Friday, April 19, 2013

Problems with the Virginia Supreme Court's Decision

For a judge, there is nothing so safe as subscribing to precedent, particularly if you do not have to re-examine it. You simply pronounce that you are following precedent, and add an entire string of case citations to "prove" you know what you are doing.

So it is with Justice Cleo E. Powell of the Virginia Supreme Court, the author of the decision in The Falls Church v. Protestant Episcopal Church (USA), which awards all of the real and personal property of what was once the largest parish in the Diocese of Virginia to that entity. (The Diocese is unable to put the property to the full use of which it is capable -- the remnant parish cannot even fill the main chapel -- and so the multi-million-dollar property comes to it as a wholly unearned windfall. No doubt the Diocese will eventually sell the property --to any entity except the congregation from whom it seized it -- in order to recoup some of the costs incurred in fighting for it.)

In one of her first major opinions since joining the Court in 2011, Justice Powell takes refuge in a coppice of previously planted judicial underbrush to justify her quixotic result. That underbrush can conceal a multitude of judicial sins, consisting chiefly of abdications of judicial responsibility. It serves at best as a trap for the unwary, into which the tyro all too easily falls. But at its worst, as we see Justice Powell deploy her precedents in the Court's opinion, it simply grows and expands, without order or restraint.

For the congregants of The Falls Church, in Virginia, a post mortem of the decision can offer scant relief. What does it matter that the Court got it wrong, since it has the final word in that State? Like Pilate, the Court says "What I have written, I have written" -- and passes to the next case on its docket.

The Court says that Virginia is a State that follows and applies "neutral principles of law," but don't let that fool you. What exactly is so "neutral" about (a) judges creating a trust out of whole cloth that the parties themselves never formalized, so that (b) a church like ECUSA can secure a windfall for the unjust enrichment of one of its dioceses?

Justice Powell's result rests entirely upon her finding that a "fiduciary relationship" existed between The Falls Church and the national Church. But she spends no time whatsoever in examining the particulars of such a relationship, or deciding just when and how it actually came into being.

Fiduciary relationships are very special in the eyes of the law. A fiduciary is a person or entity in whom one confides (such as a client with his attorney, a patient with his psychiatrist, or a penitent with his priest) -- or it can also be a person or entity to whom one entrusts money or property, such as a client with his stockbroker or banker. Or it can simply be the trustee who holds certain property in trust for what the law calls the beneficiary of that trust -- the person for whose benefit the trust was established.

The law holds fiduciaries to the highest standards of duty of care, and of loyalty to the beneficiary (no self-dealing with the property at the beneficiary's expense). As Justice Powell cites one case authority (opinion, pp. 18-19):
It is well settled that where one person sustains a fiduciary relation to another he cannot acquire an interest in the subject matter of the relationship adverse to such other party. If he does so equity will regard him as a constructive trustee and compel him to convey to his associate a proper interest in the property or to account to him for the profits derived therefrom.
Let's unpack that quotation a bit. As Justice Powell applies it, it is saying that The Falls Church, acting as a fiduciary towards the national Church, could not "acquire" an interest in its own property that was adverse to the national Church. Supposedly, that happened when The Falls Church voted in 2006 to disaffiliate from the Diocese of Virginia -- but what did The Falls Church "do" at that point to acquire the property? It already owned it. 

Assume for a moment that in 2006 the property was held by The Falls Church as a trustee for the Diocese. Then presumably by declaring itself free of the Diocese, it attempted to make its property free of that trust. And Justice Powell concludes it could not accomplish that step without betraying its fiduciary duty to keep the property available for the use of Diocese, and those loyal to the Diocese.

All right, but what about the relationship of the Diocese to The Falls Church all the time the latter was a member of the former? Was not the Diocese a fiduciary as well, in relation to The Falls Church? Did not The Falls Church rely upon the Diocese and its bishops to uphold the "doctrine, discipline and worship of [the national] Church" as that Church received them from the mother Church of England?

And what happened to that trust? The national Church and its Dioceses breached it in 2003, and breached it further in 2006 -- well before The Falls Church ever took its vote to disaffiliate in response to those breaches of trust.

When a trustee breaches the terms of a trust, the law does not award him the property held in trust as his reward. Yes, we may assume for the purposes of argument that The Falls Church held its own property in trust for the national Church and the Diocese -- but the only reason for the creation of that trust was the undertaking, by the national Church and its Diocese, to guard and preserve the faith. So the second trust was entirely dependent on the pre-existence of the first.

