Family Fed'n for World Peace v. Hyun Jin Moon

• Decision Date: 24 December 2015
• Docket Number: No. 14–CV–94.,14–CV–94.
• Citation: 129 A.3d 234
• Parties: FAMILY FEDERATION FOR WORLD PEACE and Unification International, et al., Appellants and Cross–Appellees, v. HYUN JIN MOON, et al., Appellees and Cross–Appellants.
• Court: D.C. Court of Appeals

129 A.3d 234

FAMILY FEDERATION FOR WORLD PEACE and Unification International, et al., Appellants and Cross–Appellees,

v.HYUN JIN MOON, et al., Appellees and Cross–Appellants.

No. 14–CV–94.

District of Columbia Court of Appeals.

Argued March 10, 2015.

Decided Dec. 24, 2015.

Alan I. Horowitz, with whom James A. Bensfield, Emmett B. Lewis, Brian A. Hill, John C. Eustice, Benjamin P. De Sena, Thomas C. Green, Frank R. Volpe, George W. Jones Jr., W. Gary Kohlman, Jeffrey R. Freund, Ramya Ravindran, and Philip C. Andonian, Washington, DC, were on the brief, for appellants/cross-appellees.

David A. Reiser, with whom Steven M. Salky, Blair G. Brown, Caroline E. Reynolds, Amit P. Mehta, Washington, DC, Adam B. Abelson, Baltimore, MD, Keisha N. Stanford, Peter J. Romatowski, Adrian Wager–Zito, Shay Dvoretzky, Yaakov Roth, and Francis D. Carter, Washington, DC, were on the brief, for appellees/cross-appellants.

Before GLICKMAN and BLACKBURNE–RIGSBY, Associate Judges, and STEADMAN, Senior Judge.

STEADMAN, Senior Judge:

Before us is a dispute over legal control of a District of Columbia nonprofit corporation, originally named the Unification Church International ("UCI"),¹ established in 1977 under the auspices of the Reverend Sun Myung Moon, founder of the Unification Church. UCI has received very substantial contributions in the past from entities under the greater Unification Church umbrella and manages millions of dollars in assets. Succinctly put, plaintiffs' complaint involves allegations that defendants undertook a series of coordinated and calculated illegal actions to usurp UCI and its corporate assets and wrest control of UCI from the Unification Church.²

On direct appeal, plaintiffs appeal the trial court's grant of the defendants' motion for a judgment on the pleadings for lack of subject-matter jurisdiction.³ The judgment was based on the trial court's view that the dispute could not be decided without the court's venturing into religious questions forbidden by the First Amendment. On cross-appeal by the defendants is an earlier order by the trial court refusing to dismiss the complaint on the asserted grounds of lack of personal jurisdiction, lack of standing, and failure to state a cause of action.

On the direct appeal, we conclude that the grant of judgment on the pleadings prematurely resolved the constitutional issue. On the cross-appeal, we affirm the order of the trial court.

I. UCI and Plaintiffs' Allegations⁴

A. The Founding of UCI

In a broad sense, the current dispute stems from the founding by Reverend Moon of the Holy Spirit Association for the Unification of World Christianity (the "Unification Church"), in Seoul, South Korea, in 1954. In 1971, Reverend Moon moved from South Korea to the United States to expand the Unification Church's activities around the globe. Two years later, in 1975, Reverend Moon directed his close associate, Dr. Bo Hi Pak, to "open a bank account with Diplomat National Bank in the District of Columbia in the name of Unification Church International." The first sum deposited in the account came from an account in Reverend Moon's name, and additional funds were contributed by various other Unification Church entities. Reverend Moon "directed Dr. Pak to hold the funds in the [UCI] bank account in trust solely for the benefit and support of the Unification Church and its related activities." As a key assertion, plaintiffs argue that Reverend Moon's statements and actions demonstrate the intent to create an oral, charitable trust with Dr. Pak serving as the trust's first trustee ("UCI Trust").

By 1977, approximately $7,000,000 had been donated and was held in the UCI bank account. Reverend Moon then directed Dr. Pak to establish a District of Columbia nonprofit corporation to implement the UCI Trust and carry out its purpose. Thus, UCI came into being in that year. Dr. Pak changed the UCI Trust's bank account to reflect that the donated funds would be held by UCI, as opposed to the trust itself. Reverend Moon intended for this corporation to "implement the purposes of the trust and for the Directors of the Corporation to serve as trustees and ensure that the Corporation and its assets would be administered for the benefit of the Unification Church."

