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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. St. Paul Church, Inc. v. Board of Trustees of the Alaska Missionary Conference of the United Methodist Church, Inc. (10/13/2006) sp-6061
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| ST. PAUL CHURCH, INC., an | ) |
| Alaska Corporation, PAT TURNER, | ) Supreme Court Nos. S-11641/11661 |
| CHRIS CASE, THOMAS J. | ) |
| HALLINAN, ROBERT F. | ) Superior Court No. |
| CARLSON, and CAM CARLSON, | ) 4FA-02-02290 CI |
| ) | |
| Appellants/ | ) O P I N I O N |
| Cross-Appellees, | ) |
| ) No. 6061 - October 13, 2006 | |
| v. | ) |
| ) | |
| BOARD OF TRUSTEES OF THE | ) |
| ALASKA MISSIONARY | ) |
| CONFERENCE OF THE UNITED | ) |
| METHODIST CHURCH, INC., | ) |
| ) | |
| Appellee/ | ) |
| Cross-Appellant. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Richard D. Savell, Judge.
Appearances: John J. Burns and Corinne M.
Vorenkamp, Borgeson & Burns, PC, Fairbanks,
for Appellants and Cross-Appellees. Thomas
H. Dahl and Joseph W. Sheehan, Law Offices of
Joseph W. Sheehan, Fairbanks, for Appellee
and Cross-Appellant.
Before: Bryner, Chief Justice, Eastaugh,
Fabe, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
FABE, Justice.
I. INTRODUCTION
St. Paul Church, Inc., formerly a local affiliate of
The United Methodist Church, was discontinued as a United
Methodist Church by the Alaska Missionary Conference of The
United Methodist Church. Following the discontinuance, a dispute
arose between St. Paul Church and the Alaska Missionary
Conference over two parcels of property that St. Paul Church
acquired when it was affiliated with The United Methodist Church.
Applying an approach that relied on neutral principles of law to
this issue of first impression in Alaska how property disputes
should be resolved following a schism between religious groups
the superior court determined that the Alaska Missionary
Conference was entitled to possession of the disputed properties.
St. Paul Church appeals. Because we agree with both the neutral-
principles approach adopted by the superior court and the result
it reached, we affirm. We also affirm the superior courts
determination that the individually named appellants are liable
for trespass and conversion with respect to the property properly
awarded to the Alaska Missionary Conference. The Alaska
Missionary Conference cross-appeals, seeking reversal of the
superior courts determination that St. Paul Church, and not the
Alaska Missionary Conference, is entitled to the St. Paul
corporate entity and the name St. Paul Church. Because we agree
with the superior court that St. Paul Church is entitled to
retain its independent corporate existence and name, we affirm.
II. FACTS AND PROCEEDINGS
A. Facts
1. The United Methodist Church, Alaska Missionary
Conference, and The Book of Discipline
The United Methodist Church (UMC) is a worldwide
religious denomination organized by conferences, each covering a
wider geographic scope, beginning with the local church and
charge conference and extending through the district, annual,
jurisdictional (regional), and [g]eneral [c]onferences. The
Board of Trustees of the Alaska Missionary Conference of the UMC
(AMC) is an Alaska nonprofit corporation and is the regional
conference of UMC that represents Alaska.
The Book of Discipline is the book of law of The United
Methodist Church.1 The Discipline sets forth the organizational
structure of UMC2 and contains a chapter devoted to church
property.3 According to the Discipline:
The United Methodist Church is organized as a
connectional structure, and titles to all
real and personal, tangible and intangible
property held at general, jurisdictional,
annual, or district conference levels, or by
a local church or charge, or by an agency or
institution of the Church, shall be held in
trust for The United Methodist Church and
subject to the provisions of its
Discipline.[4]
Paragraph 2503 of the Discipline sets forth trust
language which all written instruments conveying real property
for purposes of worship or as parsonages shall contain, to the
effect that all property is being held in trust for UMC.5 The
Discipline later provides:
[T]he absence of a trust clause . . . in
deeds and conveyances executed previously or
in the future shall in no way exclude a local
church or church agency, or the board of
trustees of either, from or relieve it of its
connectional responsibilities to The United
Methodist Church. Nor shall it absolve a
local church or church agency or the board of
trustees of either, of its responsibility and
accountability to The United Methodist
Church, including the responsibility to hold
all of its property in trust for The United
Methodist Church; provided that the intent of
the founders and/or a later local church or
church agency, or the board of trustees of
either, is shown by any or all of the
following:
a) the conveyance of the property to a
local church or church agency (or the
board of trustees of either) of The
United Methodist Church or any
predecessor to The United Methodist
Church;
b) the use of the name, customs, and polity
of The United Methodist Church or any
predecessor to The United Methodist
Church in such a way as to be thus known
to the community as a part of such
denomination; or
c) the acceptance of the pastorate of
ordained ministers appointed by a bishop
or employed by the superintendent of the
district or annual conference of The
United Methodist Church or any
predecessor to The United Methodist
Church.[6]
Paragraph 2506 of the Discipline notes that these
property provisions are subordinate to local law:
All provisions of the Discipline relating to
property, both real and personal, and
relating to the formation and operation of
any corporation, and relating to mergers are
conditioned upon their being in conformity
with the local laws, and in the event of
conflict therewith the local laws shall
prevail; provided, however, that this
requirement shall not be construed to give
the consent of The United Methodist Church to
deprivation of its property without due
process of law or to the regulation of its
affairs by state statute where such
regulation violates the constitutional
guarantee of freedom of religion and
separation of church and state or violates
the right of the Church to maintain
connectional structure . . . .[7]
The Discipline contemplates discontinuation of a local
church and provides for property disposition in the wake of a
discontinuance:
A recommendation of discontinuance shall
include recommendations as to the future use
of the property and where the membership . .
. and the title to all the real and personal,
tangible and intangible property of the local
church shall be transferred. On such
recommendation that a local church no longer
serves the purpose for which it was organized
and incorporated . . . , with the consent of
the presiding bishop and a majority of the
district superintendents and the district
board of church location and building of the
district in which the action is contemplated,
the annual conference may declare any local
church within its bounds discontinued.[8]
It further provides:
[W]hen a local church no longer serves the
purpose for which it was organized and
incorporated . . . , with the consent of the
presiding bishop, a majority of the district
superintendents, and of the district board of
church location and building, the annual
conference trustees may assume control of the
real and personal, tangible and intangible
property. . . . The conference trustees may
proceed to sell or lease said property,
retain the proceeds in an interest-bearing
account, and recommend the disposition of the
proceeds in keeping with annual conference
policy. It shall be the duty of the annual
conference trustees to remove, insofar as
reasonably possible, all Christian and church
insignia and symbols from such property.[9]
2. St. Paul Church, Inc. and the individually named
appellants
In 1983 a group of families in the Fairbanks area
contacted AMC, expressing interest in forming a new UMC
congregation. In a letter dated February 21, 1984 to Larry
Bennett, one of the early members of St. Paul Church, Bishop
Calvin D. McConnell informed Bennett:
All property of United Methodist Churches is
owned in trust on behalf of The United
Methodist Church. There is no such thing as
locally owned property. When a congregation
votes to purchase real estate and to build a
building on it, they obligate themselves with
the financial responsibilities of such
purchase and construction and continuing
maintenance. But they do so as part of the
connection of all United Methodists.
