Lynch v. Universal Life Church

• Decision Date: 23 October 1985
• Docket Number: No. 84-1856,84-1856
• Citation: 775 F.2d 576
• Parties: Sandra LYNCH, Appellee, v. UNIVERSAL LIFE CHURCH, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 576

775 F.2d 576

Sandra LYNCH, Appellee, v. UNIVERSAL LIFE CHURCH, Appellant.

No. 84-1856.

United States Court of Appeals, Fourth Circuit.

Argued May 7, 1985.

Decided Oct. 23, 1985.

Michael K. Curtis, Greensboro, N.C. (Martha E. Johnston, Smith, Patterson, Follin, Curtis, James & Harkavy, Greensboro, N.C., on brief), for appellant.

Lawrence J. Fine, Winston-Salem, N.C. (Harrell Powell, Jr., Winston-Salem, N.C., on brief), for appellee.

Before HALL and WILKINSON, Circuit Judges, and BUTZNER, Senior Circuit Judge.

BUTZNER, Senior Circuit Judge:

In this diversity case the district court denied a motion filed by Universal Life Church, Inc., for judgment notwithstanding the verdict and entered judgment on a jury verdict finding the church liable for fraud in representing that church ministers could perform valid marriages in North Carolina. The plaintiff, Sandra Lynch, was awarded $10,000 in compensatory damages for emotional anguish she suffered on learning that her marriage was invalid. She also recovered $150,000 in punitive damages. Because we believe that this action was barred by the applicable statute of limitations and also because Mrs. Lynch has failed to prove the elements of fraud, the judgment of the district court must be reversed.

I

The material facts are undisputed. The church is a corporation organized under the laws of California. It is authorized to conduct business in North Carolina. The church is tax exempt under the laws of California and the United States, and the parties have stipulated that at all times relevant to this case The Universal Life Church was a church.

The Universal Life Church traces its doctrine back to the anticlericalism of the Protestant Reformation and ultimately to the words of St. Paul that the church is a "priesthood of all believers." As an expression of this doctrine, the church ordains ministers without requiring special training or a fee. It ordains by mail and requests a donation with the application for ordination.

In 1972, the plaintiff's father, Chester Wilson, saw an advertisement for the church, which offered to ordain ministers who then could baptize and conduct weddings and funerals. Wilson recently had taken a course in Christianity which "entailed all phases of helping your fellow man." As a result, he believed that he could serve mankind. Because he thought that the respect and authority of a minister's credentials would help him in his work, he answered the advertisement and sent a $10 donation. The church promptly ordained him as a minister by mail. He sought no tax advantage from becoming a minister. The parties stipulated that Wilson believed sincerely that his activities in connection with his ministry were invested with religious significance.

In addition to his ministerial certificate, Wilson received an enclosure stating that he was now qualified to "perform the services any minister is entitled to, i.e. wedding ceremonies, funerals, baptisms, etc." It also contained the following admonition: "Check with your local authorities to see if you need be licensed by the City, County or State. If you encounter any difficulty with any of these authorities please contact [a church official]."

In accordance with this directive, Wilson made inquiries to determine whether a minister of the Universal Life Church could perform legal marriages in North Carolina. Wilson testified without contradiction as follows:

[Mrs. Lynch's counsel]: Did you check about the license?

[Wilson]: The question I asked the County Clerk is could any minister perform a marriage in the State of North Carolina. And they said yes.

[Counsel]: And what, if any, other indication did you have that as a Universal Life Church minister you would not be allowed to perform a marriage?

[Wilson]: I had no indication whatsoever. ¹

Wilson's daughter, Sandra, lived with James Lynch although both of them were married to other persons. After Sandra obtained a divorce, she and Lynch planned to marry before Lynch's divorce became final. Wilson convinced the couple that they should not carry out their plans and that they should wait until Lynch was divorced. In return for their agreement to wait, Wilson agreed to marry them when Lynch's divorce became final. In due time, Sandra and James obtained a marriage license and blood tests. Wilson married them on October 28, 1973. In 1977, they separated.

In April, 1978, Sandra received a letter from James Lynch's lawyer asking her cooperation in obtaining a Dominican divorce. She refused. Sandra also spoke to James by phone. During one of these conversations in June or July, 1978, James told her that his attorney had advised him that their marriage was invalid. Sandra testified that James did not explain the reasons for his lawyer's opinion and that she did not believe James.

