A local congregation is free to walk away from the United Methodist Church at any time. Just like any congregant who decides to leave a congregation, a local church can vote to leave the denomination. That is a rule without exceptions
The critical question is whether the congregation can keep its property – (e.g., real property such as buildings, personal property, bank accounts, investments, endowments and other property bestowed on the local congregation). It has been suggested by an employee of the United Methodist Church denomination, who is not an attorney, that the Methodist Trust Clause within the Book of Discipline is universally enforceable and that local churches should not even think about challenging it when considering whether it should leave the denomination and leave its property.
This argument is simply not true.
The Methodist Trust Clause
Most, if not all, of the members of the local church have never heard of the trust clause. Many will argue that they and their ancestors in the faith tithed and gifted the funds necessary to purchase the land and buildings, their upkeep, contents, and the investments and the improvements to the land. Other people in the church might say they want no part of a contentious fight and so advocate that the congregation should simply walk away from the property and start anew at another location.
If the local church holds no real estate, holds no major investments, has not grown in several years and lacks the will or resources to fight a protracted legal battle, then it may be in the congregation’s best interest to walk away from the denominationor negotiate the purchase of the property from the annual conference. Similarly, if the smaller local congregation is housed in an older building that has significant renovation and upkeep cost, it may be in the best interest of the church to walk away from the building, and rent space while the congregation accumulates the necessary funds to build anew.
However, if the local congregation owns its property outright, has the financial means and local support for litigating matters, it may be worth your while to challenge the ownership of real and personal property in state courts. The leader of the congregation moving its members through this process must initially gauge and continually support the decision of the congregational members on which path it takes when moving forward on this issue.
The issue of whether the Methodist Trust Clause is enforceable or not has not been determined by a State Supreme Court within the United States. That is clear.
The Historical Basis of the Trust Clause
The suggested application of the Trust Clause by the leaders within the United Methodist Church is at odds with the historical nature of the clause. Historically, the trust clause was never intended to be a yoke holding a congregation within the denomination. The historical record confirms that the trust clause was intended to legitimize, enforce, and protect doctrinalstandards. In his paper concerning the trust clause, which is the only paper on this subject that thoughtfully covers the Methodist trustclause, Dr. Thomas Oden summarizes the true understanding of the Trust Clause as follows:
“The Restrictive Rules have become the central fortress of the United Methodist constitutional system. Their doctrinal standards are embedded in every trust clause of every local church and in the Discipline. The trust clause embedded inthe property deed transmission is a legal guarantee in a court of law. The trust clause is not written to protect theConference, but the doctrinal standards, and to protect the Conference only insofar as the Conference protects the doctrinal standards. The trust clause guarantees the right to use property only to those who are guardians of its doctrinal standards.”
In a purely ecclesiastical property dispute, it would appear that the rightful owner would be whichever party was more faithful tochurch doctrine. Though many denominations have assumed considerable power over local churches, the arc of denominationalpower is bending back in favor of congregations.
Church Property Disputes – Federal Constitutional considerations
Church property disputes are not new. When it came to judicial decisions concerning the ownership of property, the dominantrule for roughly 150 years was the “English rule,” which required courts to award property to whichever faction of the church adhered to “the true standard of faith,” meaning the old established orthodoxy of that particular religious group.[i]
This is no longer the rule.
The U.S. Supreme Court has stated that states have “an obvious and legitimate interest in the peaceful resolution of propertydisputes.”[ii] For that reason civil courts are permitted to address such disputes, but the Religion Clauses in the U.S. Constitution“severely circumscribe the role that civil courts may play in resolving church property disputes.”[iii] In other words, courts musttake great care that, as state actors, their approach to resolving these disputes neither impinges on the right to engage in religiousexercise nor has the effect of establishing a religion. This circumspection grants churches a degree of autonomy to governthemselves by religious terms.
Thus, resolution of church property disputes is critically influenced by the First Amendment to the United States Constitution, which in relevant part provides that “Congress shall make no law respecting an establishment of religion, or prohibiting thefree exercise thereof[,]”[iv] state property law, trust law and corporation law.
