I appreciate the frustration, but I have to disagree with the legal reasoning of this post.My remarks on this topic were also the subject of a debate at StandFirm, in which DavidH (a Virginia attorney) took me to task in the same way that you do. Both you and he seem to have read my remarks to mean that a legislature has no business saying what form a trust must be in to be valid, when it does that all the time. I agree that such a definition of form is a proper legislative function, and that is not what I was talking about. I was speaking of the judicial function of determining, as a matter of law and fact, when a particular trust has satisfied the legislative (or common-law) requirements for a trust to be recognized and have effect. As a judicial function that is fully in the province of the courts, a legislature has, as I said, no business trying to usurp that role.
1) Legislative versus Judicial Act:
A legislative body certainly may pass all manner of laws governing the creation and civil law recognition of trusts as well as the duties and decision standards of fiduciaries. See, e.g., Uniform Trust Code.
It seems to me that section 5 of the Dennis Canon attempts to do just that. Having declared the imposition of a trust on all local church property in section 4, the Canon then purports to say that no further action by a diocese "shall be necessary for the existence and validity of the trust." (Emphasis added.) Maybe that is so for TEC's own purposes, and as a matter of law in some States (e.g., New York), and maybe it is not so in some other States (e.g., New Hampshire). The point is that it takes the courts in each State to determine that fact, regardless of what General Convention puts in its Canons. That is all I meant to say, and I apologize if my language was insufficiently precise or clear.
Further, the US Supreme Court in Jones, 443 US at 606, while arguably dicta, would seem to provide whatever express Judicial legitimacy required for the the Dennis canon's legal effect: "Alternatively, [to ensure TEC control of local parish property in the event of a dispute], the constitution of the general church can be made to recite an express trust in favor of the denominational church.""Arguably" dicta, Craig? I would submit that the language telling churches how to go about imposing an effective trust on local church property is unarguably dicta, since there was no such point involved whatsoever in the facts of Jones v. Wolf. It was not the holding of the case, which appears a couple of pages earlier, as I demonstrated in this earlier post. Indeed, what it amounted to was unsolicited legal advice, in response to an objection made by the dissent, which is improper in a Supreme Court opinion (but when do they ever let that bother them?). The reason it is improper is precisely because of what has happened here: evidently you, DavidH, and the other attorneys who argue as per your statements above, as well as the Court of Appeals in New York, the Fourth District Court of Appeal in California, and other courts, feel free to take the obiter dicta of Jones as an additional ratio decidendi.
Basically, in 1979, the Supreme Court told TEC and all other denominations: "If your national structure wants to ensure control over local property, there are a couple of ways to do it, including by amending your national, governing document to recite an express trust over local affiliate property."
My legal training taught me always carefully to distinguish between what was necessary to the holding of a decision, and what was unnecessary, or mere obiter dicta. I submit that no one is on legally solid ground in reading Jones as "holding" that "[to ensure TEC control of local parish property in the event of a dispute], the constitution of the general church can be made to recite an express trust in favor of the denominational church." Such a repeated misreading of Jones is at the crux of the problem here.
To continue with Craig's comments:
If a local parish didn't want to be subject to the Dennis canon, it should have disaffiliated with TEC as soon a feasible after the adoption of the canon. There's something of a laches defense here: one can't enjoy the "benefits" (whatever those might be) of being part of a national organization, find oneself at opposition to some other faction of the national group, and decide its time to take your toys and go home. One doesn't get to decide the rules don't apply, just because they're now inconvenient. Frankly, a better tactic might be to concede the point about the property, tell TEC to take it, but then have the current parishioners etc. sue under concepts of fraudulent misrepresentation regarding their contributions, etc. If one could get into a realpolitik situation where there are cross-claims of approximately similar values (10 years' worth of contributions + interest + punitive damages?), the local church would have significantly better negotiating posture vis-a-vis TEC to come to a resolution.You offer some interesting suggestions here, Craig---I hope some parish takes you up on them. But I have to observe that a defense of laches (or unjustified delay in acting), like a defense of waiver or estoppel, would require a showing, first, of a definitive knowledge on the part of a given parish about the Dennis Canon's existence, and second, a full appreciation of its intended effect. The Episcopal Church did nothing to publicize the Canon's passage to the thousands of parishes in 1979 (indeed, for a number of years it could not even say definitively that the Canon had actually been adopted at General Convention), and I doubt if you would find one non-lawyer parishioner in ten thousand today who could identify what the Canon is, or what it purports to say. In their decisions upholding the Canon, the courts usually throw in a "besides, you didn't do anything about it" remark as a makeweight to buttress their weak arguments that an effective trust can be created by a trustor who does not own the property being placed in a "trust." (In the same way, TEC and its Presiding Bishop attempt to justify their failed "depositions" of Bishops Cox, Schofield and Duncan on the ground that nobody objected---or if they did, the objection failed to carry.) Such an argument literally begs the question, which is whether or not the act in question was valid to begin with.
