Harris v. Matthews

• Citation: 643 S.E.2d 566
• Decision Date: 04 May 2007
• Docket Number: No. 479PA05-2.,479PA05-2.
• Court: United States State Supreme Court of North Carolina
• Parties: Gary HARRIS, Joseph B. Kinard, John S. Eagle, Waymon Tate, Jr., Rayford Jones, John L. McGriff, and Lesley G. Bellinger, the plaintiffs suing on behalf of Saint Luke Missionary Baptist Church, Inc. v. Clifford J. MATTHEWS, Jr., Sharla Byrd, and Aaron Moore.

643 S.E.2d 566

Gary HARRIS, Joseph B. Kinard, John S. Eagle, Waymon Tate, Jr., Rayford Jones, John L. McGriff, and Lesley G. Bellinger, the plaintiffs suing on behalf of Saint Luke Missionary Baptist Church, Inc. v. Clifford J. MATTHEWS, Jr., Sharla Byrd, and Aaron Moore.

No. 479PA05-2.

Supreme Court of North Carolina.

May 4, 2007.

On discretionary review pursuant to N.C.G.S. § 7A-31 of an unpublished decision of the Court of Appeals, 176 N.C.App. 189, 625 S.E.2d 917 (2006) (per curiam), dismissing an appeal by defendant Clifford J. Matthews, Jr. from an order denying his motion to dismiss entered 6 October 2004 by Judge Marcus L. Johnson in Superior Court, Mecklenburg County. Heard in the Supreme Court 8 January 2007.

Knox, Brotherton, Knox & Godfrey, by H. Edward Knox and Lisa G. Godfrey, and John J. Korzen, Charlotte, for plaintiffs-appellees.

Poyner & Spruill, LLP, by Steven A. Rowe and Joshua B. Durham, Charlotte, for defendant-appellant, Clifford J. Matthews, Jr.

NEWBY, Justice.

This case, involving an internal church governance dispute, presents two issues. First, we must decide whether defendant has the right to immediately appeal the trial court's interlocutory order denying his motion to dismiss for lack of subject matter jurisdiction. Because we hold defendant can appeal the interlocutory order, we also address whether the restraints of the First Amendment of the United States Constitution, as applied to the states through the Fourteenth Amendment, preclude judicial intervention in this internal church controversy.

I. BACKGROUND

Saint Luke Missionary Baptist Church ("Saint Luke"), an unaffiliated congregational church, was formed in 1950 as an unincorporated association. Like most congregational churches, Saint Luke's governing authority resides in a majority of the membership. Reverend L.D. Parker served as Saint Luke's pastor from the church's formation until his death in 1998. Defendant Clifford J. Matthews, Jr. ("Matthews") became Saint Luke's interim pastor in October 1999 and, following a congregational vote, was installed as pastor in May 2000.

After defendant Matthews' installation, Saint Luke underwent several changes to its organizational structure. At a congregational meeting on 9 December 2001, Saint Luke's members approved a new set of bylaws for the church. The bylaws created an internal governing body, the "Council for Ministry," with broad authority to manage the "business and affairs" of the church. On 13 March 2002, Saint Luke transferred its assets to Saint Luke Missionary Baptist Church, Inc., a North Carolina nonprofit corporation.

Some members of Saint Luke, including the named plaintiffs, expressed concern over the changes. On multiple occasions, they requested access to the church's financial records, but were denied. On 3 July 2002, plaintiffs Joseph B. Kinard and John S. Eagle filed suit pursuant to N.C.G.S. § 55A-16-4 for production of Saint Luke's legal and financial records. On 23 July 2002, the trial court entered an order requiring Saint Luke to produce the documents. After reviewing the documents, plaintiffs believed that church funds had been misappropriated by Saint Luke's pastor (defendant Matthews), secretary (defendant Sharla Byrd), and chairman of the Board of Trustees (defendant Aaron Moore).

