1 

Filed 3/14/13 Diocese of San Joaquin v. Nelson CA3 

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

THIRD APPELLATE DISTRICT 

(San Joaquin) 

---- 

DIOCESE OF SAN JOAQUIN et al., 

 Plaintiffs and Appellants, 

 v. 

LEE M. NELSON et al., 

 Defendants and Respondents. 

C067958 

(Super. Ct. No. 

39-2010-00248560-CU-MCSTK) 

 In 2007, the St. John’s Protestant Episcopal Church of Stockton, which is a 

corporation (Parish Corporation), decided to disaffiliate itself from the Episcopal Church 

(Church) over doctrinal differences. The Diocese of San Joaquin (Diocese) of the 

Episcopal Church filed an action for declaratory relief against the Parish Corporation, 

claiming that the property retained by the Parish Corporation is owned by the Diocese 

and Church. The Diocese also named several individual defendants: the Parish 

Corporation’s priest and members of the Parish Corporation’s vestry and board of 

directors (Individual Defendants). The Diocese does not seek damages; instead, it seeks 
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declarations that the Diocese owns and is entitled to possess and control the property and 

that, upon disaffiliation, the Individual Defendants could no longer act on behalf of the 

Parish Corporation. 

 The Individual Defendants demurred to the complaint. The trial court sustained 

the demurrer, citing Code of Civil Procedure section 1061, which gives the court 

discretion to deny declaratory relief if the relief is not “necessary or proper at the time 

under all the circumstances.”1 The Parish Corporation was not a party to the demurrer 

proceedings and remains as a defendant in the action. 

 The Diocese appeals. It claims the trial court did not rely on section 1061 to 

dismiss the action as to the Individual Defendants and, therefore, the only relevant 

inquiry is whether the demurrer was sustained on the merits of the action, which inquiry 

requires a de novo, rather than an abuse of discretion, standard of review. The Diocese 

argues for the first time in its reply brief on appeal that the trial court abused its discretion 

under section 1061. 

 We conclude that the trial court actually relied on section 1061 to dismiss the 

action as to the Individual Defendants and, because the Diocese failed to argue the 

section 1061 question in its opening brief, it has forfeited consideration of that question 

on appeal. In any event, the trial court did not abuse its discretion by dismissing the 

complaint as to the Individual Defendants. 

BACKGROUND CONCERNING DISAFFILIATION CASES 

 While this opinion does not reach the merits of who owns the parish property, a 

brief summary of similar cases is helpful to understanding the issues relevant to this 

action. 

 

1 References in this opinion to an unspecified code are to the Code of Civil 

Procedure. 
3 

 “ ‘The Protestant Episcopal Church in the United States of America . . . , 

organized in 1789, was the product of secession of the Anglican church in the colonies 

from the Church of England, the latter church itself being the product of secession from 

the Church of Rome in 1534.’ [Citation.] The church . . . is governed by a general 

convention and a presiding bishop. In the United States, the Episcopal Church is divided 

geographically into dioceses, including [here, the Diocese of San Joaquin]. Each diocese 

is governed by a diocesan convention and a bishop. A diocese is itself divided into 

missions and parishes, which are individual churches where members meet to worship. 

A parish is governed by a rector and a board of elected laypersons called the vestry. 

[Citation.]” (Episcopal Church Cases (2009) 45 Cal.4th 467, 474.) 

 Over the past decade, some California parishes have disaffiliated from the Church 

over questions of doctrine. This has led to disputes over who owned the parish property. 

(Episcopal Church Cases, supra, 45 Cal.4th at pp. 475-476.) In Episcopal Church 

Cases, the Supreme Court held that (1) secular courts must not resolve questions of 

church doctrine, on which the courts must defer to the highest relevant ecclesiastical 

authority; however, (2) if the court can resolve the dispute over property ownership 

without reference to church doctrine, it should do so applying neutral principles of law. 

(Id. at p. 485.) In the case before it, the Supreme Court concluded that the local parish 

held the property in trust for the Church and, therefore, upon disaffiliation, the property 

reverted to the Church. (Id. at p. 493.) 

