Monday, July 7, 2008

The San Joaquin Lawsuit: an Update

The Diocese of San Joaquin is a California unincorporated association that was, from 1961 to December 2007, one of the dioceses of the national Episcopal Church, a constituent member of the worldwide Anglican Communion. The members of the Diocese were the local Episcopal churches (called "parishes" and "missions") located in fourteen Central Valley counties of California. The Diocese was, and continues to be, governed by its internal "constitution" and "canons" (akin to bylaws). The highest legislative body of the Diocese is its Annual Convention.

On December 8, 2007, the delegates to the Diocese’s Annual Convention voted overwhelmingly (90 percent) to end the Diocese’s spiritual affiliation with The Episcopal Church and affiliate instead with the Anglican Province of the Southern Cone of America, another national member church of the worldwide Anglican Communion. The Diocese of San Joaquin is the first diocese to leave the national Episcopal Church since the Civil War, when nine dioceses departed to form an independent church in the southern states. 

The Presiding Bishop of the Episcopal Church, the Most Rev. Katharine Jefferts Schori, responded to the Diocese’s departure by doing three things: she declared that a motion to depose Bishop John-David Schofield had carried the House of Bishops, and that his see was now vacant; she declared that she refused to recognize the Standing Committee of the Diocese as its Ecclesiastical Authority, or for any other purpose; and she called on short notice a "special convention" of the parishioners remaining in TEC to consent to her designation of the Rt. Rev. Jerry A. Lamb, retired Bishop of the Diocese of Northern California, as Provisional Bishop of the Diocese of San Joaquin. Once those steps were accomplished, the special convention authorized Bishop Lamb to file suit against Bishop Schofield and the diocesan trust entities he controlled to acquire title to all of the diocesan properties, investments and accounts. TEC joined Bishop Lamb and the newly organized Episcopal "Diocese of San Joaquin" as a plaintiff in the lawsuit.

Plaintiffs subsequently amended their complaint to add Merrill Lynch as a defendant, because it was the custodian of the diocesan trust funds. Merrill Lynch has requested the Fresno Superior Court to be allowed to "interplead" all the funds it has in its possession, and to be dismissed from the lawsuit. By turning over the funds to the control of the court, and asking it to determine who is entitled to them, Merrill Lynch is abandoning any role as custodian and leaving it to the court to sort matters out. Pending the court’s order on the interpleader request, Merrill Lynch has on its own frozen all the funds so that no money may be withdrawn from the accounts without a joint agreement by the concerned parties.

Bishop Schofield and the diocesan trust entities have now responded to the first amended complaint. First, they have asked the court to strike it, on the ground that it was not drawn in compliance with California Rules of Court. Those Rules require, for instance, that in a case with multiple plaintiffs, as there are here, the complaint separately identify each plaintiff who is asserting each separate cause of action. The first amended complaint sets out seven causes of action in 142 numbered paragraphs, but it does not identify which allegations are made by The Episcopal Church, which are made by Bishop Lamb, and which are made by the plaintiff "Diocese of San Joaquin."

The defendants have also demurred to the first amended complaint. A demurrer in law basically challenges the complaint’s adequacy, by saying, in effect: "So what? Even if all you allege is true, you have not stated a case on which the court can grant you any relief."

The first ground on which defendants have demurred is that among the funds held by Merrill Lynch which plaintiffs are claiming, are moneys deposited in the names of two individual parishes: St. John’s of Tulare, and St. John’s of Porterville. Plaintiffs, however, neglected to join those parishes as defendants, and thus the court cannot declare who owns the funds without the churches being represented in the lawsuit. 

St. John's Episcopal Church in Tulare, however, has voted not to join the Diocese in aligning with the Province of the Southern Cone. Its rector, the Rev. Robert G. Eaton, also has declared his intention of remaining with The Episcopal Church. So let's understand what is actually happening on the ground here.  The Episcopal Church and its designated agent, Bishop Lamb, are claiming to own or control money belonging to one of their own parishes that has voted to remain in The Episcopal Church.  They are doing so regardless of the consequences, in order to maintain their fiction that Bishop Schofield "wrongfully" relinquished control of these funds to St. John's long after it had grown beyond the status of a diocesan mission. Simply by the expedient of a letter addressed to Merrill Lynch, The Episcopal Church has succeeded in having all the investment accounts of its rival Diocese, the Anglican Diocese of San Joaquin, frozen---along with accounts belonging to churches that have chosen to remain Episcopal. Is it not remarkable that a New York investment firm would so act on the strength of nothing more than a letter from another New York entity headquartered at 815 Second Avenue? Could any of us have succeeded in having Merrill Lynch freeze a rival's investment funds by the simple act of sending Merrill Lynch a letter? This entire episode calls for the illumination a lawsuit will bring.

