Church Property

A federal court in Michigan resolved a dispute between a local church and a religious

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State: Michigan
Categories: Church Property

A federal court in Michigan resolved a dispute between a local church and a religious denomination regarding ownership of the church's property.

The church was established in 1967, and it purchased a church building and adjacent property in 1971 in its own name (the deed made no reference to the denomination). In 1976, the denomination formally adopted a new constitution which, among other things, declared that all properties owned by local churches belonged to the denomination, and that no one other than the denomination had the authority to sell property of local churches.

A schism arose within the local church, and one faction challenged the denomination's ownership and control of the church's property. The court concluded that the church was part of a hierarchical denomination, and that Michigan courts may apply either the "compulsory deference rule" or "neutral principles of law" in resolving property disputes within such denominations.

Under either approach, observed the court, the denomination won. Under the compulsory deference rule, the courts follow the decision of the highest body within the national church to which the dispute has been taken. Such an approach favored the national church since it had asserted jurisdiction over the local church's property under the authority conferred upon it by its constitution. Under the "neutral principles of law" approach, church property disputes are resolved on the basis of nondoctrinal language in relevant documents (e.g., national church charter and bylaws, local church charter or bylaws, deeds, and state statutes).

The court concluded that this approach also favored the national church because of the provision in its constitution declaring that title to all local church property was vested in the national church. Contrary provisions in the local church's bylaws were "nullified by this superior authority."

The court acknowledged that the deed to the property vested title in the local church. However, it concluded that "it is immaterial in whom the legal title stands" since "there is a strong presumption that where there is a hierarchical polity and the governing constitution [of the national church] provides that all property ultimately resides with the national church, a `neutral principles' analysis will result in the property being held in trust by the local for the national church."

This is so even though the local church property was "initially bought by local parishioners." The court defined a "hierarchical" denomination as one in which a local church "is but a subordinate member of some general church organization in which there are superior ecclesiastical tribunals with a general and ultimate power of control more or less complete, in some supreme judicatory over the whole membership of the general organization."

Finally, the court rejected the local church's argument that it was independent of the national church: "A local church cannot prosper by the benefits afforded by the parent, participate in the functioning of that body, yet successfully disclaim affiliation when the parent acts to the apparent disadvantage of the local [church] …."

The court's decision is significant for a number of reasons, including the following: (1) it indicates that Michigan courts may choose either of two approaches to the settlement of church property disputes involving hierarchical churches; (2) it indicates that national church bylaws vesting title to local church property in the national church take priority over a deed vesting title in the local church; and (3) it suggests that national churches can assert a claim to local church property after a local church has acquired title in its own name (the national church's constitution, under which it declared itself owner of all local church property, was adopted after the local church had purchased its property in its own name). Kendysh v. Holy Spirit Byelorussian Autocephalic Orthodox Church, 683 F. Supp. 1501 (D. Md. 1988).

Legal Developments

Undeveloped Tract of Church-Owned Property Was Not Exempt from State Property Taxation

Church Property

Richard R. Hammar, Attorney, CPA

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State: Michigan
Categories: Taxation - Church Property

A Michigan court ruled that an undeveloped tract of church-owned property on which a sanctuary was about to be constructed was not exempt from state property taxation under a Michigan statute exempting "houses of public worship … used predominantly for religious services or for teaching of religious truths …."

The court concluded that "actual use of a building, not merely preparation for construction or even initiation of actual construction, is a prerequisite to an exemption from taxation" under the Michigan statute" since "by the statute's own terms, a prerequisite to an exemption is that the house of public worship be used predominantly for religious services or for teaching the religious truths and beliefs."

The court rejected contrary rulings in other states with the observation that such rulings were "based on the particular language of those states' exemption statutes." St. Paul Lutheran Church v. City of Riverview, 418 N.W.2d 412 (Mich. App. 1987)

Legal Developments

Court Lacked Jurisdiction to Resolve the Claims of Parishioners

A Michigan state appeals court held that it lacked jurisdiction to resolve the claims of

Richard R. Hammar, Attorney, CPA

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State: Federal
Categories: Church Members, First Amendment

A Michigan state appeals court held that it lacked jurisdiction to resolve the claims of parishioners that they had suffered intentional infliction of emotional distress as a result of their priest's actions.

Several parishioners withheld their financial support from the church because of their opposition to certain changes that a new priest had initiated. In response to this action, the priest refused to give communion to certain dissident members in the presence of the entire congregation, and verbally criticized others during services.

The court observed that "it is well settled that courts, both federal and state, are severely circumscribed by [the state and federal constitutions] in the resolution of disputes between a church and its members. Such jurisdiction is limited to property rights which can be resolved by application of civil law."

In rejecting the members claim that the church had intentionally caused them emotional distress, the court remarked: "This is quite a modern tort not yet recognized by the highest court in this state. Hopefully, it never will be. The awesome flood of litigation has already risen to the gunnels. If the courts were to offer to extract money from everyone who intentionally makes someone else mad, we would surely go under." Maciejewski v. Breitenbeck, 413 N.W.2d 65 (Mich. App. 1987)

Legal Developments

Court Upheld the Right of Church-Run School to Dismiss First Grader

A New York appeals court upheld the right of a church-operated elementary school to dismiss

Richard R. Hammar, Attorney, CPA

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State: Michigan
Categories: Schools

A New York appeals court upheld the right of a church-operated elementary school to dismiss a first grade pupil on account of "continuous behavioral problems."

The parents had filed a lawsuit demanding reinstatement of their child on the grounds that the dismissal had been "arbitrary and capricious." The court noted that the school had substantially complied with its procedure for discipline, which involved a series of graduated sanctions starting with a warning and leading ultimately to expulsion. The court also emphasized that private schools are "afforded broad discretion in conducting their programs, including decisions involving the discipline, suspension and expulsion of their students." Hutcheson v. Grace Lutheran School, 517 N.Y.S.2d 760 (1987).