Saturday, March 22, 2014

SC and TX Courts Show 815 Which Way the Wind Blows

In recent appellate decisions, the courts in both South Carolina and Texas have pointed to a decisive judicial rejection of the Dennis-Canon-based litigation strategy of the powers at 815 Second Avenue in New York, headquarters of what I (still) call ECUSA. If they ever choose to reassess that strategy (as the Rt. Rev. Jack L. Iker urged them to do, after his recent win against 815 in the Texas Supreme Court), in light of the fiduciary standards to which they ought to be held accountable, now would be a very good time.

In South Carolina recently (see this earlier post for background), the Court of Appeals mooted the Diocese's motion for transfer to the Supreme Court by entering an order dismissing 815's appeal outright. This was a correct decision because, as I had pointed out in the post just linked, 815 and its puppet ECSC were trying to appeal from a discovery order, which is not a final order. The Court of Appeals, citing just one case, agreed and ordered the matter back to Judge Goodstein's court for trial, which is scheduled to go forward this July:
Respondents [Episcopal Diocese of South Carolina and its member parishes] have filed a motion to dismiss this appeal, alleging the underlying order is not immediately appealable. After careful consideration, Respondents' motion is granted. See Lowndes Prods., Inc. v. Brower, 262 S.C. 431, 433, 205 S.E.2d 184, 184-85 (1974) (finding an order refusing to compel discovery not immediately appealable ).
Could 815 and ECSC try to drag out matters further by filing a petition for rehearing with the Court of Appeals? On the face of things, they should not. Rule 221 (c) of the South Carolina Appellate Court Rules states:
The appellate court will not entertain petitions for rehearing on a motion or petition unless the action of the court on the motion or petition has the effect of dismissing or finally deciding a party's appeal.
ECSC and 815 could try to renew their (rather elliptical) argument that the trial court's refusal to grant them discovery into Bishop Lawrence's emails with his attorneys spells the end of their case below, but in effect the Appellate Court's order granting the motion to dismiss was already a ruling on the merits of that argument. Thus I do not expect the clerk of the Court of Appeals will delay issuing the remittitur (the official document by which the Court returns the jurisdiction of the case to the trial court) for fifteen days, as Rule 221 instructs him to do for normal appellate judgments. And if he does not so delay its issuance, the case will be back in front of Judge Goodstein before any further petitions are, or could be, filed.

In another recent but unpublished decision, the same Court of Appeals disposed in one paragraph of an appeal by a Baptist Church Conference from a judgment finding it had no ownership or trust interest in the property of one of its churches (Haselden v. New Hope Church, No. 2012-213355, March 19, 2014) (h/t: commenter "Joe"). The per curiam opinion is self-explanatory:
The General Conference of the Free Will Baptist Church of the Pentecostal Faith ("the Conference") appeals the circuit court's order granting summary judgment in favor of New Hope Church ("New Hope") on the grounds that New Hope owned the property on which it was situated free and clear of any legal interest claimed by the Conference. We affirm pursuant to Rule 220(b), SCACR, and the following authorities: Rule 56(c), SCRCP (stating that summary judgment is proper when no genuine issue exists as to any material fact and the moving party is entitled to judgment as a matter of law); Jones v. Wolf, 443 U.S. 595, 603 (1979) (stating that when resolving disputes over the ownership of church property, courts must rely "exclusively on objective, well-established concepts of trust and property law familiar to lawyers and judges."); S.C. Code Ann. § 62-7401(a)(2) (Supp. 2013) ("To be valid, a trust of real property, created by transfer in trust or by declaration of trust, must be proved by some writing signed by the party creating the trust."); All Saints Parish Waccamaw v. Protestant Episcopal Church in the Diocese of S.C., 385 S.C. 428, 449, 685 S.E.2d 163, 174 (2009) ("It is an axiomatic principle of law that a person or entity must hold title to property in order to declare that it is held in trust for the benefit of another or transfer legal title to one person for the benefit of another.").  
Since it is unpublished, the opinion has no precedential value (i.e., it cannot be cited to any other South Carolina court), but its summary disposition is still a strong indicator of the way the wind blows in South Carolina. The Court found applicable Jones v. Wolf's holding that state courts may apply traditional concepts of trust and property law in resolving church property cases; a South Carolina statute setting out the legal requirements for a valid trust in the State; and the Supreme Court's opinion in the All Saints Waccamaw case, which ruled against a similar argument made by ECUSA and the then-EDSC. Taken together, those three authorities are all a court needs to cite in order to find a Dennis-Canon type of claim invalid and of no consequence under South Carolina law.

Meanwhile, over in Texas, we have the first appellate decision in a parish / church property dispute since the Supreme Court's ruling in the Masterson case (discussed previously here and here). In Windwood Presbyterian Church, Inc. v. Presbyterian Church (USA) and Presbytery of New Covenant, Inc., __ S.W.3d ___, 2014 WL 47750, 2014 Tex.App.LEXIS 114 (No. 01-10-00861CV, January 12, 2014), the trial court had ruled in favor of the Presbytery and PCUSA, by enforcing the latter's trust clause (equivalent to the Dennis Canon in ECUSA) so as to rule that the parish could not retain its property once it withdrew from PCUSA. The parish appealed, and in August 2012 the First District Court of Appeals affirmed the trial court's ruling, based on its analysis of what was then Texas law.

The parish applied for a rehearing and rehearing en banc (a hearing with all the justices of the Court of Appeals sitting, rather than just a three-member panel). While the decision on that petition was still pending, the Supreme Court handed down its decision in the Masterson case, which required all Texas courts to apply neutral principles, and indicated that the Dennis Canon could easily be revoked by a parish under standard Texas trust law.

In light of that ruling, the Windwood court granted the petition for rehearing, withdrew its former opinion, and drafted a new one that reversed the trial court's decision, since it had deferred to PCUSA's trust clause without applying neutral principles. The case will now go back to the trial court, where the Windwood parish may be expected to prevail on that kind of an analysis, just like the San Angelo parish in Masterson.

These appellate rulings are strong indicators of the anti-Dennis Canon atmosphere that now prevails in both Texas and South Carolina. As such, they call into serious question the wisdom of ECUSA's  (and PCUSA's) continuing to devote their religious resources to secular litigation with individual parishes and dioceses in those States. In South Carolina, as I long ago indicated, it was always going to be an uphill battle for ECUSA in light of the All Saints Waccamaw decision, and now it is evident that its chances of ever prevailing on its Dennis Canon in that State are nil.

For 815 to continue to pour money into the current property litigation in both those States is nothing less than an actionable waste of charitable resources on a purely punitive mission, and as such is a breach of fiduciary duty at the highest level. With the recent report that disciplinary charges have already been filed against the Presiding Bishop (about which more later), it seems that she wants to add fuel to the fire. This cannot turn out well -- either for ECUSA, or for the Most Rev. Katharine Jefferts Schori.


  1. And I suddenly hear crickets in the resident Dennis Canonist cheering section. Come on, fellas. ;-)

  2. Alas, ECSC has filed an appeal for a rehearing of this case.....