The usual lawsuit by the Diocese ensued, joined later in a separate suit by the "new sheriff in town," the Most Rev. Katharine Jeffers Schori. Both maintained that the infamous Dennis Canon operated, under California law, to prevent the congregation from departing ECUSA with its property as its own.
The case found its way to the California Supreme Court, which triumphantly applied the Dennis Canon to conclude on demurrer -- i.e., before St. James had even answered the complaint -- that the trust imposed by the Dennis Canon overrode every other claim to the property. Since the parish was no longer a part of the Episcopal Church, it no longer had any ownership interest in the property (despite the deeds being all in its name), which the Supreme Court concluded now belonged to the Diocese.
The case had to undergo a further appeal to the California Supreme Court before it clarified its ruling to say that if the facts alleged in the complaints by the Diocese and ECUSA were proved true, then the parish would no longer own its property. Along the way, the U.S. Supreme Court declined to take cognizance of the case, no doubt because it had not yet even gone to trial.
The parish of St. James rested a huge part of its defense on the strength of a letter its donors had requested and received from the Diocese of Los Angeles, which stated (under the signature of the Bishop's right-hand aide, his Canon to the Ordinary) that the Diocese "waived" any Dennis Canon interest in the property being purchased by wealthy donors to St. James, so that it could expand its premises without worrying about any future reversionary interest.
Finally, in 2013, Orange County Superior Court Judge Kim Dunning ruled on the Diocese's and ECUSA's motions for summary judgment that the parish could not retain the property under the Dennis Canon even though the Diocese had waived the Canon's application (to at least one of the parish's parcels). She did so on the ground that because the Dennis Canon was a creation of the national Church, only the national Church could "waive" the interest it created in parish property.
Consequently, she held, the letter written by the Diocese was "ineffective" to cancel out the national Church's Dennis Canon interest. And given that conclusion, the Dennis Canon triumphed again, so that the Diocese was entitled to the real property.
After some preliminary maneuvers, the parish of St. James, in a very painful decision reached in September 2013, resolved to vacate the property, and not to take any further appeals. This left the church free for the congregation that wished to remain in the Episcopal Church (USA).
By all accounts, that congregation took over the management of the property and began, under a dedicated vicar, to grow its numbers. However, after they had been using the property for about a year, Bishop Bruno (he of the forkèd tongue, remember) announced he had sold the property to an oceanfront developer, for a rumored price of $15 million (more than twice its appraised value), who planned to raze the beautiful church buildings and put up a mixed use apartment and commercial complex on the oceanfront property.
The remnant congregation was shocked and angered by this sudden decision. Their vicar bravely filed a lawsuit in Orange County Superior Court in an attempt to block the proposed sale. It emerged from the legal documents that although the Diocese of Los Angeles had taken over title to the property after the Anglican congregation vacated the buildings, Bishop Bruno had surreptitiously arranged for the transfer of its title into his corporation sole. By definition, such a corporation has only one officer -- the sitting bishop -- and thus he can make decisions about property it holds without having to obtain approval from any other people or bodies in the Diocese.
Despite the lawsuit and protests by the congregation and others in the diocese, Bishop Bruno and his diocese went ahead with plans for the sale. The vicar said good-bye to her parish after holding her last service there just a week ago. And it looked as though the sale would proceed, even though the buyer would (in my view) have been foolish to ignore the Superior Court's ruling that only the national Church could release its Dennis Canon trust interest in the property
And now -- enter God's poetic justice. It seems that Bishop Bruno, who is as quick as any Episcopal Church diocesan to recognize a Dennis Canon interest in property when he comes across one, forgot about an earlier reversionary interest in the St. James parish property. It turns out that the original developer of the area, Griffith Company, donated in 1945 the land on which the beautiful St. James building was erected, to the Protestant Episcopal Bishop of the Diocese of Los Angeles, upon "the condition, covenant and restriction" that
The property conveyed shall be used for church purposes exclusively and no building other than a church and appurtenances shall be erected, placed or maintained thereon. The foregoing restriction shall be binding upon the [Bishop], his successors and assigns. Upon the breach of the foregoing condition, the title to said property ... shall become at once divested from the [Bishop], his successors and assigns, and shall revert and revest in the grantor [Griffith Company], its successors or assigns.Thus if Bishop Bruno carries out his plans to sell the property to the current developer, the only thing that developer could do with the property is maintain the existing church building on it (or build a brand-new one). And thus there is no way a developer would pay $15 million for land that is so encumbered.
Has Bishop Bruno taken the news like a man, and canceled the sale?
Bishop Bruno? Are you kidding? He has filed a "slander of title" lawsuit against the Griffith Company, in which he maintains that the donor released its reversionary interest in the property in 1984, when it agreed to allow three of the four original St. James parcels to be used for the construction of a church parking lot (an "ancillary" use). He claims that this act freed the property of its restriction, so that to revive the claim in 2015 amounts to denigrating the Diocese's free and clear title to the property ("slander of title").
Well, two can play at that game. One of the interesting features about a claim for slander of title under California law is that the party who prevails in the lawsuit may ask to be awarded its attorneys' fees.
So the Diocese of Los Angeles, already out of pocket some $4 to $5 million in its battle to recover the St. James property, and hoping to turn it into a neat $10 million net profit, may face still more legal costs and attorneys' fees, only to find out that the property has to remain a church after all. (Or, more likely, Bishop Bruno's lawsuit is just an opening gambit in a game that will end in a settlement to divide the loot from the property with the Griffith Company and leave the congregation out in the cold.)
Stay tuned as we follow the future developments of this most circuitous church property case in the entire history of ECUSA.