 A wrinkle in the case before us, different from Episcopal Church Cases, is that the 

disaffiliation came at the diocese level. The Diocese of San Joaquin, acting through 

Bishop John-David Schofield, disaffiliated from the Episcopal Church and took steps to 

change its name to the Anglican Diocese of San Joaquin. (Schofield v. Superior Court

(2010) 190 Cal.App.4th 154, 158-159.) And St. John’s Parish joined in the diocese’s 

disaffiliation. 
4 

 The plaintiffs here are the Diocese of San Joaquin and Bishop Jerry A. Lamb, the 

provisional bishop installed by the Episcopal Church after Schofield’s disaffiliation. 

(Schofield v. Superior Court, supra, 190 Cal.App.4th at pp. 159-160.) 

 In 2010, the Fifth Appellate District decided a case that presented the question of 

who is the incumbent bishop of the Diocese of San Joaquin: Schofield or Lamb. The 

court concluded that it is a question of church doctrine. (Schofield v. Superior Court, 

supra, 190 Cal.App.4th at pp. 161-162.) The court then turned to the ecclesiastical 

authorities and determined that the Church had deposed Schofield and recognized Lamb 

as the bishop of the Diocese. (Id. at p. 162.) That determination, however, left 

unresolved “issues concerning property transfers assertedly made by Schofield while he 

was the duly constituted Bishop of the Diocese of San Joaquin.” (Ibid.) The Fifth 

Appellate District directed that those issues must be resolved in the trial court applying 

neutral principles of law. (Id. at pp. 162-163.) 

PROCEDURAL BACKGROUND 

 We begin with some pertinent allegations in the complaint: 

 “7. Defendant [Parish Corporation] . . . is a non-profit religious corporation . . . . 

At all times relevant to this action, Defendant Parish Corporation has been an 

ecclesiastical entity in union with the Diocese and subordinate to the Constitutions, 

Canons, and Conventions of the Church and the Diocese. The Parish Corporation was 

created for the convenience of the parish to conduct its temporal affairs. The Parish 

Corporation is named as a Defendant in this action because the individual Defendants 

have illegally usurped control of the Parish Corporation and are using and occupying the 

Parish Premises and Parish Assets for their own purposes. The individual Defendants 

lack authority to act on behalf of the Parish Corporation. 

 “8. Defendant Lee M. Nelson (‘Nelson’) is the purported priest and rector 

exercising de facto control of the Parish Corporation and is in possession of, and 

exercising control over, the Parish Premises and Parish Assets without the permission, 
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consent, or approval of the Plaintiffs or the Church. On or about February 2009, 

Defendant Nelson was allegedly installed as the rector of St. John’s Stockton in the 

Diocese of San Joaquin by the then deposed and former Bishop of the Diocese, JohnDavid Schofield. Defendant Nelson has neither obtained the consent of Plaintiff Bishop 

Lamb to be the rector of St. John’s parish as required by the Canons of the Church or the 

Diocese, nor sought a license to officiate in the Diocese of San Joaquin. On May 18, 

2010, the Episcopal Diocese of Fort Worth, the diocese where Defendant Nelson is 

canonically resident, determined that he has abandoned the Communion of the Church 

and has been inhibited from officiating as an ordained minister of the Episcopal Church 

for a period of six months and is liable for deposition and removal from the ministry of 

the Church. 

 “9. Defendants Wilson Melchor, Bob Johnson, Gary Crowder, Phil Berghuis, 

Honey Rosal, Pete Ottesen, Mike Combs, Rick Dunn, Steve Olmstead, Rachel Allanigue, 

Ted Yumoto and Jessica Aaron are all individuals and former members of the Church, 

exercising de facto control of the Parish Corporation and purporting to be the vestry and 

board of directors of the Parish Corporation. These defendants are in possession of, and 

exercising control of the Parish Premises and other Parish Assets without the permission, 

consent, or approval of the Plaintiffs or the Church.” 

 “64. In or about 1855, significant portions of the Parish Premises were acquired 

by the Parish Corporation from private parties under two deeds. . . . [¶] . . . Additional 

properties constituting the Parish Premises were obtained by the Parish Corporation in or 

about 1957, 1993, 1995 and in 2002.” 

