Thursday, March 1, 2012

"Heads We Win; Tails You Lose" -- That Sums Up the Virginia Rulings

After Judge Randy Bellows handed down his decision on January 10, awarding all of the real property of seven ACNA parishes to the Diocese of Virginia, and awarding to it also all their personal property (bank accounts, furnishings, equipment and everything else) as it existed as of the date(s) the Diocese filed suit against them, the parties began wrestling with the implications of his decision.

The Diocese of Virginia and ECUSA brought a motion for prejudgment interest on all of the moneys in the various accounts from the date(s) they brought their lawsuits. Judge Bellows denied that motion (quite properly, since the Diocese's right to those moneys was not even in play until after the appeal to and remand from the Virginia Supreme Court).

The Court asked the parties to agree on a form of its final order.  ECUSA and the Diocese wanted the ACNA parishes to vacate the properties by March 30; the parishes asked for more time, until April 30.  Yesterday, after a marathon session to resolve all outstanding issues about the final order, Judge Bellows settled on April 30 as the deadline for surrendering the properties.

Meanwhile, the ACNA parishes filed a motion for Judge Bellows to reconsider his ruling that the Diocese was entitled to be given all moneys which the parishes had on deposit as of January 31/February 1, 2007 (the dates on which the Diocese began its lawsuits against the parishes). They pointed out that long before those dates, individual parish members had been restricting their donations and pledges, so that none of the money so given could be paid to the Diocese or the national Church as part of the parishes' contributions to those entities.

They asked Judge Bellows to revise his ruling so as to take into account the individual donors' wishes, which they argued trumped the implied trusts in favor of the Diocese and ECUSA which he had found had been imposed over time on the real properties. The Attorney General of the Commonwealth of Virginia, in his capacity as overseer of all charitable operations under Commonwealth law, joined in their motion for reconsideration.

ECUSA and the Diocese filed a joint brief in opposition to the motion for reconsideration. In it, they argued (pp. 9-10):
. . . At the very most, the Congregations' evidence demonstrated only that some (apparently large) fractions of their donors did not want their contributions to benefit the Diocese or TEC. That is a far cry from "stat[ing] a specific purpose." A donor who restricts his contribution to the use of a particular orphanage in Uganda, for example, states a specific purpose, and in the hands of a donee church that is known as a restricted fund. It must be disbursed for the specific purpose for which it was donated. But the Congregations have proved, at most, that their donors made unrestricted contributions to Episcopal churches with nothing more than a hope or expectation that their donations would not benefit the Diocese or TEC - hopes or expectations that were not and could not be realized, as the work of every Episcopal church is conducted under the oversight and in furtherance of the mission and ministry of the Diocese and TEC. 
What a remarkable argument!  Note, first of all, that it is the same type of argument 815 uses to justify its raiding of ECUSA's trust funds, which donors specified were for use in "the mission of the Church", to pay for litigation expenses against the withdrawing dioceses: recovering property in a lawsuit is deemed to be in "furtherance" of the Church's "mission." And because the donors did not always use more specific language, 815 feels free to twist the purposes of their long-ago gifts to advance its own scorched-earth policies against former Episcopalians.

Note, secondly, the reason ECUSA says the ACNA donors' hopes and expectations "were not and could not be realized": because "the work of every Episcopal church is conducted under the oversight and in furtherance of the mission and ministry of the Diocese and TEC." Are Episcopalians in the pews even aware that all of their local operations are "conducted under the oversight . . . of the Diocese and TEC"?  When is the last time a Bishop or ECUSA ever had anything to say about a parish budget?  Where is the evidence of this "oversight", pray, of each of the parishes by the Diocese of Virginia -- let alone by 815?

Yet the argument carried the day with Judge Bellows. Yesterday, after a marathon session with counsel to settle the final order, he ended up denying the motion for reconsideration (para. I, p. 11).

[UPDATE 03/03/2012: One further note of irony: the final order (linked to in the paragraph above) goes through all of the elaborate steps needed to accomplish the transfers of title from the various parishes to the Bishop. These involve corporate resolutions, deeds, and petitions to the Circuit Court in each county where the parishes are located, etc. Yet, under Judge Bellows' ruling, neither ECUSA nor the Diocese had to take any formal steps whatsoever to impose on each parish property an unwritten, implied trust which resulted in the forfeiture of all parish property in the event of a vote to disaffiliate!  Once again -- go figure about how Virginia law works -- after the Virginia Supreme Court disemboweled the Division Statute, it is a crazy patchwork of rules for churches, with wholly different treatments for different denominations.]  

I am not informed of the details on the ground in Virginia.  It seems to me, however, that this ruling puts the ACNA parishes in a severe (and extremely unfair) financial bind.  For example, if they had been building up a kitty in 2006 and early 2007 in anticipation of filing petitions to withdraw and keep their properties under Virginia's Division Statue (section 57-9), then Judge Bellows says they have to account to the Diocese for all of the money that was in their bank account as of the end of January 2007!

This is regardless of the fact whether they used some of that money to pay their attorneys and other litigation expenses from 2007 on, or to pay mortgage payments on their properties (which reduced the amount of the encumbrance on what they now have to hand over to the Diocese).  If, just to use hypothetical numbers, a parish had $600,000 on hand in its bank account on February 1, 2007, and if since that date it spent all of that money on litigation and property expenses, then the parish now has to take $600,000 out of the moneys its parishioners have given it in the interim -- and which Judge Bellows has said does not have to be turned over -- and hand it over, nonetheless.

