It was a busy and significant week for the General Assembly Permanent Judicial Commission of the Presbyterian Church (U.S.A.). A bit over a week ago they heard three important cases and a week ago issued their decisions. I am taking these individually because of the importance of each one and taking them in order of their case number. I have already posted 221-02 Newark v. McNeill and am hoping to have 221-04 Larson v. Los Ranchos posted in a couple of days.
But here is today’s case…
Remedial Case 221-03: Wilber Tom, David Hawbecker, and Thomas Conrad, Appellants (Complainants), v. Presbytery of San Francisco, Appellee (Respondent)
This decision includes a concurring opinion. It is also notable that, as the decision says, “Presbytery of San Francisco (Presbytery or Appellee) waived its appearance at the hearing and chose to rely on its written submissions.”
If you want the bottom line, from a polity standpoint, here you go:
When a congregation seeks dismissal under G-11.0103i (now G-3.0301a), it is the responsibility of the presbytery to fulfill its fiduciary duty under the Trust Clause.
OK, now let’s dig into this. I will first discuss the case, make a few comments about the GAPJC arguments themselves, and conclude with some thoughts on what this decision means.
To begin, few preliminary notes:
First, two types of issues were part of the appeal: the Trust Clause and process issues including possible conflict of interest of commissioners and documents received into evidence. The latter is specific to this case, I will make some mention of it, but because it does not provide any real polity issues I won’t do a lot with it.
Second, while this was tried under an earlier version of the Book of Order the language of the cited sections has not changed, only the section numbers. The two most important sections are the Trust Clause (G-8.0201 is now G-4.0203) and the presbytery’s authority to dismiss (G-11.0103i is now G-3.0303b).
Third, this case is a bit unusual in that no remedy could be provided the Complainants. The Presbytery has changed their Gracious Dismissal Policy (GDP) and the church in question has been dismissed. As the decision says “[I]n cases where circumstances prevent a remedy, this Commission may exercise its declaratory authority to provide guidance to lower councils and prevent future violations. Daniel J. McKittrick v. The Session of the West End Presbyterian Church (Remedial Case 215-5, 2003).”
This case results from the dismissal of Community Presbyterian Church of Danville (Danville) by the Presbytery of San Francisco in November 2010. The church was dismissed under the Presbytery’s Gracious Dismissal Policy (GDP) with their property and an agreement to make payments representing per capita and mission funding to the Presbytery over five years. Right after the dismissal the Presbytery voided their first GDP and began work on a new one. Following the dismissal decision a remedial case was filed with the Synod PJC of the Synod of the Pacific and in March 2012 the SPJC ruled in favor of the Presbytery and affirmed the dismissal of Danville. In May, as the GAPJC was accepting the case, the Presbytery signed a quitclaim deed and finalized the Danville dismissal. Based on this the Presbytery argued the GAPJC case was moot but as noted above the GAPJC proceeded with the case. This helps explain the fact that the Presbytery only submitted written briefs.
There were 15 specifications of error by the SPJC which the GAPJC reordered in their decision, but they did not consolidate any.
The first seven specifications of error deal with issues related to the Trust Clause and the last eight deal with proceedings at the trial concerning conflict of interest of a commissioner, questions asked and receiving evidence. All specifications of error in the first group were sustained and only two specifications of error in the second group, those regarding documents that were not received as evidence, were sustained.
The seven dealing with the Trust Clause were answered as a group. Several of these specifications are related to specific details and that the Presbytery “failed to consider or to understand the meaning of the property trust clause (G-4.0202, formerly G-8.0201) or that the church property in question was in fact unequivocally owned by the Presbyterian Church (U.S.A.).” The specifications include that the testimony of a witness was not properly considered, that the meaning of the trust clause was not properly interpreted, that the Presbytery did not properly consider two General Assembly (GA) Authoritative Interpretations (AI), that the Presbytery’s Engagement Team did not properly consider the Trust Clause in their negotiations and that the Presbytery had exercised too broad a power with regards to the Trust Clause.
The GAPJC in their decision says:
Under the Trust Clause, a presbytery’s discretionary authority to determine property rights, while broad, must be guided by the presbytery acting as a fiduciary for the benefit of the PC(U.S.A.), the beneficiary of the Trust Clause. A congregation’s financial and all other assets are also understood to be covered by the Trust Clause. Chesterbrook Taiwanese PC v. National Capital Presbytery, Remedial Case 217-12, 2006.
