its intent to file for a deferral. Fifth, the application must contain a proposed schedule outlining the activities that will lead up to the submission of a management plan by May 9, 1989, including inspection of the school. This schedule must contain a deadline of no later than December 22, 1988 for entering into a contract with an accredited inspector (unless inspections are to be performed by accredited school personnel). Schools in the states of Connecticut, Illinois, New Jersey, and Rhode Island have slightly different requirements, since these states independently sought waivers of the October 12, 1988 deadline. Schools in these states must also submit an application for deferral, but their applications need only contain the following assurances: (1) their state requested a waiver from EPA prior to June 1, 1988, and (2) the school has notified affected parent, teachers, and employees groups about its intention to apply for a deferral. Other conditions apply. For more specific information regarding deferral requests, and a listing of the state agencies in each state to which deferral requests should be submitted, contact the EPA at 1-202-554-1404.

© Copyright 1988, 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: m65 c0588

Legal Developments

Court Ruled That a Prayer Room in the Illinois Legislature Did Not Violate the Nonestablishment of Religion Clause

In 1985, the Illinois House of Representatives adopted a resolution authorizing the establishment of a

Richard R. Hammar, Attorney, CPA

Bio

State: Federal
Categories: Freedom of Religion

In 1985, the Illinois House of Representatives adopted a resolution authorizing the establishment of a "prayer room" in the state capital building, as a "quiet and special place where the members of the General Assembly may seek God, the comfort of His presence, the light of His guidance, and the strength of His love."

To alleviate any constitutional questions, the room was made "nonsectarian," and the costs of renovation and maintenance were to be borne by private contributions. Shortly after the resolution was adopted, it was challenged in court on the grounds that it was an unconstitutional "establishment of religion."

A federal appeals court rejected this challenge, largely on the basis of a 1983 decision of the United States Supreme Court finding that the Nebraska legislature's practice of opening each session with a prayer read by a state-employed chaplain did not violate the First Amendment's nonestablishment of religion clause.

The appeals court observed that "if legislators may collectively bow their heads while a clergyman, paid from public funds, invokes the Deity to bless and assist their efforts, it seems absurd to find fault with the designation of a room in which they may pray or meditate privately as they individually see fit."

The court also based its ruling in part on "a degree of deference to the internal spiritual practices of another branch of government or of a branch of the government of another sovereign," and upon a tradition of legislators acknowledging, in relatively modest and nonintrusive ways, some role for spiritual values in their work." However, the court cautioned that "the intrusion of sectarian influences and religious emphases [in the decoration and use of the prayer room] could give rise to an establishment clause violation." Van Zandt v. Thompson, 839 F.2d 1215 (7th Cir. 1988)

Legal Developments

Court ruled a Bank Account Established by a Religious Leader to Assist the Poor Belonged to the Organization He Founded

Years ago, $3 million was placed in a bank account entitled "The Honorable Elijah Muhammad's

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Charitable Contributions, Church Property

Years ago, $3 million was placed in a bank account entitled "The Honorable Elijah Muhammad's Poor Fund Account." Elijah Muhammad was the leader of a religious organization known as the Nation of Islam. Following his death in 1975, the bank transferred the funds to a new account in the name of the Nation of Islam, thinking that the poor fund account belonged to the religious organization rather than to Elijah Muhammad personally.

Several years later, the estate of Elijah Muhammad sought to recover the funds from the bank on the theory that the account had been the personal property of Elijah Muhammad rather than of the religious organization. The court concluded that the account belonged to the religious organization rather than to Elijah Muhammad personally, since (1) donations from members of the Nation of Islam constituted an overwhelming portion of the money deposited in the poor fund account, and (2) donors to the poor fund account were informed that their donations would be used primarily to "see to it that the poor and needy of our nation are looked after." Donors were also advised that contributions to the poor fund account were "income tax deductible."

Under these facts, the court concluded that "the funds in the poor fund account were solicited upon the representations that the money would be used to benefit the [religious organization] and that the believers, in making donations, intended their money to be used for that purpose." Under these circumstances, Elijah Muhammad could not be deemed "the equitable owner of the poor fund account."

The court further observed that "where funds are solicited to benefit a religious organization, we believe that basic principles of equity and fair dealing should preclude the use of those funds to benefit the personal estate of the religious leader." This is so even if some donors made contributions to benefit Elijah Muhammad personally, since "contributions to religious leaders for their support are considered contributions for the benefit of the religious organization and may qualify for a charitable deduction." In re Estate of Muhammad, 520 N.E.2d 795 (Ill. App. 1987)

Legal Developments

Court Ruled That a Charitable Organization Could Be Held Responsible for Injuries Sustained by a Child Who Fell Off a Slide

An Illinois court ruled that a charitable organization could be held responsible for injuries sustained

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Personal Injuries on Church Property or During Church Activities

An Illinois court ruled that a charitable organization could be held responsible for injuries sustained by a child who fell off a slide. The slide was over six feet high, had no handrail going up the steps, and had a loose and slippery handrail around the platform at the top. Metal and concrete footings at the base of the slide were exposed.

A child fell from the slide and was severely injured. The state appeals court ruled that the charitable organization that owned the slide could be found liable for both negligence and willful and wanton misconduct, if, as the lawsuit alleged, on prior occasions other children had fallen from the slide due to its defective and dangerous condition, and that the charity was aware of the slide's condition and of the prior accidents, but took no corrective action. Scarano v. Town of Ela, 520 N.E.2d 62 (Ill. App. 1988)

Legal Developments

Park Owned by United Church of Christ Qualified for Exemption as Property Used Exclusively for Religious Purposes

Church Property

Richard R. Hammar, Attorney, CPA

Bio

State: Illinois
Categories: Taxation - Church Property

An Illinois state appeals court ruled that a 1.6-acre "religious park" owned by the Illinois Conference of the United Church of Christ was exempt from property taxation.

The "Pilgrim Park" was owned by the 330-church Conference, and had been established "to provide a unique setting outdoors for individuals and groups to experience and live out the biblical faith, and to experience a place for recreation and reflection." The park was used regularly for religious activities, including morning spiritual meditations, evening vespers, and religious retreats.

Under these circumstance, the court concluded that the park qualified for exemption as "property used exclusively for religious purposes." It rejected the contention that the presence of a small caretaker's residence on the tract prevented the property from being "used exclusively for religious purposes," and similarly ignored court rulings from other states under state property tax exemption statutes "far more restrictive than the statutory authority in our state." Illinois Conference of the United Church of Christ v. Illinois Department of Revenue, 518 N.E.2d 755 (Ill. App. 1988)