THE FALLS CHURCH, a/k/a THE CHURCH AT THE FALLS - THE FALLS CHURCH v. THE
Record No. 120919
SUPREME COURT OF VIRGINIA
April 18, 2013
JUSTICE CLEO E. POWELL
PRESENT: Kinser, C.J., Goodwyn, Millette, McClanahan and Powell, JJ., and Koontz and Lacy, S.JJ. FROM THE CIRCUIT COURT OF FAIRFAX COUNTY, Randy I. Bellows, Judge
This appeal has its origin in a protracted and complex dispute between the plaintiffs, the Protestant Episcopal Church in the Diocese of Virginia (the “Diocese“) and the Protestant Episcopal Church in the United States of America (“TEC“), and the defendants, seven local congregations including The Falls Church, the appellant in the present case. In this appeal, we are asked to consider whether the trial court properly applied neutral principles of law in deciding the ownership of certain disputed church property, whether that application was constitutional, and whether the trial court, after applying neutral principles of law, granted the proper relief. In their assignment of cross-error, TEC and the Diocese ask us to consider whether the trial court erred in its application of
I. BACKGROUND
Many of the facts in this case were related in exacting detail in prior proceedings before this Court. See Protestant Episcopal Church v. Truro Church, 280 Va. 6, 694 S.E.2d 555 (2010). Therefore, due to the extensive nature of the proceedings below, we will recite only the facts necessary for our resolution of the dispositive issues in this case.
The Falls Church was founded in 1732 as one of two congregations in Truro Parish. Construction of a church on the property conveyed to the parish was completed in 1769. TEC is a hierarchical denomination founded in 1789. Id. at 13, 694 S.E.2d at 558. The Diocese is one of the geographical dioceses within TEC. Id. at 15, 694 S.E.2d at 559. Although it existed prior to the founding of TEC or the Diocese, The Falls Church petitioned to be a part of the Diocese and TEC in 1836. At the 1836 Annual Convention, the Diocese accepted The Falls Church‘s petition.
Following a long-standing conflict within TEC that arose in 2003, the congregation of The Falls Church overwhelmingly voted to disaffiliate from TEC and the Diocese on December 17, 2006. The Falls Church and six other congregations in the Diocese (collectively the “CANA congregations“) subsequently filed petitions pursuant to
Shortly after the CANA congregations filed their petitions, TEC and the Diocese filed complaints asserting that all personal and real property held by the CANA congregations was actually held in trust for TEC and the Diocese. In their complaint, TEC and the Diocese asserted that they directed the trustees of the CANA congregations to transfer the property to the Diocesan Bishop, but the CANA congregations had refused to do so. Both complaints requested that the CANA congregations be ordered to submit an accounting, be enjoined from further use, occupancy or alienation of the disputed property, and convey and transfer control of the property to the Diocesan Bishop. The complaint filed by the Diocese further requested that the trial court enter judgment declaring an improper trespass, conversion and alienation of real and personal property. The CANA congregations filed a counterclaim seeking a declaration that TEC and the Diocese had no interest in the disputed property occupied by the CANA congregations, and asserting claims for unjust enrichment and for imposition of a constructive trust.
After a trial on the congregations’
On remand, the trial court considered the complaints filed by TEC and the Diocese as well as the counterclaims filed by the CANA congregations. Following a 22-day trial, the trial court ruled that TEC and the Diocese had contractual and proprietary interests in the property at issue, and enjoined the CANA congregations from further use of the
In a 113-page letter opinion, the trial court articulated its analysis of the dispute. The trial court explained that it applied neutral principles of law by considering our statutes, the language of the deeds conveying the disputed property, the constitution and canons of TEC and the Diocese, and the dealings between the parties. See Green v. Lewis, 221 Va. 547, 555, 272 S.E.2d 181, 185-86 (1980) (“we look to our own statutes, to the language of the deed conveying the property, to the constitution of the general church, and to the dealings between the parties“); Norfolk Presbytery v. Bollinger, 214 Va. 500, 505, 201 S.E.2d 752, 756-57 (1974) (“it is proper to resolve a dispute over church property by considering the statutes of Virginia, the express language in the deeds and the provisions of the constitution of the general church“).
