Key point 7-04. Churches and denominational agencies can avoid church property disputes by adopting appropriate nondoctrinal language in deeds, trusts, local church bylaws, or denominational bylaws .
A California court ruled that a provision in a church's deed that required church property to revert to a denominational agency in the event that the agency determined that the church no longer was in fellowship with it, was legally enforceable by the civil courts.
For many years, a church was affiliated with the Church of God denomination, and one of its regional associations ("regional church"). The church acquired property by a deed containing the following provision: "To have and to hold, so long as [the church] maintains fellowship and doctrinal unity with [the regional church] and the property remains in use by said church. If this property falls into disuse or, if in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity with the [denomination] this property shall go to, vest in and become the property, in fee simple, of the [regional church]."
In 2004, the regional church revoked the ordination of the church's senior pastor. The regional church's administrative board adopted a resolution stating that: (1) the pastor's credentials had been revoked; (2) the church's board of trustees had voted to retain him as pastor, despite his removal from the approved list of ministers; and (3) therefore, the church no longer was in fellowship and doctrinal unity with the denomination. As a result, the regional church filed a lawsuit in which it asked a court to rule that it was the lawful owner of the church's property by reason of the above-quoted clause in the church's deed.
The church claimed that the deed restriction was "no longer in accord with the policies or best interests" of the church since its board of directors have "ratified the use of the property for the general purposes of the corporation as an independent church rather than for the specific purpose for which it was [acquired]."
The regional church presented evidence that the church intended to include the reverter clause in the deed. It introduced an affidavit signed by the previous pastor, who was employed by the church for 27 years. The former pastor's affidavit established the church's lengthy affiliation with the regional church and the history of its governing documents.
He testified that the church's board of trustees intended to protect its property from unscrupulous church leaders and groups within the church by preventing them from taking control of the church's property. Indeed, he testified the purpose of the deed was to prevent the very situation that had occurred in this case.
A trial court ruled in favor of the regional church on the ground that it had established that the parties had intended to create a reversionary interest that was triggered by the church's acts. The church appealed.
A state appeals court affirmed the trial court's ruling in favor of the regional church. It began its opinion by noting that "the deed's language provided that the property was to go to the [regional church] upon the happening of a certain event subsequent to the deed's recordation." Specifically, if in the opinion of the regional church, the church was no longer in fellowship and doctrinal unity with the parent denomination, the property would revert to the regional church. The court concluded that this language created a "power of termination."
The church claimed that the language in the deed regarding "fellowship and doctrinal unity" is too ambiguous to be enforceable. The court agreed that it would be "both improper and impossible" for it to determine whether the church remained in "fellowship and doctrinal unity," but it concluded that the deed did not require such a determination.
Under the deed's plain language, this issue was clearly left in the hands of the regional church: "If in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity …." The court noted that "just as a contract that permits a buyer to unilaterally determine whether goods are of a sufficient quality is proper, so is the language of the deed. Its language places the issue squarely in the hands of the regional church, and as it offered evidence that it reached a determination on this matter, that opinion is sufficient to invoke the termination clause. We therefore find that the regional church established by sufficient evidence that under the deed, it was the legal owner of the property."
The court also addressed the church's argument that the trial court wrongfully interjected itself into ecclesiastical matters in violation of the First Amendment. Specifically, the church claimed that the trial court considered whether or not the church and regional church were in fellowship or doctrinal unity with each other. The court found this argument to be "an improper attempt to create a constitutional issue where none exists.
The trial court was not required to, and did not, make any factual finding as to whether it believed the church and regional church continued to be in fellowship or doctrinal unity. Under the plain language of the deed, all the trial court was required to find was whether the regional church believed that was no longer the case: "If in the opinion of said [regional church] the church is no longer in fellowship and doctrinal unity with the [denomination] this property shall go to, vest in and become the property, in fee simple, of the [regional church]."
As a result, the trial court "had no reason to determine whether the parties were in fellowship and doctrinal unity. It made no such finding, which would have been legally improper and irrelevant in any event. The terms of the deed did not call for the court to determine that issue; it was the regional church's opinion that mattered." New Hope Community Church of God v. Association of Church of God Southern California, 2007 WL 1493806 (Cal. App. 2007).
