Jenkins v. TRINITY EVANGEL. LUTHERAN CHURCH

• Decision Date: 25 March 2005
• Docket Number: No. 3-04-0394.,3-04-0394.
• Parties: Kevin J. JENKINS, Plaintiff-Appellant, v. The TRINITY EVANGELICAL LUTHERAN CHURCH, an Illinois Religious Corporation, and Rodger P. Abatie, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

825 N.E.2d 1206

356 Ill. App.3d 504

292 Ill.Dec. 195

Kevin J. JENKINS, Plaintiff-Appellant, v. The TRINITY EVANGELICAL LUTHERAN CHURCH, an Illinois Religious Corporation, and Rodger P. Abatie, Defendants-Appellees.

No. 3-04-0394.

Appellate Court of Illinois, Third District.

March 25, 2005.

Rehearing Denied April 29, 2005.

Raymond L. Huff and Matthew R. Huff (argued), Huff Law Offices, Peoria, for Kevin J. Jenkins.

J. Brian Heller (argued), Washington, Kirk W. Bode, Pekin, for Trinity Evangelical Lutheran Church.

Justice LYTTON delivered the Opinion of the court:

Plaintiff, Kevin Jenkins, left his employment as an associate pastor at Trinity Evangelical Lutheran Church (Trinity) after a meeting with his head pastor, Roger Abatie. Plaintiff later sued Trinity and Abatie for breach of contract, tortious interference with a contract, and defamation. The trial court dismissed the complaint for lack of subject matter jurisdiction and ordered the parties to arbitrate the issues. We hold that the trial court properly found that the tortious interference and defamation claims were subject to arbitration, but erred in dismissing the breach of contract claim.

Trinity is affiliated with the Lutheran Church-Missouri Synod (LCMS). When plaintiff became a minister of the Missouri Synod, he agreed to be bound by the bylaws of the LCMS. Article VIII of the bylaws requires that church disputes be settled exclusively through a binding dispute resolution procedure, except for property and contract disputes, in which jurisdiction is not exclusive. Article VIII of the bylaws states in pertinent part,

Preamble

"The Synod in the spirit of 1 Corinthians 6 calls upon all parties to a disagreement, accusation, controversy, or disciplinary action to rely exclusively and fully on the Synod's system of reconciliation and conflict resolution. The use of the Synod's conflict resolution procedures shall be the exclusive and final remedy for those who are in dispute. Fitness for ministry and other theological matters must be determined within the church. Parties are urged, in matters of a doctrinal nature, to follow the procedures as outlined in Bylaw 2.39c.

* * *[The] aim [of the dispute resolution procedures] is to avoid the adversarial system practiced in society.

8.02 Exceptions

This chapter does not prescribe an exclusive remedy in the following matters unless they involve theological, doctrinal, or ecclesiastical issues.

1. Disputes concerning property rights (e.g., real estate agreements, mortgages, fraud, or embezzlement)

2. Disputes arising under contractual arrangements of all kinds (e.g., contracts for goods, services, or employment benefits)

8.09 Procedures of Dispute Resolution Panel

e. The final decision of the Review Panel shall

1. be binding upon the parties to that dispute and not be subject to further appeal[.]"

On November 1, 1993, plaintiff was hired as an associate pastor at Trinity. On January 13, 1999, Abatie, who was the administrative pastor at Trinity, convened a meeting with two other pastors and plaintiff to discuss certain allegations of sexual impropriety made by congregants against plaintiff. The parties agree that at the end of the meeting there was an agreement that plaintiff would resign his pastorate. However, plaintiff also claims that, in return for his resignation, Trinity agreed to pay plaintiff's salary, health insurance and pension benefits for the remainder of the calendar year. Plaintiff alleges that Abatie submitted plaintiff's resignation to the president of the congregation but not the claimed agreement for salary and benefits.

Plaintiff filed a complaint on January 18, 2000 alleging that Abatie, 1) acting on behalf of Trinity, breached the agreement to continue to pay his salary and benefits, 2) interfered with his contract with Trinity, and 3) defamed him by telling members of the congregation that plaintiff "did the nasty" with a female congregant.

Defendants answered the complaint denying the substantive allegations but also filed several motions to dismiss. Defendants' final motion to dismiss, filed some three and one-half years after the original complaint, claimed that the trial court had no subject matter jurisdiction because the LCMS bylaws mandate arbitration. The trial court agreed and granted the motion.

I. WAIVER OF ARBITRATION

Plaintiff argues that since defendants did not specifically raise the issue of arbitration until three and one-half years after the filing of his complaint, the issue was waived.