And this is regardless of whether that $600,000 as of February 1, 2007 had all been given by parishioners who had no intention of allowing the parish to send any of their money to go to the Diocese or ECUSA. (Even the Diocese conceded that a "large" fraction of the parish thought so -- and actually, the testimony at the trial was in some cases that 100% thought so.) "Doesn't matter," says Judge Bellows. "When you gave the money to the church, it was still affiliated with the Diocese and ECUSA, so from that moment forward, it was all held in an implied trust for them -- which I am now enforcing."

This argument proves too much, in my view. For the Dennis Canon says, in its second sentence (emphasis added):
The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.
Thus if the parish was deemed (notwithstanding the votes taken in 2006) a member of the Diocese and ECUSA right up until February 1, 2007 -- sufficiently for purposes of imposing an implied trust on all of its property -- then as of that date, the parish also had full power and authority to spend it as they wished, so long as it was spent on parish purposes.  Judge Bellows used the February 1 date as a cutoff for when parish members could no longer reasonably be considered as thinking they were donating to a unit of the Episcopal Church. But from the point of view of the Diocese and ECUSA, those parishes never left the Diocese or the Church -- neither as of February 1, 2007, or afterward.

It follows that if Judge Bellows is correct about his implied trust reasoning, and if the Diocese and ECUSA are correct that parishes may never leave, but only parishioners can, then the churches' use of their money after February 1, 2007 was, under the Dennis Canon's express language, fully authorized and free from any claim of trust because those churches still were a part of ECUSA, and because they spent their money on church purposes, which preserved them. (The church buildings were occupied, in ECUSA's view, by people who were no longer "Episcopalians." But that does not mean that non-Episcopalians were not authorized to write parish checks to pay parish expenses -- so long as the parishes themselves remained a part of ECUSA, as Judge Bellows held that they were.)

The occupying parishioners, as Judge Bellows recognized, were free to keep their pledges from going to ECUSA or the Diocese from and after that date, and so neither ECUSA or the Diocese has any claim on moneys contributed by the parishioners from and after February 1, 2007. But it is illogical and inconsistent to hold that the parishes could not continue to use the moneys held before that date on parish purposes, such as maintaining the buildings, paying the mortgages, and paying attorneys to defend lawsuits brought against the parish.

Those were perfectly proper uses of the funds under the Dennis Canon, and hence cannot form the basis of a claim this much after the fact.  The same result follows if the payments were regarded as "rent" for the use of the property, since paying rent for a church building is a proper use of parish money.

In other words, had ECUSA and the Diocese wanted to keep those moneys intact, they should have brought a request for an injunction against their being spent, pending the outcome of the lawsuit. That they did not do so constitutes a waiver of any claim now that the funds were not spent as permitted under church law as codified by the Dennis Canon.

I am aware that Judge Bellows held that the Dennis Canon did not create a proper trust under Virginia law. But ECUSA and the Diocese argued over and over in the Virginia litigation that the Dennis Canon merely "codified the Church's existing trust doctrine" -- i.e., expressed the terms of the implied trusts already in effect as of the Canon's presumed enactment by General Convention in 1979. So to apply the language of the Canon in this way is not in any sense contrary to what Judge Bellows held.

For ECUSA and the Diocese, the rule is obviously "Heads we win; tails you lose." The first sentence of the Dennis Canon lets them claim all of the parishes' property because they could not leave the Church, while the second sentence has to be read to mean the opposite of what it says.  The parish can certainly continue to spend its money to keep up the grounds, the buildings and the mortgage, but they are to receive no credit for having done so and having thereby ensured that the property would still be valuable and in good condition when the Diocese took over possession.

This is why I say that Judge Bellows' ruling, and the arguments made by the Diocese and ECUSA which he apparently accepted, prove too much. Logic is logic, and it is obvious that neither he nor the Diocese nor 815 bothered to think through the consequences of their reasoning.

I also fail to see why, in light of these illogical positions and the Judge's ruling adopting them, any parishioner in any Episcopal parish of Virginia would ever donate a dime to their parish again. For what they might think is theirs today, is, as we are seeing here, not theirs at all, but is wholly under the control and oversight of the Diocese and of the national Church. Never mind, of course, that the latter two refuse all liability for what may happen at the level of the parish -- you're on your own there, folks.

Because, don't you see? In Virginia, it's "heads we win; tails you lose" -- all day, all the time.


  1. Interesting take on directed donations. These sound like anti-directional (not to go to TEC or the Diocese) donations and have somehow been deemed to be non-directional (can be distributed anywhere) donations by this judge. If I were a donor I would be furious!

    I don't get it.

  2. These mutually contradictory rulings cannot be allowed to stand if the State of Virginia is not to be the laughing stock of judiciaries in the United States. Given such illogic, I should think that the SCOTUS would most certainly grant certiorari at some point if only someone with standing were to appeal, although I suspect it might first have to be upheld by the Virginia Supreme Court. I imagine that one can only hope at this juncture that justice will somehow eventually be done.

    Pax et bonum,
    Keith Töpfer

  3. A note to would-be commenter "James Dean":

    Ordinarily I have no problem putting up comments from those who disagree with what is written here -- as long as they are civil comments.

    Your submitted comment, however, and its variations for other posts in this series, will never see the light of day, at your current rate. This blog does not allow commenters to throw around terms like "bigotry" in reference to Christians who simply apply Scripture as shown in this post, or this one.