Double-edged verdict in California ruling: CEN 1.07.09

First published in The Church of England Newspaper’s ReligiousIntelligence.com section.

The California Supreme Court has issued a double-edged verdict in the Episcopal Church property cases, handing both the Diocese of Los Angeles and three breakaway parishes a defeat in their bids to control disputed church properties.

By a vote of 6 to 0—with the seventh judge issuing a separate opinion that agreed with the ruling but rejected the legal arguments of the majority—the California Supreme Court rejected the Episcopal Church’s arguments that the state must defer to the church in adjudicating church property disputes. The judges held that California courts must use “neutral principles” of law to resolve church property dispute—giving no deference to claims made by the church hierarchy not found in the underlying title and corporate charters.

“[T]o the extent the court can resolve a property dispute without reference to church doctrine, it should apply neutral principles of law,” the court held. “The court should consider sources such as the deeds to the property in dispute, the local church’s articles of incorporation, the general church’s constitution, canons, and rules, and relevant statutes, including statutes specifically concerning religious property.”

At the same time, the Court rejected the parish’s motion to dismiss the suit and upheld an appellate court decision finding in favor of the diocese, arguing that the application of the neutral principles test in this case did not permit the parishes to withdraw from the diocese and keep their property. “When it disaffiliated from the general church, the local church did not have the right to take the church property with it,” Associate Justice Ming Chin wrote for the majority.

The court’s nuanced ruling prompted widely divergent reactions from the parties. Los Angeles Bishop J. Jon Bruno said the diocese was “overjoyed with the conclusive opinion” handed down by the court as “we have prevailed in all areas of law addressed in this case.”

Canon John Shiner, chancellor for the diocese said the decision was “final, conclusive, definitive,” and ended the litigation in favor of the diocese.

However, the lawyer for the three parishes, Eric Solhgren told The Church of England Newspaper the “good news” was that the court had “firmly come down on the side of neutral principles of law,” noting the decision would have a “wide and favorable impact for churches throughout California that seek to change their denominational affiliation.”

Mr. Sohlgren stated he was perturbed, however, that the Court appeared to have altered its interpretation of California probate law by accepting the claims of the Episcopal Church’s Dennis Canon that it could bind property held outright by a parish, by virtue of an act of the church’s national legislature.

Before Monday’s ruling, California law had held that an interest in real property could only be created by an instrument in writing executed by the owner of the property following the common law tradition of the “Statute of Frauds.”

The court’s exclusion of churches from the protection of the statute of frauds was “problematic” and “somewhat curious,” said Wicks Stephen the chancellor of the third province. He noted the California court’s interpretation of the US Supreme Court 1979 decision Jones v Wolf permitting states to use “neutral principals of law” could be considered grounds for an appeal to Washington.

Parish attorney Eric Sohlgren told CEN that “no decision” had yet been made whether to file a writ of certiorari to the Supreme Court, but noted the parish was weighing all of its options.
The California court’s decision takes effect in 30 days and the parties have 15 days to file for reconsideration or clarification.

“The facts on the ground won’t be changed” Mr. Sohlgren said, and the parishes would remain in the property until a trial court issued a judgment ordering they leave.

While taking great pains to review the law in its 40-page decision, the court’s decision was somewhat nebulous in its practical applications, as it affirmed the appellate court’s decision in favor of the diocese that the matter be sent back to the lower court for trial, but rejected the appellate court’s legal reasoning that the court’s must defer to church hierarchies in deciding property disputes. It issued no new judgment in favor of either party, instead vacating the judgment awarded the parishes by the trial court in 2005.

Although the litigation began in September 2004, no testimony or evidence has been presented to the courts, as the abstract question of which legal theory governs the dispute has been under review for the past four years.

“The matter will now return to the Orange County Superior Court for further proceedings, and we look forward to presenting evidence and additional legal arguments that [the parishes] should prevail under neutral principles of law,” Mr. Sohlgren said.