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Local Churches Prevail over Denominational Trust Clause Claims

For those following the issues of enforceability of the Methodist and Reformed Church claims of trust over property, the Texas Supreme Court issued and opinion on May 22,2020 striking a blow to denominations and freeing local congregations who wish to retain their property and leave the denomination.  In a landmark case involving claims made by the Episcopal Church (TEC) over local churches who sought to leave the denomination and retain their property, the Texas Supreme Court dismissed Trust Clause arguments made by the denomination and found that the local churches were the sole owner of their property.

The Texas Supreme Court endorsed the arguments that we make when arguing that the Methodist (“UMC”) Trust Clause and the Reformed Church of America’s (“RCA”) property trust claims is not enforceable.

The Court held:

Applying neutral principles to the undisputed facts, we hold that (1) resolution of this property dispute does not require consideration of an ecclesiastical question, (2) under the governing documents, the withdrawing faction is the Episcopal Diocese of Fort Worth, and (3) the trial court properly granted summary judgment in the withdrawing faction’s favor….

In reaching its decision, the Court reasoned:

  • The TEC’s determinations as to which faction is the true diocese loyal to the church and which congregants are in good standing are ecclesiastical determinations to which the courts must defer. But applying neutral principles to the organizational documents, the question of property ownership is not entwined with or settled by those determinations.
  • The Fort Worth Diocese’s identity depends on what its documents say.
  • To that end, the Diocesan Constitution and Canons provided who could make amendments and under what circumstances; none of those circumstances incorporate or rely on an ecclesiastical determination by the national church; and nothing in the diocese’s or national church’s documents precluded amendments rescinding an accession to or affiliation with TEC.
  • Applying neutral principles of law, we hold that the majority faction is the Fort Worth Diocese and parishes and missions in union with that faction hold equitable title to the disputed property under the Diocesan Trust.

The Court then dispensed of the remaining arguments of the Episcopal Church that its property was held in trust.

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Dalton & Tomich PLC is actively litigating cases Methodist (UMC) Trust Clause and claims made by the Reformed Church of America (RCA) across the United States asserting the same arguments that were decided in this instant case in Texas. It is now clear that in, the UMC Trust clause and RCA claims of property ownership are now unenforceable.  We are assisting, and stand ready to assist, additional local UMC and RCA churches in Texas who wish to leave the denomination and retain their property.  This case will likely lead to local churches leaving the denomination and keeping their property.

The same argument is true throughout a majority of states where neutral principals arise. If you would like to have your case evaluated, please contact Daniel Dalton or another professional at Dalton & Tomich PLC to review your case and provide guidance to separate and retain your property.

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