Illinois courts favor using arbitration as a matter of settling disputes. Schroeder Murchie Laya Associates, Ltd. v. 1000 West Lofts, LLC., 319 Ill.App.3d 1089, 253 Ill.Dec. 846, 746 N.E.2d 294 (2001). A contractual right to arbitrate can be waived like any other contractual right. Schroeder Murchie Laya, 319 Ill. App.3d 1089, 253 Ill.Dec. 846, 746 N.E.2d 294. Waiver may occur when a party's conduct is inconsistent with its right to arbitrate, indicating an abandonment of that right. Lundy v. Farmers Group, Inc., 322 Ill.App.3d 214, 255 Ill.Dec. 733, 750 N.E.2d 314 (2001). Because public policy concerns favor arbitration, the courts disfavor a finding of waiver by a party. Board of Managers of the Court-yards at the Woodlands Condominium Assoc. v. IKO Chicago, Inc., 183 Ill.2d 66, 231 Ill.Dec. 942, 697 N.E.2d 727 (1998).

Illinois courts have used several factors to determine whether a party's conduct is inconsistent with an agreement to arbitrate and an abandonment of its rights. Factors indicating waiver include filing an answer without asserting the right to arbitrate, instituting legal proceedings and participating in a trial on the merits, and moving for summary judgment. A party does not waive its rights when it files a complaint, contests venue, or includes an affirmative defense of arbitration in its answer along with a counterclaim in the alternative. Schroeder Murchie Laya, 319 Ill.App.3d at 1096, 253 Ill. Dec. 846, 746 N.E.2d at 300.

In Kostakos v. KSN Joint Venture No. 1, 142 Ill.App.3d 533, 96 Ill.Dec. 862, 491 N.E.2d 1322 (1986), a complaint was filed and defendants participated in discovery. Fifteen months later, defendants filed their answer raising an affirmative defense of arbitration. Seven months later, the trial court set the matter for trial and defendants brought their motion to compel arbitration, which the trial court allowed. The appellate court affirmed, stating that abandonment of the right to arbitrate was not determined by time passing or "papers filed", but by the types of issues submitted. Kostakos, 142 Ill.App.3d at 536-37, 96 Ill.Dec. 862, 491 N.E.2d at 1325.

In this case, plaintiff filed his complaint on January 18, 2000. On June 7, 2000, defendants filed a motion for summary judgment requesting that "the plaintiff's cause of action be dismissed", asserting among other things, that the LCMS dispute resolution procedure was the exclusive remedy for "church related controversies." The motion was denied. On January 19, 2001, defendants filed an answer specifically raising the affirmative defense of the court's lack of jurisdiction because of the ecclesiastical dispute resolution procedure provided for in the LCMS bylaws. Defendants then filed several additional motions to dismiss and motions for summary judgment and participated in extensive discovery before filing their second motion for involuntary dismissal based on the LCMS bylaws in June 2003.

Defendants did not waive their right to arbitrate. Far from acting in a manner inconsistent with Article VIII of the bylaws, they raised the issue twice within a reasonable period after the filing of the complaint. After the June 7, 2000 motion was denied, defendants had little choice but to participate in the litigation and file pleadings. When they filed their answer and affirmative defenses, the issue was again joined until the trial court granted their second motion. Defendants' actions were consistent with their right to arbitrate and did not indicate an abandonment of that right.

II. AGREEMENT TO ARBITRATE

A. Breach of Contract

Plaintiff claims that Abatie committed Trinity to continue paying his salary and benefits until the end of the calendar year if plaintiff resigned, but Abatie reneged on the agreement. Defendants reply that any alleged contract was an internal dispute of a "theological, doctrinal, or ecclesiastical" nature and was within the jurisdiction of Article VIII of the bylaws.

When plaintiff became a pastor, he agreed to abide by the constitution and the bylaws of the LCMS. Article VIII of the bylaws requires that ecclesiastical disagreements be settled by the "Synodical Dispute Resolution" procedure. However, LCMS bylaws give civil courts jurisdiction over contract disputes as long as they do not involve ecclesiastical issues. The bylaws appear to adopt the "neutral principles" doctrine developed by the civil courts. See Jones v. Wolf, 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775 (1979). Thus, we must examine whether the alleged agreement fits within neutral principles that would allow a civil court to hear the claim.

Generally, courts will not interfere in canonical or ecclesiastical controversies regarding clergymen's employment at a church. Serbian Eastern Orthodox Diocese v. Ocokoljich, 72 Ill.App.2d 444, 219 N.E.2d 343 (1966). The first amendment "severely circumscribes the role that civil courts may play in resolving church property disputes." Presbyterian Church v. Mary Elizabeth Blue Hull Memorial Church, 393 U.S. 440, 89 S.Ct. 601, 21 L.Ed.2d 658 (1969). However, certain neutral principles may apply to property and contract disputes. Jones v. Wolf, 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775 (1979); Bodewes v. Zuroweste, 15 Ill. App.3d 101, 303 N.E.2d 509 (1973). Neutral principles must be "completely secular in operation ... yet flexible enough to accommodate all forms of religious organization and polity," relying exclusively on objective,...