Under the fiduciary obligations inherent in the Trust Clause, a presbytery must take into consideration the PC(U.S.A.)’s use and benefit of the property in every decision concerning its disposition. To comply with the Trust Clause, the presbytery must consider the interest of PC(U.S.A.) as a beneficiary of the property. Payments for per capita or mission obligations are not satisfactory substitutes for valuations of the property held in trust. (G-4.0203)
Note that the case cited (217-12) regards a dissolving congregation so the application to this case beyond the scope of the Trust Clause is somewhat limited. The decision continues:
Based on an examination of the record, this Commission finds that the GDP developed by Presbytery, its implementation, and SPJC in its trial decision, failed to duly consider the economic interests of the PC(U.S.A.). Such consideration is essential. SPJC’s exclusion of documents which were the most convincing evidence of the position of PC(U.S.A.) in regard to the Trust Clause and of the financial position of Danville, strongly supports the allegation of erroneous interpretation. Failure to consider the property value and the PC(U.S.A.)’s beneficial interest in the property was a fatal omission of the trustee’s duty to the PC(U.S.A.).
The justification given by Presbytery for dismissal of the Danville church with property, which included only “Great Ends of the Church” and avoidance of litigation, was erroneously upheld by SPJC. While certainly valid, such considerations alone are not sufficient to satisfy the due diligence requirement imposed by the Trust Clause. SPJC erred in finding that due consideration had been given to the interest of the PC(U.S.A.) as the trust beneficiary under the Constitution. Due diligence, of necessity, will include not only the spiritual needs of the congregation and its circumstances, but an examination of the congregation’s financial position and the value of the property at stake. It is undisputed that Presbytery failed to make such an examination. SPJC erred in failing to require that financial due diligence be undertaken by Presbytery.
So, based on that can we determine exactly what steps a Presbytery needs to take to do “due diligence” and fulfill it’s “fiduciary responsibility”? More on that in a minute.
The other specifications of error related to process – questioning of witnesses, possible conflict of interest, and documents received or not received as evidence. With the exception of the documents alluded to above none of these specifications were sustained. The two documents that should have been received are the GA Stated Clerk’s Amicus Brief to the California Supreme Court and the Annual Statistical Report of the Danville Church.
[On a side note: I had to laugh where the decision refers to the Amicus Brief as “a clear statement of the legal position of the PC(USA).” Have a look. It is 5,294 words written for a civil court case with legal citations and vocabulary. For a document that is here described to as a “clear statement” I have always found to be a slow read. And I sometimes wonder if a document written for a civil judicial proceeding has much value in an ecclesiastical judicial case. In this case it reinforces the nature of the Trust Clause but does not really enlighten a Presbytery in determining how to properly consider it.]
The final decision section is brief, but important. Here it is in its entirety:
When the lower council’s actions cannot be undone, this Commission may exercise its declaratory authority to provide guidance to lower councils and to prevent future violations.
When a congregation seeks dismissal under G-11.0103i (now G-3.0301a), it is the responsibility of the presbytery to fulfill its fiduciary duty under the Trust Clause. This fiduciary duty requires that the presbytery exercise due diligence regarding the value of the property of the congregation seeking dismissal. Due diligence, of necessity, includes not only an evaluation of the spiritual needs of the congregation and its circumstances but also financial analysis of the value of the property at stake. Payments for per capita or mission obligations are not satisfactory substitutes for the separate evaluation of the value of the property held in trust.
There is a helpful concurring opinion that, while not authoritative, helps suggest some details for the process.
We also join in the majority’s conclusion that the language of the Gracious Dismissal Policy adopted by the Presbytery of San Francisco did not require adequate consideration of property retention issues. The needs of future congregations, the involved debt, the probability that a substantial number of dissenting members may be enabled to continue a PCUSA congregation would compel retention of a property or equity facilitating those or similar interests are all matters to be considered to be involved in the Presbytery trustee’s decision. The Gracious Dismissal Policy did not require the PET to deal with those aspects of the dismissal decision.
