Episcopal Diocese of Fort Worth v. Episcopal Church

• Decision Date: 21 March 2014
• Docket Number: No. 11–0265.,11–0265.
• Citation: 56 Tex. Sup. Ct. J. 1034,422 S.W.3d 646
• Parties: The EPISCOPAL DIOCESE OF FORT WORTH, et al, Petitioners, v. The EPISCOPAL CHURCH, et al., Respondents.
• Court: Texas Supreme Court

422 S.W.3d 646

56 Tex. Sup. Ct. J. 1034

The EPISCOPAL DIOCESE OF FORT WORTH, et al, Petitioners,

v.The EPISCOPAL CHURCH, et al., Respondents.

No. 11–0265.

Supreme Court of Texas.

Argued Oct. 16, 2012.

Decided Aug. 30, 2013.

Rehearing Denied March 21, 2014.

Richard R. Hayslett, Dallas, TX, for Amicus Curiae Anglican Communion Institute, Inc.

Kelly J. Shackelford, Liberty Legal Institute, Plano, TX, for Amicus Curiae Liberty Institute.

David B. West, Cox Smith Matthews Incorporated, San Antonio, TX, Lloyd J. Lunceford, Taylor Porter Brooks & Phillips, L.L.P., Baton Rouge, LA, for Amicus Curiae Presbyterian Lay Committee.

Eprhaim Radner, Wycliffe College, Canada, CA, pro se.

J. Shelby Sharpe, Sharpe & Rector, Fort Worth, TX, Kendall M. Gray, Andrews Kurth LLP, Houston, TX, R. David Weaver, The Weaver Law Firm PC, Arlington, TX, Scott A. Brister, Andrews Kurth LLP, Austin, TX, for The Episcopal Diocese of Fort Worth.

Frank Gilstrap, Frank Hill, Hill & Gilstrap PC, Arlington, TX, for Local Episcopal Congregations.

Jonathan D.F. Nelson, Jonathan D. F. Nelson PC, Arlington, TX, Kathleen Wells, Taylor Olson Adkins Sralla & Elam LLP, Fort Worth, TX, Thomas S. Leatherbury, William D. Sims Jr., Vinson & Elkins LLP, Dallas, TX, for Local Episcopal Parties.

David Beers, Mary Kostel, Goodwin Proctor LLP, Washington, DC, Sandra Cockran Liser, Naman Howell Smith & Lee PLLC, Fort Worth, TX, for The Episcopal Church.

Justice JOHNSON delivered the opinion of the Court, in which Justice HECHT, Justice GREEN, and Justice GUZMAN joined, and in Parts I, II, III, and IV–A of which Chief Justice JEFFERSON joined.

This direct appeal involves the same principal issue we addressed in Masterson v. Diocese of Northwest Texas, 422 S.W.3d 594, 2013 WL 4608632 (Tex.2013): what methodology is to be used when Texas courts decide which faction is entitled to a religious organization's property following a split or schism? In Masterson we held that the methodology referred to as “neutral principles of law” must be used. But, in this case the trial court granted summary judgment on the basis of the “deference” or “identity” methodology, and the record does not warrant rendition of judgment to either party based on neutral principles of law.

We reverse and remand to the trial court for further proceedings.

I. Background

The Episcopal Church (TEC) is a religious organization founded in 1789. It has three structural tiers. The first and highest is the General Convention. The General Convention consists of representatives from each diocese and most of TEC's bishops. It adopts and amends TEC's constitution and canons. The second tier is comprised of regional, geographically defined dioceses. Dioceses are governed by their own conventions. Each diocese's convention adopts and amends its own constitution and canons, but must accede to TEC's constitution and canons. The third tier is comprised of local congregations. Local congregations are classified as parishes, missions, or congregations. In order to be accepted into union with TEC, missions and congregations must subscribe to and accede to the constitutions and canons of both TEC and the Diocese in which they are located.

In 1982 the Episcopal Diocese of Fort Worth (the Diocese or Fort Worth Diocese) was formed after the Episcopal Diocese of Dallas voted to divide into two parts. The Fort Worth Diocese was organized “pursuant to the Constitution and Canons of the Episcopal Church” and its convention adopted a constitution and canons. The Diocese's constitution provided that all property acquired for the Church and the Diocese “shall be vested in [the] Corporation of the Episcopal Diocese of Fort Worth.” The canons of the Diocese provided that management of the affairs of the corporation “shall be conducted and administered by a Board of Trustees of five (5) elected members, all of whom are either Lay persons in good standing of a parish or mission in the Diocese, or members of the Clergy canonically resident in the Diocese.” The Bishop of the Diocese was designated to serve as chair of the board of the corporation. After adopting its constitution and canons the Diocese was admitted into union with TEC at TEC's December 1982 General Convention.

