National Spiritualist Ass'n of Churches, Inc. v. Cherry Valley Spiritualist Camp Ass'n, Inc.
2025 IL App (4th) 240797-U
Ill. App. Ct.2025Background
- National Spiritualist Association of Churches, Inc. (NSAC) sued Cherry Valley Spiritualist Camp Association, Inc. (Cherry Valley) for failing to surrender its assets and property after allegedly becoming defunct and surrendering its charter to NSAC in September 2021.
- NSAC’s bylaws require chartered members that become defunct or disperse to surrender records and assets to NSAC to be held in trust.
- Cherry Valley was involuntarily dissolved by the Illinois Secretary of State in January 2022 but later reinstated in October 2023.
- NSAC filed for declaratory and injunctive relief, claiming it was entitled to Cherry Valley’s assets due to the surrender of the charter and alleged defunct status; Cherry Valley disputed it was defunct when the charter was surrendered.
- The circuit court dismissed NSAC’s complaint under section 2-619, holding that Cherry Valley’s reinstatement meant it was never legally defunct and that NSAC had no vested property interest in Cherry Valley’s assets.
- The Appellate Court reversed, finding factual disputes on whether Cherry Valley was defunct and whether surrendering the charter triggered asset transfer obligations.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Whether court must defer to NSAC on religious/ ecclesiastical matters | NSAC argued court must defer to its determination under neutral principles for religious property disputes | Cherry Valley argued NSAC forfeited religious deference argument and issue is secular; NSAC itself framed issue as contractual | NSAC forfeited religious issue argument by not raising it in circuit court and by indicating dispute was contractual, not religious |
| Whether dismissal was appropriate under 2-619 due to lack of standing or no legal claim | NSAC claimed complaint raised factual issues regarding defunct status and triggering of the bylaws' trust provision | Cherry Valley claimed NSAC lacked standing and that its bylaws were not binding once Cherry Valley was no longer a chartered member or defunct | Dismissal was improper; factual disputes remain about when/if Cherry Valley was defunct and if bylaws apply; NSAC had standing |
| Whether NSAC’s bylaws require Cherry Valley to turn over property after surrendering charter | NSAC argued the act of surrendering the charter made Cherry Valley defunct and triggered turnover obligations | Cherry Valley argued surrendering the charter did not automatically make them defunct, and reinstatement meant no break in corporate existence | Factual dispute exists; court cannot find as matter of law that bylaws did or did not trigger turnover provision at the pleading stage |
| Definition and timing of "defunct" status under NSAC bylaws vs. corporate law | NSAC argued "defunct" meant not functioning or operating as a camp, as of surrender in 2021 | Cherry Valley argued "defunct" was a legal/corporate status determined by dissolution and subsequent reinstatement under state law | Not-for-profit act status is relevant but not determinative; factual issue exists as to when/if Cherry Valley was defunct as intended by parties |
Key Cases Cited
- Jones v. Wolf, 443 U.S. 595 (1979) (approved neutral principles of law approach for church property disputes, allowing civil courts to apply objective property law so long as only secular questions are involved)
- Underground Contractors Ass’n v. City of Chicago, 66 Ill. 2d 371 (Ill. 1977) (articulated standing doctrine for declaratory judgment actions)