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VIRGINIA: Court Rules in Favor of Diocese - UPDATED

VIRGINIA: Court Rules in Favor of Diocese

January 10, 2012

The Fairfax Circuit Court under Judge Randy Bellows issued its ruling in favor of the Diocese of Virginia and the Episcopal Church in litigation seeking to recover Episcopal church property. "Our goal throughout this litigation has been to return faithful Episcopalians to their church homes and Episcopal properties to the mission of the Church," said the Rt. Rev. Shannon S. Johnston, bishop of Virginia.

The court ruled that the Episcopal Church and the Diocese of Virginia have "a contractual and proprietary interest" in each of the properties subject to the litigation. The court ordered that all property subject to its ruling be turned over to the Diocese.

"We hope that this ruling will lead to our congregations returning to worship in their church homes in the near future, while finding a way to support the CANA congregations as they plan their transition," said Henry D.W. Burt, secretary of the Diocese and chief of staff.

Bishop Johnston added, "While we are grateful for the decision in our favor, we remain mindful of the toll this litigation has taken on all parties involved, and we continue to pray for all affected by the litigation."

The ruling can be found here. http://www.thediocese.net/Customer-Content/WWW/CMS/files/property_ruling_1102012.pdf

The seven churches involved are:

The Falls Church
St. Paul‟s Church
Truro Church
St. Stephen‟s Church
Church of the Apostles
St. Margaret‟s Church
Church of the Epiphany

Below are the relevant excerpts from the Judge's ruling.

(pages 110-111) IX. CONCLUSION For the reasons stated above, the Court finds for TEC and the Diocese in the Declaratory Judgment actions and against each of the seven CANA Congregations. The trustees of the churches must, therefore, promptly convey the properties to the Diocese and the CANA Congregations must promptly relinquish control over the properties to the Diocese. Further, the Court finds the Amended Counterclaims to be without merit and grants TEC's and the Diocese's Motions to Strike the claims for unjust enrichment, quantum merit, and constructive trust. Further, the Court finds that the Vestry entitled to elect the directors of the Falls Church Endowment Fund is the Falls Church Episcopal congregation recognized by the Diocese.

(page 112) ... the Court orders that all personal property acquired by the congregations before January 31, 2007 or February 1, 2007 (depending on the congregation) shall be conveyed to the Diocese and all liquid personal property (e.g., contributions and donations of money) acquired after these dates shall remain with the CANA Congregations. As to tangible personal property acquired by the CANA Congregations after these dates, they shall be conveyed to the Diocese unless the CANA Congregations can establish that they were purchased solely with funds acquired after these dates or were donated to the CANA Congregations after these dates.

*****

VA Anglicans Remain Prayerful Amid Church Property Ruling

Seven Anglican congregations in Virginia that are parties to the church property case brought by The Episcopal Church and the Episcopal Diocese of Virginia are reviewing today's ruling by the Fairfax County Circuit Court that the property should be turned over to the Episcopal Diocese.

The Circuit Court heard the case last spring after the Virginia Supreme Court remanded it in June 2010. The congregations previously had succeeded in their efforts on the Circuit Court level to defend the property that they bought and paid for.

"Although we are profoundly disappointed by today's decision, we offer our gratitude to Judge Bellows for his review of this case. As we prayerfully consider our legal options, we above all remain steadfast in our effort to defend the historic Christian faith. Regardless of today's ruling, we are confident that God is in control, and that He will continue to guide our path," said Jim Oakes, spokesperson for the seven Anglican congregations.

The Rev. John Yates, rector of The Falls Church, a historic property involved in the case, stated, "The core issue for us is not physical property, but theological and moral truth and the intellectual integrity of faith in the modern world. Wherever we worship, we remain Anglicans because we cannot compromise our historic faith. Like our spiritual forebears in the Reformation, 'Here we stand. So help us God. We can do no other.'"

The seven Anglican congregations are members of the newly established Diocese of the Mid-Atlantic, a member diocese within the Anglican Church in North America. Bishop John Guernsey of the Diocese of the Mid-Atlantic has expressed to leaders of the seven congregations, "Our trust is in the Lord who is ever faithful. He is in control and He will enable you to carry forward your mission for the glory of Jesus Christ and the extension of His Kingdom. Know that your brothers and sisters in Christ continue to stand with you and pray for you."

For background on the case or to schedule an interview with a spokesperson, please contact Caitlin Manaois at (703) 795-9183 or Megan Franko at (703) 859-9054.

