Falls Church v. Protestant Episcopal Church in the United States

• Decision Date: 18 April 2013
• Docket Number: Record No. 120919.
• Citation: 285 Va. 651,740 S.E.2d 530
• Parties: THE FALLS CHURCH, a/k/a The Church at the Falls—The Falls Church v. THE PROTESTANT EPISCOPAL CHURCH IN THE UNITED STATES of America, et al.
• Court: Virginia Supreme Court

285 Va. 651

740 S.E.2d 530

THE FALLS CHURCH, a/k/a The Church at the Falls—The Falls Church

v.THE PROTESTANT EPISCOPAL CHURCH IN THE UNITED STATES of America, et al.

Record No. 120919.

Supreme Court of Virginia.

April 18, 2013.

Steffen N. Johnson (Scott J. Ward, McLean; Timothy R. Obitts, McLean; Gordon A. Coffee; Gene C. Schaerr; Andrew C. Nichols; James A. Johnson; Paul N. Farquharson; Tyler O. Prout, Vienna; Gammon & Grange; Winston & Strawn; Semmes, Bowen & Semmes, on briefs), for appellant.

George A. Somerville, Richmond (Bradfute W. Davenport, Jr., Richmond; Mary C. Zinsner; Troutman Sanders, McLean, on brief), for appellee Protestant Episcopal Church in the Diocese of Virginia.

Mary E. Kostel (David Booth Beers; Adam M. Chud; Goodwin Procter, on brief), for appellee Protestant Episcopal Church in the United States of Virginia.

No brief filed on behalf of appellees William W. Goodrich and Steven Skancke.

Amicus Curiae: Commonwealth of Virginia (Kenneth T. Cuccinelli, II, Attorney General; Patricia L. West, Chief Deputy Attorney General; Wesley G. Russell, Jr., Deputy Attorney General; Michael H. Brady, Assistant Attorney General; E. Duncan Getchell, Jr., Solicitor General, on brief), in support of appellant.

Amicus Curiae: The Becket Fund for Religious Liberty (Adele A. Keim; Eric C. Rassbach; Luke W. Goodrich; Michael W. McConnell, on brief), in support of appellant.

Amici Curiae: 516 Donors to The Falls Church (E. Andrew Burcher; Walsh, Colucci, Lubeley, Emrich & Walsh, on brief), in support of appellant.

Amicus Curiae: A.E. Dick Howard, Charlottesville, in support of appellees.

Amici Curiae: General Council on Finance and Administration of the United Methodist Church; Episcopal Diocese of Southern Virgina; Episcopal Diocese of Southwestern Virginia; the Rt. Rev. Yung Chin Cho (Bishop, Virginia Annual Conference of The United Methodist Church); Steven D. Brown, Richmond (Chancellor, Virginia Annual Conference of The United Methodist Church); Gradye Parsons, Stated Clerk of the General Assembly of the Persbyterian Church (U.S.A) (“PCUSA”); Abingdon Presbytery of the PCUSA; Elder Donald F. Bickhart (Stated Clerk, Presbytery of Eastern Virginia, PCUSA); the Rev. Dr. G. Wilson Gunn, Jr. (General Presbyter, National Captial Presbytery, PCUSA); Virginia Synod of the Evangelical Lutheran Church of America; Metropolitan Washington, D.C. Synod of the Evangelical Lutheran Church of America, in support of appellees.

PRESENT: KINSER, C.J., GOODWYN, MILLETTE, McCLANAHAN and POWELL, JJ., and KOONTZ and LACY, S.JJ.

Opinion by Justice CLEO E. POWELL.

This appeal has its origin in a protracted and complex dispute between the plaintiffs, the Protestant Episcopal Church in the Diocese of Virginia (the “Diocese”) and the Protestant Episcopal Church in the United States of America (“TEC”), and the defendants, seven local congregations including The Falls Church, the appellant in the present case. In this appeal, we are asked to consider whether the trial court properly applied neutral principles of law in deciding the ownership of certain disputed church property, whether that application was constitutional, and whether the trial court, after applying neutral principles of law, granted the proper relief. In their assignment of cross-error, TEC and the Diocese ask us to consider whether the trial court erred in its application of Code § 57–7.1.

I. BACKGROUND

Many of the facts in this case were related in exacting detail in prior proceedings before this Court. See Protestant Episcopal Church v. Truro Church, 280 Va. 6, 694 S.E.2d 555 (2010). Therefore, due to the extensive nature of the proceedings below, we will recite only the facts necessary for our resolution of the dispositive issues in this case.

The Falls Church was founded in 1732 as one of two congregations in Truro Parish. Construction of a church on the property conveyed to the parish was completed in 1769. TEC is a hierarchical denomination founded in 1789. Id. at 13, 694 S.E.2d at 558. The Diocese is one of the geographical dioceses within TEC. Id. at 15, 694 S.E.2d at 559. Although it existed prior to the founding of TEC or the Diocese, The Falls Church petitioned to be a part of the Diocese and TEC in 1836. At the 1836 Annual Convention, the Diocese accepted The Falls Church's petition.

