Two of the four pending court cases involving realigning dioceses had further developments this week. In Illinois, the Episcopal Church's protracted efforts to punish the Anglican Diocese of Quincy by freezing its bank accounts and suing for possession of its real property met with a resounding rebuff from the Fourth District Court of Appeals -- for the second time in two years. In California, the Anglican Diocese of San Joaquin has filed a petition with the California Supreme Court to review the inexplicably obtuse decision by the Court of Appeal in Fresno to stand by its clearly erroneous reading of California corporate law. (I will write more about the latter case in a separate post.)
As we saw earlier with the Illinois Court of Appeals, its decision yesterday is a model of clear and succinct reasoning. Anyone reading it will be able to follow what happened in the case. Briefly, the Episcopal Church (USA) and its Potemkin shell of a plaintiff diocese sued the Anglican Diocese for everything it owned, based on their claims of "hierarchy" and the permanent, irrevocable trust supposedly embodied in the Dennis Canon; they lost their case in the Adams County Circuit Court in Quincy, Illinois, as reported in this earlier post. They appealed to the Fourth District in Peoria, which affirmed Judge Ortbal's thorough and thoughtful decision, as described in this post. Then they asked the Illinois Supreme Court for leave to appeal the case to that tribunal. In November 2014, it refused, so the decision by the Court of Appeals became final.
"Final", that is, for any litigant but the David-Booth-Beers-led and trust-fund-financed Episcopal warriors: they promptly filed a new action in Peoria (not Quincy). In this complaint, they now claimed that 18% of the $3.8 million in diocesan funds, which they had managed to freeze in the previous action (by threatening the bank with a lawsuit), actually was held by the Anglican Diocese in trust for some of its member parishes -- and that under the infernal Dennis Canon, again, the Episcopal Church had the right to apply those funds for the benefit of its parishioners, who had now joined the Episcopal Diocese of Chicago. (Got that? Read it again, slowly, to absorb the outlandish nature of their claims.)
On the day before the appellate court was due to issue its mandate returning the case to Adams County, Mr. Beers and his local team wrote National City Bank again, and threatened it with a new lawsuit if it should try to disperse any of the funds held in trust for the Quincy parishes. The bank responded that all of the funds were combined in a single account, and that it had no means of telling which funds were in trust from those which were not, as that was purely an internal Diocese bookkeeping matter. Faced with the threat, however, it announced it was again freezing all the funds.
Never mind that Judge Ortbal had ruled in his (now final) decision that all of the funds in the bank belonged to the Anglican Diocese, and that neither ECUSA nor its propped-up and fast-fading "Episcopal Diocese of Quincy" had any interest in or claim to the funds. This was a brand-new claim, don't you see? The earlier case had not even considered whether any of the moneys had in fact been held in trust, rather than owned outright, by the Diocese.
The attorneys for the Anglican Diocese responded to these moves by asking the Circuit Court of Adams County for an order enforcing its judgment, unfreezing the funds, and restraining the plaintiffs from pursuing their persecutions in Peoria. Circuit Judge Mark Drummond (Judge Ortbal had retired in the interim) agreed, and specifically found that Judge Ortbal's prior decision about the ownership of the funds was now final, and could not be "collaterally attacked" in any new lawsuit. He issued the injunction, ordered the bank to release all of the funds from its freeze, and sanctioned the plaintiffs by ordering them to pay all of the attorneys' fees incurred by the Diocese of Quincy in order to enforce the (now final) judgment.
Never daunted, Mr. Beers and his team took a second appeal to the Fourth District in Peoria. And it was that Court which issued its opinion affirming the injunction, order and sanctions yesterday. Here are some choice extracts for you to savor:
¶ 18 The Church denied violating the trial court's order by sending the letter to National City. According to the Church, National City "is the one that chose to freeze the account, not [the Church]." The Church maintained although it lost, the Adams County trial court only adjudicated it had no interest in the account with regard to diocesan property. The Church argued the question of whether it had any interest in the funds held for parishes and missions was a "different animal" than what was decided in the Adams County case. The following exchange then took place between the trial court and counsel for the Church:The Court of Appeals points out that the Episcopal Church was attempting to have two bites at the apple. It litigated first the Diocese's ownership of the funds, and lost that battle. Then it came back and wanted to litigate the Diocese's trusteeship of 18% of the funds for the benefit of its individual member parishes. The trial court judge, again quoted by the Court of Appeals, found that ECUSA's attorneys missed the boat by not asking Judge Ortbal to specify the scope of his ruling:
"THE COURT: Where does it say that [in] Judge Ortbal's order? Where does it say that?
[COUNSEL]: It does not say that explicitly, Your Honor, but when looking, I cite—
THE COURT: Wouldn't it have to say that explicitly?
[COUNSEL]: No, Your Honor, because the subject matter of [that] case was diocesan property.
THE COURT: And wouldn't—if there's a mistake in Judge Ortbal's order, wouldn't you have to bring a motion to correct that?
[COUNSEL]: If there was a mistake, Your Honor.
THE COURT: Well, aren't you saying there was a mistake? It's not in there.
[COUNSEL]: I'm not saying that there was a mistake, Your Honor. What was adjudicated was diocesan—my client's interest in diocesan property."
¶ 20 At the conclusion of the hearing, the trial court found in favor of the Diocese and stated the following:And so the Court of Appeals finds that Judge Drummond decided the matter correctly:
"The court's considered the pleadings and the arguments. I am not confused. This is a very simple issue.
The court finds [the Church] is attempting to grasp victory from the jaws of defeat. Judge Ortbal's order is clear. Paragraph A, quote: [']that the Diocese House and any and all disputed funds, money, endowments[,] and accounts held by [National City] are hereby declared to be owned by the [Diocese] without any claim by the [the Church].[']
. . .