 “66. In a series of actions culminating in December 2007, Schofield, the former 

bishop of the Diocese and some of the Defendants, attempted to disaffiliate the Diocese 

and its congregations, including the Parish, from the Church and affiliate them with 

another religious denomination. 
6 

 “67. This disaffiliation attempt of Schofield and the Defendants supported 

resolutions at the annual meeting of the Diocesan Convention that consisted of purported 

changes to the Diocesan Constitution and Canons of the Diocese and the Articles of 

Incorporation of the Corporation Sole that eliminated references to the accession of the 

Diocese to the Constitution and Canons of the Church. These amendments were ultra 

vires and null and void and contrary to the Canons and Constitutions of the Church and 

the Diocese.” 

 “69. After the attempted disaffiliation efforts described above, the Church’s 

House of Bishops met in March 2008, and pursuant to Canon IV.9.2 of the Church, 

authorized the Presiding Bishop to depose and remove Schofield from the ordained 

ministry of the Church, which the Presiding Bishop did that day. 

 “70. Upon Schofield’s deposition and removal as the Bishop of the Diocese of 

San Joaquin, his positions as the incumbent of the Corporation Sole, and President of the 

Investment Trust and the Episcopal Foundation, automatically terminated.” 

 The complaint seeks declarations that the property is held for the benefit of the 

Diocese and that the property must be turned over to the Diocese. The complaint also 

seeks a declaration that, upon disaffiliation from the Church, the “Individual Defendants” 

no longer had authority to act on behalf of the Parish Corporation. 

 Attached to the complaint is a legal description of the property subject to the 

action. 

 The Parish Corporation answered the complaint, but the Individual Defendants 

instead demurred. They argued that the dispute over the property was between two 

corporate entities: the Diocese and the Parish Corporation. They claimed that the 

Diocese was trying to pierce the corporate veil. The Diocese opposed the Individual 

Defendants’ demurrer, and the trial court held a hearing. 

 During the hearing, the trial court asked counsel for the Diocese why the 

Individual Defendants were necessary to the action. Counsel responded that the 
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Individual Defendants are in possession of the property, even though the Parish 

Corporation owns the property. The court noted, however, that the Individual Defendants 

do not have a leasehold on the property but are merely corporate directors. In response to 

the court’s question concerning what gives the Individual Defendants a possessory 

interest, counsel directed the court’s attention to a Church canon that all parish property 

is held in trust for the Church and Diocese. 

 The Church canon cited by counsel states: “All real and personal property held by 

or for the benefit of any Parish, Mission or Congregation is held in trust for this Church 

and the Diocese thereof in which such Parish, Mission or Congregation is located. The 

existence of this trust, however, shall in no way limit the power and authority of the 

Parish, Mission or Congregation otherwise existing over such property so long as the 

particular Parish, Mission or Congregation remains part of, and subject to, this Church 

and its Constitutions and Canons.” 

 The trial court stated that it would sustain the demurrer without leave to amend. It 

said that the canon cited by counsel for the Diocese “does not seem to provide in any way 

that the individuals have control over this property. . . . [T]o take the individuals out I 

don’t think really impairs the plaintiff’s claims as far as the property transfers are 

concerned.” The court added: “[S]hould discovery reveal that some of these people 

ought to be involved in the case, then I think that is the way you bring it back in. But at 

this point, I don’t see any facts that would support their being in the case, and I also don’t 

see any way to amend the complaint that would create a basis for that.” 

 Over the Diocese’s objection, the Individual Defendants proposed, and the trial 

court signed, an order stating: “[T]he Court has concluded that Plaintiffs’ Complaint fails 

to demonstrate to the satisfaction of the Court why it is ‘necessary or proper at the time 

under all the circumstances’ to sue the Individual Defendants in order to obtain the 

declaratory relief they seek against the corporate defendant. (See Code Civ. Proc. § 

1061.)” The order added that dismissal was “without prejudice,” a reference to its oral 
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statement that the Diocese would be allowed to “bring back” individuals as defendants if 

it was established through discovery that they are necessary to the action. 

