87 F.3d 214 (7th Cir. 1996), 94-3789, Denlinger v. Brennan

Docket Nº:94-3789.
Citation:87 F.3d 214
Party Name:Stanley J. DENLINGER, as Administrator of the Estate of Elmer Denlinger, and E. Benjamin Denlinger, Plaintiffs-Appellants, v. John W. BRENNAN, Religious Order of St. Matthew, and Church of St. Matthew, Defendants-Appellees.
Case Date:June 24, 1996
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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87 F.3d 214 (7th Cir. 1996)

Stanley J. DENLINGER, as Administrator of the Estate of

Elmer Denlinger, and E. Benjamin Denlinger,



John W. BRENNAN, Religious Order of St. Matthew, and Church

of St. Matthew, Defendants-Appellees.

No. 94-3789.

United States Court of Appeals, Seventh Circuit

June 24, 1996

Argued May 28, 1996.

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Stanley J. Denlinger, Elkhart, IN, pro se.

E. Benjamin Denlinger, South Bend, IN, pro se.

John W. Brennan, Michigan City, IN, pro se.

Religious Order of St. Matthew, Church of St. Matthew, Elmont, NY, pro se.

David E. Vandercoy, Carla Camille Waters, Law Student, Valparaiso University School of Law, Valparaiso, IN, amicus curiae on behalf of appellants.

Jerold S. Solovy, David Odom, Jenner & Block, Chicago, IL, amicus curiae on behalf of appellees.

Before POSNER, Chief Judge, and CUDAHY and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

"Render to Caesar the things that are Caesar's" (Matthew 22:21) does not figure prominently in the theology of the Church of St. Matthew. Its members are similarly unimpressed by Justice Holmes's observation that "[t]axes are what we pay for civilized society." Compania General de Tabacos de Filipinas v. CIR, 275 U.S. 87, 100, 48 S.Ct. 100, 105, 72 L.Ed. 177 (1927) (dissenting opinion). Perhaps they think the latter proposition falsified by the tenfold increase in tax rates since Holmes's day, without a corresponding improvement in the level of civilization. The Church, and a related Order of St. Matthew, take title to the members' real property and receive an appointment of their income, returning the money (less a service fee) as a stipend. Members report on their tax returns (when they bother to file) that they have neither income nor assets. It is a successor to the Life Science Church, which was found to be a tax fraud and dissolved in bankruptcy. In re Life Science Church of River Park, 34 B.R. 529 (Bankr.N.D.Ind.1983). The IRS and the courts have not been fooled by the substitution, though unscrambling the transactions takes effort. See generally Religious Order of St. Matthew v. Brennan, 77 A.F.T.R.2d 827 (N.D.Ind.1995); United States v. Stanley Denlinger, 75 A.F.T.R.2d 611 (N.D.Ind.1994).

The Church's adherents congregate in Elmont, New York, and South Bend, Indiana. Until a few years ago, the leaders of the Elmont branch included John W. Brennan, and the leaders of the South Bend branch included John Organtini, Elmer Denlinger, and Emmett Troyer. They took turns as defendants in tax cases. Brennan pleaded guilty to multiple felonies, including tax evasion and helping others to evade taxes. Organtini, the "pastor" in South Bend, also was convicted of tax evasion. Denlinger and Troyer avoided prosecution but had to surrender assets in civil cases. United States v. Elmer Denlinger, 982 F.2d 233 (7th Cir.1992); United States v. Troyer, 91-2 U.S. Tax Cas. para. 50,401 (N.D.Ind.1991), affirmed, No. 91-3560, 983 F.2d 1074 (7th Cir. Dec. 16, 1992). With the drumbeat of litigation came internecine conflict. On a visit to South Bend, Brennan detected what may be the Church's only mortal sin: wasting money. After examining the books of the South Bend branch, Brennan remarked to William Voelker that Denlinger "ought to be shot." Denlinger was a chiropractor, and Voelker had performed repairs to Denlinger's office, which the Church claimed as religious property. Brennan apparently thought that Denlinger was cheating his confederates and proceeded to act like "the sanctimonious pirate, that went to sea with the Ten Commandments, but scrap'd one out of the table." Shakespeare, Measure for Measure act I scene 2. He beat Denlinger with an iron bar until Denlinger fell unconscious; when Denlinger

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came to and tried to defend himself, Brennan pumped bullets into his torso, as did Voelker. Next the two men trundled Denlinger's inert body into the trunk of his car, which they drove to Illinois. There they doused the corpse with gasoline, set it ablaze, and fled in Voelker's car. Indiana eventually caught up with Brennan, who was convicted of murder. Brennan v. State, 639 N.E.2d 649 (Ind.1994).

Denlinger was in life unwilling to pay the taxes that support units of government, including the courts. Without evincing any sense of irony, Denlinger's estate, through his son Stanley, filed this suit seeking damages from Brennan, the Church, and the Order. When it became clear to the plaintiffs that federal jurisdiction under 28 U.S.C. § 1331 is unavailable (organized tax evaders are the antithesis of state action), they amended the complaint to assert diversity of citizenship and jurisdiction under 28 U.S.C. § 1332(a)(1). By the time the district court acted on Brennan's motion to dismiss, the sentence for tax evasion was over, and Brennan was in Indiana State Prison at Michigan City, Indiana. His earliest parole date is in 2012, when he will be 79 years old. All plaintiffs are citizens of Indiana. Brennan filed an affidavit stating that he "resides" at the Indiana State Prison. The district court took this to be a claim of domicile in Indiana and dismissed the complaint for lack of complete diversity. ("Citizenship" for purposes of § 1332 means domicile rather than residence. America's Best Inns, Inc. v. Best Inns of Abilene, L.P., 980...

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