2) "Legally Cognizable Form": I will admit, I don't understand from where the perceived disconnect with this phrase comes. "Legally cognizable" in SCOTUS jurisprudence merely means a claim or argument that is able to be properly considered by a court. If the canon were written, "It is an ecclesiastic duty and tenet of faith that all member parishes must (irrespective of civil law) refuse to defend against real property actions instituted by the Diocese," then a court wouldn't be able to properly consider it. While the intent behind it might have been the same as the Dennis canon (the imposition of a trust on all locally held property), the result is not. A civil court cannot properly determine if something is a religious obligation and what should happen if a dispute arises about the fulfilment of ecclesiastic obligations. However, when something is expressed in a "legally cognizable" form, it's merely something a court can look at and not have to consider theology in order to resolve the dispute. While not an exhaustive list, the Supreme Court clearly indicated that a court may properly review the language of the property deeds, the local congregation's charter, and the constitution of the general church for language that would provide for an express or an implied trust (emp. added).[your comment ends abruptly at this point: did you mean to complete the sentence with the words "wrong here"?]
And that's what the NY CoA did, saying, in essence, 'we don't see anything
Given that Justice Blackmun's language at this point is dicta, I cannot attach much significance to his words "legally cognizable form" if they are used again simply to beg the question of whether a valid trust is created in law by the adoption of a national church canon. Your argument says that the local deeds forming the record chain of title can be overridden unilaterally by a legislative pronouncement that forms no part of the chain, because the legislative pronouncement is somehow in "legally cognizable form." When you say that all such language means is that a court can give effect to it, do you see how the argument becomes circular? "A national canon can be read to create a trust contrary to local deeds because it is in the legally cognizable form of a canon or constitutional provision to which a court can give legal effect, since the canon is legally cognizable." The best response to this circular argument, and to the New York Court of Appeals, is the one given by the Supreme Court of New Hampshire in Berthiaume v. McCormack, 153 N.H. 239, 831 A.3d 539 (2006), in which it held, first, that a court must “consider only secular documents such as trusts, deeds, and statutes. Only if these documents leave it unclear which party should prevail will we consider religious documents, such as church constitutions and by-laws, even when such documents contain provisions governing the use or disposal of church property.” (Id. at 248.) It justified this ranking by holding that such an approach “is consistent with [the] rules governing the resolution of property disputes generally. In resolving such disputes, [courts] consider extrinsic evidence and the circumstances surrounding a conveyance to determine the parties’ intent only if the language of the relevant documents contains either patent or latent ambiguity.” (Ibid. [citations omitted].)
And that is why I suggest that the contrary approach of the New York Court of Appeals violates the Establishment Clause, by giving preference to a church under a pretended "neutral principles" approach that no other trustor receives in the law. (Maybe it violates the Equal Protection Clause on that ground, as well.)
Again, I think the line quoted above from Jones clearly indicates that a constitutional canon is sufficient. One of my primary areas of practice is trust and estate law, and it is long-standing principle that legally enforceable trusts do not have to take the form of a written trust indenture or trust agreement. In fact, a trust does not even have to be a written down to be enforceable many times (i.e., an implied trust). Now here, when dealing with real property, things get a bit sticky because of the "statute" of frauds, a legal principle where we normally require transactions that take over a year to complete or those transferring rights in real property to be written down if a court is going to enforce it. However, there are counter-arguments to a statute of frauds defense.Again, Craig, given that you are taking a line of dicta as a definitive holding, you can make all the parallels to trust law that you wish. But I defy you to show me a single instance in statutory or common law where a trust for real property came into being through the unilateral act of a beneficiary, without the full knowledge, acquiescence or participation of the person actually owning the property in question. And I know you have things to say on that topic, so let's continue:
Even if a state's substantive law, however, would refuse to hold an express trust over the property for the benefit of TEC (at the national level), there still are other hurdles to overcome too:I agree, these are very fact-specific claims, and would require first and foremost, as I noted earlier, proof of knowledge of the Canon's existence and full appreciation of its intended legal effect. And that would be such a hurdle in most individual cases that I doubt even all the talent at Goodwin Procter could overcome it. Continuing with your theories of justification:
- implied trust: the local parish has acted in ways consistent with an implied trust, i.e., "Up until this dispute occurred, did the Parish seem to act as if there was an implied trust with the National church?" (This is a very fact specific claim, but can be easy to get buy-in from a judge with non-obvious support: if, for example, if there was a diocesan requirement to inform the Bishop about any building or borrowing against the property, and the Parish in question had complied, that would support the idea that it was in trust for the Dioceses (and by extrapolation, TEC); another example of a supporting fact would be if the Parish property were insured as part of the Diocese's group policy and/or through the TEC's Church Insurance Group, which because of some arcana of insurance law, would also support an argument for an implied trust).
