In re Episcopal Church Cases

• Decision Date: 25 June 2007
• Docket Number: Nos. G036096, G036408, G036868.,s. G036096, G036408, G036868.
• Citation: 61 Cal.Rptr.3d 845,152 Cal.App.4th 808
• Court: California Court of Appeals Court of Appeals
• Parties: EPISCOPAL CHURCH CASES.

61 Cal.Rptr.3d 845

152 Cal.App.4th 808

EPISCOPAL CHURCH CASES.

Nos. G036096, G036408, G036868.

Court of Appeal, Fourth District, Division 3.

June 25, 2007.

Holme Roberts & Owen, John R. Shiner, Los Angeles, Brent E. Rychener; Horvitz & Levy, Frederic Cohen and Jeremy Rosen, Encino, for Plaintiffs and Appellants.

Goodwin Procter, David Booth Beers, Heather H. Anderson and Matthew J. Wilshire, for Intervener and Appellant.

Payne & Fears, Eric C. Sohlgren, Benjamin A. Nix and Daniel F. Lula, Irvine, for Defendants and Respondents.

Law Offices of George S. Burns, George S. Burns and John C. Ashby, Newport Beach, as Amici Curiae for the Presbyterian Church (U.S.A.), The Synod of Southern California and Hawaii, and Presbytery of Hanmi on behalf of Plaintiffs and Appellants.

OPINION

SILLS, P. J.

I. SUMMARY

This appeal stems from a classic dispute over church property where a local congregation of a general church seeks to disaffiliate itself from that general church and take the local church property with it. (See generally Baker v. Ducker (1889) 79 Cal. 365, 21 P. 764 (Baker); N.L. Wheelock v. First Presbyterian Church of Los Angeles (1897) 119 Cal. 477, 51 P. 841 (Wheelock); Horsman v. Allen (1900) 129 Cal. 131, 61 P. 796 (Horsman); Committee of Missions v. Pacific Synod (1909) 157 Cal. 105, 106 P. 395 (Committee of Missions); see also Rosicrucian Fellowship v. Rosicrucian Fellowship Nonsectarian Church (1952) 39 Cal.2d 121, 245 P.2d 481 (Rosicrucian Fellowship); Providence Baptist Church v. Superior Court (1952) 40 Cal.2d 55, 251 P.2d 10 (Providence Baptist).)

But this appeal is about more than a church property dispute. It is also about the rule of stare decisis. As we shall explain below, in no less than six California Supreme Court opinions, our state's highest court, taking its cue from the United-States Supreme Court decision in Watson v. Jones (1871) 80 U.S. (13 Wall.) 679, 20 L.Ed. 666 (Watson), consistently used a "principle of government" or "highest church judicatory" approach to resolve disputes over church property, an approach it applied to hierarchically organized churches and non-hierarchically organized churches alike.

However, in 1979, a panel of the intermediate California Court of Appeal came to the belief that this line of consistent California Supreme Court cases should be ignored, and that a new approach, called "neutral-principles analysis" was the appropriate California common law approach to church property disputes. (Presbytery of Riverside v. Community Church of Palm Springs (1979) 89 Cal. App.3d 910, 152 Cal.Rptr. 854 (Church of Palm Springs)). Neutral principles is a. four-factor analysis for use in church property disputes, that typically examines (1) title, (2) articles of incorporation, (3) a church's constitution, canons and rules, and (4) state statutes.

The Church of Palm Springs court came to its conclusion based on its reading of a quartet of United States Supreme Court cases decided in the previous decade. (See Presbyterian Church v. Hull Church (1969) 393 U.S. 440, 89 S.Ct. 601, 21 L.Ed.2d 658 (Hull Church); Eldership v. Church of God at Sharpsburg (1970) 396 U.S. 367, 90 S.Ct. 499, 24 L.Ed.2d 582 (Eldership); Serbian Eastern Orthodox Diocese v. Milivojevich (1976) 426 U.S. 696, 96 S.Ct. 2372, 49 L.Ed.2d 151 (Serbian Eastern Orthodox); and Jones v. Wolf (1979) 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775 (Jones)).

In this opinion we shall explain in detail why those federal high court opinions did not overrule (either expressly or impliedly), or even alter in any way, the existing common law approach used by the California Supreme Court in Baker, Wheelock, Horsman, Committee of Missions, Rosicrucian Fellowship, or Providence Baptist. In this opinion we shall refer to these cases collectively as the "Baker-Wheelock line."

