March 10, 2014
Appeal from Breakaways in Virginia Denied by U.S. Supreme Court
WASHINGTON DC - The historic Falls Church in northern Virginia was one of several congregations in the Diocese of Virginia announcing its intention to leave the Episcopal Church with its property a few years ago.
Last year Virginia's Supreme Court said not-so-fast, and ruled that individual communicants could leave, but the property would stay with the Episcopal Church.
Today, the United States Supreme Court refused to hear an appeal of that decision, in effect allowing the ruling of the state's Supreme Court to become a new standard in cases around the country in which breakaway congregations are trying to leave their denominations with their property in tow.
Court's refusal to take up the Virginia case has huge implications for breakaway groups like the one in South Carolina.
Church's Dennis Canon gains
The willingness of the US Supreme Court to let the Virginia case stand is a huge victory for the Episcopal Church's so-called Dennis Canon that formalized the idea that parish property is not independently owned by congregations, but rather held in trust for the Church.
The Dennis Canon was approved by the 1979 General Convention after a number of parishes tried to leave with their properties over the ordination of women and the new Book of Common Prayer. It has become increasingly relevant in recent cases in which evangelical and anti-gay congregations have gotten the itch to take off.
The Diocese of South Carolina approved the Dennis Canon in 1987, though it enthusiastically voted to approve it at the General Convention eight years earlier.
Here's the key part of it: "All real and personal property held by or for the benefit of any Parish, Mission, or Congregation is held in trust for this Church [i.e., TEC] and the Diocese thereof in which such Parish, Mission or Congregation is located. 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."
When the Virginia Supreme Court used the Dennis Canon in its decision last fall it said ... "[W]hen one considers the constitution and canons, specifically the adoption of the Dennis Canon, and the course of dealing between the parties, The Falls Church, TEC and the Diocese intended, agreed and expected that the property at issue would be held in trust by The Falls Church as trustee for the benefit of TEC and the Diocese. As such, we find that the fiduciary relationship required to impose a constructive trust has been shown to exist."
While the Dennis Canon is only a church law, secular courts in the United States have generally deferred to such laws when there is a conflict with secular law because of the Constitutional separation of Church and State. Since the Court's 1979 ruling in Jones v. Wolf, secular courts have been allowed to adjudicate Church property cases when there was no doctrinal issues involved.
The Virginia ruling was similar to those in earlier cases in Connecticut, California, and Georgia ... and all had the same outcome when they reached the US Supreme Court.
Message to South Carolina?
The ruling by the Virginia Supreme Court is important because it is broad and addresses a number if issues that have surfaced in cases like South Carolina's.
Thanks to The Falls Church (founded in 1708), the US Supreme Court is now apparently in agreement that the Dennis Canon can apply even to parishes whose existence predates the formation of the Episcopal Church in one of its original dioceses.
"We are most gratified by the Supreme Court's ruling," said the Rt. Rev. Shannon S. Johnston, bishop of Virginia. "We look forward to the possibilities that the months ahead will bring, and continue to keep those affected by the litigation in our prayers."
"Although it breaks my heart to think of where all that money and energy could have gone, today's news is uplifting for our congregation," said the Rev. John Ohmer, rector of The Falls Church Episcopal. "My hope and prayer is that all sides can now continue to grow their communities of worship, ministries and outreach in our church homes."
Lawrence's lawsuit in trouble as it heads to trial this summer
In South Carolina ex-Bishop Mark Lawrence and 34 parishes aligned with him have spent years and millions of dollars developing a lawsuit against the Episcopal Church laying claim to parish properties and diocesan assets. At the heart of their case is the assumption that the Dennis Canon is dead in South Carolina, using essentially the same argument advanced by the breakaway congregations in Virginia.
Lawrence's lawyers are making that assumption based on a controversial 2009 decision by the South Carolina Supreme Court in the matter of All Saints' Episcopal Church on Pawleys Island.
In that case, the state's high court awarded parish property to the breakaway congregation based on a change in the parish's corporate documents and the issuance of quitclaim deed issued by the Diocese of South Carolina more than a century earlier.
The South Carolina Supreme Court said those two unique factors trumped the Dennis Canon, but did not say it was dead.
For months, Lawrence's 41-member legal team has been pushing for the opportunity to make an argument to the state's Supreme Court that the 2009 All Saints' decision should apply to all parishes in the Episcopal Church in South Carolina.
Yesterday that was a far more credible argument to make than today.
While it is unlikely the status quo at Pawleys Island will change as a result of today's decision, it does appear that the outcome of the 2009 decision by the SC Supreme Court might not be inconsistent with the Virginia ruling which takes a broader view of the Canon.
In its appeal to the US Supreme Court, the Falls Church specifically asked the question of whether a Church canon could be applied retroactively to parishes, especially if they never affirmatively accepted it or incorporated it into their governing documents.
By not accepting the appeal, the Court gave a kind of answer: See the decision handed down by your state's Supreme Court.
Thanks to Lawrence and his team, the South Carolina's Supreme Court will have a chance to undo the damage it did in 2009 in the All Saints' case. His lawsuit goes to trial in a circuit court this summer, where an appeal to the state's high court is almost guaranteed
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Is the U.S. Supreme Court sending a Message to South Carolina Breakaways?