Soon after this conversation, and without obtaining a divorce, James Lynch married his girlfriend. When Sandra found out about this marriage in July, 1978, she brought it to the attention of state officials. Lynch was prosecuted for bigamy and convicted. In 1980, the North Carolina Supreme Court reversed on the ground that the state had failed to prove that the marriage between Sandra and James Lynch was valid under the laws of North Carolina. State v. Lynch, 301 N.C. 479, 272 S.E.2d 349 (1980). The Court held that Wilson was not authorized under North Carolina law to perform a marriage ceremony. ² In January, 1981, James Lynch obtained an annulment of his marriage to Sandra. This action was filed in August, 1981.

II

The North Carolina statute of limitations for fraud is three years, and "the cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud ..." N.C.Gen.Stat. 1-52(9). The statute has been construed to provide that an action for fraud accrues and limitations begin running "when the aggrieved party discovers the facts constituting the fraud, or when, in the exercise of reasonable diligence, such facts should have been discovered." Vail v. Vail, 233 N.C. 109, 116, 63 S.E.2d 202, 207 (1951).

This action was commenced in August, 1981. Thus, if Mrs. Lynch knew, or in the exercise of reasonable diligence should have known, of the facts constituting the alleged fraud before August, 1978, the statute of limitations would bar her action. The district court submitted this issue to the jury, which returned a verdict for Mrs. Lynch.

The parties entered into the following stipulation concerning the facts Mrs. Lynch knew at the time of her marriage:

As Mrs. Lynch knew at the time of the marriage, Mr. Wilson had been ordained as a minister of the Universal Life Church. He had been ordained by writing a request for ordination and he was ordained on January 7, 1973.

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Sandra Lynch knew that her father had no formal ministerial training, had no congregation of his own, and how he obtained his ministerial credentials. All of these facts were fully known to Mrs. Lynch prior to the time of her marriage to James Robert Lynch.

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Sandra Lynch knew that her father had written off to the Universal Life Church and had been ordained by mail and had not been required to undergo any course of study prior to being ordained.

Thus, Mrs. Lynch at the time of her marriage knew the facts about the ordination of her father that formed a basis of the North Carolina Supreme Court's decision that he was not authorized to perform a marriage ceremony. ³

Furthermore, Mrs. Lynch testified that in June or July, 1978, her husband told her that he was going to get married to his girlfriend "because our marriage is not legal anyway." She also testified that her husband told her that his lawyer had told him that "our marriage wasn't any good." She added that she did not believe her husband. Any doubts about her husband's intentions soon were dispelled. She testified that in July, 1978, she learned that her husband had married his girlfriend.

Thus, prior to August, 1978, Mrs. Lynch knew all the facts about her father's ordination. She knew her husband had said their marriage was invalid and that he had remarried. In short, she knew that she had been harmed, and she knew all the facts that caused the harm.

We cannot accept Mrs. Lynch's argument that her cause of action accrued when she learned her marriage was invalid after the decision of State v. Lynch in 1980. This argument overlooks the distinction drawn in North Carolina between knowledge of facts that constitute fraud and knowledge of the law governing fraud. The law of North Carolina on this point is stated in Hiatt v. Burlington Industries, Inc., 55 N.C.App. 523, 529-30, 286 S.E.2d 566, 570, review denied 305 N.C. 395, 290 S.E.2d 365 (1982):

Plaintiff attempts to prolong the statute of limitations by arguing that his knowledge of the facts of the alleged fraud was not complete until 1980 when he read an article about the law of patents. We reject this argument. Knowledge of the law governing alleged fraud is not included in the G.S. 1-52(9) requirement of knowledge of the facts constituting the alleged fraud. (emphasis in original)

The significance of knowledge of the facts constituting the alleged fraud is emphasized in Vail v. Vail, 233 N.C. at 116, 63 S.E.2d at 207 (1951), where the court said: "[I]t is the accepted rule that 'Knowledge by the defrauded person of facts which in the exercise of proper diligence would enable him to learn of the fraud ordinarily is equivalent to discovery of the fraud.' "

There is no question about what facts Mrs. Lynch knew about the alleged fraud, for they are derived from a stipulation and her testimony. When the facts are admitted or established, the plea of limitations should be decided as a matter of law. Little v. Rose, 285 N.C. 724, 727, 208 S.E.2d 666, 668 (1974).

These general principles of North Carolina law were applied in a case involving a charge of fraud against the Universal Life Church,...