The original February 1977 Articles of Incorporation are alleged to "reflect[ ] the purposes" of the corporation and "evidence" Reverend Moon's intent. Specifically, Article 3, Section 2 of the Articles of Incorporation stated that the UCI will "serve as an international organization assisting, advising, coordinating, and guiding the activities of Unification Churches organized and operated throughout the world." Furthermore, Section 3 stated that the UCI will "promote the worship of God, and to study, understand and teach the Divine Principle, the new revelation of God, and, through the practical application of the Divine Principle ... achieve the interdenominational, interreligious, and international unification of world Christianity and all other religions." Additionally, Article 9 also stated that the Directors of UCI "recognize and acknowledge that the Reverend Sun Myung Moon has provided the inspiration and spiritual leadership for the founding of the Corporation and is the spiritual leader of the international Unification Church movement." Plaintiffs assert that the Divine Principle is the theological textbook of the Church and contains the essential teachings of Reverend Moon.

From 1977 to 2006, UCI operated without controversy.⁵ From 1977 through 1992, Dr. Pak, as the president of the corporation, managed the corporation's assets, to which various entities, notably one in Japan that is a plaintiff in this action, donated "hundreds of millions of dollars" allegedly to be "held in trust" and used for the Church's endeavors. Both Dr. Pak and plaintiff Dr. Douglas D.M. Joo, who served as President of UCI from 1992 to 2005, understood that the corporation held its assets to fund the Church's activities.

Things changed radically beginning in 2006, when Preston Moon,⁶ one of Reverend Moon's sons, became the new president of the UCI as well as one of the five directors. Two years later, Reverend Moon appointed another son, Sean Moon, as the next leader of the Church's worldwide religious organization. This appointment allegedly disappointed Preston Moon, who "resolved not to take direction from his younger brother Sean Moon in matters relating to UCI," and led Preston Moon to take a series of actions to divest the Church of control over UCI and divert the corporation from its alleged mission and intended purpose. Plaintiffs' challenge to those actions by Preston Moon and the other directors is the subject of this law suit.

B. Plaintiffs' Claims

Five plaintiffs are linked in this case. Three of them are entities related to Reverend Moon's original Unification Church. The first entity is the lead plaintiff, Family Federation for World Peace and Unification International ("Family Federation") that is located in South Korea and is the current name for the religious entity that directs the church's activities worldwide and is now headed by Sean Moon.⁷ The second entity is the Holy Spirit Association for the Unification of World Christianity (Japan) (the "Japanese Church"), which is the "corporate embodiment" of the Universal Church in Japan and was the primary donor of funds to UCI for several decades. The third entity is the Universal Peace Federation, a District of Columbia nonprofit corporation, which was a long-time major recipient of funding from UCI prior to the takeover by Preston Moon. The other two plaintiffs, Dr. Douglas D.M. Joo and Peter H. Kim, are individuals who were directors of UCI until ousted by Preston Moon. Plaintiffs challenge virtually all of the actions taken by Preston Moon and UCI since he gained control, summarized as follows.⁸

Plaintiffs first challenge the actions taken to secure control of the corporation's Board of Directors. Under its by-laws, the corporation (which had no members or stockholders) functioned under the supervision of a five-person self-perpetuating Board of Directors. Plaintiffs assert that although the written by-laws provide that the Board of Directors shall elect successor directors, Reverend Moon, as the co-settlor of the trust and spiritual leader of the Church, had designated all individuals to serve on the Board of Directors of UCI. Plaintiffs further assert that the directors have "understood and accepted" this "long and continuous usage of this uniform practice" that constitutes a "binding convention" as to how the directors are to be nominated.

In January 2009, Preston Moon held a UCI board meeting during which he arranged for the resignation of two of the five original directors and the election of defendants Michael Sommer and Richard Perea to the Board of Directors. Preston Moon and his hand-picked directors allegedly stymied an effort by directors Joo and Kim to elect directors designated by Reverend Moon, which contravened the longstanding, uniform custom and practice of Reverend Moon nominating the individuals to be directors of the corporation. Preston Moon completed his takeover of the UCI Board of Directors in August 2009, when he convened a special board meeting where he, Sommer, and Perea voted to remove directors Joo and Kim from the Board of Directors.⁹ Defying instructions from the Family Foundation to reinstate the removed directors, Preston Moon, Sommer, and Perea instead added two of Preston Moon's brothers-in-law to the Board of Directors. Plaintiffs contend that these steps constituted "unauthorized, illegal and improper actions" that vitiated the validity of subsequent UCI corporate acts.

Next, plaintiffs challenge the diversion of corporate expenditures from the purposes set forth in the trust imposed on the corporation and in the original articles. In late 2009 and early 2010, Preston Moon was stripped of his positions on several Church entities. In response to this, ...