BIBLE WAY CHURCH v. BEARDS

• Decision Date: 24 July 1996
• Docket Number: No. 95-CV-311,No. 95-CV-527,95-CV-311,95-CV-527
• Citation: 680 A.2d 419
• Parties: The BIBLE WAY CHURCH OF OUR LORD JESUS CHRIST OF THE APOSTOLIC FAITH OF WASHINGTON, D.C., et al., Appellants, v. Eddyemae R. BEARDS, et al., Appellees. Eddyemae R. BEARDS, et al., Appellants. v. James SILVER, et al., Appellees.
• Court: D.C. Court of Appeals

680 A.2d 419

The BIBLE WAY CHURCH OF OUR LORD JESUS CHRIST OF THE APOSTOLIC FAITH OFWASHINGTON, D.C., et al., Appellants, v. Eddyemae R. BEARDS, et al.,Appellees.Eddyemae R. BEARDS, et al., Appellants. v. James SILVER, et al.,Appellees.

Nos. 95-CV-311, 95-CV-527.

District of Columbia Court of Appeals.

Argued May 23, 1996.

Decided July 24, 1996.

THIS PAGE CONTAINED HEADNOTES AND HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.

THIS PAGE CONTAINED HEADNOTES AND HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.

THIS PAGE CONTAINED HEADNOTES AND HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.

B. Michael Rauh, with whom Martin Shulman was on the brief, Washington, D.C., for appellants in No. 95-CV-311 and appellees in No. 95-CV-527.

Clement T. Cooper, Washington, D.C., for appellees in No. 95-CV-311 and appellants in No. 95-CV-527.

Before FERREN and KING, Associate Judges, and KERN, Senior Judge.

FERREN, Associate Judge.

These consolidated appeals reflect two suits by Eddyemae R. Beards and Julius Beards against The Bible Way Church of Our Lord Jesus Christ of Washington, D.C., its pastor James Silver, and its board of trustees.¹ In the first appeal (No. 95-CV-311), Bible Way contends the trial court erred in refusing to dismiss the complaint's first count charging Bible Way with negligent failure to account for church funds and to issue financial reports to church members.² In the second appeal (No. 95-CV-527), the Beardses maintain the trial court erred in dismissing their complaint for (1) breach of contract, (2) harassment, (3) defamation, (4) intentional infliction of emotional distress, (5) tortious interference with an employment contract, and (6) invasion of privacy. In No. 95-CV-311 we reverse, and order dismissal of the negligence claim, and we affirm dismissal of the other two counts. In No. 95-CV-527 we affirm.

I.

Bible Way Church is a tax-exempt religious organization incorporated in the District of Columbia under D.C. Code § 29-901 et seq. (1991 Repl.). The church has a congregation of approximately 3,000 members and has been incorporated in the District since Bishop Smallwood E. Williamsfounded it in 1936. As a qualifying religious organization, the Bible Way Church is not required to file federal or District income-tax returns or annual reports required of corporations in the District.

Eddyemae R. Beards became a member of Bible Way Church on May 13, 1951, and began working as a church volunteer in 1963. In 1979, Bishop Williams, then pastor of the church, hired her to work as a part-time employee. By 1991, Eddyemae Beards worked approximately forty to fifty hours per week for the church. After the death of Bishop Williams on June 28, 1991, James Silver, the church's interim pastor, hired Beards as Financial Secretary of the church to assume responsibility for maintaining records of individual member contributions.

At the time of Beards' appointment as Financial Secretary, the church received its income through tithes imposed on its members and from various church fundraisers. According to the Beards' first-filed complaint, Eddyemae Beards' relationship with Silver began to deteriorate in January 1992 when she issued a salary check for $15,600 to Wallace Williams, a church elder who had been suspended from the church, and paid related federal and District withholding taxes. According to the Beardses, Silver used the church intercom to tell Eddyemae Beards that she could be charged with embezzlement for issuing the check, and he later subjected her to unspecified daily humiliations, verbal abuses, and defamatory accusations as a result of the incident.

Approximately two years later on December 1, 1993, Silver sent a letter to Beards informing her that "as part of our ongoing administrative reorganization, the Bible Way Church is discontinuing the position of Financial Secretary, effective today." On May 27, 1994, Eddyemae Beards and Julius Beards, her husband, filed suit (No. 95-CV-527) naming Bible Way Church, Pastor James Silver, and each member of the board of trustees as defendants (collectively "Bible Way," supra note 1). The complaint stated six contract and tort counts (summarized earlier) arising out of Eddyemae Beards' dismissal. The defendants moved on July 25, 1994, to dismiss the complaint for failure to state a claim upon which relief could be granted.