A review of case law helps to illustrate the issues courts have grappled with in this arena and where courts stand today. At the outset, however, it should be noted that not all types of churches are necessarily subject to the same rules of adjudication. Structure impacts treatment, and not every church operates beneath denominational governance.
For churches that operate independently or effectively independently, in other words where church government is nonhierarchical, ownership of church property is dictated by majority rule. In these cases, in the Supreme Court’s view, “[a]n expulsion of the majority by a minority is a void act.”[v] So long as that congregation has not adopted an alternative mechanism with which to adjudge a property dispute, courts will generally defer to the will of the majority of the congregation.
The question has been more complicated with respect to hierarchical churches. Some denominations, such as the Baptists, operate on a generally even administrative plane and are not subject to a higher ecclesiastical authority. The situation is different for the hierarchical Roman Catholic Church, which has taken the position that it subordinates affiliated local churches to abide by its constitutional rules.
Neutral Principals of Law
In the Supreme Court’s 1872 Watson v. Jones decision, the Court adopted an alternative approach called “hierarchical deference.” This method bound courts to defer to the judgment of the highest ecclesiastical tribunal of the denomination.[vi] Such an approach was initially thought to be the best way for courts to steer clear of unconstitutionally meddling in religious affairs and, consequently, “departure from doctrine” beganfalling out of favor–though not expressly discredited until 1969 in Presbyterian Church v. Mary Elizabeth Blue Hull Memorial Church.[vii]
In rejecting the “departure from doctrine” approach, the Supreme Court drew attention to a new alternative. Jones had already given passing endorsement to allowing courts to examine “the deed or will of the donor, or other instrument by which the property is held” to determine ownership.[viii]
The Court in Blue Hull Memorial Church gave this approach a label, recognizing that “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.”[ix]
With that reminder, the Court remitted the case and the term “neutral principles” within the context of church property law wasborn. But it was not yet fleshed out. In concurrence the following year, Justice William Brennan noted that this approach is consistent with the First Amendment only if it is applied “without the resolution of doctrinal questions and without extensive inquiry into religious polity.”[x]
However, in Jones v. Wolf (1979), the leading church property case to date, the Court specified that neutral principles:
“Require a civil court to examine certain religious documents, such as a church constitution, for language of trust infavor of the general church. In undertaking such an examination, a civil court must take special care to scrutinize the document in purely secular terms, and not to rely on religious precepts in determining whether the document indicates that the parties have intended to create a trust.”[xi]
In the Court’s view, neutral principles “rel[y] exclusively on objective, well-established concepts of trust and property lawfamiliar to lawyers and judges,” thereby producing outcomes reflecting “intentions of the parties.” Though the Court has given states the option to choose between deference and neutral principles, the majority of states have adopted the latter.
Connectionalism and Methodism
It is clear that the United Methodist Church is not a legal entity. Rather, it describes itself as a “connectional” denomination. “Connectionalism,” as recently defined by the Methodist Judicial Council is as follows:
“As a primary principle in any organizational structure of The United Methodist Church, connectionalism denotes a vital web of interactive relationships—multi-leveled, global in scope, and local in thrust—that permits contextualization and differentiation on account of geographical, social, and cultural variations and makes room for diversity of beliefs and theological perspectives but does not require uniformity of moral-ethical standards regarding ordination, marriage, and human sexuality.”[xii]
Thus, the Judicial Council provides that connectionalism “permits contextualization and differentiation on account of geographical, social, and cultural variations and makes room for diversity of beliefs and theological perspectives”[xiii] By defining connectionalism in the way it has, the Judicial Council has established the relationship between local churches and annual conference as “consulting,” but not enforcing any type of theology. Given that the Discipline states that, “all decisions of the Judicial Council shall be final,”[xiv] the consulting relationship of the Methodist denomination is confirmed.
Therefore, based upon the “connectional” nature of the United Methodist denomination, the analysis of who owns the local Church property will be based on “neutral principles of law,” meaning, state trust law, state corporate law and state property law.[xv] The question courts then turn to is whether this means the Methodist denomination is “hierarchical,” or “congregational,” when evaluating the ownership of property.
