In this first blog of this series, I outlined the Supreme Court guidelines as to how religious property disputes are to be evaluated under state law. The second blog reviewed the governance of the United Methodist Church and how the “Connectional” nature of the denomination leads it to be more “Congregational” than “Hierarchal.” In the third blog of this series, I described the history and parameters of the Trust Clause as set forth in United Methodist Book of Discipline and also noted that all property law is subject to state law and pursuant to the Discipline, State Law prevails over the requirements of the Discipline. In this blog, I will briefly review concepts of state law as they relate to the enforceability of the Trust Clause, focusing on Texas as a trial court in Dallas County recently found the Trust Clause to be unenforcible in a case involving Southern Methodist University.
The Texas approach to Neutral Principals
Texas adopted and applies the neutral principles of law approach to resolving church property disputes. As it pertains to a local church withdrawing from the denomination, the most relevant and applicable case is Masterson v. Diocese of Nw. Texas, 422 S.W.3d 594, 600 (Tex. 2013) (“Masterson”), decided by the Supreme Court of Texas. The Court in Masterson held that the neutral principles approach requires the court to decide a church property dispute by examining in—a purely secular manner—the (1) language of the deeds, (2) local church charters, (3) state statutes, and (3) provisions of the general church’s constitution. Even when religious entities are involved, the approach is applied to issues concerning titles and trusts, as well as corporate formation, governance, and dissolution.
To be clear, the principles and holding of Masterson are not without limitation. For example, in Mouton v. Christian Faith Missionary Baptist Church, 498 S.W.3d 143 (Tex. App. 2016), after several individuals were expelled from church membership, they sued the local church, its pastor, and other church members arguing that the local church failed to follow its bylaws regarding pastoral selection. The plaintiffs argued that under Masterson, the court must apply neutral principles of law and find that their expulsion violated the local church’s own bylaws. The trial court dismissed the case under the ecclesiastical abstention doctrine and held that it lacked subject matter jurisdiction to resolve the controversy.
The Court of Appeals of Texas agreed. In so doing, the Court cited C.L. Westbrook, Jr. v. Penley, 231 S.W.3d 389 (Tex. 2007) and found that the plaintiffs’ claims are inextricably intertwined with the selection of the church’s new pastor and the church’s expulsion of members, two issues that have been long recognized to be inherently ecclesiastical and of prime importance to the exercise of religious liberty. See also Singh v. Sandhar, 495 S.W.3d 482, 493 (Tex. App. 2016) (fining that the trial court lacked jurisdiction over the parties’ dispute over membership in a Sikh temple.)
Although these limitations seem irrelevant, they are nonetheless worth noting because the lawsuit in the Mouton decision depended on a finding that certain actions violated the corporation’s bylaws. But because asserted harm that result from the violation pertains to appointment and expulsion of personnel associated with the church, abstention and deference are required.
The most recent case addressing the neutral principles of law approach is Episcopal Diocese of Fort Worth v. Episcopal Church, 602 S.W.3d 417 (Tex. 2020), decided by the Supreme Court of Texas. There are at least four things we must highlight:
- The dispute was between the regional diocese (the Diocese of Forth Worth) and The Episcopal Church (TEC). If we were to compare TEC’s religious organizational structure with the UMC’s, the dispute would be similar to a hypothetical dispute between an annual conference and the UMC, as opposed to the more common dispute between a local UMC church and the annual conference.
- The Court made it very clear that local churches “are free to disassociate from a hierarchical church at any time.”However, the Court expressly recognized that church property disputes “involving hierarchical church organizations, like TEC, are challenging because their organizational structure requires subordinate units to accede to ecclesiastical control by higher authorities.”
- The Diocese of Fort Worth is an unincorporated association and, accordingly, issues concerning its officers and control are governed by the Uniform Unincorporated Nonprofit Association Act. Thus, keep in mind that if a local UMC church is in fact incorporated as a non-profit, the Texas Nonprofit Corporation Law would provide the applicable statutory provisions, Tex. Bus. Orgs. Code Ann. § 22.001 – § 22.516. However, aside from the corporate issues, the law on whether or not a valid trust exists would be the same under Texas trust law.
In the next blog, we will examine statutory law in Texas as it relates to the enforceability of the United Methodist Trust Clause.
Should you have specific questions regarding your state law on religious property disputes, please reach out to Daniel Dalton at Dalton & Tomich PLC to discuss your case. You can read more about this topic in Daniel Dalton’s book, Religious Property Disputes, House of God, Laws of Man available at theAmerican Bar Association Book store or Amazon.