In considering the applicable statutes, the trial court found that the adoption of
Turning to its examination of the relevant deeds, the trial court considered the eleven deeds connected with The Falls Church. In 1746, the first deed conveyed two acres to “the said Vestry of Truro parish.” The second deed is to the “trustees of the Episcopal Church, known and designated as the ‘Falls Church.‘” The third deed is to “Trustees for the Falls Church Episcopal Church,” and the fourth is to “Trustees of the Falls Church.” The fifth and sixth deeds are both to “Trustees of The Falls Church, Falls Church, Virginia.” The seventh through eleventh deeds are all to “Trustees of the Falls Church (Episcopal).” The trial court found that the fact that most of the deeds refer to the church as Episcopal was an indication that the designated cestui que trust was a unit or component of TEC. Relying on the circumstances of the times during which the deeds were executed, the trial court found that a reasonable grantor would have understood that property conveyed to a local Episcopal church would not be removed from the denomination without TEC‘s or the Diocese‘s consent.
In looking at the constitution and canons of the church, the trial court cited provisions stating that each congregation was bound by the constitution and canons of the general church and must acknowledge the jurisdiction of the Bishop; all clergy must affirm they “conform to the Doctrine, Discipline, and Worship of the Episcopal Church” to be ordained; all congregations use the Book of Common Prayer; Bishops must regularly visit parishes to examine the state of the churches; and congregations must participate in the Diocesan health care plan, contribute to the Church Pension Fund, and purchase fire, casualty and workers’ compensation insurance. The trial court also noted property canons which prohibited the congregations from alienating consecrated property without the consent of the Diocese and allowed the Diocese to declare property abandoned if it ceased to be used by a congregation of TEC and the Diocese. The trial court concluded that TEC and the Diocese exercised pervasive dominion, management, control, supervision and authority over local church property, in a manner traditionally associated with ownership and possession.
Finally, in considering the course of dealings between the parties, the trial court cited the fact that the churches became members of TEC and the Diocese in accordance with the rules of the Diocese, were known in the community as Episcopal churches, sought consent from the Diocese to encumber property, were served by ordained Episcopal priests, used the Book of Common Prayer, contributed financially to the Diocese and the Church Pension Fund and were visited every year between 1934 and 2005 by the Bishops of the Diocese.
Based on its consideration of neutral principles of law and examination of our statutes, the deeds, the constitutions and canons, and
The trial court further stated that there was a point in time after which it was clear that donations by members of the CANA congregations were not contributions to Episcopal congregations. Therefore, the trial court adopted the date TEC and the Diocese filed the declaratory judgment actions, January 31, 2007, as the proper “point of demarcation,” and ordered that all personal property acquired before that date be conveyed to the Diocese and all intangible personal property acquired after that date remain with the CANA congregations. Tangible personal property acquired after that date would be conveyed to the Diocese unless the CANA congregations could demonstrate that it was purchased with funds acquired after the date.
The Falls Church appeals.1 TEC and the Diocese cross-appeal the trial court‘s ruling with regard to
II. COURT REVIEW OF CHURCH PROPERTY DISPUTES
The primary issue in this case is whether TEC and the Diocese have a proprietary interest in the real and personal property that was held by The Falls Church. See
The trial court erred in enforcing canon law, rather than “principles of real property and contract law” used in all cases, to award [TEC and the Diocese] a proprietary interest in [The Falls Church‘s] property and to extinguish [The Falls Church‘s] interest in such property, even though [The Falls Church‘s] own trustees held title and [The Falls Church] paid for, improved, and maintained the property.
Although it has been recognized that “the First Amendment severely circumscribes the role that civil courts may play in resolving church property disputes,” Presbyterian Church in the United States v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U.S. 440, 449 (1969), it is well established that “there is no constitutional prohibition against the resolution of church property disputes by civil courts, provided that the decision does not depend on inquiry into questions of faith or doctrine.” Norfolk Presbytery, 214 Va. at 503, 201 S.E.2d at 755.
“Civil courts do not inhibit free exercise of religion merely by opening their doors to disputes involving church property. And there are neutral principles of law, developed for use in all property disputes, which can be applied without ‘establishing’ churches to which property is awarded.” Neither the State Constitution nor the First Amendment deprives church members of their right to resort to the courts for the protection of their property rights or their civil rights. The question is simply whether the court can decide the case by reference to neutral principles of law, without reference to issues of faith and doctrine.