- laches/equitable estoppel:
agreement to be bound by the Denis canon discussed in (1) above, i.e., "you had a chance to complain about the canon and quit then, but you waited too long. It's now been almost thirty years, and it's too late for you to complain about the canon now."
- constructive trust based on representation/cy pres: the Parish held itself out as an "Episcopal Church" and as a member of the Diocese and ECUSA when it conducted its activities and solicited its charitable contributions. It cannot then play "gotcha" with those donor's funds by making such a significant legal change as disaffiliating from TEC while "absconding" with the funds. Yes, a majority of the current members voted in favour of the disaffiliation, but those funds were not provided solely by the majority or even solely by the current membership. Charitable funds are always subject to special oversight/scrutiny because the state has an interest in seeing that they are used for the purposes that the donor intended. A constructive trust may be imposed on those funds if the holders of them intend to significantly divert from the express and implied representations made when the donation was solicited. Further, if a donor's intent for funds in trust or held for charitable purposes are frustrated (i.e., unrealizable or risk being diverted or forfeited because of the current political/legal environment/situation), a court can direct the funds be used for purposes as close to those as the donor's intent and expectancy as possible under the cy pres doctrine. Consequently, a court could find, for example, that the money to build the parish was given by a cradle-to-grave Episcopalian, and it seemed clear that the intent was for it to be used for an Episcopal Church. So Parish, if you wish to disaffiliate from TEC, fine and dandy, Mr. State Court judge doesn't care and doesn't want to get into the middle of it. However, you're going to have to find somewhere else to move to because this land was given to be used for a TEC member church, and you don't get to keep it, just because you've been using it for the last XX years.Properly applied, the cy pres doctrine would require the court to decide the issue of whether The Episcopal Church in its current mission is carrying out the intent of the long-ago donors who purchased the parish property. So if a court will be disinclined to get involved in such an inquiry (and I agree with you there), I do not see cy pres being available to TEC as a sword when it would not be available to the departing parish as a shield. The hypothetical ruling you describe above is an abdication of the principles of cy pres, not an application of them.
If this were another member-based non-profit organization otherwise unconnected with religion, it would be something of a slam-dunk in most states, I would think, but the religious component muddies the waters. If this were a fraternity, for example, state courts have been very accepting of arguments along these lines (especially, even though you are an independent corporation, if you held yourself out as being affiliated with the National Fraternity and all of your actions up to this dispute with the National organization have been consistent with your membership therein). Just because you, local frat of many years, want to disaffiliate from your national organization and start a new fraternity doesn't mean you get to take the house. The expectancies that led to the purchase, funding, maintenance, et cetera of that house were all based around your national affiliation. You cede that aspect of your local corporate entity, you've now departed so far from what you've held yourself out to be to the world when asking for money that you're no longer the 'same' entity that received the donations and are not entitled to keep them or their proceeds (i.e., the frat house).I can't comment on this, because I haven't seen the cases you are describing. Going by neutral principles, I would want to see first what the deeds say in every case. I submit that what "muddies the waters" in the case of churches is the tendency, as noted earlier, of TEC and some courts to take Justice Blackmun's gratuitous dictum as expressing constitutional First Amendment doctrine applied to real property disputes. (Remember, he's also the Justice who made up, out of whole cloth, the tripartite division of a pregnancy for purposes of abortion in Roe v. Wade. This is a Justice who loved to legislate from the bench. He was, indeed, the counterpoise to General Convention's usurpation of the judicial function---he regularly usurped the legislative function.)
