NEWPORT BEACH, Calif. – May 5, 2011 – The California Supreme Court today held that St. James Anglican Church can defend its property rights against the claims of the Episcopal Church with evidence in a court of law. The Court confirmed that its 2009 Episcopal Church Cases decision did not end the property dispute in the Episcopal Church’s favor as it had claimed. “Further proceedings are still necessary to finally decide the dispute,” said the Court.
Today’s decision, titled Rasmussen v. Superior Court (Bunyan), returns the case to the Orange County Superior Court where St. James will now have the right to defend itself with evidence before a court of law, including having motions heard to dismiss church volunteers who have been sued by the Episcopal Church.
Eric Sohlgren, St. James’s lead attorney, said, “St. James has been vindicated. The California Supreme Court has soundly rejected the idea that its prior decision required the people of St. James to move off the property they built and paid for over many decades. St. James will, at last, get its deserved day in court to present evidence showing that it has the legal right to the property.”
In upholding St. James’s right to put on its defense, the California Supreme Court rejected an argument of the Episcopal Church that a 1991 letter issued by a bishop of the Episcopal Diocese of Los Angeles – which promised St. James that it could hold its property free of any Episcopal interest – had been declared invalid by the 2009 opinion. The Court said, “We express no opinion regarding the legal significance, if any, of the 1991 letter. We merely hold that a court must decide the question.”
St. James senior pastor, the Rev. Richard Crocker, said, “I’m thankful and grateful for this opinion. We are looking forward to having our day in court.”
Before St. James had the opportunity to present its evidence, the Orange County Superior Court ruled in 2005 (see case summary, below) that the Episcopal Church’s allegations were legally defective. After the trial court dismissed the Episcopal complaints, the appellate courts took years to decide what law should apply to the dispute, eventually ruling that the Episcopal complaints could go forward.
In early 2009, the California Supreme Court sent the case back to the Orange County Superior Court, where St. James for the first time answered the Episcopal complaints, raised affirmative defenses, began discovery, and looked forward to defending the property that its members bought, paid for and maintained since its founding six decades ago. In its 2010 opinion, the Court of Appeal majority essentially ruled that St. James could not defend itself, and that the Episcopal Church was entitled to judgment in their favor based on their allegations alone. Today’s decision from the California Supreme Court rejects that unprecedented result.
The Episcopal lawsuits against St. James stemmed from a decision by the members of St. James Church in August 2004 to align themselves with another branch of the worldwide Anglican Communion, and end the church’s affiliation with the Episcopal Church over core theological differences involving the authority of the Bible and Jesus Christ. The Episcopal Diocese of Los Angeles sued St. James Church, All Saints Church, Long Beach, CA, and St. David’s Church, No. Hollywood, CA, and over two dozen volunteer board members in September 2004, including for monetary damages. Subsequently, the national Episcopal Church intervened into the lawsuits.
St. James Anglican Church continues to hold services every Sunday at its Newport Beach location as it has for the past six decades.
The California Supreme Court decision may be found here: http://www.courtinfo.ca.gov/opinions/documents/S182407.PDF
A Brief Recap: St. James Anglican Church’s Fight to Keep its Property
In August 2004 St. James Church ended its affiliation with the Episcopal Diocese of Los Angeles and the Episcopal Church over theological differences involving the authority of Holy Scripture and the Lordship of Jesus Christ. The Episcopal Diocese of Los Angeles brought lawsuits against St. James Church, All Saints Church, Long Beach, CA, and St. David’s Church, No. Hollywood, CA, and their volunteer board members in September of 2004. Subsequently, the national Episcopal Church intervened into the lawsuits against the three local church corporations and their volunteer board members.
In August 2005 the Honorable David C. Velasquez of the Orange County Superior Court ruled in favor of St. James Church and struck the complaint brought by the Diocese of Los Angeles. In October 2005 Judge Velasquez issued a similar ruling in favor of All Saints and St. David’s Churches. These early victories arose from early challenges to the Episcopal allegations made by the Diocese and the Episcopal Church, and as a result, no trial ever occurred and St. James never had an opportunity to defend those claims on the merits. The Episcopalians then appealed to the California Court of Appeal sitting in Orange County on this very limited court record, arguing that under neutral principles of law they had a probability of prevailing and had alleged legally viable claims.