Property is held on behalf of the
denomination as a whole for its strategically
missional purposes. When a new forming
religious community agrees to become a United
Methodist Church they agree to its
constitution, Articles of Religion, and its
polity and governance. Part of its polity
and governance involves property being held
in trust on behalf of The United Methodist
Church.
And also:
I go into all of this to indicate that we are
a connectional church. The local church is
tied together with others for the mutual
benefit of one another in mission to the
world. Property is held in common by the
denomination, with each local church assuming
the responsibilities and enjoyment of using
its own property, maintaining it, developing
it, and improving it. If a congregation, or
a portion of it, should at any point in its
history decide to separate from The United
Methodist Church, it could certainly do so,
but could not take the title of the property
with them. The property is held by the
denomination to assure the means of providing
continuing ministry on behalf of The United
Methodist Church in that location.
Bishop McConnell also referred Bennett to the paragraphs of the
Discipline relating to property ownership, and he quoted with
emphasis from Paragraph 2501:
The United Methodist Church is organized as a
connectional structure, and titles to all
properties held at General, Jurisdictional,
Annual, or District Conference Levels, or by
a local church or charge, or by an agency or
institution of the church, shall be held in
trust for The United Methodist Church and
subject to the provisions of its DISCIPLINE.
The letter then noted:
Incidentally, there have been some rather
unfortunate civil suits against denominations
such as United Methodist and Presbyterian to
challenge this concept of property being held
in trust. In every case the civil courts
have upheld the denomination.
I do not go into such long detail about this
matter to intimidate you or discourage you,
but only to inform you. It would seem
important to me that your developing
congregation understand the implications of
the connectional nature of this undertaking
in establishing a new local church. It is
something that is being done together. Your
group needs to be sure that it really wants
to be United Methodist. If so, there are
certain understandings which are inherent
within it . . . [including] holding property
in trust on behalf of the denomination.
From January 1984 through April 1984, members of the
St. Paul Church community signed a Statement of Intent which
declared that they were intending to present themselves for
membership in UMC and that they would worship and conduct
business in accordance with The Book of Discipline of The United
Methodist Church. On April 15, 1984, St. Paul was granted a
Certificate of Organization by AMC, stating that it had been duly
constituted according to the provisions of the Discipline of UMC.
Parties to this litigation, Robert Carlson, Cam Carlson, and
Thomas Hallinan, signed the Statement of Intent.
St. Paul Church was incorporated as a religious
corporation on November 23, 1984 under the name St. Paul United
Methodist Church. The stated purposes of the corporation were
to promote Christian religion, conduct public
worship, conduct religious education, perform
acts of charity, acquire, hold or dispose of
church property and funds and perform such
other lawful acts as may be necessary from
time to time, subject to the Discipline of
The United Methodist Church and ultimately
subject to the word of God as found in the
Old and New Testaments of the Bible.
To receive and maintain a fund or funds of
real or personal property or both and,
subject to the restrictions and limitations
hereinafter set forth, to use and apply the
whole or any part of its income therefrom and
the principle thereof exclusively for
religious, charitable or educational purposes
of the corporation directly . . . .
The Articles of Incorporation further provided:
Upon dissolution of the corporation, or upon
the conclusion of its affairs, the assets of
the corporation shall be distributed to such
religious, charitable, or education
organization(s) as the Board of Trustees may
select, which are carrying on functions
consistent with the purpose of this
corporation . . . .
Under the Articles, the Board of Trustees shall be in
charge of all property of the Church and of the act of
incorporating the Church. The Articles were signed by Robert F.
Carlson, Trustee in Trust as Chairman of the Board of Trustees.
In 1988 St. Paul Church purchased two pieces of
property, a parsonage and land upon which it later built a
church. Title to both properties was in the name of St. Paul
United Methodist Church. Neither of the deeds contained the
trust language set forth in Paragraph 2503 of the Discipline.
St. Paul annually informed AMC of its failure to include the
trust language in the deeds when it submitted its annual reports
to the trustees of AMC, and answered no to the question whether
each deed contained a trust clause.
In November 1986 a letter was sent to St. Paul from the
General Board of Global Ministries of the UMC (GBGM) informing
that, pursuant to its application for a grant to assist with a
land purchase, the GBGM had approved a $25,000 grant to St. Paul
on the condition that a Trust Agreement and Mortgage be recorded
against the local church as security for the donation of mission
funds. The letter stated that [t]he National Division, in
granting a conditional donation to a church, requires that a lien
be placed upon the property for the return of the monies in the
event that the property should be ever sold, alienated from The
United Methodist Church, or cease to be used for church purposes.
The Trust Agreement and Mortgage was signed on November 9, 1990.
The introductory clauses of the Trust Agreement and
Mortgage provide in relevant part:
Whereas the party of the first part does
hereby represent and declare that it has
acquired title to, and does now hold, the
premises hereinafter described, and that said
premises shall be held, kept, and maintained
as a place of residence for the use and
occupancy of the ministers of The United
Methodist Church, who may from time to time
be entitled to occupy the same by
appointment, and/or[] used, kept and
maintained, as a place of divine worship of
the United Methodist ministry and members of
The United Methodist Church; subject to the
Discipline, usage, and ministerial
appointments of said church as from time to
time authorized and declared by the General
Conference of said church, and the Annual
Conference within whose bounds the said
premises are situated[.]
The agreement later states:
[I]n case [St. Paul] shall cease to be
connected with The United Methodist Church,
or its successor, or the corporate existence
of [St. Paul] shall cease, or the property
hereinafter described shall ever hereafter be
alienated from The United Methodist Church,
or cease to be used for or be devoted to
other uses and purposes than the uses [or]
purposes set forth herein, then, [St. Paul]
shall and will forthwith repay to the party
of the second part, the successors or assigns
thereof, the said amount with lawful interest
thereon, from the date of the aforesaid
alienation, dissolution or abandonment.
3. The discontinuation
Following a period of conflict between members of the
lay congregation of St. Paul and the regional administration of
UMC, on December 8, 2001, Reverend Rachel Lieder Simeon, on
behalf of the Cabinet of AMC, informed Reverend Don Strait, then
interim pastor at St. Paul, and Judy Stoop, the chairperson of
the Staff Parish Relations Committee, that it was the
recommendation of the Cabinet of AMC that St. Paul acknowledge
the need for new lay leadership. The communication informed
Strait and Stoop that a formal request was being made that the
lay leadership of St. Paul step aside in order to facilitate the
development of new leadership. It was further recommended that
the new leadership stay in office for no less than three years.
On January 22, 2002, a meeting was held at St. Paul,
and lay leaders were elected in a manner contrary to the wishes
of AMC. Subsequently, in February 2002 Lieder Simeon recommended
to AMCs Administrative Unit that UMC cease its affiliation with
St. Paul.
On May 22, 2002, St. Paul filed a verified complaint
for a temporary restraining order, a preliminary injunction, and
a permanent injunction asking the superior court to enjoin a vote
on the discontinuation because AMC was not following the proper
discontinuation procedure under the Discipline. The superior
court, finding that the lawsuit concerned the internal workings
of The United Methodist Church and that the court had no
jurisdiction to determine the question, granted AMCs motion to
dismiss the complaint.
