Churches built on sinking sand: how courts decide who keeps church property following a schism.

• Author: Coffman, Daniel

Heartland Presbytery v. Gashland Presbyterian Church, 364 S.W.3d 575 (Mo. Ct. App. 2012), transfer denied.

1. INTRODUCTION

   With a marked decrease in regular church attendance and the flowering of non-denominational churches across the United States, (1) traditional hierarchical church organizations are losing members in droves. (2) Such losses are exacerbated when denominations make controversial doctrinal changes, such as the ordination of women and homosexual clergy. (3) Local members can disagree so strongly with the decisions made by their national church that they choose to disaffiliate, oftentimes in favor of a denomination that more closely resembles their values and beliefs. (4) This has led to a flurry of litigation across the country in which the denomination seeks to retain all of the disaffiliating church's property, normally pursuant to a clause in the denomination's constitution that purports to create a trust relationship between the national and local church. (5)

   The recent case of Heartland Presbytery v. Gashland Presbyterian presented the question of whether a denomination could, relying solely on the property-trust clause in the denomination's constitution, could create a trust relationship in which the local congregation held all church property in trust for the denomination. (6) In this matter of first impression for Missouri, the Missouri Court of Appeals, Western District, applied what courts have called the "neutral principles of law" approach, which instructs courts to resolve church property disputes using "objective, well-established concepts of trust and property law." (7) The court found that a national church's property-trust clause, on its own, did not establish such a relationship. (8) With this ruling, the Western District established a framework of strict compliance for other Missouri courts to follow.

   This Note will examine whether the "strict title" application of the neutral principles taken by Gashland is a more preferable approach than the interpretation and application of the neutral principles in other jurisdictions. This Note will discuss whether Gashland squares with the Supreme Court of the United States' prior decisions involving church property disputes and whether Gashland's strict title approach is most true to the principles set forth in the leading case on the issue, Jones v. Wolf. (9) This Note will first review the facts and holding of Gashland. (10) It will then chronicle the history of church property jurisprudence in Missouri and the Supreme Court of the United States. (11) Next, this Note will outline the reasoning of the Gashland court. (12) Finally, this Note will analyze the dicta in Jones that has led to the deep split in how to apply the neutral principles of law approach to church property disputes. Specifically, this Note will advocate for the application of the neutral principles approach outlined in Gashland on the basis that it represents the most accurate reading of Jones and because its application is most in line with the Supreme Court of the United States' First Amendment jurisprudence. (13)

2. FACTS AND HOLDING

   Gashland Presbyterian Church (Gashland) was incorporated in August of 1948 and subsequently deeded a piece of real property by the Presbytery of Kansas City. (14) "The grantee [was] identified in the Corporation Warranty Deed as 'Gashland Community Church, Gashland, Missouri.'" (15) The deed stated that the property was granted "to Gashland in exchange for 'one dollar and other good and valuable considerations [sic].'" (16) The deed did not reserve any "beneficial, reversionary, or remainder interest to any other person or entity." (17)

   The Presbyterian Church in the United States of America (PCUSA) identifies itself as an "unincorporated association of '[Reformed Christian believers.'" (18) PCUSA is comprised of individual churches, such as Gashland, that are governed by the churches' pastors and elders, also known as sessions. (19) "Multiple sessions are governed by a district governing body known as a presbytery, which is in turn governed by a regional body, the synod. Synods are governed by the General Assembly, the highest governing body within PCUSA." (20) Before its departure from PCUSA, Gashland fell within the purview of Heartland Presbytery. (21)

   On September 30, 2007, Gashland notified Heartland Presbytery of its plans to disaffiliate from PCUSA, taking its property with it. (22) Receiving no response, on January 14, 2008, Gashland notified Heartland that it had "unilaterally disaffiliated" from PCUSA and Heartland in favor of the Evangelical Presbyterian Church. (23) In response to these letters, Heartland notified Gashland that a hearing would be held in April 2008 regarding its request for dismissal with property. (24) Three days prior to the scheduled hearing, Gashland notified Heartland that it would not participate in the hearing. (25) The hearing was nonetheless held on April 10, 2008, without Gashland's participation. (26) After a series of subsequent attempts to engage Gashland, Heartland initiated litigation to enforce PCUSA's purported rights to Gashland's property. (27)