Denominational Trust Clauses evaluated under State Law
The division over the meaning of Jones v Wolf is deep. Even the divide among states understates the extent of disagreement over Jones, for many of the state court decisions feature impassioned dissents contending that the majority has misapplied Jones. This massive inconsistency in the results of materially indistinguishable cases has visited enormous and expensive uncertainty upon this country’s religious institutions. Worse still, by unmooring courts from the predictability of established state law, the hybrid approach “gives judges tremendous flexibility to reach almost any result—making the outcome unpredictable and largely dependent upon the predilections of the judges.”[xvi]
The Eighth Circuit and the high courts of seven States—Alaska, Arkansas, Indiana, New Hampshire, Oregon, Pennsylvania, and Texas—have adopted the “strict approach” to Jones. Intermediate courts in Louisiana, Minnesota, and Missouri have likewiseadopted this approach in decisions that the high courts of those states declined to review. Each of these jurisdictions holds that Jones requires courts to resolve property disputes between religious organizations the same way they resolve property disputesbetween secular institutions: by applying ordinary principles of state trust and property law. Accordingly, these courts recognize a trust claimed to vest title to local real property in a national church only if the alleged trust satisfies the established rules that state law requires to create a trust.
The Supreme Court of Texas’ divided decision in Masterson v. Diocese of Northwest Texas,[xvii] exemplifies the strict approach.A parish disassociated from the national Episcopal Church and revoked any trusts that may have existed in favor of the national church. Although the parish’s real property was titled in its name, the national Episcopal Church claimed the Dennis Canon imposed an irrevocable trust in its favor. The court acknowledged that the high courts of several other States have held that “an express trust canon like [the Dennis Canon] precludes the disassociating majority of a local congregation from retaining local parish property after voting to disaffiliate from the Church.” But the court disagreed with that approach, holding that it would “not read Jones as purporting to establish substantive property and trust law that state courts must apply to church property disputes.” Instead, the court held that Jones instructs courts to “apply neutral principles of law to non-ecclesiastical issues involving religious entities in the same manner as they apply those principles to other entities and issues.”[xviii]
The Supreme Court of Indiana has also faithfully followed Jones.[xix] The majority acknowledged that “[s]ome state courts have apparently read Jones as an affirmative rule requiring the imposition of a trust whenever the denominational church organization enshrines such language in its constitution.”[xx] But the court disagreed with that view, observing that the hybrid approach“result[s] in de facto compulsory deference,” which, the Jones dissenters advocated but the majority rejected, “by enforcing the claim of the denominational church organization merely because the trust claim is added to the denominational church organization’s constitution and regardless of any contrary evidence or state law.” The Indiana court held that the relevant question under Jones is instead whether a trust “is embodied in some legally cognizable form’ under state law.”[xxi]
The Supreme Court of Arkansas adopted the strict approach in Arkansas Presbytery of the Cumberland Presbyterian Church v. Hudson.[xxii] A four-justice majority held that a national church’s Dennis Canon analogue did not establish a trust over the property of a disassociated congregation because the canon did not create a trust under ordinary principles of Arkansas law.[xxiii]
The Eighth Circuit has also applied the strict approach to Jones, holding that language in a national church’s constitution and charterpurporting to establish a trust was “not dispositive” of the property dispute, and that its relevance would have to be judged againstordinary principles of state law.[xxiv] The high courts of Oregon, Alaska, and Pennsylvania have similarly adopted the strict approach to Jones. Applying ordinary state law, these courts ultimately found in favor of the national church. But this result is perfectly consistent with the strict approach because under that approach, unlike under the hybrid approach, “the outcome of achurch property dispute is not foreordained.”[xxv] The high court of New Hampshire has also adopted the strict approach,[xxvi]and so too has an unpublished intermediate court decision in Minnesota,[xxvii] and published intermediate court decisions in Missouri and Louisiana.[xxviii]
In sum, the courts of at least ten States and the Eighth Circuit have adopted the strict approach to Jones, and at least eight state courts of last resort have adopted the hybrid approach. The division exists not only among States but also within them, as exemplified by the deeply divided decisions just discussed, and now, with the decision below, by conflicting decisions within a single State’s Jurisprudence. This patchwork of conflicting decisions cannot be chalked up to federalism and the inconsistency from State to State in the law of property and trusts. The conflict, rather, is over the meaning of Jones.