At the Annual Meeting of AMC on May 30, 2002, St. Paul
was discontinued. According to the minutes, at the outset of the
meeting, Bishop Paup reminded all that we are not owners we are
custodians. Lieder Simeon also informed the conference:
It is important to realize that we are not
making a determination as to whether or not
St. Paul should exist as a church. The only
determination we make, as an annual
conference of The United Methodist Church, is
whether or not St. Paul should be continued
as a United Methodist Church.
The vote for discontinuance was recorded as sixty-one for
discontinuance and one against discontinuance, with Robert
Carlson the only person voting against discontinuance.
With respect to disposition of property, the minutes
read:
Superintendent Rachel Lieder Simeon reminded
the conference that all local church property
is held in trust for the denomination.
Whenever a church ceases to exist as a United
Methodist entity, all the property and assets
revert to the denomination.
Recommendation concerning the disposition of
property:
The Administrative Unit of the Alaska
Missionary Conference recommends that the
Alaska Missionary Conference retain the title
and asset[s] of the current parsonage and
make the church property available to an
appropriate body for continuation as a church
on that site. Further, we recommend that the
Board of Trustees of the Alaska Missionary
Conference be empowered by the annual
conference to negotiate the terms of the
transfer of deed and property. If agreement
cannot be reached between the parties, the
trustees shall be empowered to work out
another arrangement.
Recommendation supported.
The following recommendation was also made concerning
the disposition of the membership:
The cabinet recommends that the
superintendent who has been in charge of St.
Paul UMC contact the current membership
within one month of the vote by the Annual
Conference to attempt to meet with the
membership and work with those who desire
assistance in finding a new church home.
A few days after St. Paul was discontinued, Rachel
Lieder Simeon accompanied a team to Fairbanks, entered the church
building and removed all books and other items that contained the
identification, through word or symbol, of The United Methodist
Church. The team also removed the UMC symbol from the sign,
removed office equipment, changed the locks on the church
building and the parsonage, and withdrew the balance from St.
Pauls bank account. The team also affixed No Trespassing signs
to the church.
On June 6, 2002, after the discontinuation, St. Paul
amended its Articles of Incorporation, deleting all references to
UMC, changing its name to St. Paul Church, and changing its
status from a religious corporation to a nonprofit corporation.
In mid-July 2002 St. Paul concededly regained control of its
parsonage and church buildings, and resumed regular worship in
the church.
B. Proceedings
On September 27, 2002, AMC filed a complaint against
St. Paul United Methodist Church, Inc., Pat Turner, Gary Koll,10
Chris Case, Thomas Hallinan, Robert Carlson, Cam Carlson (the
individually named appellants), and several John Doe members of
the congregation for forcible entry and detainer, breach of
contract, trespass, quiet title, and ejectment and sought
declaratory relief. On October 23, 2002, AMC filed an amended
complaint which added a claim for breach of fiduciary duty. St.
Paul asserted the affirmative defenses of lack of subject matter
jurisdiction, statute of limitations, estoppel, laches, failure
of consideration, waiver, and statute of frauds. St. Paul also
included within its answer to the amended complaint a
counterclaim for theft based on AMCs removal of personal property
from the church and the withdrawal of $6,000 from St. Pauls bank
account.
On June 9, 2003, AMC moved for partial summary
judgment, arguing that it was entitled to judgment as a matter
of law for breach of contract, breach of fiduciary duty on the
part of the individually named appellants, ejectment, and quiet
title. On April 5, 2004, St. Paul and the individually named
appellants moved for summary judgment on all claims brought
against them.
On April 2, 2004, AMC moved to dismiss the answer and
the counterclaims of the individually named appellants for lack
of standing. The superior court denied the motion on the ground
that the only counterclaim asserted in the responsive pleading of
the defendants was brought on behalf of St. Paul and not on
behalf of the individually named appellants. Therefore, it was
irrelevant if the individually named appellants had standing to
bring a claim.
On June 24, 2004, the superior court entered a judgment
of liability in favor of the Board of Trustees of AMC and against
St. Paul Church, Inc. for trespass and conversion. St. Paul
Church appeals, arguing that the lower court did not apply a true
neutral-principles approach for resolving church property
disputes in Alaska when it found that St. Paul was bound by the
rules of The Book of Discipline, and when it disregarded basic
principles of trust and property law. St. Paul further argues
that the superior court erred in finding the individually named
appellants liable for trespass and conversion.
On August 2, 2004, the superior court awarded St. Paul
its name and corporate existence. AMC cross-appeals, arguing
that it is entitled to these property rights. AMC also revives
its claim that the individually named appellants should be
dismissed from the lawsuit.
III. DISCUSSION
A. Standard of Review
Constitutional issues present questions of law, and
they are reviewed de novo.11 The choice of the proper standard to
adopt for resolving property disputes is a question of law that
we review de novo,12 adopting the rule of law that is most
persuasive in light of precedent, reason, and policy.13 Motions
to dismiss,14 motions for summary judgment,15 and issues of
standing16 are reviewed de novo. In reviewing a grant of summary
judgment, we may affirm on any basis appearing in the record, so
long as no new factual determinations are required.17
B. We Adopt a Neutral-Principles Approach to Resolving
Church Property Disputes.
1. United States Supreme Court precedent
In 1871 the United States Supreme Court first addressed
a dispute over ownership of church property stemming from a rift
between two religious factions of a local church in Watson v.
Jones.18 In analyzing the dispute, the Court distinguished
between churches with congregational or independent
organizations, governed solely within themselves, and those where
a congregation was part of a larger, structured denomination.
When property disputes arose in hierarchical churches,
the Court adopted an approach deferential to the hierarchy,
explaining:
[W]e think the rule of action which should
govern the civil courts, founded in a broad
and sound view of the relations of church and
state under our system of laws, and supported
by a preponderating weight of judicial
authority is, that, whenever the questions of
discipline, or of faith, or ecclesiastical
rule, custom, or law have been decided by the
highest of these church judicatories to which
the matter has been carried, the legal
tribunals must accept such decisions as
final, and as binding on them, in their
application to the case before them.[19]
While courts began to make exceptions to the Watson
deference approach for fraud, collusion, or arbitrariness,20 the
Watson approach was not substantially modified until the United
States Supreme Courts decision in Presbyterian Church in the
United States v. Mary Elizabeth Blue Hull Memorial Presbyterian
Church.21 Presbyterian Church involved the withdrawal of two
local churches from the Presbyterian church because the local
organizations believed that certain actions of the general church
were departures from the doctrine and practice in force when they
became affiliated with the church.22 The local churches denounced
the jurisdiction of the general church, and an administrative
commission appointed by the general church (after it failed to
broker a reconciliation) acknowledged the withdrawal of the local
church and took over the local churches property.23 The local
churches did not appeal to higher church tribunals but instead
filed a civil suit in the Georgia courts.24 The Supreme Court of
Georgia affirmed a jury verdict in favor of the local churches
that was based on the theory that Georgia law implied a trust of
local church property for the benefit of the general church on
the sole condition that the general church adhere to tenets of
faith existing at the time of affiliation by the local churches.25
The United States Supreme Court reversed, reasoning
that
the departure-from-doctrine element of the
Georgia implied trust theory requires the
civil court to determine matters at the very
core of religion the interpretation of
particular church doctrines and the
importance of those doctrines to the
religion. Plainly, the First Amendment
forbids civil courts from playing such a
role.[26]
Significantly, in reaching its decision the Supreme
Court in Presbyterian Church laid the foundation for a competing
view of the proper role of civil courts in resolving church
property disputes when it found that
not every civil court decision as to property
claimed by a religious organization
jeopardizes values protected by the First
Amendment. Civil courts do not inhibit free
exercise of religion merely by opening their
doors to disputes involving church property.