Web link to statement: http://www.anglicandoma.org/pages/page.asp?page_id=169074&articleId=28166

*****

CANA Responds to Judge's Ruling in Virginia

January 11, 2012

Word has just been received that Judge Randy Bellows of the Fairfax County (Virginia) Circuit Court has issued a 113-page letter opiniondeciding the issues in the lengthy property trial last year completely in favor of the Episcopal Diocese of Virginia and the national Church. The Judge's summary of his rulings is as follows:

In this Letter Opinion, the Court makes three princip[al] rulings:

1. TEC and the Diocese have a contractual and proprietary interest in each of the seven Episcopal churches that are the subjects of this litigation. Specifically, the Court finds for TEC and the Diocese in their Declaratory Judgment actions and, among other relief, orders that all real property conveyed by the 41 deeds, as well as all personal property acquired by the churches up to the filing date of the Declaratory Judgment actions (on or about January 31, 2007 or February 1, 2007) are to be promptly conveyed to the Diocese. (Additional instructions are provided at the conclusion of this Letter Opinion.)

2. The CANA Congregations‟ Amended Counterclaims are denied in their entirety. Specifically, the Court finds that the CANA Congregations, in that they are not Episcopal Congregations, do not possess either contractual or proprietary interests in the property of the seven Episcopal Churches at issue. They are, therefore, enjoined from further use or control of these properties and must promptly relinquish them to the Diocese. Moreover, the Court finds no merit in the CANA Congregations‟ claims for unjust enrichment,quantum meruit, and constructive trust and grants TEC‟s and the Diocese‟s motions to strike these claims.

3. The vestry empowered to elect directors to the Falls Church Endowment Fund is the vestry recognized by the Diocese as the Episcopal vestry of The Falls Church, that is to say, the Continuing Congregation.

The opinion then concludes (after 100 more pages):

It remains to determine the disposition of the personal property of the seven churches. Virginia Code §57-10 provides as follows:

When personal property shall be given or acquired for the benefit of an unincorporated church or religious body, to be used for its religious purposes, the same shall stand vested in the trustees having the legal title to the land, to be held by them as the land is held, and upon the same trusts or, if the church has created a corporation pursuant to §57-16.1, to be held by it as its land is held, and for the same purposes. Thus, the disposition of the personal property of these churches follows the disposition of the real property of these churches, that is to say, it must also be turned over to the Diocese. There is a significant caveat to this, however, and it arises from the fact that there came a point in time when it was absolutely clear that a contribution or donation or the payment of membership dues to one of the seven congregations was not a contribution to an Episcopal congregation.

Therefore, the personal property acquired by the CANA congregations after this point in time should remain with the CANA congregations. There are four possible points in time which the Court has considered:

First, the Court has considered using as a point of demarcation the various points in time when the congregations made varying arrangements to withhold contributions from the Diocese.[FN 84]

________________

[FN 84]According to CANA, "all of the CANA Congregations curtailed or terminated their donations to the Diocese in response to the actions of the denomination at its 2003 General Convention." (CANA Brief #1A at 159.) Congregants were given the opportunity to designate that no portion of their title should go to the Diocese; or the congregation stopped giving money to the Diocese entirely; or the congregation established a congregation only fund. Id. at fn. 120.
________________

Putting aside the accounting difficulties in applying these various dates to the various circumstances, and whether it would even be possible to account for the individual choices of parishioners where they were given the opportunity to designate, there is a much more dispositive objection to using this as the point of demarcation: Whatever may have been the level of discord and disenchantment with TEC and the Diocese, each of the seven churches in 2003, 2004, 2005, and through most of 2006 remained Episcopal churches, constituent members of the Diocese and TEC.

Second, the Court has considered using as the point of demarcation the date upon which each of the CANA Congregation voted to disaffiliate pursuant to §57-9(A)(December 2006-January 2007). (Alternatively, the Court could use the date when each congregation filed its §57-9(A) petition.) Here, too, there are significant problems: first, it has now been conclusively determined that §57-9(A) is inapplicable to these proceedings; second, it is not the act of taking a vote, or even the filing of a petition, that renders a decision to affiliate with a different denomination final and conclusive - rather it is the Court‟s approval of the petition. That did not come until January 8, 2009, and in any event was reversed by the Virginia Supreme Court.

Third, the Court has considered using as the point of demarcation the Diocese‟s January 22, 2007 Notice of Inhibition, or January 22, 2007 resolution determining the properties to have been abandoned, or the August 1, 2007 Notice of Removal. While arguments could be made in support of each of these dates, especially the January 22, 2007 resolution declaring the properties to be abandoned, they do not have the public notice character of the fourth possibility, which is the one this Court adopts.

This fourth possibility, which this Court adopts as the point of demarcation, is the filing date of the Declaratory Judgment actions by the Diocese against each congregation on either January 31, 2007 (involving five of the congregations) or February 1, 2007 (involving the two remaining congregations).

After this date, no contribution made, no donation made, no dues paid by a congregant, could reasonably have been made with the understanding that the money was going to Episcopal congregations. (While the seven churches, for the reasons stated in this opinion, never lost their character as Episcopal churches, the Court‟s focus here is on the actions taken by - and the Declaratory Judgment actions filed against - the CANA congregations.)

