Ad Hoc Committee of Parishioners v. Reiss

• Decision Date: 23 February 2010
• Docket Number: No. 1 CA-CV 08-0360.,No. 1 CA-CV 09-0079.,1 CA-CV 08-0360.,1 CA-CV 09-0079.
• Citation: 224 P.3d 1002
• Parties: AD HOC COMMITTEE OF PARISHIONERS OF OUR LADY OF The SUN CATHOLIC CHURCH, INC., Plaintiff/Appellant-Cross Appellee, v. Peter Wheeler REISS and Carma B. Reiss, husband and wife; Peter Wheeler Reiss, Jr. and Lisa Reiss, husband and wife; Art Spina and Ruth Allen aka Ruth Allen Schwichtenberg, Defendants/Appellees-Cross Appellants. Jeremy Schmuki, individually and as a former Board Member of Our Lady of the Sun, an Arizona corporation; Patrick Lyons, individually and representing those members of Our Lady of the Sun community, who are similarly situated, Plaintiffs/Appellants, v. Our Lady of the Sun Catholic Church, Inc., an Arizona corporation and the following persons who had served and/or still serve on the Board of Directors of Our Lady of the Sun: Paul Andrade; Albert Kenneally; Paul Monaghan; Ruth Allen Schwichtenberg; Arthur Spina; Peter Wheeler Reiss, Sr. and Peter Wheeler Reiss, Jr., each individually and as a member of the Board, Defendants/Appellees.
• Court: Arizona Court of Appeals

224 P.3d 1002

AD HOC COMMITTEE OF PARISHIONERS OF OUR LADY OF The SUN CATHOLIC CHURCH, INC., Plaintiff/Appellant-Cross Appellee, v. Peter Wheeler REISS and Carma B. Reiss, husband and wife; Peter Wheeler Reiss, Jr. and Lisa Reiss, husband and wife; Art Spina and Ruth Allen aka Ruth Allen Schwichtenberg, Defendants/Appellees-Cross Appellants.

Jeremy Schmuki, individually and as a former Board Member of Our Lady of the Sun, an Arizona corporation; Patrick Lyons, individually and representing those members of Our Lady of the Sun community, who are similarly situated, Plaintiffs/Appellants, v. Our Lady of the Sun Catholic Church, Inc., an Arizona corporation and the following persons who had served and/or still serve on the Board of Directors of Our Lady of the Sun: Paul Andrade; Albert Kenneally; Paul Monaghan; Ruth Allen Schwichtenberg; Arthur Spina; Peter Wheeler Reiss, Sr. and Peter Wheeler Reiss, Jr., each individually and as a member of the Board, Defendants/Appellees.

No. 1 CA-CV 08-0360.

No. 1 CA-CV 09-0079.

Court of Appeals of Arizona, Division 1, Department B.

February 23, 2010.

Jennings, Haug & Cunningham, LLP, By Philip G. Mitchell, Craig J. Bolton, Phoenix Attorneys for Plaintiff/Appellant-Cross Appellee Ad Hoc Committee of Parishioners of Our Lady of the Sun Catholic Church, Inc. and Defendant/Appellee Paul Andrade.

The Lynch Law Firm, L.L.C. By Andrew D. Lynch, John C. Shorb, Scottsdale, and Paul G. Ulrich, P.C., By Paul G. Ulrich, Phoenix, Attorneys for Defendants/Appellees-Cross Appellants Peter Wheeler Reiss, Carma B. Reiss, Peter Wheeler Reiss, Jr., Lisa Reiss, Art Spina, and Ruth Allen Schwichtenberg.

Law Office of Maria Salapska, PLLC By Maria Salapska, Phoenix, Attorney for Plaintiffs/Appellants Jeremy Schmuki and Patrick Lyons.

Jones, Skelton & Hochuli, P.L.C. By Eileen Dennis Gilbride, William D. Holm, Nicholas D. Acedo, Phoenix, Attorneys for Defendants/Appellees Our Lady of the Sun Catholic Church, Inc., Albert Kenneally, Paul Monaghan, Ruth Allen Schwichtenberg, Arthur Spina, Peter Wheeler Reiss, Sr., and Peter Wheeler Reiss, Jr.

OPINION

BARKER, Judge.

¶ 1 This opinion addresses two related cases that are consolidated for purposes of appeal. Each case has common factual elements relating to Our Lady of the Sun Catholic Church, Inc. ("OLS"), and requires us to address different aspects of the ecclesiastical abstention doctrine. For the following reasons, we affirm as modified.

I.

¶ 2 We first address the trial court's dismissal of the verified complaint filed by Jeremy Schmuki and Patrick Lyons.

A. Facts and Procedural History

¶ 3 Father Francis LeBlanc, an ordained Roman Catholic priest, founded OLS in 1984. Father LeBlanc organized OLS outside of the structure of the Diocese of Phoenix to conduct the Tridentine Latin Mass, to administer traditional sacramental rites of the Roman Catholic Church, and to promote the doctrines, traditions, and liturgy of the Roman Catholic Church.¹ A five-member board of directors governs the church, and only directors serve as officers of OLS. The priest serves as a director and president of OLS. Father LeBlanc was priest and president of OLS until he passed away on September 28, 2006.

¶ 4 In the wake of Father LeBlanc's death, the board of directors, then consisting of Appellant Jeremy Schmuki and Appellees Albert Kenneally, Paul Monaghan, and Arthur Spina, elected Father Paul Andrade as a director and the president of OLS on October 15, 2006. Schmuki was the only director who voted against Father Andrade. Schmuki believed Father Andrade did not meet the qualifications specified in the bylaws to become the OLS priest. Article VI of the bylaws gives the board the power to "select and receive a priest to promote the purposes and objectives of the Corporation" and specifies that "[t]he Priest must indicate a willingness to comply with all of the provisions of the Articles of Incorporation and more specifically Article XI thereof." Article XI of the articles of incorporation prohibits any Roman Catholic priest who was not ordained according to pre-1968 rites from being the OLS priest.² Schmuki contends the board failed to ascertain whether Father Andrade was duly ordained according to pre-1968 Roman Catholic rites.