3) What's different between GM and a church: GM is a for-profit organization and a church is not. Churches are granted huge operational freedoms under law that other organizations are not (hence why a significant amount of money laundring in metropolitan cities are now being conducted through storefront "churches".Agreed. My point with the GM example could be made with any other non-profit litigant I could think of (unless, as you suggest, local fraternities receive the same short shrift as do individual church parishes): only TEC and similar "hierarchical" churches are allowed to dispense with the usual formalities of drawing up a trust for each piece of property involved.
Further, the legal relationship of affiliation between a dealership and a member church are different, but do share some common items. Often a dealer will have to sign a security agreement, personally guaranteeing all of the dealerships liabilities to GM as well as giving a broad security interest in both business and personal property. Further, there are very, very express limits on how a dealer can conduct his or her business while it is a GM licensee. If a dealer wants to go off the reservation, he or she can, but there will be significant financial repercussions.
4) a minor quibble... the trust isn't irrevocable. All you have to do is get the canon changed at the next GC. Remove that, and then no trust (at the TEC level at least) would be imposed.Agreed again. But don't you find it even slightly unusual under the principles of trust law that once the national church imposes a unilateral trust on an individual parish's property without its consent, it has no legal way of escaping from the trust except by getting a vote to repeal the Canon passed at a subsequent General Convention? Or have I perhaps misread your argument? (Are you conceding, for example, that if a church voted to leave TEC in 1980 or 1981 that the courts would have been forced to recognize it as having successfully repudiated the trust? And if so, then would you concede that a parish that could prove definitively that it just found out about the existence and meaning of the Dennis Canon---say, for example, a parish in New York who just read the decision in the Harnish case I discussed in my previous post---could successfully repudiate the trust by voting to leave right after gaining that knowledge?)
5) Even if you removed the Dennis canon, you would still have diocesan issues in many circumstances. I'm going to pass on the "hierarchical" church question, not because it isn't a good and valuable question, but because there's a lot of existing civil law precedent holding that or discussing TEC as a hierarchical structure within the civil law definition. I think reasonable people could disagree, but in a variety of the current controversies, the point is somewhat moot because the principles of law indicated would apply at the diocesan level, since many of the diocesan canons have similar provisions or incorporate the TEC canons by reference.Yes, I agree that in the absence of the Dennis Canon there would still be a lot of individual factual issues as between the parish and the diocese. That being said, it is remarkable how quick the dioceses are simply to jump on the Dennis bandwagon and ride with it.
6) "why afraid of leaving": I think we all know the answer to that question, however this is a policy discussion that goes beyond the legal arguments otherwise presented (unless one is going to make an argument that TEC has so changed that the member parishes/dioceses are no longer bound by its structure, but I think most courts will view that as an ecclesiastic dispute upon which there is no way to apply the "neutral principles of law" doctrine.I heartily agree, Craig. I raised the question only because in all these discussions of TEC law and polity, it is easy to forget that TEC is supposed to be, first and foremost of all, a Christian Church, and so (supposedly) unwilling to press a short-term legal advantage against other Christians who have a sincere disagreement with it over its Christian mission. (See, for instance, the highly appropriate reminder of the words of St. Ignatius, Bishop of Antioch, as quoted in this post.) I believe that the majority rule as embodied in Virginia's division statute is the most equitable way to resolve such disputes, with a fractional division of the property in accordance with the numbers voting to stay and to leave (and if that requires a partial buyout, then so be it).
7) "offer for sale": is keeping the property for future generations, just in a different form. However, I think there's real danger (political and legal) if TEC/PB refuse to sell to a break-away parish and take a lower offer from another party. They can't cloak themselves in the mantle of fiduciary duty and then throw it away just so they can be petty. A parish leaving the supervision of TEC should get a third party to conduct a blind-bid sale on commercially reasonable terms and then make sure they have the resources to buy the building. PB couldn't do much about that: the departing vestry is meeting its fiduciary duty to any claims the TEC might have as trustees for TEC and then they still get to keep the building.Craig, I sincerely thank you for adding immeasurably to the depth of the issues discussed here, and for getting me to think (and rethink) about what I have written in earlier posts. It is for readers such as you that I put in the time and effort required to keep up this blog, and I always welcome the dialogue thereby generated. May you always feel welcome to comment here, and may the Lord's blessings be upon you, always.
Always enjoy the AC blog, but felt like I had to try and add some more background to legal side of the discussion.
Attorney-at-Law (Va, DC, MD) & Certified Public Accounting (DC)