Next, defendants say that the plaintiffs failed to describe the real properties they are claiming to own (other than some parcels in Kern and Madera Counties) with any degree of particularity, so that they can be readily identified. Finally, the defendants point out that plaintiff Jerry Lamb, individually, is asking for relief that properly should be requested by the religious corporation sole of which he claims to be the incumbent. The corporation sole is the entity which by law is authorized by the Diocese to hold title to diocesan property, but it is not a party to the lawsuit as currently drafted. (It is a little like the president of Exxon Corporation suing in his own name, but asking for relief that has to be given, if at all, to the company which he heads.)  

So the first skirmishes have taken place, and it is now up to the plaintiffs to decide whether to redraft their complaint and change some of the parties to it, or to try to convince the court that their complaint as filed is adequate, and needs no changes. The court will not assign a date for trial until the case is "at issue"— meaning that the allegations of the complaint have each been responded to, and the parties are ready to conduct discovery and then go to trial. A hearing on the demurrers and on the motion to strike will take place in Fresno County Superior Court the afternoon of August 20.


  1. It seems a bit funny to me that a complaint would have as many problems with it as you appear to suggest. Is this a case where an east coast lawyer is trying to practice in a west coast court?

  2. The problems with the San Joaquin complaint are numerous, as I have suggested in previous posts. The plaintiffs have able California attorneys working for them, so I don't think it's a matter of "east coast/west coast" differences. Rather, it's that TEC's position is flawed from the very start, given how they went about "deposing" Bishop Schofield and then installing Bishop Lamb to give them a plaintiff for their lawsuit. This is just the first round in what I believe will be a lengthy encounter that tests the legitimacy of TEC's actions.

  3. I have had the privilege of being taught the true Gospel of Jesus Christ by a true man of God, Father David Schofield and I know that the path he is taking will lead him and those who follow closer to our Heavenly Father.

  4. Both the motion to strike and the demurrers, general and special, over the long term, assist the plaintiffs to be able to shore up their theory of the case, relevant law to support it, and other functions. The reason why this strategy is ever usually a good is simple: the Court can and usually does, if it grants the motions, grant with LEAVE TO AMEND. And, of course, it specifically sets forth what amendments would be required to resolve such issues these motions bring--standing to sue, more definite statements, etc. The only support for such a strategy is if it is genuinely believed that the Plaintiff will be unable to return to Court with the proper parties, because of internal divisions remaining, and related scenarios. Usually, the better strategy is to answer and defend and, where proper, cross complain or counter sue, and then move to discovery. Ultimately, you can move the Court for a Judgment on the Pleadings and win the case on the merits, for the same reasons the motion to strike and demurrers were brought and could conceivably be granted and sustained. I often explain it, however, this way to people trying to understand why this strategy is used. Generally, the ultimate decision as to whether or not any motion should be filed rests with the attorney and not with the client. Secondly, absent the "inability to return scenario" I have described, skilled trial lawyers do not bring such motions. Litigators do, but not trial lawyers. Litigators are bullies. They strut and they are glamour on parade but they are no match for the serious trial lawyer. Thirdly, litigators will allow a belligerent client to determine such motions so long as he's willing to pay the fees and costs. In this case, it remains to be seen if the Plaintiffs can return or will return, but I strongly suspect they will return. Thus the motions are about a particular mind set, that is argumentative on every point, at every turn, and is unable and unwilling to make any deals, to reach any compromise. It says I will fight every paragraph and every comma and semicolon. It is simply put--STUBBORN PRIDE. That's a poor captain for litigation strategy. The defense should have waited until the Court would no longer permit amendment, we're past discovery, and the Plaintiffs would be stuck with their pleadings as they are. Then the Motion for Judgment on the Pleadings would have terminated the lawsuit on the merits. All the defense did by its stubborn hardheadedness is assist the Plaintiffs in doing a better job. They helped their lawyers get their case strategy and theory correct before it's too late. It will be very, very interesting to see what happens with this case.

  5. C.E., thank you very much for that thorough comment. You are obviously an experienced trial lawyer (notice I did not say "litigator"), and as one myself, I have to say that I agree with all that you say about the strategy of answering and defending, rather than demurring and fighting over every paragraph.

    That being said, though, there were other considerations at play here. Chief among them is that each of the grounds for demurrer would have been deemed waived if not raised with the initial pleading---they could not have formed the basis for a subsequent motion for judgment on the pleadings, because they were formal, and not substantive, defects, and could each be easily corrected by amendment. (That is why, I assume, the plaintiffs stipulated to amend rather than take the issues to a hearing.) The second amended complaint is due any day now, and I daresay that the guidelines you have so capably sketched will also inform the defense strategy from this point forward.