In the meantime, on June 10, 1994, the Beardses filed a second, three-count suit (No. 95-CV-311) against Bible Way. Count one charged negligence, alleging that Bible Way had violated a duty of care owed to its members — reflected in particular "Standards of Responsible Stewardship" and "Guidelines and Standards for Audits and Certified Public Accounts" — as a result of the following defaults (among others): failing to monitor "funds received from all sources" for over twenty years; permitting itself to "fall under the complete domination" of the pastor; failing to comply with Social Security and other federal, as well as local, tax laws; failing to separate the church's religious operations from its "purely secular" activities such as a day care center, apartment complex, and supermarket; failing to account for funds turned over to the wife of the founding pastor; failing for over fifteen years to account for the receipts averaging over $150,000 from the annual church banquet; failing to provide annual financial reports to the members based on monthly statements prepared by Eddyemae Beards as Financial Secretary; failing to account for church funds collected from "Annual Rallies" of "all Church Clubs;" failing to account for the "tithes" paid by "more than 3,000 dues paying members" of the church; failing (before Eddyemae Beards became Financial Secretary) "to maintain accurate records of funds received by the Church;" and violating "the normal, acceptable standards of: (a) Responsible Stewardship and (b) Guidelines and Standards for Audits and Certified Public Accountants."

Count two of the complaint alleged that Bishop Williams had created a testamentary trust in his will for the benefit of church members. The Beardses requested an accounting of, and a receiver for, the testamentary assets. Count three reiterated all previous allegations and sought an accounting of all Bible Way Church assets.

On August 4, 1994, Bible Way moved to dismiss count one (negligence) of the second-filed (June 10) complaint on the ground it was absolutely immune from suit and thus that the court lacked subject matter jurisdiction.The defense premised immunity on a proffer that the claim would entangle the trial court in matters of "internal church governance." Bible Way moved to dismiss count two for failure to state a claim upon which relief could be granted and sought dismissal of count three as duplicative of the other counts.³ On October 6, 1994, while the defense motion was pending, the Beardses sought class certification of the counts stated in the second-filed complaint, naming as a class all past and present members of the Bible Way Church.

On March 3, 1995, the trial court ruled on the motions pending on the second-filed complaint. The court denied class certification because the Beardses had failed to file the motion within ninety days of filing the complaint, as required by Super. Ct.Civ.R. 33-I(b)(1). The trial court then granted Bible Way's motion to dismiss counts two and three but denied the motion to dismiss the negligence count. The court concluded that this first count could be resolved exclusively by reference to objective, well-established standards of accounting and reporting that would not entangle the court in matters of religion in contravention of the First Amendment. Bible Way filed an interlocutory appeal of this ruling; the Beardses did not cross-appeal the court's other rulings.

On April 4, 1995, the trial court granted Bible Way's motion to dismiss each count of the Beards' first-filed (May 27, 1994) complaint. The court initially ruled that Eddyemae Beards had been an at-will church employee whose dismissal could not be challenged under the exception to the at-will employment doctrine announced in Adams v. George W. Cochran & Co., 597 A.2d 28 (D.C. 1991) (allowing wrongful discharge claim where at-will employee fired for refusing to violate law). The court then dismissed the first and fifth counts alleging, respectively, breach of contract and tortious interference with an employment contract. The court also dismissed count two, ruling that it duplicated the other counts and was based on a non-existent tort ("harassment") in the District of Columbia. Finally, the court ruled that the defamation, intentional infliction of emotional distress, and invasion of privacy counts were barred by the applicable statute of limitations. The Beardses filed a timely notice of appeal.

II.

Appeal No. 95-CV-311

A.

Bible Way contends, on interlocutory appeal, the trial court erred in denying its Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Although this court ordinarily reviews only "final orders and judgments" of the Superior Court, see D.C. Code § 11-721(a)(1) (1995 Repl.), we will treat certain interlocutory orders as final and "collateral," and hence appealable, when "they have a final and irreparable effect on important rights of the parties." United Methodist Church v. White, 571 A.2d 790, 791-92 (D.C. 1990); see Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949) (denial of motion to require plaintiff to post security in stockholder derivative action appealable as final disposition but not ingredient of cause of action); Jenkins v. Smith, 535 A.2d 1367, 1367 (D.C. 1987) (en banc) (interlocutory appeal from deal of motion to dismiss on ground of forum non conveniens permitted); Stein v. United States, 532 A.2d 641, 643 (D.C. 19...