And when the national Church and the Diocese breached that first trust in 2003, the reason for the  second trust ceased to exist. Justice Powell takes absolutely no notice of that crucial fact (other than to observe that there was "a long-standing conflict within TEC that arose in 2003"). For her, the second trust is the only one the law can actually enforce, since the courts cannot make a church hold true in matters of doctrine, discipline and worship. But she utterly ignores the consideration for the second trust, which was the establishment of the first trust when The Falls Church joined the denomination in 1836.

Thus even though the first trust is not civilly enforceable in the courts, it nonetheless furnished the quid pro quo for the creation of the second. And when that first trust ceased to exist, the Virginia Supreme Court had no justification for continuing to enforce the second trust. The Court should have shied away from any use of the term "trust" altogether, and told the parties that it could not enforce the property trust without assessing the failure of the consideration that had been given for its creation. That would have left the parties where the court found them.

Thus the trust analysis in Justice Powell's opinion is highly problematic, and ignores more issues than it resolves. But even how she manages to get to the second trust is an exercise in contradictory logic. Consider her chain of reasoning, which is as follows:

1. In Virginia, from its earliest times until 1993, a "hierarchical" church was prohibited from creating any trusts, express or implied, in its favor.

2. Thus the Dennis Canon, enacted in 1979, had no force or effect in Virginia at the time.

3. But in 1993, the Virginia legislature abolished that rule in part, and enacted a statute which allowed such a trust, in these words:
Every conveyance or transfer of real or personal property, whether inter vivos or by will, which is made to or for the benefit of any church, church diocese, religious congregation or religious society, whether by purchase or gift, shall be valid.
4. Even though the Dennis Canon could have no operative effect to create a trust in Virginia, it nevertheless described the relationship that had always existed between the national Church and the properties of its parishes.

5. Therefore, from and after 1993, that relationship suddenly became enforceable, and so we (the Court) will enforce it now, even if we must use a constructive trust (one created entirely by judicial decision) to do so.

Do you see the problems with that reasoning?

Look at the words of the statute that changed Virginia law, quoted above. It begins: "Every conveyance or transfer of real or personal property ...". If trusts in Virginia stand or fall by the law in effect when they were created (opinion, p. 17), then what conveyance or transfer of The Falls Church property took place after 1993 to give rise to the existence of any trust as described by the Dennis Canon?

The Court cannot have it both ways (but Justice Powell tries to do just that). Either the trust in question arose at a time when it was invalid under Virginia law, or it arose at a time when it was valid, i.e., after 1993. And to arise and be effective as declared by the statute, it had to be part of a conveyance of transfer upon terms of trust executed after that date. If it "arose" out of a course of conduct or dealing, then it does not come within the language of the statute -- and so it would remain invalid under Virginia law.

I see no way out of the corner into which the Court's faulty reasoning has painted itself. It should never have purported to try to resolve the case upon principles of trust law, because they simply do not apply to the facts. As a result of its attempt, the principles applied by the Court are anything but "neutral."

Would the Court even listen to a petition for rehearing along these lines? That is for the plaintiff's  attorneys to judge, but since it got things so wrong the first time, I doubt it will have the capacity to see its error.

"Quod scripsi, scripsi" -- to quote Pontius Pilate again. Right or wrong, the Court has spoken.


  1. Dear Curmy,

    So did any of the Falls Church legal team make the arguments you describe during the various trials?

    Despairingly yours,
    NW Bob

  2. Dear Northwest Bob, since I did not participate in any of those proceedings, I could not say for sure. However, I should also point out that Justice Powell's reasoning was not all that easy to anticipate from the briefs and the oral argument. Indeed, the fact that she felt able to publish an opinion on the lines that she did, without having to address any of the points that I raise, is a strong indication of the degree to which her ruling in this particular fashion could not have been anticipated.

    And thus it was not the litigators' fault that they could not see where the Court would go. Instead, the Court's staking out of such an indefensible position, plus the lack of prior argument addressing the issues which the Court now deems dispositive, are both indications that the Virginia Supreme Court suffered from a harmful "disconnect" in this case.

  3. So, does this mean that it is over and there is no further recourse? Is SCOTUS a possibility? Would that be a good thing? Lots of questions.

  4. Mr. Haley--The last portion of your post points out very well the obvious illogicality at the heart of this Virginia decision, a decision which strikes me as one which should be accorded a validity under the law equal to a document assembled from assorted items taken from the output of a random selection of paper shredders. Although Christians are wisely instructed to shun recourse to litigation in seeking to settle a dispute, I don't see our duty as one which involves abstention from resistance in any form and in every instance where another, or others, may seek to seize property or inflict a personal injury. An abstention of any further action on the part of those who were opposed by TEC in this matter would seem the equivalent of making an unwarranted gift in an undeserving circumstance and one which would provide the legacy of a legal "free pass" to this decision. History would surely see such a gift as one that was unwise and regrettable.

