• The Kentucky Supreme Court rejected the claim of the Protestant Episcopal Church in the United States (PECUSA) to the property of a local church that voted unanimously to disaffiliate from the parent body. The church voted to disaffiliate from the PECUSA because of disagreement with certain denominational policies, and a dispute arose between the church and PECUSA regarding ownership of the church’s property. A trial court found that the local congregation was the rightful owner of its property, but a state appeals court reversed this decision. The congregation appealed the case to the state supreme court, which ruled in favor of the local church. The court emphasized that: (1) the congregation’s withdrawal from the PECUSA “was unequivocal, and there was no dissenting faction”; (2) the “church property was acquired exclusively by the efforts of the local congregation”; (3) through the years title to the property was held by the church trustees and later by the church when it incorporated; and (4) the church “freely engaged in transactions such as purchase, encumbrance, and sale of its real property without any involvement by PECUSA”. Such evidence, observed the court, created an “appearance of absolute ownership” in the local church. However, the PECUSA maintained that certain denominational documents imposed a trust on the local church’s property in favor the national church, and that in any event the civil courts were required to defer to the conclusions of a hierarchical denomination such as the PECUSA (under the so-called “compulsory deference rule”). Both of these contentions were rejected by the court. As to the documents, the court concluded that (1) they were ambiguous, and accordingly could not create a trust in the absence of a “reversionary clause” in favor of the PECUSA, and (2) the PECUSA had never previously regarded the documents as having any legal effect. The court refused to adopt the “compulsory deference rule,” choosing instead the “neutral principles of law” approach to resolving church property disputes. Under the neutral principles approach, a court resolves church property disputes on the basis of nondoctrinal language in deeds, charters, and the bylaws of both the local church and parent denomination. Under this approach, the court concluded that the local church and not the PECUSA was the rightful owner of the property in question since nondoctrinal language in the church’s charter and deed clearly vested title in the local church. The court concluded: “It should be remembered that [the church] acquired the property with no assistance from PECUSA; that the property was managed and maintained exclusively by the church; that the church improved and added to its property; and that PECUSA deliberately avoided acquisition of title or entanglement with the property to ensure that it would not be subject to civil liability. The record is clear that PECUSA’s relationship with the church was exclusively ecclesiastical and the church was at all times in control of its temporal affairs.” Two dissenting justices argued that a document executed by the church 81 years earlier did create a trust in favor of the PECUSA. They observed that the church “enjoyed the benefits of membership in PECUSA for many long years—its members were confirmed by the bishop … its clergy participated in a PECUSA pension plan, PECUSA insured the church, and the church regularly asked for and received help and advice from the bishop …. Because of disagreement with national church policy, the church cannot now repudiate a legal document executed 81 years ago.” Bjorkman v. Protestant Episcopal Church in the United States of America, 759 S.W.2d 583 (Ky. 1988).

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