However erroneous the omissions of the GDP, and the construction given by its PET, it may well have been within the discretion of the Presbytery to dismiss the Danville church with its property.
and after considering the circumstances of the Danville situation
In short, there may have been no apparent reason to require retention by the PC (USA) of any property interest. With the evidence in that stature, the burden of proof that the Complainant would had to have met to show an abuse of discretion by the Presbytery would have been heavy.
And they conclude:
What the Presbytery did in securing additional mission and per capita payments may or may not have been sufficient to “balance the books” in this particular scenario, but it was within their discretion once they exercised due diligence and considered all the factors inherently required by the fiduciary duty of a trustee.
Let me take a brief look at a couple of the points in the arguments before the GAPJC that an observer at the hearing passed on to me. One point that the complainants argued for was step by step instructions that show the presbyteries understand the Trust Clause. Beyond this there also was a request that the GAPJC constitutional interpretation include payment of just compensation. In questions from the commissioners there was one of the nature of “Aren’t you in effect asking us to write the rest of the trust clause?” The response was along the lines that they wished they didn’t have to but it is clearly not understood so the presbyteries need procedural steps.
So we have this decision and it does not contain a step-by-step checklist as the complainants suggested. How does it fit into the patchwork of interpretation and what does it mean? Well, I had to chuckle when I read the two Authoritative Interpretations cited in the Specifications of Error. The first, 9-88, was from a stated clerk asking for guidance in these matters. The second, 89-10, was the same stated clerk coming back to GA a year later asking for further clarification. Yup, clear as mud.
So what interpretation do we have? The first AI says:
A presbytery may dismiss a church with its property pursuant to
G-11.0103i and G-11.0103y, provided the request is made in proper form
and provided proper consideration is given to the interests of the
Presbyterian Church (U.S.A.) as provided in Chapter VIII. In particular,
G-8.0201 recognizes the principle that all property by or for a
particular church is held in trust for the use and benefit of the
Presbyterian Church (U.S.A.). Thus the Presbyterian Church (U.S.A.) is a
party in interest when a presbytery takes action with respect to a
request to dismiss a church with its property.
The second expounds on this:
When dealing with a request by a church for dismissal with its
property pursuant to G-11.0103i and G-11.0103y, the presbytery is
responsible for exercising the expressed trust provisions of G-8.0201
recognizing and protecting the interests of the Presbyterian Church
(U.S.A.). Separate consideration should be given to the questions of
dismissing the congregation, the disposal of property, and the
relationships of ministers of the Word and Sacrament.
Each request for dismissal should be considered in the light
of the particular situation and circumstances involved. If guidelines
are established, it should be done with extreme caution. Any guidelines
which restrict presbytery in its deliberations and in the exercise of
its responsibility and authority might be subject to question in a case
of judicial process within the church. Instead of establishing
guidelines a presbytery might be better advised to trust its good
judgment in particular situations.
This decision says:
Under the Trust Clause, a presbytery’s discretionary authority to determine property rights, while broad, must be guided by the presbytery acting as a fiduciary for the benefit of the PC(U.S.A.), the beneficiary of the Trust Clause. A congregation’s financial and all other assets are also understood to be covered by the Trust Clause.
and later
Under the fiduciary obligations inherent in the Trust Clause, a presbytery must take into consideration the PC(U.S.A.)’s use and benefit of the property in every decision concerning its disposition. To comply with the Trust Clause, the presbytery must consider the interest of PC(U.S.A.) as a beneficiary of the property. Payments for per capita or mission obligations are not satisfactory substitutes for valuations of the property held in trust. (G-4.0203)
and finally
Due diligence, of necessity, will include not only the spiritual needs of the congregation and its circumstances, but an examination of the congregation’s financial position and the value of the property at stake.
At the present time there is Advisory Opinion 19 from the Office of the General Assembly that talks about the Trust Clause for the Unity of the Church. The detail contained in there talks about dismissing a church but does not address the due diligence discussed in this decision. There might be an update in the works based on this case. There is also a constitutional musing on Transferring Congregations that talks a lot about process but does not detail the property aspect.
Based upon all of these let me make a few observations and suggestions that relate to this and what these passages suggest to me is due diligence.
- In spite of the AI above cautioning against a fixed policy the 218th General Assembly encouraged the development of Gracious Dismissal Policies. It would seem that based on the interpretations above these policies would entail process and guidelines but not specific dismissal terms. It should also be noted that the GDP postdates the two AI’s.
