UPDATE: Anglican Curmudgeon has commentary on this development up now which you may read here. The seven Virginia Anglican congregations are set to respond to the Episcopal Diocese of Virginia's motion for "Award of Prejudgment Interest" on February 9, a date set by law from the date the Episcopal Diocese of Virginia filed their Prejudgment Interest motion on January 23. By Virginia statute, the hearing is set for February 16th. However, the Diocese of Virginia for some reason is seeking to rush the hearing up sooner to next Friday, February 10th, rather than the 16th as set by law. The Anglican congregations have filed a motion opposing the attempt by the Episcopal Diocese of Virginia change the hearing date.
The local online newspaper The Patch has the story here. The Episcopal Diocese of Virginia has filed a motion in the Fairfax Circuit Court for an "award of prejudgment interest" against the seven Anglican congregations in Virginia.
Last weekend the Episcopal Bishop of Virginia Shannon Johnston told the Annual Council meeting in Reston that regarding the recent favorable ruling over the Virginia church properties of seven of the congregations that voted to separate in 2006, "The bottom line is that just as we have been able to sustain our case throughout a lengthy and expensive legal process, I strongly believe that we will be able to do what it takes over the next months and years to be faithful to the Church’s mission with respect to each one of the properties involved." Is this filing what he meant?
The filing also comes as The Episcopal Church's Executive Council was faced last week with a very public duel between the Presiding Bishop and the House of Deputies President over substantial budget cuts at 815, the headquarters of the national offices of The Episcopal Church.
Here is the Diocese of Virginia's filing:
MOTION FOR AWARD OF PREJUDGMENT INTEREST AND
MEMORANDUMIN SUPPORT THEREOF
The Protestant Episcopal Church in the Diocese of Virginia (the “Diocese”), by counsel,
moves the Court for an award of prejudgment interest pursuant to Va. Code 8.01-3 02. In
support of its motion, the Diocese submits the following memorandum.
1. On January 10, 2012, this Court issued a 113 page Letter Opinion setting forth
three significant rulings in favor of the Diocese: (i) The Episcopal Church and the Diocese have
contractual and proprietary interests in each of the seven Episcopal churches that are the subject
of this litigation, and all real and personal property acquired by the churches up to the ñling date
of the declaratory judgment actions are to be conveyed promptly to the Diocese; (ii) the CANA
Congregations do not possess either contractual or proprietary interests in the property of the
seven Episcopal churches and are enjoined from further use or control of the property and must
promptly relinquish them to the Diocese; and (iii) the vestry empowered to elect directors to the
Falls Church Endowment Fund is the Episcopal vestry recognized by the Diocese. Op. at 14.
2. The Diocese is endeavoring to craft a Final Order which will encompass these
rulings and has communicated with the CANA Congregations to obtain an accounting of real and
personal property, including tangibles and intangibles such as bank deposit accounts, which have been
in their exclusive possession and control since the inception of the litigation. The parties
are attempting to reach agreement as to the sums on deposit at yarious financial institutions as of
the demarcation date identified by the Court, and the Diocese intends to identify such specific
amounts in the Final Order and have such order decree that such sums be returned to it.
3. The Diocese seeks an award of pre-judgment interest as to the liquidated sums on
deposit at various financial institutions as of the date of the Diocese’s filing of the declaratory
judgment actions. Va. Code allows a jury or a court to “provide for interest on any
principal sum awarded . _ . and [to] fix the period at which the interest shall commence.” An
award of pre-judgment interest is completely discretionary with the trial court. Upper Occoquan
Sewage Authority v. Blake Constr. Co., 275 Va. 41, 655 S.E.2d 10 (2008); Dairyland Ins. Co. v.
Douthat, 248 Va. 627, 449 S.E.2d 799 (1994). The purpose of prejudgment interest is to
compensate a plaintiff for the loss sustained by not receiving the amount it was entitled to and
restore the party to the position it would have occupied. Blake, 275 Va. at 63; Marks v. Sanzo,
231 Va. 350, 356 (1986). “[N]atural justice [requires] that he who has the use of another’s
money should pay interest for it.” Blake, 275 Va. at 63 (citations omitted).