 The trial court dismissed the action as to the Individual Defendants, and the 

Diocese appeals. 

SECTION 1061 

 The Code of Civil Procedure allows a party to seek a declaration from the courts 

concerning the parties’ legal rights and duties “in cases of actual controversy relating to 

the legal rights and duties of the respective parties . . . .” (§ 1060.) However, “[t]he court 

may refuse to exercise the power granted by [the statutes governing declaratory relief] in 

any case where its declaration or determination is not necessary or proper at the time 

under all the circumstances.” (§ 1061.) 

 “The discretion to be exercised pursuant to section 1061 is not unlimited. It is a 

legal or judicial discretion subject to appellate review, and declaratory relief must be 

granted when the facts justifying that course are sufficiently alleged. [Citation.] Refusal 

is limited to cases where a declaration of rights and obligations would be unnecessary or 

improper at the time under all the circumstances. The determination rests on the facts in 

each case.” (Kessloff v. Pearson (1951) 37 Cal.2d 609, 613.) 

 “[I]f a plaintiff . . . has other means of seeking a determination of [its] rights, then 

a trial judge may sustain a general demurrer to a declaratory relief claim.” (C.J.L. 

Construction, Inc. v. Universal Plumbing (1993) 18 Cal.App.4th 376, 390 and cases cited 

therein.) 

 “[W]hether, under all of the circumstances, a declaration of the rights of the 

parties is necessary or proper is a matter within the discretion of the trial court, and in the 

absence of a clear showing of abuse of that discretion, . . . its decision will not be 

disturbed upon appeal. (Code Civ. Proc. § 1061; [citations].)” (Lawrence Barker, Inc. v. 

Briggs (1952) 39 Cal.2d 654, 669-670.) 
9 

 A court may rely on its discretionary power under section 1061 to sustain a 

demurrer to a declaratory relief action. (Simpson v. Security First Nat. Bank (1945) 71 

Cal.App.2d 154, 157-158.) 

DISCUSSION 

 The Diocese insists in its opening brief that the trial court did not sustain the 

demurrer based on an exercise of discretion under section 1061. Having so insisted, the 

Diocese does not address in its opening brief whether the trial court abused its discretion 

under section 1061. Instead, the Diocese contends that the sustaining of the demurrer 

was improper as a matter of law based on the merits of the dispute. 

 In its response, the Individual Defendants assert that sustaining the demurrer under 

section 1061 was not an abuse of discretion. They also note that the Diocese has not 

argued that it was an abuse of discretion. 

 In the last few pages of its reply brief, the Diocese, for the first time, contends that 

sustaining the demurrer was an abuse of discretion under section 1061. 

 We conclude that (1) the trial court relied on section 1061 in sustaining the 

demurrer (which means that we apply an abuse of discretion standard on appeal); (2) the 

Diocese forfeited any claim that the trial court abused its discretion because it makes the 

argument for the first time in the reply brief; and (3) in any event, the trial court did not 

abuse its discretion under the circumstances of this case. 

I 

The Trial Court Relied on Section 1061

 The Diocese bases the legal argument in its opening brief on its assertion that the 

trial court did not rely on section 1061 when it sustained the Individual Defendants’ 

demurrer. Since the trial court did not rely on section 1061, argues the Diocese, the 

proper standard of review is whether the demurrer was improperly sustained as a matter 

of law on the substantive merits of the action. This premise is false, as the trial court 

explicitly relied on section 1061. 
10 

 The trial court’s order cites section 1061 and states that declaratory relief against 

the Individual Defendants is not “ ‘necessary or proper at the time under all the 

circumstances.’ ” The Diocese objected in the trial court to this language concerning 

section 1061 when counsel for the Individual Defendants sought approval of the proposed 

order, and the trial court effectively overruled the objection by using the proposed 

language in the order. Despite this clear invocation of the court’s discretionary power, 

the Diocese contends that, because section 1061 was neither briefed nor discussed at the 

hearing on the demurrer, “[i]t is clear . . . from the order on the demurrer that the trial 

court did not sustain the demurrer pursuant to an exercise of its discretion under Section 

1061 . . . .” The Diocese argues that the trial court actually based its sustaining of the 

demurrer on the merits of the issues relating to corporate law and possession of the 

property. 