Therefore, the Court orders that all personal property acquired by the congregations before January 31, 2007 or February 1, 2007 (depending on the congregation) shall be conveyed to the Diocese and all liquid personal property (e.g., contributions and donations of money) acquired after these dates shall remain with the CANA Congregations. As to tangible personal property acquired by the CANA Congregations after these dates, they shall be conveyed to the Diocese unless the CANA Congregations can establish that they were purchased solely with funds acquired after these dates or were donated to the CANA Congregations after these dates.[FN 85]

______________________

[FN 85] As to the argument that the CANA Congregations should not have to convey to the Diocese funds on hand as of January 31, 2007 because such funds were used to maintain the church facilities since then, the Court would note the obvious fact that the CANA Congregation had the use of the property since that point in time as well.

______________________

TEC and the Diocese seek an accounting as part of their requested relief. To the extent an accounting is necessary to implement the Court‟s orders, an accounting is ordered.

TEC and the Diocese are to prepare and submit a proposed final order within 45 days of the issuance of this Letter Opinion, affording the CANA Congregations a reasonable opportunity to note their exceptions. If either party believes a hearing is necessary regarding the terms of the Final Order, they should communicate this to the Court, by letter, no later than 30 days from today.

The opinion is remarkable for its exhaustive consideration of every possible Virginia statute and previous case (including an unreported one) that could bear on the issues at stake. Along the way, it notably holds that the Dennis Canon (and its local diocesan equivalent) were ineffective per se to create a trust interest in favor of the diocese or national Church. But the bulk of the opinion appears (on a very quick first read) to be devoted to arriving at the same result (i.e., as if the Dennis Canon and its local equivalent had established a trust) by other means. It reaches its conclusion in favor of ECUSA and its diocese by drawing upon a minutely detailed analysis of the course of conduct between the parishes in question and the former entities over more than a hundred years (and in the case of Falls Church and a few others, for many more years than that -- but in the case of the Church of the Epiphany, on a course of conduct extending for just the first twenty of the last twenty-four years).

In doing so, however, the court ends up equating what it terms a "proprietary and contractual interest" of the diocese in individual parish property to the functional legal equivalent of an express or implied trust in favor of the diocese (and the national Church). And since it recognizes that Virginia law does not allow express or implied trusts in favor of denominations, the marvel is that Judge Bellows can still conclude, by drawing heavily upon his interpretation of a Virginia statute (§ 57-16.1), that the parishes effectively controlled their own properties only for so long as they remained constituent members of the Episcopal Church (USA) -- which is exactly what the Dennis Canon states, in haec verba.

The result is a carefully-crafted holding that appears (at first blush, at any rate) to be insulated against any federal constitutional grounds for overturning it -- unless it can be argued that the "proprietary and contractual interest" which the court found to be decisive is simply the inherent byproduct of being affiliated with what the Virginia Supreme Court already deemed (without any distinctions) to be a "hierarchical church." If that is the net effect of this decision, one has to wonder whether or not Judge Bellows has given the Episcopal Church (USA) an unassailable preference by the back door, and so thereby "established" it as a specially preferred type of church for purposes of resolving property disputes, in violation of the First Amendment.

It will take some time to analyze the opinion more carefully, because Judge Bellows is nothing if not painstaking and thorough. I also have to prepare for a court proceeding of my own tomorrow, and so it may be a day or two before I can publish a full assessment and analysis. Baby Blue has more background and first-person reportage at this post.

Prayers go out to all the congregations affected by this ruling.

*****

ACNA Leader Responds to Virginian Court Ruling

Dear Friends,

As I read today's daily devotion in Oswald Chambers' My Utmost for His Highest, I was first convicted of the deep personal message of responsibility to obey God's call. Following Luke 23:26, Chambers begins:

"If we obey God, it is going to cost other people more than it costs us, and that is where the pain begins. If we are in love with our Lord, obedience does not cost us anything- it is a delight. But to those who do not love Him, our obedience does cost a great deal. If we obey God, it will mean that other people's plans are upset. They will ridicule us as if to say, "You call this Christianity?" We could prevent the suffering, but not if we are obedient to God. We must let the cost be paid."

Reflecting on the passage, I was struck by how poignant it is, not only for me, but for our entire North American Province on this very day in light of recent national litigation and yesterday's unfavorable ruling by the Fairfax County, VA Circuit Court against seven of our member congregations.

As we continue to stand for the integrity of our historic faith in the modern world, we must remain obedient to the call our Lord has placed on our lives.

Chambers challenges us:

"Will we remain faithful in our obedience to God and be willing to suffer the humiliation of refusing to be independent? Or will we do just the opposite and say, "I will not cause other people to suffer"? We can disobey God if we choose, and it will bring immediate relief to the situation, but it will grieve our Lord. If, however, we obey God, He will care for those who have suffered the consequences of our obedience. We must simply obey and leave all the consequences with Him."

Let us not grow weary, but rejoice in the blessing of being part of the body of Christ, our Lord and Savior.

Thank you for standing strong.

Many Blessings,

Brad B. Root
ACNA Chief Operating Officer

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