First Assembly Church of West Plains v. Ticor Title Ins. Co.

• Decision Date: 15 February 1994
• Docket Number: No. 18572,18572
• Parties: FIRST ASSEMBLY CHURCH OF WEST PLAINS, a Missouri Not-For-Profit Corporation, Plaintiff-Respondent, v. TICOR TITLE INSURANCE COMPANY, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 577

872 S.W.2d 577

FIRST ASSEMBLY CHURCH OF WEST PLAINS, a Missouri

Not-For-Profit Corporation, Plaintiff-Respondent, v. TICOR TITLE INSURANCE COMPANY, Defendant-Appellant.

No. 18572.

Missouri Court of Appeals,

Southern District,

Division Two.

Feb. 15, 1994.

Motion for Rehearing or Transfer

Denied March 8, 1994.

Application to Transfer Denied April 26, 1994.

Ben K. Upp, Springfield, for defendant-appellant.

Patrick J. Platter, Paul F. Sherman, Daniel, Clampett, Lilley, Dalton, Powell & Cunningham, Springfield, for plaintiff-respondent.

GARRISON, Judge.

Ticor Title Insurance Company ("Ticor") appeals from a judgment entered in favor of its insured, First Assembly Church of West Plains ("Local Church"). The primary issue is whether claims being made concerning the Local Church's property are covered or excluded under Ticor's title insurance policy. The factual background of the case is complex, requiring an extensive review.

FACTUAL BACKGROUND

The Local Church was originally organized in 1912, and first affiliated with the Assemblies of God in 1917. At some point it was incorporated as a not-for-profit corporation under the name First Assembly of God Church of West Plains, Missouri.

The Local Church had a constitution and bylaws which acknowledged its affiliation with the Assemblies of God, made provisions for a governing body, deferred in some instances to the constitution and bylaws of the Southern Missouri District Council of the Assemblies of God ("District Council"), and also authorized supervision by the District Council under certain circumstances. ¹

In January 1989, the Local Church's board requested that its pastor resign. The pastor reported to the District Council that there were irreconcilable differences and requested an investigation. Upon the pastor's refusal to resign, a meeting of the congregation was called on January 21, 1989, the propriety of which was challenged, but which resulted in a decision to fire him. Thereafter, a meeting was held on January 26 between the deacons of the Local Church, the pastor and representatives of the District Council. As a result of that meeting, the District Council declared that it was placing the Local Church under District supervision until the strife ceased, ² and it further determined that "the Church Board shall be set aside." (Hereafter that board will be referred to as the "Suspended Board.") The District Council appointed temporary directors and trustees of the Local Church to serve in the capacity of directors ("Temporary Board").

In February, the Temporary Board passed a resolution purporting to change the identity of the persons authorized to draw on the Local Church's bank accounts. Evidence also indicated that at some point the locks on the church building were changed by either the pastor or District Council. On March 9, 1989, Boatmen's First National Bank of West Plains filed an interpleader suit against the Local Church, the District Council and the Temporary Board in which it alleged that they were adverse claimants to funds on deposit in the bank and requested that the defendants interplead to settle their respective rights in the funds. A similar suit was later filed by the West Plains Bank on May 16, 1989, except that it also included the Suspended Board members as defendants.

On April 29, 1989, a meeting of the voting members of the congregation resulted in a decision to disassociate the church from the Assemblies of God, to change the name to First Assembly Church of West Plains, and to amend the constitution, bylaws and articles of incorporation accordingly. It was also decided to transfer and convey all the property and accounts of the church to the new name. On the same day, the Suspended Board changed the locks on the church building so that they had access. On May 4, 1989, the Secretary of State issued a Certificate of Amendment changing the name from First Assembly of God Church of West Plains, Missouri to First Assembly Church of West Plains. Three days later, on May 7, 1989, there was a meeting of the Suspended Board, the minutes of which included the following:

It was noted that Rev. Combs [the pastor] has not moved from the parsonage and that legal action may be necessary.

The Board discussed the possibility of purchasing title insurance for the church and parsonage property. The Board unamousily [sic] agreed to authorize the Secretary to make the purchase.

On May 14, 1989, the name change was recorded in the Howell County Recorder's Office.