So it appears [the Church] comes in after the fact and says: [']Well, if we can't get the whole 100 percent, we want the 18 percent.['] So if *** the issue that was litigated back then was this distinction between diocesan versus parish and mission property when Judge Ortbal entered this order on October 9th, 2013, within 30 days [the Church] should have come in and said: [']Hey judge, this order is wrong. You've got to correct this. You've got to designate diocesan versus parish—parish and missions,['] and they didn't do that. * * *
I find [the Church's] position in this case to be so lacking in merit that I am assessing sanctions in this case."
¶ 33 Put simply, the trial court in the original Adams County action found the Church had no interest in any of the funds in the National City account. The Church did not file a motion to reconsider or a motion to clarify to argue the court's judgment should apply to just 82% of the funds. On appeal, we affirmed the trial court's judgment. Thereafter, the supreme court denied the Church's petition for leave to appeal. As such, the issue has been settled as a matter of law, and any relitigation is barred by the law-of-the case doctrine.
¶ 34 If the Church wished to advance its current theory of the case, it should have argued in the alternative before the trial court and on appeal. Instead, the Church chose to wait until after the trial court rendered its final judgment to file a complaint in a different county (located in a different appellate court district) advancing an alternative theory of recovery. Under the circumstances of this case, it was improper for the Church to do so. Accordingly, the trial court's judgment granting the Diocese's motion to enforce is affirmed.Alas for the Anglican Diocese and its members, this decision, satisfying as it is, still does not end all of the matters pending against them. Before they lost the first appeal, but after they had lost in the trial court, the Episcopal team of litigators filed two more actions in Illinois courts: one against an incorporated parish in Moline, seeking the funds and property it held in its own name, and the other the aforementioned suit in Peoria, seeking not just the 18% of the bank funds held in trust for parishes, but also the real property of those parishes. These cases were stayed pending the appeal from the injunction and order granted by the Adams County Circuit Court.
Now that the case will return to Adams County (assuming the Church litigators do not waste everyone's time and money with a request for leave to appeal again to the Illinois Supreme Court), the stay against those actions will be lifted, and they can proceed. However, like the claim to the moneys in the bank, the claims in these suits will not be proceeding in a vacuum. Twice now the Illinois Court of Appeals has held that ECUSA had no enforceable trust interest in property held for parishes. The first of those decisions also dealt with the ineffectiveness of the Dennis Canon to create any such trust under Illinois law. It is likely, therefore, but not certain, that these last few isolated claims will fare the same fate as the others. (No one ever made anything by trying to predict what a particular court will decide to do.)
It is nonetheless deplorable that the new Presiding Bishop of ECUSA sees fit to allow his litigators to continue to waste the Church's trust funds and pledge income on litigation for purely punitive purposes. One has to wonder, when it comes to going after realigning dioceses and parishes, just who is in charge of ECUSA after all these years. The irony is that a person who acts as his own attorney (or lets his attorney make all the decisions, which comes to the same thing) has, as those of us in the profession happily admit, "a fool for a client."
[UPDATE 05/19/2016: It appears that even Episcopalians are finally getting disgusted with the ongoing waste of precious resources on punitive litigation that has no legal merit. Today, your Curmudgeon received a copy of the following letter addressed to ECUSA's new Presiding Bishop from an attorney who is a member in good standing of a congregation in the Diocese of Chicago (which absorbed the Potemkin plaintiff "diocese", and so now finds itself liable for the sanctions imposed by the Illinois courts:
May 18, 2016Your Curmudgeon was a lifelong Episcopalian until General Convention went off the deep end, as I explained in this post. So my criticisms of ECUSA, which used to be based on my own status as a member of that denomination, once carried more weight than they do now. But my Rumpolean bowler is off to Mr. Duggan for taking such a firm and forthright stand from within. "He who has ears to hear, let him hear."]
The Rt. Rev. Michael Curry Presiding Bishop of The Episcopal Church 815 Second Avenue New York, NY 10017
Right Reverend Sir:
I write as a longtime member of the Diocese of Chicago, a lawyer in my secular vocation, an award-winning writer of devotional essays, and as a Christian who believes in the word of God, first to advise you of an adverse ruling in the Illinois Appellate Court in long-pursued litigation against the former Diocese of Quincy and second, to request your intermediation to have this Diocese and others cease and desist from further litigation over the physical property and intangible assets of those parishes or dioceses which have chosen to leave the national body.
On May 13, the Illinois Appellate Court sanctioned the Diocese of Chicago for bringing a second lawsuit after it had already lost the first one at the trial court. I do not know how much this Diocese will have to pay for the departing parishes' and diocese's legal fees, but it can be expected to be in the hundreds of thousands of dollars. That is money that comes from my pocket and that of other devoted Christians, all to pursue a legal position that is, frankly, untenable. As explained at length in the Appellate Court's opinions, the national church has been wrong on the law (insofar as it has contended that the Episcopal Church is "hierarchical"), wrong on the facts (insofar as it has contended that the Diocese has a protected property interest in the buildings and other assets), and the act of pounding on the table and arguing someone else's case has grown thin. Because of this gross mis-use of funds, I will ask my parish, Church of the Ascension in Chicago, to reduce its annual giving to the Diocese.
Regardless of the applicability of St. Paul's admonitions against Christians' use of secular courts, the scorched earth policies of your immediate predecessor should be rejected. While I believe that you do not have the authority to tell your brother and sister bishops how to run the affairs within their dioceses, you do have the power of the purse as to the use of national church funds in this foolish enterprise. I bid you to use it.
Your faithful servant,
David G. Duggan cc: The Rt. Rev. Jeffrey Lee The Rev. Patrick Raymond