¶ 5 Several days after electing Father Andrade as president, the board voted to remove Schmuki as a director. Patrick Lyons, a former member of the church congregation, along with Schmuki ("Appellants"), filed this derivative lawsuit on June 7, 2007 against OLS and current and former members of the board of directors, including Father Andrade, Kenneally, Monaghan, Spina, Peter Reiss, Sr., and Ruth Allen Schwichtenberg ("Appellees").³ Appellants filed a nine-count verified amended complaint and an application for preliminary injunction on May 29, 2008. Count One alleges Appellees breached fiduciary duties to OLS by acting contrary to the OLS bylaws and articles of incorporation when the board appointed Father Andrade as priest of OLS on October 15, 2006. Count Two seeks declaratory relief to invalidate the board's actions beginning on October 15, 2006, to reinstate Schmuki as a director, and to force all other directors to resign. Count Three alleges Appellees were grossly negligent in not ascertaining Father Andrade's qualifications in accordance with the bylaws. Count Four alleges fraud against Father Andrade for representing himself as a duly ordained Roman Catholic priest when he knew he did not qualify as one. In Count Five, Appellants claim Father Andrade negligently misrepresented his qualifications to OLS. Count Six alleges conversion against Father Andrade asserting he, under false pretenses, received monetary benefits from OLS and controlled OLS assets. In Count Seven, Appellants claim Father Andrade, under false pretenses, unjustly enriched himself by accepting benefits from OLS. Count Eight alleges conversion against Kenneally for taking gold coins that belonged to OLS. Count Nine alleges Kenneally was unjustly enriched by taking things that belonged to Father LeBlanc's trust.

¶ 6 Kenneally filed a motion to dismiss on June 11, 2008. Subsequently, OLS, Spina, Reiss, Jr., Reiss, Sr., and Schwichtenberg filed a separate motion to dismiss the amended verified complaint on June 11, 2008. Monaghan and Kenneally then joined the second June 11 motion to dismiss. Although Father Andrade filed an answer and a counterclaim to the amended complaint, Father Andrade orally joined the second June 11 motion during the hearing on the motion to dismiss and argued Counts Four through Seven should be dismissed for lack of subject matter jurisdiction. In a signed judgment entered on December 3, 2008, the trial court dismissed Counts One through Three with prejudice for lack of standing and lack of subject matter jurisdiction under the ecclesiastical abstention doctrine, dismissed Counts Four through Seven with prejudice for lack of subject matter jurisdiction under the ecclesiastical abstention doctrine, and dismissed Counts Eight and Nine with prejudice because it was not the "right forum" for the claims. Appellants filed a timely notice of appeal.

¶ 7 On appeal, Appellants advance three arguments. First, Appellants argue the trial court erred in dismissing Counts One, Two, and Three because Appellants have standing and the trial court has subject matter jurisdiction. Second, Appellants argue Counts Four, Five, Six, and Seven are not barred for lack of subject matter jurisdiction under the ecclesiastical abstention doctrine. Finally, Appellants claim the trial court erred in dismissing Counts Eight and Nine because Appellants properly stated claims against Kenneally in the verified complaint and the merits of this issue have not been adjudicated in the probate proceeding.

¶ 8 We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution, Arizona Revised Statutes ("A.R.S.") sections 12-2101(B) (2003), and 12-120.21(A)(1) (2003).

B. Discussion

¶ 9 We review a trial court's grant of a motion to dismiss for an abuse of discretion but review issues of law de novo. Dressler v. Morrison, 212 Ariz. 279, 281, ¶ 11, 130 P.3d 978, 980 (2006). We "uphold dismissal only if the plaintiffs would not be entitled to relief under any facts susceptible of proof in the statement of the claim." Mohave Disposal Inc. v. City of Kingman, 186 Ariz. 343, 346, 922 P.2d 308, 311 (1996).

¶ 10 Though the trial court based its decision on both standing and the ecclesiastical abstention doctrine, we turn directly to the issue of the ecclesiastical abstention doctrine and determine that there is no subject matter jurisdiction. Craft v. Cannon, 58 Ariz. 457, 458, 121 P.2d 421, 421 (1942) (a motion to dismiss will be upheld if the record supports any of the grounds asserted in favor of dismissal). We refer to subject matter jurisdiction in the same sense as did the court in Dobrota v. Free Serbian Orthodox Church St. Nicholas, 191 Ariz. 120, 952 P.2d 1190 (App.1998):

At the outset we note that sometimes courts have used the word "jurisdiction" imprecisely. Here we use jurisdiction to mean a court's "authority to do a particular thing." See Taliaferro v. Taliaferro, 186 Ariz. 221, 223, 921 P.2d 21, 23 (1996). A civil court obviously has the authority to adjudicate the types of claims in Father Dobrota's complaint. The issue presented is whether the doctrine of ecclesiastical abstention, Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 696, 709, 96 S.Ct. 2372, 2380, 49 L.Ed.2d 151 (1976), requires the court to abstain from deciding these claims.

Id. at 124, ¶ 12, 952 P.2d at 1194. As described below, we do not have "statutory or constitutional power to hear and determine [this] particular type of case." State v. Maldonado, 573 Ariz. Adv. Rep. 8, ¶ 14 (Jan. 7, 2010) ("Jurisdiction in this sense cannot be conferred by the consent of the parties and a court that lacks subject matter jurisdiction cannot adjudicate the action.")....