On May 24, 1989, the secretary of the Suspended Board, Dennis Von Allmen, contacted Marjorie Privette of Howell County Title, who was authorized to issue title commitments and policies in behalf of Ticor, and requested a title insurance policy on the church building as well as the parsonage. According to Mr. Von Allmen, he made the original request in a brief telephone call, telling her that "the local church had experienced some difficulties with the District On February 28, 1991, the District Council and the members of the Temporary Board, together with one of the members from the Suspended Board, filed an amended cross-claim in the interpleader suits ³ against the other members of the Suspended Board. ⁴

                Council and that the local church had to disassociate from the Assemblies of God," and further that they "wanted to apply for title insurance to make sure that we did have good title of the property."   Ms. Privette disputed that evidence and said that she was not told about problems between the church and the District Council, but was told that the name had been changed and they were no longer affiliated with the Assemblies of God.  Mr. Von Allmen was not asked for any additional information or documentation.  Ms. Privette was not furnished with the organizational documents (including the constitution and bylaws) of either the Local Church or the District Council;  she was not told that the Local Church had voted to terminate the pastor but that he remained in the parsonage with no apparent intent to leave;  and she was not told that the locks had been changed on the church building.  The policy was issued on June 1, 1989, to First Assembly Church of West Plains (formerly First Assembly of God Church of West Plains, Missouri) as the named insured
                

The preamble to the amended cross-claim contained allegations applicable to all of the individual counts. Among other things, it recited the provisions of the Local Church's bylaws and constitution referred to earlier in this opinion; alleged that the then board of the Local Church called a business meeting of the church, contrary to the provisions of the constitution; and recited the fact that the Temporary Board had been installed and the Local Church had been placed under District supervision. The following is a summary of the six counts contained in the amended cross-claim:

COUNT I

Alleged that after appointment of the Temporary Board, the Suspended Board held "themselves out to the public as the Official Board of the Local Church and Church Corporation, promoted and participated in the unlawful and unauthorized operation, maintenance, possession, use and control of the Local Church's assets ... including the church building and parsonage, and interfered with the Local Church's fundamental right to use, enjoy, possess and control church property." It also alleged that the conduct of the Suspended Board was contrary to the rights of the membership of the church and the Temporary Board and was "unauthorized, illegal, unjustified, oppressive and wrongful." It sought an injunction against the members of the Suspended Board restraining them from "misusing, appropriating, dissipating, wasting, conveying, transferring, mortgaging, encumbering, damaging" the real and personal property of the Local Church and "from excluding and denying the Local Church Membership and the Temporary Board of Directors the use and enjoyment of the Local Church's real and personal property."

COUNT II

Alleged a dispute concerning the meaning and application of the bylaws relating to District supervision of the church. It sought a declaratory judgment concerning the authority of the District Council to establish District supervision of the Local Church, the authority of the Temporary Board, including its authority to manage the affairs of the corporation, and a determination as to the identity of the authorized governing board of the Local Church.

COUNT III

Alleged that the April 29, 1989, meeting at which the decision was made to disassociate from the Assemblies of God and change the corporation's name was "improperly called and an illegal meeting under the church's Constitution and Bylaws";

that the amendments to the constitution and bylaws were inconsistent and in conflict with the constitution and bylaws of the District Council; violated the bylaws of the Assemblies of God by failing to provide an opportunity for its representative to be heard before any such action was taken; the meeting violated § 355.115 RSMo in that insufficient notice of the meeting was given; and sought a declaratory judgment concerning the legality of the April 29, 1989, meeting and its results, including the amendment to the articles of incorporation, the change of name, and the disassociation from the Assemblies of God.

COUNT IV

The District Council and the Temporary Board sought actual and punitive damages against the Suspended Board for their allegedly "wrongful acts" by which they intentionally interfered with the Local Church's right to use, enjoy and possess its property. ⁵

COUNT V

Based on all of the prior allegations, it sought a constructive trust on the church's property, including real estate, in favor of the "Assemblies of God denomination and local Assemblies of God ministry," alleging that the Suspended Board would be unjustly enriched and the intentions and desires of members and contributors of the Assemblies of God denomination would be...