Reid v. Gholson, 229 Va. 179, 187-88, 327 S.E.2d 107, 112 (1985) (citations omitted).
In Jones v. Wolf, 443 U.S. 595, 602 (1979), the United States Supreme Court held that “‘a State may adopt any one of various approaches for settling church property disputes so long as it involves no consideration of doctrinal matters, whether the ritual and liturgy of worship or the tenets of faith‘” (quoting Maryland & Va. Churches v. Sharpsburg Church, 396 U.S. 367, 368 (1970) (Brennan, J., concurring) (emphasis
The primary advantages of the neutral-principles approach are that it is completely secular in operation, and yet flexible enough to accommodate all forms of religious organization and polity. The method relies exclusively on objective, well-established concepts of trust and property law familiar to lawyers and judges. It thereby promises to free civil courts completely from entanglement in questions of religious doctrine, polity, and practice. Furthermore, the neutral-principles analysis shares the peculiar genius of private-law systems in general - flexibility in ordering private rights and obligations to reflect the intentions of the parties.
As part of its explanation of the neutral principles of law, the Supreme Court noted that:
Under the neutral-principles approach, the outcome of a church property dispute is not foreordained. At any time before the dispute erupts, the parties can ensure, if they so desire, that the faction loyal to the hierarchical church will retain the church property. They can modify the deeds or the corporate charter to include a right of reversion or trust in favor of the general church. Alternatively, the constitution of the general church can be made to recite an express trust in favor of the denominational church. The burden involved in taking such steps will be minimal. And the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form.
Virginia has long applied neutral principles of law when there is a dispute between a hierarchical church and a local congregation over the ownership of church property. See Reid, 229 Va. at 188, 327 S.E.2d at 112; Green, 221 Va. at 555, 272 S.E.2d at 185; Norfolk Presbytery, 214 Va. at 507, 201 S.E.2d at 758. We have held that the hierarchical church bears the burden of proving a proprietary interest2 in the property at issue by demonstrating that the local congregation violated either “the express language of the deeds or a contractual obligation to the general church.” Norfolk Presbytery, 214 Va. at 507, 201 S.E.2d at 758. In resolving church property disputes, we have
heretofore specifically limited our consideration to certain aspects of property and contract law. This limitation was necessitated only by the fact that, in Virginia, hierarchical churches were prohibited from relying on denominational trusts, whether express or implied. See Green, 221 Va. at 555, 272 S.E.2d at 185; Norfolk Presbytery, 214 Va. at 507, 201 S.E.2d at 758.
However, in their assignment of cross-error, TEC and the Diocese argue that the plain language of
A. CODE § 57-7.1
We have long recognized that, for the most part, express and implied trusts for hierarchical churches “are invalid under Virginia law.” Norfolk Presbytery, 214 Va. at 507, 201 S.E.2d
at 754. However, this limitation on denominational trusts is a creature of statutory law and, therefore, it is within the
In reviewing
in the area in which it dealt.” Philip Morris USA Inc. v. Chesapeake Bay Found., Inc., 273 Va. 564, 576, 643 S.E.2d 219, 225 (2007). Finally, “statutory construction is a question of law which we review de novo.” Smit v. Shippers’ Choice of Va., Inc., 277 Va. 593, 597, 674 S.E.2d 842, 844 (2009).
Former
religious congregation.” (Emphasis added.) In this context, this Court has previously explained that the phrase “religious congregation” was limited, meaning “the local congregation rather than a larger hierarchical body.” Norfolk Presbytery, 214 Va. at 506, 201 S.E.2d at 757.
However, in 1993, the General Assembly repealed
diocese for certain residential purposes.” Norfolk Presbytery, 214 Va. at 506, 201 S.E.2d at 757-58. Thus, notwithstanding Virginia‘s long history of invalidating trusts for hierarchical churches, the General Assembly has expressly allowed such trusts with the passage of
B. EXISTENCE OF A TRUST
Having determined that the property could be subject to a denominational trust, we now examine what effect, if any,
Court‘s recognition that “the constitution of the general church can be made to recite an express trust in favor of the denominational church.” Jones, 443 U.S. at 606.
We have previously explained that, “unless the language shows a contrary intent, the language of an inter vivos trust should be construed according to the law in effect at the time the trust is executed.” McGehee v. Edwards, 268 Va. 15, 20, 597 S.E.2d 99, 102 (2004) (emphasis added); see also Yancey v. Scales, 244 Va. 300, 303, 421 S.E.2d 195, 196 (1992); Wildberger v. Cheek, 94 Va. 517, 520, 27 S.E. 441, 442 (1897). In 1979, when the Dennis Canon was enacted, former
Our analysis does not end here, however. Our holding in McGehee was clearly limited to express trusts. Therefore, we next examine whether the property was subject to an implied trust. Virginia has recognized two forms of implied trusts: resulting and constructive. See Leonard v. Counts, 221 Va. 582, 588, 272 S.E.2d 190, 194 (1980) (“Resulting and constructive trusts comprise two categories of trusts by operation of law arising without any express declaration of trust.“). A resulting trust “arises when prior to the purchase one person binds himself to pay purchase money and stands behind his commitment, but title is conveyed to another.” Id. at 588, 272 S.E.2d at 195. It is readily apparent that the record in the present case does not support the existence of a resulting trust.
Constructive trusts, on the other hand, are trusts “which the law creates, independently of the intention of the parties, to prevent fraud or injustice.” Id.
Certain species of constructive trusts arise from actual fraud; many others spring from the violation of some positive fiduciary obligation; in all the remaining instances there is, latent perhaps, but none the less real, the necessary element of that unconscientious conduct which equity calls constructive fraud.
Porter v. Shaffer, 147 Va. 921, 929, 133 S.E. 614, 616 (1926) (citation and internal quotation marks omitted) (emphasis in original); see also Leonard, 221 Va. at 590, 272 S.E.2d at 196 (“‘[N]ot . . . all constructive trusts are based on “fraud“, unless that word is used in its broadest sense to include all conduct which equity treats as unfair, unconscionable and unjust‘“) (quoting George G. Bogert, The Law of Trusts and Trustees § 471, at 22-23 (2d ed. rev. 1978)).
Moreover,
[i]t 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.
Horne v. Holley, 167 Va. 234, 240, 188 S.E. 169, 172 (1936).
Notably, constructive trusts “will not arise until explicitly created by a court.” David A. Thomas, 3 Thompson on Real Property § 27.04(g)(1)(i) (David A. Thomas, ed., 2d ed. 2001 & Supp. 2012). A “court‘s action creating a constructive trust will relate back to the time when the property began to be wrongfully held.” Id. As previously discussed,
Thus, the existence of a constructive trust in the present case turns on the nature of the relationship between the parties. To determine the nature of the relationship between a local congregation and a hierarchical church, we look to the articles of religious governance8 of the hierarchical church as
well as the course of dealing between the local congregation and the hierarchical church.
1. ARTICLES OF RELIGIOUS GOVERNANCE
In the present case, we need look no further than the Dennis Canon to find sufficient evidence of the necessary fiduciary relationship. As a number of courts in other states have noted, the Dennis Canon “merely codified in explicit terms a trust relationship that has been implicit in the relationship between local parishes and dioceses since the founding of [TEC] in 1789.” Rector, Wardens & Vestrymen of Trinity-St. Michael‘s Parish, Inc. v. Episcopal Church, 620 A.2d 1280, 1292 (Conn. 1993); see also Episcopal Diocese of Mass. v. DeVine, 797 N.E.2d 916, 924 n. 21 (Mass. App. Ct. 2003) (“the Dennis Canon merely confirmed the preexisting relationship between [TEC], its subordinate dioceses, and the parishes thereunder.“); Trustees of the Diocese of Albany v. Trinity Episcopal Church, 684 N.Y.S.2d 76, 81 (N.Y. App. Div. 1999) (“the ‘Dennis Canon’ amendment expressly codifies a trust relationship which has implicitly existed between the local parishes and their dioceses throughout the history of the Protestant Episcopal Church.“); Bishop & Diocese of Colorado v. Mote, 716 P.2d 85, 105 n. 15 (Colo. 1986) (“the [Dennis Canon] did nothing but confirm the relationships existing among [TEC], the diocese and the
parish“); Protestant Episcopal Church in the Diocese of New Jersey v. Graves, 417 A.2d 19, 24 (N.J. 1980) (“[The Dennis Canon] reflects established customs, practices and usages of The Protestant Episcopal Church.“).The Falls Church has argued in this case that it was not bound by the canons, including the Dennis Canon, as there is no evidence of mutual assent by The Falls Church with regard to TEC and the Diocese having any rights to the property. As this argument relates to the nature of the relationship between the parties, we will address it here.
We begin by observing that the relationship created by a local church‘s decision to join a hierarchical church is analogous to a contractual relationship. See, e.g., Norfolk Presbytery, 214 Va. at 507, 201 S.E.2d at 758 (recognizing that courts are not “powerless to prevent a hierarchical church from being deprived of contractual rights in church property held by trustees of a local congregation“).9 Therefore, to determine the issue
of [the parties‘] intentions which are communicated between them.” Lucy v. Zehmer, 196 Va. 493, 503, 84 S.E.2d 516, 522 (1954) (internal quotation marks omitted). Here, the record clearly establishes that The Falls Church has affirmatively assented to the constitution and canons. Upon joining TEC and the Diocese in 1836, The Falls Church agreed to “be benefited and bound . . . by every rule and canon which shall be framed, by any Convention acting under this constitution, for the government of this church in ecclesiastical concerns.” Moreover, The Falls Church‘s Vestry Manual states “The Falls Church is subject to the constitution and canons of the national church ([TEC]) and of the Diocese.” (Emphasis added.) Thus, contrary to its argument, it is clear that The Falls Church agreed to be bound by the constitutions and canons of both TEC and the Diocese.
Similarly, The Falls Church‘s argument that TEC and the Diocese acted in a unilateral manner in passing certain canons is without merit. The record demonstrates that the adoption of the canons is hardly “unilateral.” The triennial General Convention, the highest governing body of TEC, adopts TEC‘s constitution and canons. The General Convention is composed of representatives from each diocese. The legislative body of each diocese (referred to in Virginia as the “Annual Council“) selects the representatives that are sent to the General
Convention. The Annual Council is composed of representatives from each of the churches and other congregations within the Diocese. Thus, it is clear that each canon, including the Dennis Canon, is enacted through a process resembling a representative form of government.
Moreover, even if the implementation of the canons were unilateral, “religious freedom encompasses the ‘power [of religious bodies] to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.‘” Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S. 696, 721-22 (1976) (quoting Kedroff v. St. Nicholas Cathedral, 344 U.S. 94, 116 (1952)). Thus, even if implementation of the Dennis Canon was unilateral, this Court would be powerless to address any issues of inequity wrought thereby, as to do so would involve judicial interference with religion and clearly violate the First Amendment.10
2. COURSE OF DEALING
Turning to the course of dealing between the parties, the record clearly demonstrates that The Falls Church allowed the Diocese to play an active role in its overall operations. Indeed, the trial court found that on at least two occasions, the Diocese vetoed the employment of clergy at The Falls Church and The Falls Church complied with the decision; Bishops of the Diocese and other Bishops within TEC have visited The Falls Church every year between 1934 and 2005; and the vestry members of The Falls Church have regularly “subscribed to the oath or declaration prescribed by Diocesan Canons.” It is worth noting that The Falls Church actively participated in the Diocese, having sent representatives to the Annual Convention every year for at least 100 years (1909-2010).
In conclusion, neither TEC nor the Diocese can claim a proprietary interest in the property by way of an express denominational
yet still maintain the property represents a violation of its fiduciary obligation to TEC and the Diocese. Therefore, equity dictates that a constructive trust be imposed on the property for the benefit of TEC and the Diocese.
III. PROPERTY AWARDS
In its remaining assignments of error, The Falls Church asserts that, notwithstanding the method of determining the ownership of the property, the trial court‘s property award was in error. These arguments are independent of the trial court‘s application of the neutral-principles analysis and our constructive trust determination; therefore, we will address them.
A. CONSTITUTIONALITY
In its second assignment or error, The Falls Church argues that “[t]he trial court‘s award of [The Falls Church‘s] property to [TEC and the Diocese] violates the Religion Clauses of the U.S. and Virginia Constitutions by enabling denominations to secure others’ property by means available to no other Virginia entity.” The essence of The Falls Church‘s argument is that the method of resolving a property ownership dispute between a hierarchical church and a local church is unconstitutional. In light of the fact that the trial court‘s analysis and the existence of denominational trusts rely on the application of neutral principles of law, which has been specifically upheld by
the United States Supreme Court in Jones, 443 U.S. at 602-03, we must disagree with The Falls Church. So long as the dispute was resolved in a wholly secular manner through the use of neutral principles of law, as it was in the present case, we cannot say that the trial court committed constitutional error.
B. PROPERTY ACQUIRED BEFORE 1904
The Falls Church next takes issue with the trial court‘s finding that the Diocese and TEC “had proprietary interests in [The Falls Church‘s] real property acquired before 1904, when the legislature first referenced denominational approval of church property transfers.” Specifically, The Falls Church argues that the trial court erred by “retroactively applying laws and canons not in force when [The Falls Church] acquired its initial property or when it joined the denomination.” The Falls Church claims that the trial court ruled that the 1904 amendment to
In light of our above ruling, we no longer need to consider this issue, as this case is governed by
court did not hold that
Furthermore, The Falls Church‘s interpretation of
C. UNCONSECRATED PROPERTY
The Falls Church next argues that the trial court erred in deciding to award the Diocese and TEC the unconsecrated property held by The Falls Church. According to The Falls Church, it was incorrect for the trial court to rely upon TEC‘s canons to determine ownership of unconsecrated real property. The Falls Church contends that the canons only apply to consecrated
property, therefore, it was improper for the trial court to apply them to any unconsecrated property. However, The Falls Church never raised this argument before the trial court and therefore we will not consider it here. See Rule 5:25 (“No ruling of the trial court . . . will be considered as a basis for reversal unless an objection was stated with reasonable certainty at the time of the ruling“).
D. PERSONAL PROPERTY
In its fifth assignment of error, The Falls Church argues that
[t]he trial court erred in awarding [The Falls Church‘s] personal property to [TEC and the Diocese] - even though [TEC and the Diocese] never had any control over [The Falls Church‘s] funds or their use, and [The Falls Church‘s] donors, for religious reasons, gave on the express condition that their gifts not be forwarded to [TEC and the Diocese] - in violation of
Va. Code § 57-1 and the Religion Clauses of the U.S. and Virginia Constitutions.
The Falls Church asserts that the trial court failed to require TEC to prove an interest in the personal property of The Falls Church. The Falls Church contends that the trial court ignored the evidence that its use of its funds was discretionary, as demonstrated by the fact that TEC had no enforcement system. Thus, according to The Falls Church, TEC had no dominion over the personal property of The Falls Church.
In making its ruling, the trial court relied exclusively on
When personal property shall be given or acquired for the benefit of an unincorporated church or religious body, to be used for its religious purposes, the same shall stand vested in the trustees having the legal title to the land, to be held by them as the land is held, and upon the same trusts . . . .
(Emphasis added.)
In light of our above ruling recognizing the existence of a constructive denominational trust, it is clear that any contributions or donations or payments of membership dues made to The Falls Church would also be held in trust for the benefit of TEC and the Diocese. Indeed, the existence of such a trust is further demonstrated when
The Falls Church further argues that the trial court failed to properly consider the donative intent of the congregants. The Falls Church relies on the fact that, starting in 2003, The
Falls Church‘s vestry decided it would no longer give money to TEC or the Diocese. The congregants were informed that they could contribute directly to TEC and the Diocese if they wished. According to The Falls Church, any contributions or donations made to The Falls Church after 2003 must be viewed as demonstrating the congregants’ donative intent to support only The Falls Church and not TEC or the Diocese. The Diocese counters that The Falls Church can only prove donative intent by tracing the source of the donations and contributions to specific donors/contributors.
establishes that it was exercising the discretion granted to it by TEC and the Diocese.
E. RELIEF SOUGHT
In its final assignment of error, The Falls Church asserts that “[t]he trial court erred in awarding [TEC and the Diocese] more relief than sought, including funds given after [The Falls Church] disaffiliated and funds spent on maintenance, which [TEC and the Diocese] stipulated [The Falls Church] should keep.” According to The Falls Church, the Diocese and TEC only sought the real and personal property The Falls Church acquired prior to disaffiliation. The trial court, however, ordered The Falls Church to turn over funds it acquired after it had disaffiliated from TEC and the Diocese.
In its letter opinion, the trial court identified four points in time which it considered as the potential demarcation point at which The Falls Church became an entirely separate entity from the Diocese and TEC: (1) when The Falls Church began withholding contributions to the Diocese; (2) when The Falls Church voted to disaffiliate; (3) when the Diocese declared that the property was abandoned; or (4) when the Diocese filed its declaratory judgment action. Ultimately, the trial court determined that the date that the Diocese filed its declaratory judgment action against The Falls Church was the proper demarcation point, explaining that “[a]fter this date, no
contribution made, no donation made, no dues paid by a congregant, could reasonably have been made with the understanding that the money was going to [an] Episcopal congregation[].” This was error on the part of the trial court.
As we have previously indicated, The Falls Church‘s decision to withhold donations and contributions to the Diocese and TEC was clearly within The Falls Church‘s discretion and, ultimately, had no bearing on The Falls Church‘s standing as an Episcopal Church. Similarly, the filing of the declaratory judgment action had no bearing on The Falls Church‘s standing as an Episcopal Church, as both parties had already taken affirmative steps that clearly indicated that The Falls Church was not an Episcopal Church: The Falls Church had voted to disaffiliate and the Diocese had declared that the CANA congregations had “severed ties with the Episcopal Church and the Diocese of Virginia.”
Thus, the proper demarcation point is either when The Falls Church voted to disaffiliate or when the Diocese declared that the property was abandoned. The trial court, in its letter opinion, correctly explained that once a congregation votes to disaffiliate from a hierarchical church, that congregation no longer has any rights or interest in any property owned by the
general church.12 A necessary corollary is that once a congregation votes to disaffiliate from a hierarchical church, the hierarchical church no longer has any rights or interest in any
Furthermore, as the trial court noted, the vote to disaffiliate necessarily renders the Diocese‘s abandonment declaration a nullity, as the declaration:
did not “extinguish” the CANA Congregations’ “interest” in the seven church properties,
This ruling expressly contradicts the trial court‘s earlier statement that the act of disaffiliation eliminated The Falls Church‘s interest in the property. Additionally, nothing in our jurisprudence supports the notion that a congregation must receive court approval to disaffiliate. Indeed, such a requirement would clearly amount to unconstitutional judicial interference.
for the CANA Congregations are not in authorized possession of Episcopal church property and, therefore, have no “interest” in the properties capable of being extinguished.
(Emphasis in original.)
Therefore, we agree that the trial court awarded more relief than TEC and the Diocese sought. Accordingly, we will remand this issue to the trial court to reconsider its award using the date The Falls Church voted to disaffiliate as the proper demarcation point.
IV. CONCLUSION
For the foregoing reasons we will reverse the judgment of the trial court with regard to its analysis of
Affirmed in part,
reversed in part, and remanded.
JUSTICE McCLANAHAN, concurring.
I agree with the majority as to its disposition of the property awards in section III. I write separately as to the majority‘s neutral-principles analysis in section II, however, because I believe TEC and the Diocese acquired their interest in the disputed church property, not merely by a constructive trust, but rather by an express trust pursuant to the Dennis Canon, as TEC and the Diocese have consistently argued throughout this case.1
After holding that Virginia now allows trusts for hierarchical churches under
the Dennis Canon. In my opinion, that assumption is incorrect. Under First Amendment law, the prohibition of the enforcement of an express trust under former
when the subject deeds were executed, as the statute violated both the United States and Texas Constitutions); Dunn v. Pate, 431 S.E.2d 178, 179-83 (N.C. 1993) (In an action instituted in 1989, the North Carolina Supreme Court held that private examination statutes repealed in 1977 were unconstitutional in 1962 when the subject deed was executed, as the statutes violated both the United States and North Carolina Constitutions).
The manifest problem with former
This was accomplished by use of Virginia‘s long-accepted but ultimately unconstitutional construction of the term “religious congregation” in former
Such application of former
that solicited more than fifty percent of their funds from nonmembers worked a “denominational preference” in violation of the First Amendment); Fowler v. Rhode Island, 345 U.S. 67, 69-70 (1953) (holding that a municipal ordinance violated the First Amendment when applied to prohibit preaching in a public park by a Jehovah‘s Witness but to permit preaching during the course of a Catholic mass or Protestant church service). The Supreme Court has called this constitutionally
This command for government neutrality among religious groups or denominations was thus well established in the law when the United States Supreme Court decided Jones v. Wolf, 443 U.S. 595 (1979). In Jones, the Court addressed the question of how, consistent with the First Amendment, a state court may resolve a dispute between a hierarchical church and one of its local church affiliates over the ownership of church property. Id. at 597. In doing so, the Court directed that “[a]t any time before the dispute erupts” the parties could “ensure” a resolution of the matter by, inter alia, making the denomination‘s governing documents “recite an express trust in favor of the denominational church.” Id. at 606. “[C]ivil courts will [then] be bound to give effect” to such provisions. Id.
Relying on Jones, TEC enacted the Dennis Canon at its 1979 General Convention (just months after Jones was decided). With this canon, TEC created an express trust for the benefit of it and its Dioceses as to all the property then being held by or for the benefit of its local parishes, missions and congregations, specifically providing, in relevant part: “All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for [TEC] and the Diocese thereof in which such Parish, Mission or Congregation is located.”
Based on TEC‘s enactment of the Dennis Canon pursuant to the directive in Jones along with the neutrality rule dictated under the First Amendment, the express trust created by the Dennis Canon could not be invalidated under Virginia law by former
I would therefore hold that former
Volkswagen of Am., Inc. v. Smit, 279 Va. 327, 336, 689 S.E.2d 679, 684 (2010) (“Because our jurisprudence favors upholding the constitutionality of properly enacted laws, we have recognized that it is possible for a statute . . . to be facially valid, and yet unconstitutional as applied in a particular case.“). Accordingly, the statute‘s prior application to other circumstances would remain unaffected by holding it unconstitutional as applied to trusts benefiting hierarchical churches. See Women‘s Med. Prof‘l Corp. v. Voinovich, 130 F.3d 187, 193 (6th Cir. 1997) (explaining that “[i]f a statute is unconstitutional as applied, the State may continue to enforce the statute in different circumstances where it is not unconstitutional“).
Having reached these conclusions, I would join the other courts that have determined that the Dennis Canon established an express trust for the benefit of TEC and its Dioceses in their respective states in the context of the nationwide church property dispute between TEC, its Dioceses and local Episcopal congregations. See Protestant Episcopal Church in the Diocese of Tennessee v. St. Andrew‘s Parish, 2012 Tenn. App. LEXIS 274, at *35-41 (Tenn. Ct. App. 2012); Episcopal Church in the Diocese of Conn. v. Gauss, 28 A.3d 302, 318-28 (Conn. 2011); Episcopal Church Cases, 198 P.3d 66, 82 (Cal. 2009); Episcopal Diocese of Rochester v. Harnish, 899 N.E.2d 920, 922-25 (N.Y. 2008); In re
Church of St. James the Less, 888 A.2d 795, 807-10 (Pa. 2005); Episcopal Diocese v. DeVine, 797 N.E.2d 916, 923-24 (Mass. 2003).
For these reasons, I concur.
Notes
Every conveyance, devise, or dedication shall be valid which . . . has been made, and every conveyance shall be valid which hereafter shall be made of land for the use or benefit of any religious congregation as a place for public worship, or as a burial place, or a residence for a minister, or for the use or benefit of any church diocese, church, or religious society, as a residence for a bishop or other minister or clergyman who, though not in special charge of a congregation, is yet an officer of such church diocese, church or religious society, and employed under its authority and about its business; and every conveyance shall be valid which may hereafter be made, or has heretofore been made, of land as a location for a parish house or house for the meeting of societies or committees of the church or others for the transaction of business connected with the church or of land as a place of residence for the sexton of a church, provided such land lies adjacent to or near by the lot or land on which is situated the church to which it is designed to be appurtenant; or for use in furtherance of the affairs of any church diocese, and the land shall be held for such uses or benefit and for such purposes, and not otherwise.
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.
All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church 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.
(Emphasis in original.)it is not the act of taking a vote, or even the filing of a petition, that renders a decision to affiliate with a different denomination final and conclusive - rather it is the Court‘s approval of the petition. That did not come until January 8, 2009, and in any event was reversed by the Virginia Supreme Court.