Disaffiliating Church Loses Church Buildings, But Not Trust Property

In New Hope Lutheran Ministry v. Faith Lutheran Church of Great Falls, No. DA 13-0127, 2014 WL 949393 (Mont. Mar. 12, 2014), the court, applying neutral principles of law, ruled that the rightful owner of church buildings of a congregation that chose to disaffiliate from the Evangelical Lutheran Church of America (ELCA) was the newly incorporated minority in the congregation that remained loyal to the ELCA. The church constitution required a vote by 90 percent of the congregation to transfer the property. The court found no evidence that this threshold was reached, but it reversed the lower court's decision, finding that the newly incorporated minority was also entitled to the church foundation's property by virtue of an express trust created to benefit the congregation. The court concluded that the foundation, which had as its purpose "the advancement and support of activities of Faith Lutheran Church, Great Falls, Montana" predated the church's affiliation with the ECLA. It also concluded that the foundation's organizing documents made no reference to the ECLA, and that the foundation's purpose could still be carried out.

The court rejected the disaffiliating church's arguments that: (1) the newly incorporated minority lacked standing to sue on its own behalf to vindicate rights originating under the disaffiliating church's constitution; (2) the court lacked subject matter jurisdiction over what the church described as an intra-membership ecclesiastical dispute; and (3) the constitution containing the 90 percent clause was improperly enacted. The court found that it could decide an issue where a church's governing documents were disputed as readily as a dispute arising from unambiguous governing documents as long as the resolution does not require inquiry into doctrinal matters. The court also awarded prejudgment and post-judgment interest to the newly formed corporation, but upheld the denial of attorneys' fees to the new entity.


http://www.mondaq.com/unitedstates/x/304650/Human+Rights/Religious+Institutions+Update+April+2014