And 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. But
First Amendment values are plainly
jeopardized when church property litigation
is made to turn on the resolution by civil
courts of controversies over religious
doctrine and practice. If civil courts
undertake to resolve such controversies in
order to adjudicate the property dispute, the
hazards are ever present of inhibiting the
free development of religious doctrine and of
implicating secular interests in matters of
purely ecclesiastical concern.[27]
In a concurring opinion in Maryland & Virginia
Eldership of the Churches of God v. Church of God at Sharpsburg,
Justice Brennan elaborated on the Courts decision in Presbyterian
Church, noting that a State may adopt any one of various
approaches for settling church property disputes so long as it
involves no consideration of doctrinal matters, whether the
ritual and liturgy of worship or tenets of faith.28 He noted that
courts could adopt the Watson approach, enforcing property
decisions made within a hierarchical church by the highest
authority within the church that ruled on the dispute.29 Citing
Presbyterian Church, he noted that
[n]eutral principles of law, developed for
use in all property disputes provide another
means for resolving litigation over religious
property. Under the formal title doctrine,
civil courts can determine ownership by
studying deeds, reverter clauses, and general
state corporation laws. Again, however,
general principles of property law may not be
relied upon if their application requires
civil courts to resolve doctrinal issues.
For example, provisions in deeds or in a
denominations constitution for the reversion
of local church property to the general
church, if conditioned upon a finding of
departure from doctrine, could not be civilly
enforced.[30]
In Jones v. Wolf, the latest United States Supreme
Court decision to offer guidance to state courts in resolving
church property disputes, a five-to-four majority of the Court
expressly declined to find that the First Amendment requires the
states to adopt a rule of compulsory deference to religious
authorities, and held that a State is constitutionally entitled
to adopt neutral principles of law as a means of adjudicating a
church property dispute.31 Its discussion in Jones clearly
suggested that while states retain the leeway to implement the
deference approach of Watson, the neutral- principles approach is
the preferred approach.
The primary advantages of the
neutral-principles approach are that it is
completely secular in operation, and yet
flexible enough to accommodate all forms of
religious organization and polity. The
method relies exclusively on objective,
well-established concepts of trust and
property law familiar to lawyers and judges.
It thereby promises to free civil courts
completely from entanglement in questions of
religious doctrine, polity, and practice.
Furthermore, the neutral-principles analysis
shares the peculiar genius of private-law
systems in general flexibility in ordering
private rights and obligations to reflect the
intentions of the parties.[32]
While expressing some reservations about the neutral-principles
approach, the majority of the Court had sharper criticism for the
Watson approach when addressing a dissent that would require
compulsory deference.
The dissent suggests that a rule of
compulsory deference would somehow involve
less entanglement of civil courts in matters
of religious doctrine, practice, and
administration. Under its approach, however,
civil courts would always be required to
examine the polity and administration of a
church to determine which unit of government
has ultimate control over church property.
In some cases, this task would not prove to
be difficult. But in others, the locus of
control would be ambiguous, and [a] careful
examination of the constitutions of the
general and local church, as well as other
relevant documents, would be necessary to
ascertain the form of governance adopted by
the members of the religious association. In
such cases, the suggested rule would appear
to require a searching and therefore
impermissible inquiry into church polity.
The neutral-principles approach, in contrast,
obviates entirely the need for an analysis or
examination of ecclesiastical polity or
doctrine in settling church property
disputes.
The dissent also argues that a rule of
compulsory deference is necessary in order to
protect the free exercise rights of those who
have formed the association and submitted
themselves to its authority. This argument
assumes that the neutral-principles method
would somehow frustrate the free-exercise
rights of the members of a religious
association. Nothing could be further from
the truth. The neutral-principles approach
cannot be said to inhibit the free exercise
of religion, any more than do other neutral
provisions of state law governing the manner
in which churches own property, hire
employees, or purchase goods. Under the
neutral-principles approach, the outcome of a
church property dispute is not foreordained.
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 the general church can be
made to recite an express trust in favor of
the denominational church. The burden
involved in taking such steps will be
minimal. And the civil courts will be bound
to give effect to the result indicated by the
parties, provided it is embodied in some
legally cognizable form.[33]
Following Jones, state courts were permitted to adopt either the
neutral-principles approach or the compulsory-deference approach,
resulting in a split among the jurisdictions. For example, the
Supreme Court of Pennsylvania in Presbytery of Beaver-Butler of
the United Presbyterian Church in the United States v. Middlesex
Presbyterian Church,34 when considering which of the competing
approaches to adopt, cited California, Georgia, Illinois,
Maryland, Missouri, South Dakota, and Ohio as among those
jurisdictions adopting the neutral-principles view,35 with
Florida, Iowa, Michigan, New Jersey, and West Virginia adhering
to the Watson approach.36
2. Alaska Supreme Court precedents
While the issue of resolution of church property
disputes has never come squarely before us, and is thus an issue
of first impression in Alaska, we have had the opportunity to
address the proper role of civil courts in evaluating disputes
between churches and church employees, and have adopted an
approach similar to the neutral- principles approach. In
Marshall v. Munro, we held that while this court did not have
jurisdiction over a breach of contract claim because employment
disputes within churches are core ecclesiastical concerns outside
the jurisdiction of the civil courts,37 we did have jurisdiction
over defamation and intentional interference with contract claims
against a minister because it was not necessary to involve
ourselves in qualifications for the ministry when considering the
elements of the defamation claim.38
In McAdoo v. Diaz, we faced another defamation claim
against a minister and, citing Marshall v. Munro, noted that we
would allow claims against the minister for libel to proceed
because they did not touch the merits of any core religious
questions or present a religious question.39
Considering our precedents, the superior courts
analysis, the weight of authority favoring the neutral-principles
approach, and the compelling logic of the opinion of the majority
of the United States Supreme Court in Jones, we adopt the neutral-
principles approach when resolving property disputes between
religious organizations.
C. Applying Neutral Principles to St. Pauls Claim, We
Agree that the Disputed Properties Belong to AMC.
When applying neutral principles of law to resolve
church property disputes, courts generally examine the deeds to
the church property, the charter of the local church, the book of
order or discipline of the general church organization, and the
state statutes governing the holding of the church property40 so
that they may give effect to the intentions of the parties with
respect to the property. Assessing these factors, the superior
court concluded that the disputed properties belong to AMC.
St. Paul argues that it never intended to create a
trust in favor of UMC, and finds fault with the superior courts
decision, arguing that
the lower court tacitly held that The Book of
Discipline trumped St. Paul, Inc.s
independent corporate charter, as well as St.
Paul, Inc.s recorded property deeds. This
ruling, based upon notions of hierarchy and
religious deference rather than neutral
principles, unconstitutionally and improperly
elevated The United Methodist Churchs
assertion of a trust above established Alaska
trust law.
Specifically, St. Paul argues that no trust can be found in favor
of UMC, because: (1) there is no evidence of unequivocal intent
to create the trust by the settlor, St. Paul; (2) there was no
trust res at the time the trust was created; and (3) there is no
document that complies with the statute of frauds. We reject
each argument in turn.