Retaining local Church property under State Law
But whether a state has adopted neutral principles is just the starting point. There is much more to consider. As noted, under neutral principles courts will examine a wide range of factors, including relevant church and property documents, the parties’ behavior, and relevant state law. In this potentially dizzying array of considerations there may be no clear-cut answers to church property dispute questions.
Because states regulate property, this confusion is compounded. Congregants will encounter different rules in every state. Inmany cases applicable rules differ only mildly from jurisdiction to jurisdiction. Though differences may be apparent and their impact palpable, subtleties may nonetheless spell the difference between property retention and forfeiture. One must therefore look cautiously to respective state law for guidance. Key starting points include the state’s corporation, contract, and trust law, as well as court decisions within the state that interpret those provisions and reveal how courts might respond to claims in a particular church property dispute.
Certain states regulate incorporated religious bodies more comprehensively than others. Church governance structure conforms to state incorporation law, and terms of incorporation law may determine what happens to church property in the event of dissolution or schism. How state law directs the incorporated management of property, then, can be of critical importance.
Is the Methodist Trust Clause enforceable?
The elephant in the room is the United Methodist trust clause. Is it binding? Can it be revoked? Will courts consider other factors? The answer in all cases is maybe.
Trusts are essentially a conditional transfer of property. Like contracts, trusts are dependent on mutual consent.[xxix] In trust law, the one creating a trust is referred to as the settlor. The settlor transfers property to a trustee under certain agreed conditions,creating a fiduciary duty for the trustee. This means that the trustee has a responsibility to abide by the terms of the trust in fulfilling the prescribed duties to specified beneficiaries.
State-to-state there are many similarities in trust law, but it is important to remember that states, whether through jurisprudence or statutory instruction, create their own standards for trust law. Your state’s stance on the revocability of trusts is one of the most important things to consider. In some states, trusts are in fact revocable. In others, they may not be. Most commonly only the settlorwill be able to modify or revoke an extant trust. But in any event there tend to be rules and exceptions that must be analyzedclosely for alignment with your situation.
With a conceptual understanding of trusts, a careful reading of the Supreme Court’s Wolf decision becomes all the more important. An oft-cited excerpt of Wolf purportedly solidifying the legitimacy of denominational trust provisions reads as follows:
“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 thegeneral church can be made to recite an express trust in favor of the denominational church. Theburden involved in taking such steps will be minimal. And the civil courts will be bound to give effect to theresult indicated by the parties, provided it is embodied in some legally cognizable form.”[xxx]
A facial reading may suggest that a denomination may simply adopt an express trust, and that courts will be bound to enforce that trust “provided it is embodied in some legally cognizable form.”
This is not the case.
The opinion does not state that one party–the denomination– can make such modification. To the contrary, it requires pluralparticipation, the “parties” – denomination and local congregation – to have reached a mutually understood agreement.
A question most courts will ask in these cases, therefore, is whether the local congregation consented to the trust. In light of howlittle opportunity many churches have to address terms of church property management, this may not be as simple a question as thedenomination hopes. That being said, some courts understand general consent to the United Methodist constitution as consent to partake in a trust relationship. But it is important to remember that one normally cannot forfeit a property right without giving consent.
Do not assume that your local church cannot challenge the United Methodist Trust Clause. The suggestion to not challenge it is completely wrong. This is a state by state, church by church specific issue. Many issues presented with leaving the denomination have not been litigated previously. Therefore, it is important to consider all of the issues discussed to make sure that you take the appropriate action when leading your congregation away from the United Methodist Church.
Please feel free to contact Daniel Dalton, an attorney with years of experience litigating trust clause cases across the United States, or one of the professionals at Dalton & Tomich PLC if you have questions about your property and the Methodist trust clause.