  5. Hello again. Just returned from our place in the mountains in Mexico. Spent much time trying to do the required three readings of April's inclusions. Mainly depressing.
    All entries, responses, and comments give El Gringo Viejo some sense of comfort, however.

    Two points: (1) Would it not be nice if blind purchasers who are Orthodox could stand by and bid to purchase successfully when the diocesan destroyers finally do what must be done....namely putting up elements of the old parish at Falls Church for sale? And (2) ....the point is well taken that litigation must be avoided if we follow our instructions from the ancient fathers. But was is left to us? Are we Essenes or are we Zealots? Are we on the top of Masada?
    If we are Essenes, then the only choice is turn our backs on it all and find some Roman or other Orthodox refuge that has not been ruined by homosexuality and/or Marxism and/or existing only for social impression.

    If we are Zealots, we would then become the thing that our enemies are....destroyers. The whole matter would instantly become pyrrhic.

    Masada is not an alternative.

    I trust in our Vicar. I truly am astounded and give my total admiration of his work, analysis, and care that he has for our concerns and interest. I further have either strongly concurred or totally agreed with everything he has posted since the first time I tide my horse's reins to the hitching-post in front of his place.

    We shall be remaining with you all for a bit. Good to be back.
    El Gringo Viejo

  6. El Gringo Viejo, thank you, as always. It's good to have you back among us.

    Saltmarsh Gal, as I suggested in the main article, where this case goes from here is up to The Falls Church parish and its Virginia attorneys. They can request (within 15 days, I believe) a rehearing from the Virginia Supreme Court, or they could file within 90 days a petition for writ of certiorari with the U.S. Supreme Court -- each of which has very long odds against its being granted. Or they can decide to move on, and rebuild elsewhere. May God be with them in their decision.

  7. The Virginia Supreme Court's opinion in this case confirmed my worst fears, which arose when this litigation first began over six years ago - that politics, not the law, would dictate the outcome.

    Thinking back to that time, I recall the confidence which The Falls Church and its attorneys placed in Virginia's so-called "division statute." Indeed, they prevailed based on this point during the first trial. Yet, the Virginia Supreme Court found a way to reverse that ruling, employing tortured logic to conclude that the Division Statute did not apply.

    After the second trial, the Virginia Supreme Court clearly disagreed with the core rationale that the trial judge employed to find in favor of TEC (otherwise, they could have simply affirmed that ruling). Clearly seeking some means - any means - to avoid ruling with The Falls Church, the Court took the highly unusual and manifestly unjust route of injecting issues and doctrines that no one had argued before it, then summarily denied The Falls Church's motion for rehearing in one paragraph, without explanation.

    In other words this was a political result, plain and simple. Being perceived as a cabal of right-wing knuckle-draggers, The Falls Church never had a chance (this isn't to accuse any of the Virginia Supreme Court justices of having a political agenda; instead, I'm merely observing that judges aren't immune from the very human tendency to side with the "safe" or "establishment" option, like a so-called "Mainline Church).

    I wish The Falls Church had engaged in a much more visible media campaign exposing TEC's bad faith negotiations and the assault on freedom of conscience and religious liberty which TEC's "land grabs" truly represents.

    A similar scenario has played out in appellate courts across the country over and over again. Congregations that have broken with TEC and PC(USA) may occasionally win at the trial level, but they invariably lose on appeal, regardless of the strength of the facts or the persuasiveness of the legal arguments presented. Many of these rulings draw upon a misreading of Justice Blackmun's suggestion in a 1979 U.S. Supreme Court case (he said that hierarchical churches might clarify their ownership of property by establishing express trusts but he did not say this could be done unilaterally!).

    The notion that hierarchical churches can impose unilateral trusts (thereby assuming powers that belong to no secular membership organization) fundamentally violates The First Amendment's Establishment Clause - and The Falls Church's lawyers appear to have done yeoman's work in presenting this argument. Yet, the Virginia Supreme Court invented an entirely different basis for its ruling, cleverly denying The Falls Church its most salient argument for certiorari to the United States Supreme Court.

    I pray that The Falls Church and its lawyers can find a way to file suit in U.S. District Court (perhaps a civil rights/due process lawsuit?) rather than directly petitioning the U.S. Supreme Court for certiorari, which would offer a fresh opportunity to bring the real issues at stake to the nation's attention.

  8. An excellent summary of over five years' worth of litigation, David Host. Thank you for offering it to the readers here at AC. I continue in prayers for the health and prosperity of The Falls Church, and humbly suggest that others do likewise.