1. Unequivocal intent to create a trust
St. Paul argues that the language of The Book of
Discipline does not itself constitute a manifestation of intent
by St. Paul, Inc. to give The United Methodist Church a
beneficial interest in its property. But St. Paul seems to
suggest that the articles of incorporation and the deeds to the
disputed properties themselves negate intent on the part of St.
Paul to create a trust. We decline to adopt either polar
position and instead view the relationship between St. Paul and
UMC as a whole in order to discern intent.
When St. Paul chose to affiliate with UMC, the record
reveals that its members were fully cognizant of the implications
of affiliation. At the time of affiliation, the Discipline
expressly stated:
In consonance with the legal definition and
self-understanding of The United Methodist
Church . . . and with particular reference to
its lack of capacity to hold title to
property, The United Methodist Church is
organized as a connectional structure, and
titles to all properties held . . . by a
local church . . . shall be held in trust for
The United Methodist Church and subject to
the provisions of its Discipline.
Through the February 21, 1984 letter from Bishop McConnell, the
founding members of St. Paul were informed:
When a new forming religious community agrees
to become a United Methodist Church they
agree to its constitution, Articles of
Religion, and its polity and governance.
Part of its polity and governance involves
property being held in trust on behalf of The
United Methodist Church.
St. Pauls founders were also referred to the trust provisions of
the Discipline, and told, [y]our group needs to be sure that it
really wants to be United Methodist. If so, there are certain
understandings which are inherent within it . . . [including]
holding property in trust on behalf of the denomination. Yet the
members of St. Paul willingly presented themselves for membership
in UMC and incorporated as St. Paul United Methodist Church.
Furthermore, St. Paul continued to affiliate with UMC, using the
name, customs and polity of The United Methodist Church . . . in
such a way as to be known to the community as a part of such
denomination41 for almost twenty years, until the discontinuation.
Given the express trust language of the Discipline and the
mutually understood connectional nature of UMC, the overt acts
undertaken by the members of St. Paul to affiliate with UMC
constitute a manifestation of intent to create a trust in favor
of UMC.
Contrary to the argument of St. Paul that it is a
violation of neutral principles to rely upon provisions of the
Discipline when discerning the intent of St. Paul, examining the
trust provisions of the Discipline in connection with the actions
of the parties is fully consonant with neutral principles. As
when parties agree to be bound by the law of another
jurisdiction, we faithfully apply Alaska law by honoring the
secular rules by which the parties have chosen to be bound.42
Furthermore, reliance upon trust language such as that contained
in the Discipline to determine the objective intent of the
parties was contemplated by and endorsed by the United States
Supreme Court in Jones, when it observed:
[T]he neutral-principles analysis shares the
peculiar genius of private-law systems in
general flexibility in ordering private
rights and obligations to reflect the
intentions of the parties. Through
appropriate reversionary clauses and trust
provisions, religious societies can specify
what is to happen to church property in the
event of a particular contingency, or what
religious body will determine the ownership
in the event of a schism or doctrinal
controversy. In this manner, a religious
organization can ensure that a dispute over
the ownership of church property will be
resolved in accord with the desires of the
members.[43]
Although the record is replete with evidence that St.
Paul intended to affiliate with UMC, and thereby undertook to
hold its property in trust in favor of UMC, St. Paul argues that
as the title holder, it is entitled to the presumption that it is
the absolute owner, and that presumption has not been overcome.
While St. Paul is correct that as the titleholder of the disputed
properties, it is entitled to the presumption that it is the
owner of the disputed properties and this presumption may not be
overcome by mere surmise or conjecture,44 the evidence in the
record that St. Paul intended to create a trust far surpasses
mere surmise and conjecture and is sufficient to overcome the
presumption.
The deeds to the disputed properties are in the name of
St. Paul United Methodist Church and they do not contain the
trust clauses which the Discipline provides they shall contain.
From the absence of the trust clauses, St. Paul asks that we draw
the inference that it did not intend to impress its property with
a trust in favor of the UMC. But the Discipline expressly
provides that the absence of a trust clause does not relieve a
local church of its connectional responsibilities to UMC if the
intent of the founders of the church to hold the property in
trust is shown through the use of the name, customs and polity of
The United Methodist Church.45 Since the deeds are recorded in
the name of St. Paul United Methodist Church, the deeds are
consistent with the means set forth in the Discipline to manifest
an intent to create a trust.
St. Paul asks that we accord significance to the fact
that on its annual report forms submitted to AMC, St. Paul
annually informed the AMC that it did not put the trust clause in
its deeds and that the failure of AMC to insist upon inclusion of
the trust clauses constituted a waiver of the trust requirement.
This argument is unpersuasive in light of the default trust
provisions in the Discipline, of which St. Paul was made aware.
Furthermore, the affirmative act of submitting annual reports to
AMC on a yearly basis in itself constitutes yet another outward
manifestation of St. Pauls intent to affiliate with UMC.
St. Paul also argues that the $25,000 GBGM mortgage is
absolutely inconsistent with any other trust interest in favor of
The United Methodist Church or its affiliated entities over St.
Paul, Inc.s real property. It relies upon the provision of the
Trust Agreement and Mortgage which states:
[I]n case [St. Paul] shall cease to be
connected with The United Methodist Church,
or its successor, or the corporate existence
of [St. Paul] shall cease, or the property
hereinafter described shall ever hereafter be
alienated from The United Methodist Church,
or cease to be used for or be devoted to
other uses and purposes than the uses [or]
purposes set forth herein, then [St. Paul]
shall and will forthwith repay to the party
of the second part, the successors or assigns
thereof, the said amount with lawful interest
thereon, from the date of the aforesaid
alienation, dissolution or abandonment.
However, this routine documentation of a financial transaction
between two distinct entities is immaterial in the face of the
manifest intent of St. Paul to affiliate with UMC. Additional
language within the very same Trust Agreement and Mortgage
reflects an intent on the part of St. Paul to hold the disputed
properties for the use of UMC:
[S]aid premises shall be held, kept, and
maintained as a place of residence for the
use and occupancy of the ministers of The
United Methodist Church, who may from time to
time be entitled to occupy the same by
appointment, and/or[] used, kept, and
maintained, as a place of divine worship of
the United Methodist ministry and members of
The United Methodist Church; subject to the
Discipline, usage, and ministerial
appointments of said church as from time to
time authorized and declared by the General
Conference of said church, and the Annual
Conference within whose bounds the said
premises are situated[.]
2. The purchase of the disputed properties after the
affiliation with UMC is not fatal to a finding of
a trust.
St. Paul notes that under trust law, the lack of the
requisite trust property or res when the trust is purportedly
created is fatal to the formation of an express trust. Since St.
Paul did not have legal title to the disputed properties when it
incorporated or became a member of UMC, it argues, no trust in
favor of UMC could have been created. In support of its
argument, St. Paul cites the Restatement (Second) of Trusts which
provides in part:
A trust cannot be created . . . unless there
is trust property in existence and
ascertainable at the time of the creation of
the trust. In the absence of such property
there is at most an agreement to create a
trust, and whether such an agreement is
binding as a contract depends upon whether
the requirements for the creation of a
contract are satisfied.[46]
The absence of a res does not prove fatal to the
imposition of a trust, however, because it is not necessary to
isolate St. Pauls manifestation of intent to create a trust to
the narrow window of time in which St. Paul was organized and
affiliated with UMC. The default trust clause in the Discipline,
which states that intent sufficient to create a trust in favor of
UMC can be shown through the use of the name, customs, and polity
of The United Methodist Church or any predecessor to The United
Methodist Church in such a way as to be thus known to the
community as a part of such denomination,47 suggests that intent
to create a trust can be inferred from St. Pauls continued
affiliation with UMC after it purchased the disputed properties.