   Heartland claimed that, under the "property-trust clause" in PCUSA's Book of Order, Gashland held all church property in trust for the national church. (28) The "property-trust clause" (located in Section G 8.0201 of the Book of Order) stated:

   All property held by or for a particular church, a presbytery, a synod, the General Assembly, or the Presbyterian Church (U.S.A.), whether legal title is lodged in a corporation, a trustee or trustees, or an unincorporated association, and whether the property is used in programs of a particular church or of a more inclusive governing body or retained for the production of income, is held in trust nevertheless for the use and benefit of the Presbyterian Church (U.S.A.). (29) Thus, Heartland argued that disaffiliation with the national church would result in Gashland's forfeiture of all church property in favor of PCUSA. (30)

   Heartland alleged that Gashland's membership in PCUSA, along with its original Articles of Agreement from 1948 and amended By Laws adopted in 1987, showed that Gashland agreed to be bound by PCUSA's Constitution. (31) Alternatively, Heartland also asserted that PCUSA's Book of Order, standing alone, established a trust and that Missouri trust laws were not applicable to the dispute. (32)

   In contrast to Heartland's multitude of trust claims, Gashland asserted that under the neutral principles approach, the court must look solely to Missouri trust law in determining whether Gashland held its church property in trust for PCUSA. (33) Gashland argued that it did not acquiesce in PCUSA's unilateral imposition of a trust and that PCUSA's Book of Order, standing alone, failed to create an express trust under Missouri Law. (34)

   The Clay County circuit court dismissed Heartland's petition with prejudice citing Heartland's failure to state a cause of action. (35) The circuit court, citing Presbytery of Elijah Parish Lovejoy v. Jaeggi, (36) explained that in deciding church property disputes, "Missouri courts are prohibited from deferring to religious hierarchy, but must instead use 'neutral principles' of law in determining the property rights of congregations." (37)

   Adopting the "strict title" neutral principles approach, the circuit court emphasized that a court will only enforce a trust if it is "embodied in a legally cognizable form." (38) Under Missouri law, a trust is only legally cognizable if the owner of the property declares that he holds the property as a trustee. (39) The court further established that in order for a trust to be created, the settlor must have the capacity to create a trust, "indicate" an intention to create the trust," and declare as much in a signed writing (for the purposes of creating a trust in land). (40) The court concluded that the trust provision in PCUSA's Book of Order did not constitute a trust because it was not made by the owner of the property, Gashland, and, "to the extent the trust [was] alleged to cover Gashland's real property," the Denomination's Book of Order was signed on the behalf of, but not by, Gashland. (41) The court also rejected Heartland's second contention that the "[d]enomination's governing documents, including its trust and local-church control provisions," represented a binding contract on Gashland. (42) Missouri law, the court held, looks "to the governing documents of local organizations to determine if they have agreed to be bound by the provisions of an umbrella organization's governing documents." (43)

   The Missouri Court of Appeals, Western District affirmed the circuit court's dismissal on substantially similar grounds. (44) The appellate court first affirmed the use of the "'neutral principles' approach as the sole method" in which to resolve church property disputes in Missouri. (45) The court then held that a denomination cannot unilaterally create an express trust in local church property by means of a property-trust clause in the denomination's constitution. (46)

3. LEGAL BACKGROUND

   To understand the deep divide in how state courts have chosen to resolve church property disputes, it is important to understand the vast legal history of court involvement in church property disputes. Much of the jurisprudence surrounding the resolution of church property cases has been a delicate balancing act. On one side, courts show a desire to resolve church property disputes so as not to close the doors of the court to churches that are equally under the protection of the law. (47) On the other, courts have been wary of interfering with the ability of local churches to submit to the authority of a denomination and all of its dictates, fearing suppression of free exercise. (48) A brief history shows how early Supreme Court of the United States' decisions grappled with balancing these two conflicting desires. The Court in...