Following a long-standing conflict within TEC that arose in 2003, the congregation of The Falls Church overwhelmingly voted to disaffiliate from TEC and the Diocese on December 17, 2006. The Falls Church and six other congregations in the Diocese (collectively the “CANA congregations”) subsequently filed petitions pursuant to Code § 57–9(A), which was the subject of this Court's opinion in Truro Church.

Shortly after the CANA congregations filed their petitions, TEC and the Diocese filed complaints asserting that all personal and real property held by the CANA congregations was actually held in trust for TEC and the Diocese. In their complaint, TEC and the Diocese asserted that they directed the trustees of the CANA congregations to transfer the property to the Diocesan Bishop, but the CANA congregations had refused to do so. Both complaints requested that the CANA congregations be ordered to submit an accounting, be enjoined from further use, occupancy or alienation of the disputed property, and convey and transfer control of the property to the Diocesan Bishop. The complaint filed by the Diocese further requested that the trial court enter judgment declaring an improper trespass, conversion and alienation of real and personal property. The CANA congregations filed a counterclaim seeking a declaration that TEC and the Diocese had no interest in the disputed property occupied by the CANA congregations, and asserting claims for unjust enrichment and for imposition of a constructive trust.

After a trial on the congregations' Code § 57–9(A) petitions, the trial court granted the petitions and dismissed the complaints filed by TEC and the Diocese as legally moot. This Court reversed, and remanded the case with direction that the trial court reinstate TEC's and the Diocese's declaratory judgment actions and the CANA congregations' related counterclaims. Id. at 29, 694 S.E.2d at 567. In so doing, we stated the trial court was to “ resolve this dispute under principles of real property and contract law.” Id.

On remand, the trial court considered the complaints filed by TEC and the Diocese as well as the counterclaims filed by the CANA congregations. Following a 22–day trial, the trial court ruled that TEC and the Diocese had contractual and proprietary interests in the property at issue, and enjoined the CANA congregations from further use of the property. The trial court denied the entirety of the CANA congregations' counterclaims.

In a 113–page letter opinion, the trial court articulated its analysis of the dispute. The trial court explained that it applied neutral principles of law by considering our statutes, the language of the deeds conveying the disputed property, the constitution and canons of TEC and the Diocese, and the dealings between the parties. See Green v. Lewis, 221 Va. 547, 555, 272 S.E.2d 181, 185–86 (1980) (“we look to our own statutes, to the language of the deed conveying the property, to the constitution of the general church, and to the dealings between the parties”); Norfolk Presbytery v. Bollinger, 214 Va. 500, 505, 201 S.E.2d 752, 756–57 (1974) (“it is proper to resolve a dispute over church property by considering the statutes of Virginia, the express language in the deeds and the provisions of the constitution of the general church”).

In considering the applicable statutes, the trial court found that the adoption of Code § 57–7.1 did not change the long-standing rule in Virginia that church property may not be held by a trustee for the general church, and only trusts for local congregations are recognized. Thus, the trial court found it unnecessary to address the applicability of Code § 57–7.1. The trial court further determined that Code § 57–15 allowed it to order the transfer of property only if the transfer was the wish of the constituted church authorities of a hierarchical church.

Turning to its examination of the relevant deeds, the trial court considered the eleven deeds connected with The Falls Church. In 1746, the first deed conveyed two acres to “the said Vestry of Truro parish.” The second deed is to the “trustees of the Episcopal Church, known and designated as the ‘Falls Church.’ ” The third deed is to “Trustees for the Falls Church Episcopal Church,” and the fourth is to “Trustees of the Falls Church.” The fifth and sixth deeds are both to “Trustees of The Falls Church, Falls Church, Virginia.” The seventh through eleventh deeds are all to “Trustees of the Falls Church (Episcopal).” The trial court found that the fact that most of the deeds refer to the church as Episcopal was an indication that the designated cestui que trust was a unit or component of TEC. Relying on the circumstances of the times during which the deeds were executed, the trial court found that a reasonable grantor would have understood that property conveyed to a local Episcopal church would not be removed from the denomination without TEC's or the Diocese's consent.

In looking at the constitution and canons of the church, the trial court cited provisions stating that each congregation was bound by the constitution and canons of the general church and must acknowledge the jurisdiction of the Bishop; all clergy must affirm they “conform to the Doctrine, Discipline, and Worship of the Episcopal Church” to be ordained; all congregations use the Book of Common Prayer; Bishops must regularly visit parishes to examine the state of the churches; and congregations must participate in the Diocesan health care plan, contribute to the Church Pension Fund, and purchase fire, casualty and workers' compensation insurance. The trial court also noted property canons which...