In July 2007 the Court of Appeal rejected nearly thirty years of California church property law by ruling that a secular court must defer to the determinations of the highest level of the church hierarchy regarding ownership of local church property, regardless of any agreements between the parties, the corporate documents, who paid for the property, or who held the deed. The Court of Appeal reversed the trial court judgment in favor of St. James, and ordered the case back to the trial court.
In August 2007 St. James filed a petition with the California Supreme Court, which the Court unanimously and quickly accepted under the name of Episcopal Church Cases. The Court heard oral argument in the case in October 2008.
In January 2009 the California Supreme Court ruled in Episcopal Church Cases that church property disputes in California must be resolved by neutral or non-religious principles of law, not by civil courts merely deferring to the decrees of church “hierarchies” or larger church bodies. As a result, every church property dispute in California now will be resolved based on non-religious factors that are unique to the dispute. While adopting this non-religious method of resolving property disputes between churches, however, the Court seemed to defer to the Episcopal Church’s alleged “trust canon,” which purports to create a trust interest in church property owned by local congregations. The Court made its ruling despite the fact that St. James purchased and maintained its property with its own funds and has held clear record title to its property for over fifty years. St. James believes that this ruling overlooked decades of trust law in California that only allows the owner of property to create a trust in favor of someone else, and will as a result have wide impact for local church property owners throughout California that seek to change their religious affiliation.
In late January 2009 St. James formally asked the California Supreme Court to modify its January decision.
In February 2009 the California Supreme Court granted the St. James request, and modified its decision to confirm both that the suit against St. James is not over and that no decision on the merits of the case has yet been made. Instead, the Court clarified that its decision was only based on the limited record before it, which will now be augmented through the normal discovery and trial process.
In late February 2009, the case against St. James Church corporation, the volunteer board members, and clergy returned to the trial court in Orange County where St. James can assert factual and legal arguments that were not addressed on appeal through discovery, depositions, motions, and trial. Using the legal standard set forth by the California Supreme Court, the Orange County Superior Court will eventually decide the merits of this dispute. For example, St. James has brought a complaint against the Diocese of Los Angeles based on a 1991 written promise that it would not claim a trust over the property of St. James on 32nd Street in Newport Beach.
On June 24, 2009, St. James filed a petition for a writ of certiorari with the United States Supreme Court. A response from the Court regarding its decision to hear St. James’s petition can be expected by October 2009. If the Court takes the case, a decision would be rendered by mid-2010.
On July 13, 2009, St. James Church won a significant legal battle in its property rights case in Orange County Superior Court when Judge Thierry P. Colaw denied two motions brought by the Episcopal Diocese of Los Angeles and The Episcopal Church which sought to end the case in their favor.
In October 2009, the Supreme Court of the United States denied a petition by St. James to hear its church property rights battle with the Episcopal Diocese of Los Angeles and the national Episcopal Church (TEC).
In November 2009, St. James returned to the California Court of Appeal for a hearing to argue that the February 2009 opinion by the California Supreme Court stated that the case is not over and that the litigants will continue their case in Orange County Superior Court. The Episcopal Diocese of Los Angeles and the national Episcopal Church (TEC) argued that the California Supreme Court decided the lawsuit in its favor and demanded that the church turn the property over to the Diocese.
In March 2010, two justices of the California Court of Appeal essentially ruled that St. James did not have the right to defend itself in court, conduct discovery or even have a trial, and that the Episcopal allegations alone were enough for St. James to lose its property. Dissenting Justice Fybel said that the majority’s opinion was “unprecedented,” “revolutionary” and “without any basis in law.”
In May 2010, St. James petitioned the California Supreme Court to review the Court of Appeal’s majority opinion.
In June 2010, the California Supreme Court unanimously agreed to hear the St. James petition, ordering briefing and argument on this one issue: “Did the Court of Appeal properly direct the entry of judgment on the pleadings in favor of the national Episcopal Church under Episcopal Church Cases (2009) 45 Cal.4th 467?”
On May 5, 2011, the California Supreme Court held that its prior 2009 decision in Episcopal Church Cases did not end the property dispute, but that St. James now has the right to defend itself in court with evidence.