4. An awarci of pre-judgment interest is appropriate here “to make the Plaintiff
whole.” Blake Constr. Co. v. Upper Occoquan Sewage Authority, 71 Va. Cir. 248 (Fairfax
2006), a/Td in part, rev ’d in part, 655 S.E.2d 10 (Va. 2008). For over five years, the Diocese
has been deprived of access to and use of the real and personal property of the seven Episcopal
churches at issue, including the amounts on deposit at various ñnancial institutions and
maintained in investment accounts. The financial sums are sizeable, ranging from several
hundred thousand dollars in the case of smaller churches such as St. Paul’s Church to several
million dollars as to The Falls Church and Truro Church. In addition to taking exclusive control
of the real property, the CANA Congregations took possession of the financial accounts and
claimed and maintained them as their own, precluding any use or application of such monies to
the spiritual and other missions of the Diocese. An award of prejudgment interest is necessary
to make the Diocese whole and restore the Diocese to the position it was in at the time it filed the
declaratory judgment actions.
5. In concluding that the CANA Congregations do not possess either contractual or
proprietary interests in the property of the seven Episcopal Churches, the Court noted the
“pervasive control” exercised by The Episcopal Church and the Diocese over the churches. Op.
at 101. The Court emphasized the hierarchical structure of the Church and referenced “the
undeniable fact that these seven churches *were part of a hierarchical denomination for decades
and, in some cases for centuries” and that the congregations’ claims of autonomy and
independence were “contradicted by the overwhelming body of evidence before this Court.” Op.
at 101. The Court said that applying neutral principles of law, as established by United States
and Virginia Supreme Court precedents, it is “clear - indeed, to this Court, it is overwhelmingly
evident- that TEC and the Diocese have contractual and proprietary interests in the real and
personal property of each of these seven churches.” Op. at 104. The Court stressed that “whi1e
the CANA Congregations had an absolute right to depart from TEC and the Diocese, they had no
right to take these seven Episcopal churches with them.” Id. (emphasis in original) Given the
“compelling” evidence and “clear” law presented, the ultimate conclusion reached by the Court,
while disappointing to the CANA Congregations, could not have come as any surprise; and they
presumably segregated such sums and can readily turn the accounts over with the accrued
interest. See Op. at 102, 104. Moreover, that the CANA Congregations may have believed there
was a bona ñde dispute as to ownership of the real and personal property has no bearing on the
decision whether to award prejudgment interest. See Gill v. Rollins Protective Servs. Co., 836
F.2d 194 (4th Cir. 1987) (neither Code 8.01-3 82 nor Virginia case law makes an exception to
the general discretionary rule on pre-judgment interest for bona ñde legal disputes).
6. The amounts on deposit in various financial institutions by the seven Episcopal
churches as of the demarcation date identified by the Court (the date of the filing by the Diocese
of the various declaratory judgment actions) is easily discernible. This litigation has been
pending for over five years and the duration of the case and overwhelming evidence in favor of
the Diocese merit the award. See Tauber v. Comm. of Va., 263 Va. 520, 562 S.E.2d 1818 (2002)
(affirming decision to award prejudgment interest based on the “extended duration of this suit”
and “the overwhelming evidence in the record”). Pre-judgment interest as to these liquidated
sums can and should be calculated and decreed to restore the Diocese to its position as of the
date of ñling the declaratory judgment actions. See Op. at 112. Pursuant to Va. Code
the rate of pre-judgment interest is six percent.
WHEREFORE, for the foregoing reasons, the Diocese respectfully requests that the
Court order and decree that the Diocese’s request for an award of prejudgment interest is
granted and, following entry of the Final Order, interest shall accrue at the judgment rate until paid.
BB NOTE: This is indeed sad news, but may we pause and consider prayer - we, the people of the Diocese of Virginia and the people of the Diocese of the Mid-Atlantic pray .... please pray too. We will be able to go forward when we can trust again and know, in the depths of our hearts, that we are loved, not through our own merits, but by the merits of Jesus. May it be so.