Court To Determine Whether Board Members May Serve

In a few cases, a court may resolve such disputes.

Church Law and Tax 1997-05-01

Officers, Directors, and Trustees

Key point. The civil courts have consistently ruled that they cannot resolve disputes concerning the eligibility and status of church board members if any consideration of religious doctrine would be required. However, a small minority of courts have ruled that they can resolve such disputes if they can do so without considering religious doctrine.

A Missouri court ruled that it could determine whether two board members of a religious organization were qualified to serve, since it could do so without considering religious doctrine. A synagogue created a subsidiary corporation and transferred all of its property to the subsidiary in an attempt to protect its assets from liability. The subsidiary was incorporated as a nonprofit corporation under state law. Its bylaws specified that board members had to be members of the synagogue. A dispute arose among members of the subsidiary’s board, and two board members filed a lawsuit against other board members, and attempted to oust other board members and install new ones. In response to these actions, the board voted to expel the two dissident members. The two dissidents refused to honor this vote, but they did nothing to challenge it. The board then asked a court to determine that the dissidents were not qualified to serve as directors since they were no longer members of the congregation as required by the bylaws, and to remove them from office. A trial court refused, noting that this case involved “an ecclesiastical matter not to be decided by this court.” The board appealed, and a state appeals court ruled that it did have the authority to resolve the dispute. The court acknowledged that it had no authority to resolve ecclesiastical matters, and that “the removal or expulsion from a congregation is a matter for an ecclesiastical tribunal to decide and its decision thereon is binding and not reviewable by the civil courts.” However, in this case the two dissidents had already been removed, and their removal was not the issue. Rather, the court was asked to determine whether or not the dismissed board members were eligible to continue serving on the board. The court observed that “the true issue raised and presented for review is whether [the two dissidents] qualify to continue as directors of the board .” It then referred to state nonprofit corporation law:

When the incorporators decided to incorporate under the not for profit laws of Missouri, they submitted it to the state courts’ jurisdiction in all matters of a corporate nature. Under the not for profit corporation laws in Missouri, the corporation is authorized to promulgate bylaws for the administration and regulation of its affairs …. Under the laws of Missouri, the directors of the not for profit corporation are authorized to manage the corporation [and their] qualifications as directors may be prescribed by the articles or bylaws.

The court noted that the subsidiary corporation’s bylaws specified that the board members were to be elected by the entire board, that eligible candidates included those persons who were members of the congregation, and that the board was empowered to remove directors. The court noted that even apart from a specific bylaw provision, “the body which appoints a director may remove a director.” It then concluded:

The bylaws herein at issue specify that the directors shall serve their term unless sooner removed or disqualified. A director is no longer qualified to serve if he is not a member of the congregation. Nothing in the statutes prevents [the board] from seeking to initiate the court’s jurisdiction to enjoin [the two dissident board members] from serving as directors …. Such a cause of action involves nothing of an ecclesiastical nature. Although this care arises out of a religious dispute, we are of the opinion that to resolve the matter does not require the court to become entangled in religious doctrine or unconstitutionally interfere with a religious body’s affairs. Here, the court has jurisdiction to inquire as to what the bylaws require and determine the degree of the parties’ adherence to them. The inquiry focuses on the parties’ in their capacity as directors of a not for profit corporation organized under the laws of Missouri, not as congregation members seeking rights under ecclesiastical law.

Application. Consider the following: (1) The court’s ruling represents a minority view. Most courts would have viewed this dispute as ecclesiastical in nature—concerning the status of board members of a religious organization—and would have refused to intervene. (2) The congregation incorporated a subsidiary corporation and transferred assets to it in order to protect the congregation’s assets from liability. A number of religious organizations have done the same thing. Unfortunately, such arrangements will not protect the congregation’s assets from liability if the congregation exercises control over the subsidiary (as is almost always the case). (3) Some religious organizations have attempted to establish self-perpetuating boards. The legal validity of such boards has been questioned by some. While the court in this case did not directly address this issue, it is perhaps worth noting that the court recognized that the subsidiary’s board was self-perpetuating but made no comments regarding the legality or propriety of such boards under nonprofit corporation law. (4) The court noted that religious organizations that incorporate under their state’s nonprofit corporation law “submit to the state’s jurisdiction in all matters of a corporate nature.” This means that those administrative or corporate matters that are not addressed in a church’s articles of incorporation or bylaws will be resolved on the basis of nonprofit corporation law. (5) The dismissed board members argued that their dismissal should not be recognized as final since they never “exhausted” or pursued their ecclesiastical remedies within the congregation. The court rejected this argument, noting that the civil courts ordinarily will not resolve church disciplinary decisions if the disciplined member failed to exhaust appeal remedies under the church’s bylaws. The court noted that “without an ecclesiastical remedy being initiated by them, we consider their expulsion from the congregation as final and binding.” (6) The court observed that “the body which appoints a director may also remove a director.” This principle will be relevant to those churches whose bylaws make no provision for the removal of officers or directors. Beth Hamedrosh Hagodol Cemetery v. Levy, 923 S.W.2d 439 (Mo. App. 1996). [Church Officers, Directors, and Trustees, Judicial Resolution of Church Disputes]

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold 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. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay