Author(s): Edward T. Schroeder
Published: 03/17/2008
Church schisms are tragic events that exact a heavy emotional, missional, and financial toll on congregations and their individual members. Whether a schism results from disagreement over doctrine, governance, direct, or personality, the severing of close institutional and personal bonds inevitably demands that the multiple resulting bodies focus energy and resources to mend injuries caused by the split, often to the detriment of traditional activities supporting the church's goals and beliefs. The financial and emotional toll is multiplied when competing factions disagree over who controls church property. Church property disputes result in costly litigation that draws resources from the church's ministries.
Churches cannot guarantee that schisms will not occur. However, steps can be taken to define the ownership of property so as to minimize the likelihood of litigation being required to resolve church property disputes. By doing so, churches improve the odds of surviving and more quickly recovering from a schism, thereby allowing the church to continue pursuit of its mission and goals. While any method of defining property ownership to minimize the likelihood of litigation must be tailored to each church's doctrines and theology, along with the law of the state where property is held, the first step to addressing the issue is understanding the legal framework for judging church property disputes under the First Amendment.
Supreme Court: Two Approaches
The United States Supreme Court has held that courts may not inquire or make determinations as to religious doctrine when deciding disputes over religious property. The Court has suggested two constitutionally permissible approaches to resolving church property disputes: the polity approach and the neutral principles approach. The polity approach looks to the governance of the religious organization (e.g., hierarchical or congregational) and defers to the decision of the highest ecclesiastical body to state a position on the property dispute. Generally, this approach is favorable to the general church in a hierarchical structure. Under the neutral principles approach, courts look to deeds, church charters, constitutions and church law, state statutes governing religious incorporation, and other legal documents to apply secular property law to determine the outcome of the dispute. Typically, this inquiry involves an attempt to determine whether a valid reversionary interest has been created or if the local church is holding the property in trust for the general church.
1. Polity Approach (Rule of Judicial Deference)
The first United States Supreme Court case considering the resolution of church property disputes, Watson v. Jones (1871), was decided on federal common-law grounds without specific reliance on the First Amendment. The Watson decision divided disputes over religious property into the following three situations: (1) property held in express trust for the teaching, support, or spread of a specific form of religious doctrine or belief; (2) property held by an independent or congregational church that owed no fealty to any higher organization; and (3) property held by a hierarchical church, subordinate in some way to a general church organization or superior ecclesiastical body. The Watson Court declared the first two situations to be straightforward legally (in the first, apply the language of the express trust, and in the second, apply the ordinary principles of voluntary organizations, for example, majority rule). In the third situation, the Court declared that civil courts must follow the decision of the highest ecclesiastical authority to rule on the dispute. This approach became known as the polity approach (or the Rule of Judicial Deference).
In some instances, the actual issue underlying a church property dispute is a disagreement over the right to hold an ecclesiastical office. Because the right to ecclesiastical office is inextricably tied to church doctrine, polity, identity, and governance, such disputes are always decided according to the polity approach. This is the case even when a jurisdiction generally applies the neutral principles approach to church property disputes. In Serbian Eastern Orthodox Diocese for the United States of America and Canada v. Milivojevich (1976), the United States Supreme Court reversed an Illinois Supreme Court decision granting the right to property to a local bishop who had been removed from office by the general church. The Supreme Court recognized that neutral principles analysis was appropriate to resolve some church property disputes, but stated that it could not be used to resolve questions of the right to ecclesiastical office, even when the right to that office dictated the ultimate control of church property.
2. Neutral Principles Approach
In the late 1960s and 1970s the Supreme Court identified neutral principles analysis as a second permissible method for resolving church property disputes. In Jones v. Wolf (U.S. 1979), the United States Supreme court endorsed neutral principles analysis while affirming the continued acceptability of the polity approach. Holding that various approaches could be applied, the Court based its preference for the neutral principles approach on the fact that it relied on concepts within the expertise of lawyers and judges while simultaneously allowing religious organizations flexibility to structure property relationships according to the organization's specific doctrines and beliefs. The Court limited neutral principles analysis by squarely stating that its application must be consistent with church law and could not involve the Court in interpreting religious doctrine or leadership.
Application by the States
Under either approach, churches are not resigned to messy church property disputes if they act to clearly define property ownership rules before a split occurs. The Supreme Court has emphasized that it prefers the neutral principles approach because it allows churches means to define the succession of property using tools that judges and lawyers are trained to interpret. Jones explicitly encouraged churches to take steps following the opinion to define the structure of their property relationships under neutral principles analysis. One example of a church responding to this instruction is the Episcopal Church, which clearly defined its property relationships by enacting the Dennis Canon into its church law, months after release of the Jones v. Wolf opinion. The Dennis Canon states that "[a]ll real and personal property held by or for the benefit of any Parish, Mission, or Congregation is held in trust for [the Episcopal] Church and the Diocese thereof in which such Parish, Mission or Congregation is located." Under neutral principles analysis, civil courts looking to church law like this could quickly determine that property held in the name of a local congregation was held in trust for the diocese and the denomination. In addition to defining their property relationships in church law, religious organizations should consider the language in their secular legal documents, such as deeds and articles of incorporation.
The Court's polity approach also allows churches the freedom to structure their property relationships by allowing the ecclesiastical authority within the general church to apply the organization's doctrine and rules. To ensure proper application of the polity approach, churches should clearly define their governance structure and process for resolving disputes. Further, clearly defined principles related to the control of church property will minimize conflict and assist the ecclesiastical authority in ruling on a church property dispute.
Conclusion
Both the polity approach and the neutral principles approach provide churches with tools to define property arrangements and, thereby, minimize the likelihood of conflict or the need for government interference should a schism occur. Churches and denominations that are unclear about their property relationships should consult with competent legal counsel for advice
Edward T. Schroeder is an associate in RJ&L's Denver office. His practice focuses on religious institutions law, and he also represents clients in commercial and complex civil litigation involving business entities of various sizes. He can be reached at 303-628-9558 or by e-mail at eschroeder@ rothgerber.com.