[i] Watson v. Jones, 80 U.S. 679, 727 (1871)
[ii] Jones v. Wolf, 443 U.S. 595, 602 (1979)
[iv] Together, the First Amendment’s Establishment Clause and Free Exercise Clause are known as the Religion Clauses, which directly limit the federal government and restrict the activity of state governments through application of the Fourteenth Amendment’s Due Process Clause. U.S. Const. Am. I.
[v] Bouldin v. Alexander, 82 U.S. 131, 140 (1872)
[vi] 80 U.S. 679
[vii] 393 U.S. 440
[viii] Watson, 80 U.S. at 722.
[ix] Blue Hull, 393 U.S. at 449 (emphasis added).
[x] Maryland and Virginia Eldership of the Churches of God v. Church of God at Sharpsburg, 396 U.S. 367, 370 (1970) (Brennan, J., concurring).
[xi] Wolf, 443 U.S. at 604
[xii] Methodist Judicial Council Decision 1366, p. 11
[xiv] 2016 Methodist Book of Discipline, p. 19 (¶57)
[xvi] McConnell, 58 ARIZ. L. REV. at 339.
[xvii] 422 S.W.3d 594 (Tex. 2013), cert. denied, 135 S. Ct. 435 (2014)
[xviii] Id. at 606. See also Episcopal Church of Fort Worth v. Episcopal Church, 422 S.W.3d 646, 653 (Tex.
2013), cert. denied, 135 S. Ct. 435 (2014).
[xix] Presbytery of Ohio Valley, Inc. v. OPC, Inc., 973 N.E.2d 1099 (Ind. 2012), cert. denied, 569 U.S. 958 (2013)
[xx] Id. at 1106 n.7
[xxi] Id. (quoting Jones, 443 U.S. at 606)
[xxii] 40 S.W.3d 301 (Ark. 2001), cert. denied, 534 U.S. 945 (2001)
[xxiii] Id. at 309
[xxiv] Church of God in Christ, Inc. v. Graham, 54 F.3d 522, 526 (8th Cir. 1995)
[xxv] Jones, 443 U.S. at 606. See Hope Presbyterian Church of Rogue River v. Presbyterian Church (U.S.A.), 291 P.3d 711, 722 (Or. 2012); St. PaulChurch, Inc. v. Board of Trustees of Alaska Missionary Conference of United Methodist Church, Inc.,145 P.3d 541, 553-54, 557 (Alaska 2006); In reChurch of St. James the Less, 888 A.2d 795, 806 (Pa. 2005).
[xxvi] Berthiaume v. McCormack, 891 A.2d 539, 547 (N.H. 2006)
[xxvii] Presbytery of the Twin Cities Area v. Eden Prairie Presbyterian Church, Inc., 2017 WL 1436050, at *7-8 (Minn. Ct. App. Apr. 24, 2017), review denied (Minn. 2017)
[xxviii] Heartland Presbytery v. Gashland Presbyterian Church, 364 S.W.3d 575, 590 (Mo. Ct. App. 2012), application for transfer denied (Mo. 2012); Carrollton Presbyterian Church v. Presbytery of S. La. of Presbyterian Church (USA), 77 So.3d 975, 981 (La. Ct. App 2011), writ denied, 82 So.3d 285 (La. 2012), cert. denied, 568 U.S. 818 (2012).
[xxix] An exception is the remedial “constructive” trust. John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 YALE L. J. 625, 650 (1995).
[xxx] Wolf, 443 U.S. at 606
[xxxi] Emberry Community Church v. Bloomington Dist., 482 N.E.2d 288, 293 (Ind. Ct. App. 1985)
[xxxii] Note, Judicial Intervention in Disputes Over the Use of Church Property, 75 HARV. L. REV. 1142 (1962).
[xxxiii] 89 C.J.S. Trusts § 139 (1955)
[xxxiv] Bogert, Trusts and Trustees, 2d Ed., § 471
[xxxv] David A. Thomas, 3 Thompson on Real Property § 27.04(g)(1)(i) (David A. Thomas, ed., 2d ed. 2001 & Supp.2012).
[xxxvi] 76 Am.Jur.2d Trusts § 166 (1992)