In February 1983, the Fort Worth Diocese filed articles of incorporation for the Fort Worth Corporation. That same year the Dallas and Fort Worth Dioceses filed suit in Dallas County and obtained a judgment transferring part of the Dallas Diocese's real and personal property to the Fort Worth Diocese. The 1984 judgment vested legal title of the transferred property in the Fort Worth Corporation, except for certain assets for which the presiding Bishop of the Dallas Diocese and his successors in office had been designated as trustee. The judgment transferred the latter assets to the Bishop of the Fort Worth Diocese and his successor in office as trustee.

Doctrinal controversy arose within TEC, leading the Fort Worth Corporation to file amendments to its articles of incorporation in 2006 to, in part, remove all references to TEC. The corporate bylaws were similarly amended. The 2007 and 2008 conventions of the Fort Worth Diocese voted to withdraw from TEC, enter into membership with the Anglican Province of the Southern Cone, and adopt amendments to the Diocese's constitution removing references to TEC.¹

TEC responded. It accepted the renunciation of Jack Iker, Bishop of the Fort Worth Diocese, and TEC's Presiding Bishop removed Iker from all positions of authority within TEC. In February 2009, TEC's Presiding Bishop convened a “special meeting of Convention” for members of the Fort Worth Diocese who remained loyal to TEC. Those present at the meeting elected Edwin Gulick as Provisional Bishop of the Diocese and Chair of the Board of Trustees for the Fort Worth Corporation. The 2009 Convention also voted to reverse the constitutional amendments adopted at the 2007 and 2008 Conventions and declared all relevant offices of the Diocese to be vacant. Bishop Gulick then appointed replacements to the offices declared vacant, including the offices of the Trustees of the Corporation. TEC recognized the persons elected at the 2009 Convention as the duly constituted leadership of the Diocese.

TEC, Rev. C. Wallis Ohls, who succeeded Bishop Gulick as Provisional Bishop of the Episcopal Diocese of Fort Worth, and clergy and lay individuals loyal to TEC (collectively, TEC) filed suit against The Episcopal Diocese of Fort Worth, the Fort Worth Corporation, Bishop Iker, the 2006 trustees of the corporation, and former TEC members (collectively, the Diocese), seeking title to and possession of the property held in the name of the Diocese and the Fort Worth Corporation.² Both TEC and the Diocese moved for summary judgment. A significant disagreement between the parties was whether the “deference” (also sometimes referred to as the “identity”) or “neutral principles of law” methodology should be applied to resolve the property issue. TEC contended that pursuant to this Court's decision in Brown v. Clark, 102 Tex. 323, 116 S.W. 360 (1909), the deference methodology has been applied in Texas for over a century and should continue to be applied. Under that methodology, it argued, TEC was entitled to summary judgment because it recognized Bishops Gulick and Ohls, the leaders elected at the 2009 convention, and the appointees of the Bishops as the true and continuing Episcopal Diocese. TEC also contended that even if the neutral principles methodology were applied, it would be entitled to summary judgment. The Diocese, on the other hand, contended that in Brown this Court effectively applied the neutral principles methodology without specifically calling it by that name, and Texas courts have continued to substantively apply that methodology to resolve property issues arising when churches split. Under the neutral principles methodology, the Diocese argued, it was entitled to summary judgment affirming its right to the property. The Diocese also maintained that even if the deference methodology were applied, it would still be entitled to summary judgment.³

The trial court agreed with TEC that deference principles should apply, applied them, and granted summary judgment for TEC. The Diocese sought direct appeal to this Court and we noted probable jurisdiction. We had previously granted the petition for review in Masterson, and we heard oral arguments for both cases on the same day.

II. Jurisdiction

The Government Code provides that “[a]n appeal may be taken directly to the supreme court from an order of a trial court granting or denying an interlocutory or permanent injunction on the ground of the constitutionality of a statute of this state.” Tex. Gov't Code § 22.001(c). The trial court granted summary judgment and issued injunctions ordering the defendants to surrender all Diocesan property and control of the Diocesan Corporation to the Episcopal Diocese of Fort Worth, and ordering the defendants to desist from holding themselves out as leaders of the Diocese. While the trial court order did not explicitly address the constitutionality of a statute, “[t]he effect of the trial court's order ... is what determines this Court's direct appeal jurisdiction.” Tex. Workers' Compensation Comm'n v. Garcia, 817 S.W.2d 60, 61 (Tex.1991).

In its motion for summary judgment TEC argued, in part, that the actions of the Board of Trustees in amending the Fort Worth Corporation's articles of incorporation were void because the actions went beyond the authority of the corporation, which was created and existed as an entity subordinate to a Diocese of TEC. TEC argued that “[t]he secular act of incorporation does not alter the relationship between a hierarchical church and one of its subordinate units” and that finding otherwise “would risk First Amendment implications.” The Diocese, on the other hand, argued that the case was governed by the Texas Non–Profit Corporation Act ⁴ and the Texas...