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The Supreme Court reviews the enforceability of denominational trust clauses

Written by Daniel P. Dalton on March 20, 2018 Category: Church Property Disputes/Denominational Splits

One of the main items that presently hold local churches to mainline denominations is being reviewed by the United States Supreme Court, the enforceability of denominational trust clauses. The impact of the decisions of these cases on the enforceability of all trust clauses is significant for all local churches seeking to leave their denominations and for all denominations who use the trust clause as the yoke to hold its members.

In The Protestant Episcopal Church in the Diocese of South Carolina, et. Al v. The Episcopal Church, et al., (Feb. 9, 2018) the entire diocese of South Carolina left the Episcopal Church denomination, after it altered its theology, and successfully challenged the trust clauses in both the trial court and appellate court level.  The South Carolina Supreme Court, with members who are part of the Episcopal Church and refused to recuse themselves based on the clear conflict of interest, ruled in favor of the denomination. Another pending petition, challenging the unpublished decision of a Minnesota intermediate Court of Appeals, presents the same question as the South Carolina case involving the Presbyterian USA trust clause. See, Presbytery of the Twin Cities Area v. Eden Prairie Presbyterian Church, Case No. 17-582 (Oct. 16, 2017).

In the petitions for Writ of Certiorari, which is a request for the appeal to be taken, both cases note that state courts have made conflicting  decisions based on the Supreme Court’s prior case law.  Currently, there are eight states that allow state courts to use “neutral principals of law” to evaluate trust clause.  These states generally find that local churches are the owners of their own property so long as the governing documents provide for local control.  Conversely, there are six states that defer the issue of property ownership to the denomination, meaning, the denomination will likely end up owning the property.

In both cases, the local churches are asking the United States Supreme Court to clarify the law with respect to the enforceability of “trust clauses.”  Should the Court do so, we will hopefully have a uniform rule on the issue.  If the Court declines to take the cases, the issue will remain a state by state interpretation, and in some instances, case by case.

The professionals at Dalton & Tomich, PLC have been representing local churches leaving mainline denominations for over a decade throughout the United States.  Please contact Dan Dalton should you wish to discuss the issue of a local church leaving a denomination.

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