The Restatement (Third) of Trusts lends support to our conclusion
when explaining that in a scenario in which a person gratuitously
purports to declare a trust, or to make a transfer to another in
trust, of a bare expectancy or nonexistent property:
No trust arises when the person later
acquires the intended trust property in the
absence of some express or implied
manifestation at the later time of an intent
to give effect to the trust.[48]
The deeds to the disputed properties themselves, which lack the
trust language urged by the Discipline, manifest the intent of
St. Paul to establish a trust in favor of UMC because the deeds
are in the name of St. Paul United Methodist Church.
Additionally, St. Paul continued its affiliation with UMC after
the purchase of the disputed properties in 1988 until the
discontinuation in 2002, further demonstrating a willingness to
be bound by the trust provisions of the Discipline. The fact
that there was no res when St. Paul initially affiliated with UMC
is therefore not dispositive.
3. The statute of frauds is not implicated.
St. Paul argues that under Alaskas statute of frauds,
an agreement to establish a trust is unenforceable unless it or
some note of it is in writing and subscribed by the party charged
or by an agent of that party.49 AMC refers to the multiple
indicia of intent by St. Paul to affiliate with UMC, many of
which are reflected in writings subscribed to by members of St.
Paul, including: (1) St. Pauls request to join UMC, (2) its
Certificate of Organization, (3) the St. Paul Constituting
Church Conference Register of Attendance, (4) the Report of
Pastors, (5) the name St. Paul United Methodist Church, (6) the
Certificate of Religious Corporation issued by the State of
Alaska to St. Paul, and (7) St. Pauls Articles of Incorporation,
including the name St. Paul United Method Church. These writings
are sufficient evidence of intent to form a trust to satisfy the
statute of frauds.
D. The Trust Was Not Revoked when St. Paul Amended Its
Articles of Incorporation.
St. Paul argues that, even if a trust existed, St. Paul
revoked the trust when it amended its Articles of Incorporation
and deleted any reference to UMC and the Discipline. In support
of its argument, St. Paul refers to AS 10.40.050, which provides
that [a] corporation formed under this chapter may alter or amend
its articles of incorporation and change its seal. St. Paul also
relies upon California-Nevada Annual Conference of United
Methodist Church v. St. Lukes United Methodist Church50 for the
proposition that amending its articles had the effect of revoking
the trust.
In St. Lukes, a California appellate court applying
neutral principles upheld a trial courts determination that a
trust was created in favor of UMC.51 But the California court
found that St. Lukes had subsequently revoked the trust in favor
of UMC when it amended its articles of incorporation as permitted
by the applicable provisions of the California Corporations Code
pertaining to religious corporations.52 The court made clear,
though, that its decision was based upon the presumption in
California law that unless a trust is expressly made irrevocable
by the trust instrument, the trust is revocable by the settlor.53
St. Lukes is distinguishable because the opposite
presumption applied under Alaska law in 1988, when the disputed
properties were acquired and St. Pauls intent to create a trust
was manifested through the use of the name St. Paul United
Methodist Church on the deeds and through its continued
affiliation with UMC. This court noted in Alaska State Employees
Association v. Alaska Public Employees Association that [t]rusts
may be modified to the extent that the settlor of the trust has
reserved the power of modification.54 While St. Paul is correct
that religious corporations may amend their articles of
incorporation under Alaska statute, St. Paul has presented no
evidence to suggest that it reserved the right to revoke the
trust and therefore was entitled to do so by amendment. We
therefore conclude that St. Paul did not revoke the trust.
St. Paul raised in passing before the trial court, but
not through this appeal, the question whether AS 13.36.338(a),
which was enacted in 2000 and provides that unless a trust is
expressly made irrevocable, a trust executed on or after August
30, 2000 is revocable by the settlor, enables St. Paul to revoke
any trust that existed. Since we conclude that the trust in
favor of UMC was created in 1988 when Alaska law presumed the
reverse, we deem AS 13.36.338(a) to be inapplicable. But we note
that under different facts, we, like the California court in St.
Lukes, might determine that in accordance with AS 13.36.338(a) a
trust created by a local church in favor of a parent church is
revocable.
E. No Joint Trust Was Created.
St. Paul argues that the lower court also erred in
implicitly holding that a trust existed only in favor of [UMC]
and contends that the Discipline creates at most a joint trust
between the AMC and St. Paul, Inc. As the foundation of its
argument, St. Paul cites Paragraph 2537 of The Book of
Discipline, which states:
Incorporated Local Church Property-Title and
Purchase:
. . . .
the title to all property now owned or
hereafter acquired by an incorporated local
church . . . shall be held by and/or conveyed
to the corporate body in its corporate name,
in trust for the use and benefit of such
local church and of The United Methodist
Church.[55]
St. Paul emphasizes the language in trust for the use and benefit
of such local church and The United Methodist Church to argue
that, if a trust exists, it is a joint trust.
If this paragraph were read in isolation, it could
perhaps lend support to St. Pauls argument. But under neutral
principles, we consider the language of Paragraph 2537 of the
Discipline in context, not in isolation, just as we would when
interpreting a contract56 or a statute.57
Immediately following the language quoted by St. Paul
Church, Paragraph 2537 incorporates by reference Paragraph 2503,
when it states that [e]very instrument of conveyance of real
estate shall contain the appropriate trust clause as set forth in
the Discipline ( 2503). Paragraph 2503 provides:
[A]ll written instruments of conveyance by
which premises are held or hereafter acquired
for use as a place of divine worship or other
activities for members of The United
Methodist Church shall contain the following
trust clause:
In trust, that said premises shall be used,
kept, and maintained as a place of divine
worship of the United Methodist ministry and
members of The United Methodist Church;
subject to the Discipline . . . . This
provision is solely for the benefit of the
grantee, and the grantor reserves no right or
interest in said premises.[58]
Read as a whole along with the paragraph it incorporates,
Paragraph 2537 undermines rather than supports St. Pauls argument
that the parties intended for the disputed properties to be held
in joint trust. Paragraph 2501, which sets forth UMCs general
understanding about its connectional structure, also contradicts
St. Pauls argument, when it states that titles to all real and
personal, tangible and intangible property . . . shall be held in
trust for [UMC] and subject to the terms of the Discipline.59 We
therefore reject St. Pauls argument that the trust created in
favor of UMC was a joint trust.
F. The Superior Court Did Not Err in Finding the
Individually Named Appellants Personally Liable for
Conversion and Trespass.
On June 23, 2004, the superior court heard oral
argument and issued a written order determining that the
individually named appellants were liable for trespass and
conversion. St. Paul appeals, arguing that summary judgment
relieving plaintiffs from personal liability should have been
granted. St. Paul claims that there was no evidence that any
individual personally committed any acts to constitute trespass
or conversion. If the superior courts decision is based on
individual acts, St. Paul argues, there is no support in the
record to establish which individuals actually changed the locks,
entered onto and possessed the disputed property, and took
personal property. However, St. Paul admits in its briefing even
before this court that St. Paul regained control of its parsonage
and church buildings, and resumed regular worship in the church.