- The thoughts that follow are contingent on a number of conditions including that the dismissal is to another recognized reformed body, there is near unanimous agreement in the congregation for dismissal, the process has been followed and there are no encumbrances on the property or at least all sides can agree on how loans and deed restrictions will be handled.
- The first thing that these guidelines seem to say is that the real and other property must be specifically accounted for in the dismissal agreement and an acknowledgement that they are presently held in trust for the PC(USA) as a whole.
- The requirement for due diligence indicates that the value of the property should be determined by appraisal or some other reasonable method.
- As the concurring opinion suggests, a case can be made in the agreement for dismissal with property, possibly without financial compensation in consideration of the property, where the case for mission supports it. But it appears that this case needs to be laid out in detail in the agreement or an associated document.
- One spiritual and fiduciary consideration should be the cost, in money and good will, of civil litigation.
As I look at the collection of documents this is the conclusion that I reach. Your mileage may vary.
There is certainly the possibility that there will be official clarification on this by one of the usual channels. We can get official interpretations by an AI from the General Assembly or a future judicial case that has the GAPJC clarify this decision. There can also be clarifications, recommendations and guidelines that might be issued by various entities or individuals (like my thoughts above) that are helpful but do not rise to the level of Constitutional Interpretation like those from GA or the GAPJC. [Guidance has been issued by the Office of the General Assembly – See UPDATE at bottom.]
On thing I would not expect and would caution against is a definitive number that is recommended. I often hear suggestions of a payment of 10% of the value of the property but the AI above talks about taking these on a case-by-case basis and the Assembly Committee on the Constitution gave the advice to the 220th General Assembly, regarding a different matter, not to enshrine specific numbers in the constitution as that was against the spirit of the new Form of Government.
Let me conclude with some thoughts on the implications of this decision. The original San Francisco GDP has been held up as a model for use by other presbyteries, my own included. At the risk of inviting a remedial case I would add that the agreements with the churches we recently dismissed would probably not meet the test the GAPJC puts forward in this decision. I have to wonder how many other dismissal cases currently in process or recently completed would be in the same category. Clearly all future agreements need to seriously address the Trust Clause and provide due diligence regarding property.
In addition, I don’t think it is an exaggeration to say that the Trust Clause has become a bit of a Rorschach Test across the denomination and different people and groups see it differently.
But the bottom line is that the GAPJC did not give a definite process or very many specific steps as to what would constitute due diligence. Until or unless such authoritative guidance is given each presbytery that dismisses congregations has some latitude in determining for itself what it’s good faith due diligence work entails.
Enough about that for the moment. Something tells me this question may arise again in the future.
Now I set my sights on the last of the three cases, Larson and other v. Presbytery of Los Ranchos. We will see how quickly I can get that written. Stay tuned…
UPDATE: 11/12/12 – Late last week the Office of the General Assembly issued a Frequently Asked Questions document about this decision. There guidance is a bit less detailed than the suggestion I had above but my thoughts are pretty much in line with the guidelines they gave.
It’s now official, the PC(USA) cares more about property, than the right teaching of the Word of God.
Many congregations currently in the middle of discerning whether to remain in the PC(USA) will figure its cheaper to just walk away from the building, than to try to negotiate with a Presbytery which now has no discretion in determining the terms of a ‘gracious’ dismissal.
Others, in states where the trust clause was judged as null and void using the neutral principles of law, will just disaffiliate and the Presbytery will have no recourse.
At several points in this case there was a sense that this was about preserving the institution.
Thanks Steve. This is really helpful. Good work as always.
The two assertions in this decision that really stick out, in my opinion, are: 1) that “the church property in question was in fact unequivocally owned by the Presbyterian Church (U.S.A.)”; and 2) that “[I]n cases where circumstances prevent a remedy, this Commission may exercise its declaratory authority to provide guidance to lower councils and prevent future violations.”
The first assertion doesn’t seem “unequivocal” at all, either in light of the language of G-4.0203 or – especially – the tangled web of interpretation that’s come out of civil courts. To call the property trust clause “unequivocal ownership” is downright fantasist.