WASHINGTON - Today’s announcement that the United States Supreme Court would not hear an appeal from a breakaway congregation in northern Virginia is likely a major red flag to ex-Bishop Mark Lawrence against the Episcopal Church and its continuing diocese in South Carolina.
The Court’s refusal to take up an appeal from the breakaway congregation at The Falls Church and let stand last year’s decision by Virginia’s Supreme Court declaring that the parish was the owner its property and buildings only as long as it was operated for the exclusive benefit of the Episcopal Church.
The key to the Virginia case was something called the Dennis Canon, and the potential ramifications for parishes in rebellion in South Carolina are huge.
Va. Supreme Court: Congregations hold property in trust for the Church
In 1979, in response to congregations trying to leave the Church over the ordination of women and its new Prayer Book, General Convention overwhelming approved a new canon (church law) establishing that all parish property in the Episcopal Church belonged to the Church. The Diocese of South Carolina was fully supportive of it, and its delegates to the Convention that year voted unanimously in its favor.
According to the Canon, congregations hold their parish’s property and buildings in trust for the Episcopal Church. If those congregations were to leave the Church or ceased to function, the property would still belong in the Church.
The Dennis Canon has been challenged in court across the country ever since it was enacted. Over the past ten years, there have been some eighty cases in which the Episcopal Church has been involved in defending itself against breakaway groups trying to get around the Dennis Canon and make off with parish property.
Critics, like those in South Carolina, have tried to gin up support for their causes by claiming that liberals in the leadership of the Episcopal Church are punishing conservative parishes and trying to take away their parish properties. In fact, just the opposite is true. Rebellious congregations tried to lay claim to parish properties and the Church was forced to defend against them in court.
While the Dennis Canon is a Church law, it has elevated status in secular courts because of the U.S. Constitution's doctrine of Separation of Church and State and the status of Churches like the Episcopal Church that are considered "hierarchical" as opposed to "congregational."
Secular courts must defer to Church law, if at its heart, the dispute is theological or doctrinal.
All Saints' decision. Most folks in the Diocese of South Carolina never really paid much attention to the Dennis Canon, until about ten years ago when All Saints’ on Pawleys Island announced it was leaving the Episcopal Church and taking its buildings and property with it.
The Diocese of South Carolina took All Saints’ parish to court, and initially was declared the owner of the parish property and buildings by a circuit court.
The ruling was complicated by a number of elements that were unique to All Saints’, but at least at that point the Dennis Canon prevailed.
However, the case was appealed to the South Carolina Supreme Court, which voted unanimously in 2009 to overturn the lower court decision, saying that the unique factors in the All Saints’ case trumped the Dennis Canon. Significantly the unique factors included changes the parish had made to its corporate bylaws and the filing of a quitclaim by the Diocese of South Carolina decades earlier.
Lawrence: All Saints' now allows breakaways to leave with their property
Over the past five years, Lawrence and his army of lawyers have maintained that the Dennis Canon does not apply in South Carolina because of the state Supreme Court opinion in the All Saints’ case. Even if it did, they argued it was created in 1979 long after the independent legal status of most parishes in the Diocese was established. Older parishes were especially protected because their pre-Revolutionary War charters from the colonial legislature predated the founding of the Episcopal Church.
The opinion in the All Saints case did not quite say that so, to buttress their position in a future lawsuit, they pressured parishes in the Diocese to make changes in their corporate bylaws consistent with those made by All Saints decades decades earlier. In 2010, Lawrence also quietly began issuing quitclaim deeds to parishes, effectively relinquishing any claim the Church may have on their property and buildings.
All that remained was for Lawrence to get himself kicked out of the Episcopal Church so he could file a lawsuit against it. That finally happened at the end of 2012.
In January 2013 Lawrence and 34 parishes and missions aligned with him filed the lawsuit against the Episcopal Church and its loyal parishes and missions that they’d been working on for years.
Using the logic of the All Saints’ case, they asked that the state courts pre-emptively declare that the Episcopal Church has no legal claim on their property. They further asked that the courts give them all the financial assets and property belonging to the Diocese of South Carolina.
The central legal premise on which the lawsuit is constructed is the assumption that the Dennis Canon does not apply in South Carolina.
This is exactly the same assumption made by the lawyers for the breakaway group at The Falls Church. The question they posed to the US Supreme Court was whether a church canon like the Dennis Canon could be retroactively applied to Church property dispute even though it was not expressly incorporated into property ownership agreements or was even consistent with state law at the time in question.
In refusing to hear the appeal, the Supreme Court said effectively it agreed with the Virginia Supreme Court when it said the answer is “yes”.
What does this mean for Lawrence’s lawsuit?
In a word it is devastating.
For years the strategy of Lawrence’s legal team is to get the South Carolina Supreme Court to rule as quickly as possible that the Dennis Canon does not apply in South Carolina and that Lawrence’s non-profit corporation known as “The Protestant Episcopal Church in the Diocese of South Carolina” and parishes aligned with it are free to leave the Episcopal Church with their buildings, property, and financial assets valued in the millions of dollars.
Now, the scheme has backfired.
They most likely will end up the state Supreme Court but they can't argue with any credibility that the Dennis Canon doesn’t apply in South Carolina after the Supreme Court just said in effect that it applies to exactly the same situation in Virginia.
In other words, they have spent years and millions of dollars creating a scenario in which the state Supreme Court most likely will affirm the validity of the Dennis Canon and apply it to the Lawrence 'diocese" and the churches aligned with it.
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