Additionally, the individually named appellants admit in their
answer that they entered the parsonage against the express
written objection of AMC and that they entered the church,
changed the locks, and have begun having services there.
Trespass is defined as an unauthorized intrusion or
invasion of anothers land.60 An intentional entry onto the land
of another constitutes intentional trespass even if the
trespasser believes that he or she has the right to be on the
land.61 To establish a conversion claim, a plaintiff must prove
that it had a possessory interest in the property, that the
defendants intentionally interfered with the plaintiffs
possession, and that the defendants acts were the legal cause of
the plaintiffs loss of property.62
With respect to the trespass and conversion claims the
superior court found:
[G]ood faith may go and certainly does go to
issues of damages that have been raised.
However, the individual defendants are liable
for conversion, are liable for any damage
done to property or the property that has
been converted and unrecovered.
Whether they did so as fiduciaries or out of
their belief in a fiduciary duty to the
amended entity, St. Paul Church, is not a
matter before the Court, but rather one that
may go to the corporate desire to indemnify
or reimburse for any damages or expenses, but
the individuals that withheld property, broke
locks, and did those things, are liable. And
they are liable as of the time of their acts,
not when the determination of ownership was
made.
Because the individually named appellants admitted entering
property and removing locks from property belonging to
AMC, and a claim of right to the property is not a
defense to either trespass or conversion, the superior
court did not err in finding the individually named
appellants liable, subject to a determination of the
extent of damages. G. The Superior Court Did
Not Err in Granting Control of the St. Paul Corporate
Entity and Name to St. Paul.
In its memorandum decision dated April 8, 2004, the
superior court, after determining that the Discipline expressly
requires local churches to hold property in trust for the general
church, awarded the disputed church and parsonage to AMC. It
also found that title was quieted in the name of St. Paul, and
ruled that AMC could be substituted as the legal title owner. On
June 23, 2004, however, the superior court reached a different
result with respect to the question of St. Pauls corporate name.
Through its cross-appeal, AMC challenges the superior courts oral
order granting St. Paul control of the St. Paul corporate entity
and the name St. Paul.
As a preliminary matter, we address AMCs argument that
the individually named appellants lack standing to assert a claim
for the St. Paul corporate entity and name. AMC moved to dismiss
the answer and the counterclaims of the individually named
appellants for lack of standing on April 22, 2004. At oral
argument on June 23, 2004, Superior Court Judge Richard D. Savell
noted that he was confused about the motion because it appeared
from the pleadings that the individually named appellants had not
raised any counterclaims. According to the responsive pleadings
to the original complaint and the amended complaint, the
counterclaim against AMC for theft was in fact only brought in
the name of St. Paul Church, Inc., f/k/a St. Paul United
Methodist Church. The following exchange took place between the
superior court and AMCs counsel at oral argument on this issue:
Mr. Sheehan: If there are no individual
claims, then they have no standing to assert
I mean, one of the issues that was raised in
the motion was whether they have standing to
assert a claim on behalf of St. Paul.
The Court: All right. They havent made one.
So I dont care if they have standing. The
church has counterclaimed for conversion, and
Im prepared to address that as part of the
whole package.
Mr. Sheehan: Okay.
No further argument in favor of the motion was made, and on
August 2, 2004, the superior court issued an order denying AMCs
motion.
AMC appeals, asking that the superior courts June 23,
2004 oral ruling be vacated. AMC makes the argument that the
individually named appellants are only five of sixty-two members
of the congregation of St. Paul and as such a minority, they have
no standing to represent St. Paul, amend its Articles, and claim
the St. Paul corporate entity and name. AMC has not addressed in
its appeal the fatal flaw identified by the superior court that
the individually named appellants are not parties to this
litigation as claimants.63 Instead, they were brought into this
litigation in their individual capacities solely to defend claims
brought by AMC.
Further, it is clear from the motion of St. Paul for
summary judgment, which resulted in the award of the St. Paul
name and corporate existence to St. Paul, that the corporate
entity was claiming legal title to the disputed property on its
own behalf, and the individually named appellants only offered
defenses to personal liability. While some of the individually
named appellants are also officers of the corporation, it does
not follow that they were making claims to the name and corporate
existence of St. Paul on their own behalf. The superior court
therefore did not err when it denied AMCs motion to dismiss for
lack of standing because the individually named appellants were
in fact asserting no claims.
Finding AMCs jurisdictional arguments unpersuasive, we
turn to the substance of the superior courts order granting
control of the St. Paul corporate entity and name to St. Paul.
In its decision, the superior court reasoned that it was
responsible for [St. Paul] to amend the documents by which they
continued their association, affiliation and worship. The name
St. Paul Church is not one that belongs to the Alaska Missionary
Conference. St. Paul United Methodist Church does. They have
abandoned that . . . and . . . their corporate status, is not, in
view of this change . . . something they will be divested of.
The superior court further explained that
the corporate entity is the legal recognition
of the name, and they changed that, and in
effect, by changing it . . . changed the
character of it so that it was not the
property of The United Methodist Church
because it is not that which formed the
relationship and was part of the documents
and the . . . affiliation.
And the interest of the United Methodist
Church in having nonaffiliated churches use
the name Methodists is preserved. Anyone can
name their church after any saint they wish,
and they have done so here.
The superior courts conclusion that there is an
analytical distinction between the corporation as a separate
legal entity and the religious society which may bind itself to a
hierarchical organization is both persuasive and supported by
authority. According to American Jurisprudence
[a] church society, by incorporating, does
not lose its existence or become wholly
merged in the corporation. The religious
corporation and the church, although one may
exist within the pale of the other, are in no
respect correlative. The objects and
interest of the one are moral and spiritual;
the other deals exclusively with things
temporal and material. Each as a body is
entirely independent and free from any direct
control or interference from the other.[64]
In a situation such as that before this court, where a local
church is involuntarily disassociated from a national
denomination, the equities and neutral principles of law favor
respecting the integrity of the separate legal existence of the
corporation. Therefore, we affirm the decision of the superior
court awarding the St. Paul corporate existence and name to St.
Paul.
AMC argues that since the Discipline provides that all
properties, tangible and intangible, be held in trust for UMC,65
and under the Discipline discontinuance places all of a local
churchs properties under the control of the annual conference
trustees,66 AMC is entitled to St. Pauls personal property, its
corporate existence, and its intangible property, and its name
St. Paul United Methodist Church, Inc. AMC, however, cites no
case law to support its position and relies instead upon the
provisions of the religious corporation statute and its own
interpretation of its authority under the Discipline to succeed
to the office of corporation sole67 under AS 10.40.110.68 Because
we find that under neutral principles, St. Paul exists as a legal
entity independent of its affiliation with UMC, we need not and
would not delve into the matters of power allocation within UMC
implicated by AMCs argument.69
IV. CONCLUSION
We adopt the neutral-principles approach to resolving
property disputes among religious organizations. Applying
neutral principles, we agree with the superior court that a trust
was created by St. Paul in favor of UMC, and therefore AFFIRM.