The second assertion makes perfect sense on its face, but seems to be in direct conflict with the Los Ranchos decision, along with Bush v. Pittsburgh (and First Presbyterian v. Washington, in which I was involved). Is the GAPJC reserving for itself a prerogative that it denies to synods, presbyteries and sessions? The only defense I can imagine would be that Los Ranchos dealt (albeit indirectly) with ordination examinations and San Francisco deals with property. Still, the system of figuring out who’s allowed to say what when is getting downright Byzantine.
Property – Yes, everyone I talk to about this finds it the tangled web you mention. We have to hold in tension the ecclesiastical polity with the civil cases and the civil side is determined on a state-by-state basis thanks to the 1979 case. Talking with someone close to this the other day about if the US Supreme Court would step in. They just passed up a good chance to help clarify by not taking the case this term.
Overall, across all three of these cases, I think you are seeing the same thread that is running through them. I hope to develop this more in a future post, but there is a real question about whether presbyteries can have theological standards as our polity has said for a long time or whether this has to be developed at the top. Another thing to look at is if every case has to be on a case-by-case basis (both the San Francisco and Los Ranchos decisions said this in regards to two different areas of polity), and if the confessions speak in a variety of voices (as I have heard as a constant drumbeat over the last year) than is there anyway we can declare clearly what we believe.
With respect, I don’t think that there is a question anymore. Los Ranchos seems to have finished what Bush v. Pittsburgh began. The only valid theological standards are either ad hoc, during actual examinations, or from above (there are precious few of those, and with a couple of exceptions they can be scrupled).
I’ve been wondering if one effect of Los Ranchos might not be to prohibit membership in something like the Fellowship of Presbyterians. It does, after all, involve a session covenant outlining theological principles and resulting promised actions.
Having now wrestled with Los Ranchos and the associated previous decisions and interpretation I have indeed come around to your position. All of the interpretations form a small space in which I don’t think anything meaningful can be said.
Your second observation here is indeed prescient and the Syond PJC in the Santa Barbara case has now taken it to that level.
My initial ordination was in the Cumberland Presbyterian Church, and in studying Cumberland history I learned about the original schism and subsequent relations between the Cumberland denomination and what ultimately became the PC(USA). A common theme was the bitterness over property litigation and how the assertion of denominational superiority had poisoned relationship for two generations and more. It is a sad and regrettable story. It appears that some in the PC(USA) would repeat the same mistakes, and we will all harvest the same poisoned fruit. Below is a copy of the apology offered in 1962 by the 174th General Assembly to the Cumberland General Assembly. Half a century later it would be nice if we could avoid the same grievous error, but unfortunately, the Danville decision appears to be guiding us into the same sin.
Here is the text of the PC(USA) apology as contained in the 174th GA Minutes:
This communication was prefaced by a statement from the Report of the Committee on Ecumenical Mission and Relations of the above Church to its General Assembly: “This Committee recommends that the 174th General Assembly approve the following message, and ask that it be delivered in person and read to the General Assembly of the Cumberland Presbyterian Church by the Rev. W. Glen Harris who is to be our fraternal delegate to that General Assembly.”
Fathers and Brethren:
We are thankful that in these past several years we have begun to bridge the gulf that has existed between our churches, in the fellowship of the World Presbyterian Alliance and in less formal contacts and conversations, we believe that the Holy Spirit has been healing the wounds and pain caused by the original division of the Cumberland Presbytery in 1810, and by the only partially successful union of 1906.
We are conscious of the fact that our fathers were responsible by their insensitivity to the needs of the frontier and by their provincialism, for a great share and the causes of the original schisms and we, their descendants, wish to express to you, the loyal descendants of the founders of the Cumberland Presbyterian Church, our sorrow for the part our Church played in this tragic division. We ask your forgiveness. We are conscious too that fifty-five years ago, and in the years immediately following, our church appeared to be more interested in church property and legal rights than in Christian love and witness. For this too, we ask forgiveness.
We address you thus not in any immediate hope of reunion, but rather to encourage our two Churches to ever more intimate cooperation and common witness wherever our congregations are near each other. We would like to work with you as Christian brothers. We hope you will come to feel the same way towards us.
Yours in the name of our Lord Jesus Christ.
Marshall L. Scott, Moderator
Eugene Carson Blake, Stated Clerk
Thank you very much for posting this. This is a part of the CPC/PCUSA history that I had not seen and as you say it is very relevant to circumstances today. If I get the chance I want to look into this some more.