Epis­co­pal land dis­pute melds re­li­gion, state prop­erty laws

Austin American-Statesman - - FRONT PAGE - By Chuck Lin­dell clin­dell@states­man.com

Wad­ing into the tricky le­gal wa­ters where re­li­gion and government meet, the Texas Supreme Court will de­cide who owns 52 Fort Worth-area churches — the na­tional Epis­co­pal Church, or the dio­cese that broke away in protest of the con­se­cra­tion of a gay bishop, the or­di­na­tion of women and other lib­eral poli­cies.

The prop­er­ties at stake are worth more than $100 mil­lion, mak­ing this the largest church-prop­erty dis­pute in Texas his­tory, and prob­a­bly in U.S. his­tory as well, lawyers say.

What’s more, the court de­ci­sion will af­fect the way Texas han­dles fu­ture church dis­putes by fur­ther pin­ning down a mov­ing le­gal tar­get: the di­vid­ing line be­tween the free ex­er­cise of re­li­gion, as guar­an­teed by the First Amend­ment, and state laws af­fect­ing prop­erty, non­prof­its and re­lated ar­eas.

“It’s not the amount of money that makes the case im­por­tant,” Scott Bris­ter, a lawyer for the break­away dio- cese, told the court dur­ing oral ar­gu­ments in Oc­to­ber. “Churches are, of course, an im­por­tant part of this state. Af­ter all, what does it profit a state to gain the whole world if you lose your soul?”

Led by con­ser­va­tive Bishop Jack Iker, mem­bers of the Fort Worth dio­cese over­whelm­ingly voted to leave the na­tional church in 2008, join­ing an ex­o­dus in­volv­ing dozens of in­di­vid­ual con­gre­ga­tions and three other U.S. dio­ce­ses, which are re­gional col­lec­tions of churches.

The Iker-led dio­cese also claimed to hold the deeds to all church prop­er­ties, in­clud­ing 48 con­gre­ga­tions that fol­lowed Iker into schism and eight churches that re­mained loyal to the na­tional body.

Iker even­tu­ally trans­ferred own­er­ship of four loy­al­ist churches to their mem­bers, but many con­gre­ga­tions that had not al­ready sep­a­rated along lib­eral and con­ser­va­tive lines went through a painful split that con­tin­ues to­day. About 15 churches have two con­gre­ga­tions meet­ing un­der the same name — Iker fol­low­ers in the of­fi­cial sanc­tu­ary and mem­bers of the na­tional church in a strip mall or other space.

The dis­pute moved into the sec­u­lar realm when the na­tional Epis­co­pal Church filed suit in 2009, ar­gu­ing that the prop­er­ties be­longed to the de­nom­i­na­tion. Iker, who had turned his back on that de­nom­i­na­tion, could not take church as­sets with him, the na­tional body said.

Iker sup­port­ers likened the law­suit to an at­tempted hos­tile takeover, but a state district judge sided with the na­tional church in 2011 and gave Iker 30 days to sur­ren­der the prop­er­ties, in­clud­ing dioce­san of­fices in down­town Fort Worth and a youth camp in Gran­bury.

The trans­fer was placed on hold when the Ik­erled dio­cese ap­pealed to the Texas Supreme Court, which has no dead­line to is­sue its rul­ing.

Lawyers for both sides agree that the Dio­cese of Fort Worth owns all church prop­erty. The prob­lem is that both sides claim to run the dio­cese.

In 2009, Pre­sid­ing Bishop Katharine Jef­ferts Schori of the na­tional Epis­co­pal Church re­moved Iker as bishop, named a re­place­ment and rec­og­nized loyal con­gre­gants as the “con­tin­u­ing dio­cese” that holds ti­tle to all church as­sets.

Iker claimed Jef­ferts Schori did not fol­low church pro­ce­dure in re­mov­ing him and, more im­por­tant, lacked the author­ity to re­place him and other dioce­san of­fi­cials, par­tic­u­larly those serv­ing on the board of direc­tors for the non­profit cor­po­ra­tion that con­trols church as­sets.

To help the court sort out the own­er­ship ques­tion, the fac­tions of­fered com­pet­ing le­gal the­o­ries:

The Iker-led fac­tion sug­gested that the court ap­ply the “neu­tral prin­ci­ples” stan­dard, cre­ated by the U.S. Supreme Court to de­ter­mine own­er­ship based on a straight­for­ward look at prop­erty records and by ap­ply­ing state law gov­ern­ing deeds, trusts and non­prof­its.