Because the individually named appellants have admitted
acts that would establish trespass and conversion, we AFFIRM the
superior courts conclusion that they are liable. We also AFFIRM
the superior courts order denying AMCs motion to dismiss the
claims because the individually named appellants have not
asserted any claims. Finally, we AFFIRM the superior courts
decision that St. Paul is entitled to maintain its own name and
corporate existence.
_______________________________
1 Book of Discipline of the United Methodist Church
(Harriet Jane Olson et al. eds., 2000).
2 Id. at 23-35, 7-43.
3 Id., ch. 6.
4 Id. at 649, 2501.
5 Id. at 649-50, 2503(2)-(3).
6 Id. at 651, 2503(6).
7 Id. at 652, 2506.
8 Id. at 680, 2548(2).
9 Id. at 680-81, 2548(3).
10 Gary Koll was dismissed as a party to the litigation by
stipulation on January 26, 2004.
11 Alaska Legislative Council ex rel. Alaska State
Legislature v. Knowles, 86 P.3d 891, 893 (Alaska 2004).
12 Rausch v. Devine, 80 P.3d 733, 737 (Alaska 2003).
13 Guin v. Ha, 591 P.2d 1281, 1284 n.1 (Alaska 1979).
14 McElroy v. Kennedy, 74 P.3d 903, 906 (Alaska 2003).
15 K & K Recycling, Inc. v. Alaska Gold Co., 80 P.3d 702,
711 (Alaska 2003).
16 Fairbanks Fire Fighters Assn, Local 1324 v. City of
Fairbanks, 48 P.3d 1165, 1167 (Alaska 2002).
17 Far North Sanitation, Inc. v. Alaska Public Utils.
Commn, 825 P.2d 867, 869 n.2 (Alaska 1992).
18 80 U.S. 679 (1871).
19 Watson, 80 U.S. at 727.
20 See, e.g., Gonzalez v. Roman Catholic Archbishop of
Manila, 280 U.S. 1, 14 (1929).
21 393 U.S. 440 (1969).
22 Id. at 442.
23 Id. at 443.
24 Id.
25 Id. at 443-44.
26 Id. at 450.
27 Id. at 449.
28 Maryland & Virginia Eldership of the Churches of God v.
Church of God of Sharpsburg, 396 U.S. 367, 368 (1970).
29 Id.
30 Id. at 370 (quotations and citations omitted). As a
third alternative, he suggested that states pass special state
statutes governing church property arrangements in a manner that
precludes state interference in doctrine. Id. Alaska has
adopted no such statutes.
31 443 U.S. 595, 596 (1979).
32 Id. at 603.
33 Jones, 443 U.S. at 605-06 (citations omitted).
34 489 A.2d 1317 (Pa. 1985).
35 Id. at 1321-22.
36 Id. at 1322 n.4.
37 845 P.2d 424, 427 (Alaska 1993).
38 Id. at 428.
39 McAdoo v. Diaz, 884 P.2d 1385 (Alaska 1994).
40 Jones, 443 U.S. at 600-01.
41 Discipline 651, 2503(6)(b).
42 See, e.g., United Airlines, Inc. v. Good Taste, Inc.,
982 P.2d 1259 (Alaska 1999) (applying Illinois law when contract
provided that disputes would be governed by the laws of
Illinois).
43 443 U.S. at 603-04.
44 Sugg v. Morris, 392 P.2d 313, 316 (Alaska 1964).
45 Discipline 651, 2503(6).
46 Restatement (Second) of Trusts 2 cmt. k (1959).
47 Discipline 651, 2503(6).
48 Restatement (Third) of Trusts 41, cmt. d (2003).
49 AS 09.25.010(a)(9).
50 17 Cal. Rptr. 3d 442, 445 (Cal. App. 2004).
51 Id.
52 Id. at 452.
53 Id. at 453.
54 825 P.2d 451, 460 (Alaska 1991) (citing Restatement
(Second) of Trusts 331 (1959)); see also In re Last Will and
Testament of Tamplin, 48 P.3d 471, 473 (Alaska 2002) (when
addressing whether a will could revoke an inter vivos trust
created in 1993, noting that a trust is revocable by the settlor
if and to the extent that by the terms of the trust he reserved
such power ).
55 Discipline 670.
56 Cf. Matanuska Elec. Assn, Inc. v. Chugach Elec. Assn,
Inc., 99 P.3d 553, 562 (Alaska 2004) (The goal of contract
interpretation is to give effect to the parties reasonable
expectations, which we assess by examining the language of the
disputed provisions, the language of other provisions, relevant
extrinsic evidence, and case law interpreting similar provisions.
In reaching a reasonable interpretation of a contract, we attempt
to give effect to all of its terms, if possible. We consider
disputed language within the context of the whole contract and
its purposes, and the circumstances surrounding its formation.)
(internal citations omitted).
57 Cf. Bradford v. First Nat. Bank of Anchorage, 932 P.2d
256, 262 (Alaska 1997) (this court interprets each part or
section of a statute with every other part or section, so as to
create a harmonious whole ) (citations omitted).
58 Discipline 649-50.
59 Discipline 649.
60 Mapco Express, Inc. v. Faulk, 24 P.3d 531, 539 (Alaska
2001) (citing Parks Hiway Enters., L.L.C. v. CEM Leasing, Inc.,
995 P.2d 657, 664 (Alaska 2000); Restatement (Second) of Torts
158, 163 (1965)).
61 Brown Jug, Inc. v. Intl Bhd. of Teamsters, Chauffeurs,
Warehousemen & Helpers of America, Local 959, 688 P.2d 932, 938
(Alaska 1984) (citing Restatement (Second) of Torts 164 (1965)).
62 K & K Recycling, 80 P.3d at 717.
63 For this reason alone, we would affirm the superior
court. See Peterson v. Mutual Life Ins. Co. of New York, 803
P.2d 406, 411 n.8 (Alaska 1990) (finding that an argument was
waived where appellant failed to advance any legal argument as to
why the court erred).
64 66 Am. Jur. 2d, Religious Societies 5 (2005).
65 Discipline 649, 2501.
66 Id.
67 AS 10.40.060 provides:
Upon the filing of the articles of
incorporation for record the person
subscribing the articles and a successor in
office by the name or title specified in the
articles is a corporation sole, with
continual perpetual succession.
68 AS 10.40.110 addresses succession to property when a
corporate sole is removed, providing in relevant part:
In the event of the death or resignation
of the archbishop, bishop, president, trustee
in trust, president of stake, president of
congregation, overseer, presiding elder, or
member of the clergy, who has formed a
corporation under this chapter, or such a
persons removal from office by the person or
body having removal authority, the successor
in office as the corporation sole is vested
with the title of all property held by the
successors predecessor with the same power
and authority over the property, subject to
all the legal liabilities and obligations
with reference to the property.
(Emphasis added.)
69 See, e.g., Maryland & Virginia Eldership of the
Churches of God v. Church of God of Sharpsburg, 396 U.S. 367, 369
(1970) (Under Watson civil courts do not inquire whether the
relevant church governing body has power under religious law to
control the property in question. Such a determination, unlike
the identification of the governing body, frequently necessitates
the interpretation of ambiguous religious law and usage. To
permit civil courts to probe deeply enough into the allocation of
power within a church as to decide where religious law places
control over the use of church property would violate the First
Amendment in much the same manner as civil determination of
religious doctrine.).
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