On 16 July 2003, pursuant to N.C.G.S. § 55A-7-40, plaintiffs filed suit, as members, on behalf of Saint Luke, alleging conversion of funds, breach of fiduciary duty, and civil conspiracy by defendants. The plaintiffs sought return of the disputed funds and punitive damages on behalf of Saint Luke. A somewhat lengthy procedural process ensued. Defendants moved to dismiss the complaint pursuant to N.C.G.S. § 55A-7-40(b), alleging that plaintiffs failed to demand an investigation by the church's governing body before filing suit, but the trial court denied the motions on 5 November 2003. Defendant Matthews, through new counsel, moved on 1 September 2004 to dismiss the complaint for lack of subject matter jurisdiction. The trial court denied this motion on 6 October 2004. Defendant Matthews appealed, and plaintiffs filed a motion to dismiss the appeal, alleging in part that the appeal was interlocutory. On 18 August 2005, the Court of Appeals allowed plaintiffs' motion to dismiss defendant's appeal. On 1 December 2005, we dismissed defendant's notice of appeal and denied his petition for discretionary review, but allowed his petition for writ of certiorari "for the limited purpose of remanding this case to the Court of Appeals for more thorough consideration in light of Tubiolo v. Abundant Life Church, Inc., 167 N.C.App. 324, 605 S.E.2d 161 (2004), disc. rev. denied, 359 N.C. 326, 611 S.E.2d 853, cert. denied, , 126 S.Ct. 350, 163 L.Ed.2d 59 (2005)." Harris v. Matthews, 360 N.C. 175, 626 S.E.2d 297 (2005). The Court of Appeals again dismissed defendant's appeal on 21 February 2006, holding that defendant had not obtained Rule 54(b) certification from the trial court and that defendant did not possess a substantial right that would be irreparably damaged if his interlocutory appeal was delayed. Defendant again sought review by this Court, which allowed his petition for discretionary review on 17 August 2006.

II. INTERLOCUTORY APPEAL

Defendant's appeal from the trial court's denial of his motion to dismiss for lack of subject matter jurisdiction is interlocutory. See Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) ("An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy."). "Generally, there is no right of immediate appeal from interlocutory orders and judgments." Goldston v. Am. Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). This general prohibition against immediate appeal exists because "[t]here is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders." Veazey, 231 N.C. at 363, 57 S.E.2d at 382. However, interlocutory orders are immediately appealable if they: "(1) affect a substantial right and (2) [will] work injury if not corrected before final judgment." Goldston, 326 N.C. at 728, 392 S.E.2d at 737.¹

Defendant asserts that the trial court's order affects substantial First Amendment rights. We agree. The First Amendment provides that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." U.S. Const. amend. I. Likewise, the "comparable provision" in the North Carolina Constitution declares that "[a]ll persons have a natural and inalienable right to worship Almighty God according to the dictates of their own consciences, and no human authority shall, in any case whatever, control or interfere with the rights of conscience." N.C. Const. art. I, § 13 ("Religious liberty"); see Atkins v. Walker, 284 N.C. 306, 318, 200 S.E.2d 641, 649 (1973).

The United States Supreme Court has found First Amendment rights to be substantial, Frisby v. Schultz, 487 U.S. 474, 479, 108 S.Ct. 2495, 2499, 101 L.Ed.2d 420, 428 (1988) (noting that First Amendment right to picket is substantial), and has held the First Amendment prevents courts from becoming entangled in internal church governance concerning ecclesiastical matters, Presbyterian Church in the U.S. v. Mary Elizabeth Blue Hull Mem'l Presbyterian Church, 393 U.S. 440, 451-52, 89 S.Ct. 601, 607, 21 L.Ed.2d 658, 666-67 (1969). When First Amendment rights are asserted, this Court has allowed appeals from interlocutory orders. Priest v. Sobeck, 153 N.C.App. 662, 571 S.E.2d 75 (2002), rev'd per curiam, 357 N.C. 159, 579 S.E.2d 250 (2003) (for reasons stated in the dissenting opinion, thus finding in a defamation action that a trial court order concerning actual malice affected a substantial First Amendment right and was therefore immediately appealable). Accordingly, we reaffirm our stance that First Amendment rights are substantial and hold that First Amendment rights are implicated when a party asserts that a civil court action cannot proceed without impermissibly entangling the court in ecclesiastical matters.

Further, we are unpersuaded by plaintiffs' suggestion that defendant cannot raise entanglement concerns. The constitutional prohibition against court entanglement in ecclesiastical matters is necessary to protect First Amendment rights identified by the "Establishment Clause" and the "Free Exercise Clause." See Erwin Chemerinsky, Constitutional Law: Principles and Policies 1218 n. 129 (2d ed. 2002) ("Analytically, it does not seem to matter whether this [court involvement in internal church disputes] issue is characterized as a free exercise clause issue or one involving the establishment clause."). These rights are not held by church bodies alone. They have been consistently asserted by individuals to challenge administrative, legislative, and judicial actions. See, e.g., Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004); Wallace v. Jaffree, 472 U.S. 38, 105 S.Ct. 2479, 86 L.Ed.2d 29 (1985); Jones v. Wolf, 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775 (1979); Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971); Watson v. Jones, 80 U.S. (13 Wall.) 679, 20 L.Ed 666 (1871).

It is not determinative that the trial court's order affects a substantial right. The order must also work injury if not corrected before final judgment. "The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Elrod v. Burns, 427 U.S. 347, 373, 96 S.Ct. 2673, 2690, 49 L.Ed.2d 547, 565 (1976) (plurality). In Elrod, the United States Supreme Court held injunctive relief appropriate in situations in which "First Amendment interests were either...