Another panel of California's intermediate appellate court followed Church of Palm Springs in the case of Protestant Episcopal Church in the Diocese of Los Angeles v. Barker (1981) 115 Cal.App.3d 599, 171 Cal.Rptr. 541 (Barker). The Barker court, however, did not independently examine the United States Supreme Court authorities which the Church of Palm Springs court had cited as authority to ignore the Baker-Wheelock line, or the Church of Palm Springs' reading of the California Supreme Court cases, particularly Wheelock. The Barker court simply assumed that the Church of Palm Springs decision had been correct in upsetting the stable legal universe that existed in California up until that time in the name of "neutral principles."

Thereafter, California intermediate appellate courts have given lip service to "neutral principles," but have come to results that are sometimes difficult, if not impossible, to reconcile with each other. In Korean United Presbyterian Church v. Presbytery of the Pacific (1991) 230 Cal. App.3d 480, 281 Cal.Rptr. 396 (Korean United)¹ and Guardian Angel Polish National Catholic Church v. Grotnik (2004) 118 Cal.App.4th 919, 13 Cal.Rptr.3d 552 (Guardian Angel) the Court of Appeal applied the "neutral principles" approach to reach a result identical with what the traditional "principle of government" approach would have required, i.e., upholding the property claim of a general church. On the other hand, in California-Nevada Annual Conf. of the United Methodist Church v. St. Luke's United Methodist Church (2004) 121 Cal.App.4th 754, 17 Cal. Rptr. 3d 442 (California-Nevada), the court reached an opposite result (and also acknowledged that it could not be reconciled with Guardian Angel).

This case is also about statutory construction. In 1982, that is — after the consistent Baker-Wheelock line and after Church of Palm Springs and Barker — the Legislature, by passing Senate Bill 1178 (1981-1982 Reg. Sess.), added subdivisions (c) and (d) to Corporations Code section 9142² involving trusts on property held by religious corporations.

An examination of the history of Senate Bill 1178 shows that the Legislature had no intention of overturning or even changing the Baker-Wheelock line, or codifying Barker or Church of Palm Springs, as the California-Nevada court would later surmise. Rather, the expressed intent of the Legislature was to "fill a void" (the phrase consistently found in the legislative history) created by earlier legislation, Senate Bill 1493 (1979-1980 Reg. Sess.) in 1981, which, while it had stripped the California Attorney General of the ability to enforce trusts against religious corporations, left no one else with the ability to enforce such trusts.

In fact, an examination of the plain language of (then newly-added) subdivisions (c) and (d) to section 9142 shows a consistency with the Baker-Wheelock line, as long as (to use the statutory phrases) a "general church" has a "governing instrument" that "expressly" provides for a trust against the property of a local church corporation which is a "member" of that general church.

Since, in the case before us, the general church does have a governing instrument so providing an express trust on the property of local parish corporations who are members of the general church, we are, in this opinion, spared the issue of any arguable conflict between the Baker-Wheelock line and the statute. (This issue might arise in a case where, say, a hierarchically organized church did not have a governing instrument "expressly" declaring a trust, but where it asserted such a trust some other way). In this case, the common law rule of the former and the plain language of the latter dovetail to require the same result.

And finally, this case is about anti-SLAPP motions.³ In procedural terms, part of this appeal arises out of a dismissal, pursuant to an anti-SLAPP motion, of a lawsuit brought by the diocese of a general church against a disaffiliating local church corporation that had been a member of the general church. It is now well-established in California that anti-SLAPP motions are tested by a two-prong process, in which the court must first look at (1) whether the motion even qualifies for anti-SLAPP treatment, and (2) the merits. Readers by this point will have already grasped that the trial court erred as to (2). But we also explain that it erred as to (1) as well.

In a word, the lawsuit brought by the plaintiff general church is a property dispute — basically over who controls a particular church building in Newport Beach — and does not arise out of some desire on the part of the general church to litigate the free exercise rights of the local congregation. They are free to disaffiliate just so long as they do not try to take the parish property with them. Readers will look in vain in this opinion for any indication of what religious controversy may have prompted the disaffiliation. We may easily reach the merits of the case under both the "principle of government" standard of the Baker-Wheelock line, and the plain language of section 9142, without ever needing to mention the reason for the defendants' disaffiliation. That controversy is irrelevant to this action.

II. FACTS AND BACKGROUND

St. James Parish in Newport Beach began as a "mission" of the Episcopal Church in 1947. In requesting permission to upgrade the parish's status from a "mission" to a full-fledged church, the founding members promised to be bound under the "Ecclesiastical authority of the Bishop of Los Angeles, and his successors in office, the Constitution and Canons of the Church now known as the Protestant Episcopal Church in the United States of America."

As a full-fledged church, it was incorporated in 1949. The articles of incorporation expressed this purpose: "To establish and maintain a Parish which shall form a constituent part of the Diocese of Los Angeles in that branch of the Holy Catholic Church now known as the Protestant Episcopal Church in the United States of America."

Under the canons of the Los Angeles Diocese of the Episcopal Church, each parish elects a board of directors known...