Most states have adopted the neu­tral stan­dard in church dis­putes, Bris­ter told the Texas Supreme Court, be­cause it is sim­ple to im­ple­ment and keeps courts from be­com­ing en­tan­gled in ec­cle­si­as­ti­cal mat­ters, where the First Amend­ment says they do not be­long.

Just to pre­pare the Supreme Court to con­sider the Fort Worth case, he said, the na­tional church submitted a 70page his­tory of the le­gal dis­pute that was re­but­ted by an equally long af­fi­davit from an equally re­li­able ex­pert.

On the other hand, un­der the by­laws gov­ern­ing the non­profit cor­po­ra­tion that holds the dio­cese’s as­sets, only its board of direc­tors can re­move or re­place its mem­bers — not the Epis­co­pal Church or its pre­sid­ing bishop, said Bris­ter, a former jus­tice on the court.

A study of the cor­po­ra­tion’s by­laws, backed by state laws meant to pro­tect non­prof­its, in­di­cates that the non­profit cor­po­ra­tion un­der Iker’s con­trol re­mains in charge of dioce­san as­sets, Bris­ter said.

“Must Texas courts de­fer on prop­erty own­er­ship ques­tions to un­writ­ten rules an­nounced by who­ever claims to speak for the church?” he asked. “Does it mat­ter what deeds say, what state laws say and what church char­ters say, or does it only mat­ter what the cur­rent church ex­ec­u­tive says?”

■ Lawyers for the Epis­co­pal Church sug­gested that the court ex­am­ine the dis­pute un­der the “de­fer- ence” stan­dard, also devel­oped by the U.S. Supreme Court to weigh dis­putes in­volv­ing churches that be­long to a hi­er­ar­chi­cal de­nom­i­na­tion.

To avoid un­con­sti­tu­tional med­dling in re­li­gious af­fairs, the def­er­ence stan­dard re­quires courts to ac­cept a church hi­er­ar­chy’s de­ci­sions on mat­ters in­volv­ing faith, prac­tice and dis­ci­pline — in­clud­ing which fac­tion rep­re­sents the “true” dio­cese and who is cho­sen to lead it, Epis­co­pal Church lawyer Mary Kos­tel said.

But, Kos­tel added, even if the Supreme Court ap­plies the neu­tral-prin­ci­ples stan­dard, “we win.”

“Look at our record all over the coun­try,” she said. “I count 32 cases from 17 states where courts have or­dered that Epis­co­pal Church prop­erty be re­turned to the con­trol of lo­cal Epis­co­palians. Most of those cases were de­cided un­der the neu­tral­prin­ci­ples ap­proach.”

The vic­to­ries in­cluded rul­ings by supreme courts in eight states or­der­ing break­away fac­tions to re­turn church prop­erty.

Success un­der the neu­tral stan­dard hinges on doc­u­ments — signed by Fort Worth and ev­ery other dio­cese of the church — promis­ing to fol­low the de­nom­i­na­tion’s rules, hold all prop­erty in trust for the na­tional body and open churches only for ser­vices and rites ap­proved by the Epis­co­pal Church, church lawyer Thomas Leather­bury said.

Bris­ter, how­ever, warned that the Epis­co­pal Church’s at­tempt to re­cover the build­ings vi­o­lated the spirit, and his­tory, of the de­nom­i­na­tion.

“That wasn’t the rule when the Epis­co­pal Church left the Church of Eng­land in 1789,” Bris­ter told the court. “That wasn’t the rule when the Church of Eng­land left the Church of Rome in 1534. (Both times), the mem­bers who weren’t loyal took all the prop­erty.

“Epis­co­pal tra­di­tion is just the op­po­site that they say it is, and that’s the kind of dis­tor­tion that is the rea­son why we re­quire rules re­gard­ing prop­erty to be in writ­ing,” he said.

The case is Epis­co­pal Dio­cese of Fort Worth v. Epis­co­pal Church, 110265. The court also will de­cide a re­lated case, 110332, in­volv­ing a dioce­san con­gre­ga­tion, Church of the Good Shep­herd, in Gran­bury.

KEL­LEY CHINN / FORT WORTH STAR-TELE­GRAM 2008

Bishop Jack Iker (left) and As­sist­ing Bishop Wil­liam Want­land dis­cuss their dis­as­so­ci­a­tion from the Epis­co­pal Church in ’08.

Anas­tashia and her sis­ter Aleina (back­ground) got purses as part of their gifts. ‘It will be the best Christ­mas ever,’ their mom said.

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