 In an attempt to bolster its argument that the court did not rely on section 1061, the 

Diocese cites Collins v. City & Co. of S.F. (1952) 112 Cal.App.2d 719 (Collins). In that 

case, the court held that, before reviewing a case for abuse of discretion under section 

1061, the court must have evidence that the trial court acted under section 1061. Since 

the trial court’s ruling sustaining the demurrer went to the merits of the action and did not 

purport to rely on section 1061, the appellate court refused to consider the section 1061 

issue. (Collins, supra, at pp. 723-724.) 

 Unlike the circumstances of Collins, the trial court here expressly relied on section 

1061 in sustaining the demurrer. In addition to that express reference, the trial court 

explored at the hearing whether the Individual Defendants’ presence in the action was 

necessary to the relief the Diocese sought. The court asked: “[Counsel], let me ask, 

though, if the individuals were dismissed from the action, how does that impair your 

action? You still have your claims against the corporate entity.” 

 We therefore conclude that, contrary to the Diocese’s argument, the trial court 

actually relied on section 1061 in sustaining the demurrer. 
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II 

The Diocese Forfeited an Abuse-of-Discretion Challenge

 As a result of its insistence that the trial court did not rely on its discretionary 

power under section 1061, the Diocese argues in its opening brief only that sustaining the 

demurrer was error as a matter of law on the merits of the action and that we must apply a 

de novo standard of review. The opening brief, therefore, does not present a challenge to 

the trial court’s exercise of discretion under section 1061. And because the Diocese does 

not make this challenge in its opening brief, the challenge is forfeited. 

 “ ‘Points raised for the first time in a reply brief will ordinarily not be considered, 

because such consideration would deprive the respondent of an opportunity to counter the 

argument.’ [Citation.] ‘Obvious reasons of fairness militate against consideration of an 

issue raised initially in the reply brief of an appellant.’ [Citation.] ‘ “Obvious 

considerations of fairness in argument demand that the appellant present all of his points 

in the opening brief. To withhold a point until the closing brief would deprive the 

respondent of his opportunity to answer it or require the effort and delay of an additional 

brief by permission. Hence the rule is that points raised in the reply brief for the first 

time will not be considered, unless good reason is shown for failure to present them 

before.” ’ [Citation.]” (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.) 

 The Diocese offers no good reason for not addressing in its opening brief whether 

the trial court abused its discretion under section 1061. Therefore, the argument is 

forfeited. 

III 

The Trial Court did not Abuse Its Discretion

 In any event, even were we to consider the issue on the merits, we would conclude 

that the trial court did not abuse its discretion under section 1061. 

 This is not an action for ejectment or trespass. In fact, the Diocese seeks only a 

declaration that it owns the property and is entitled to control and possess it. The essence 
12 

of this action is that the Parish Corporation holds the parish property in trust for the 

benefit of the Diocese and the Church. The complaint does not allege that the Individual 

Defendants claim any ownership or possessory right beyond the title held by the Parish 

Corporation. Therefore, we see no reason why declaratory relief against the Individual 

Defendants is “necessary or proper at the time under all the circumstances.”2 (§ 1061.) 

DISPOSITION 

 The order dismissing the action as to the Individual Defendants is affirmed. The 

Individual Defendants are awarded their costs on appeal. (Cal. Rules of Court, rule 

8.278(a).) 

 NICHOLSON , Acting P. J. 

We concur: 

 BUTZ , J. 

 DUARTE , J. 

 

2 Several of the Individual Defendants are no longer members of the Parish’s vestry 

and board of directors, and these defendants filed a motion in this court to be dismissed 

from the action. The Diocese opposes this motion because, according to the Diocese, the 

individuals’ position in the Parish is irrelevant. The Diocese maintains that the 

individuals remain in unlawful possession of the Diocese’s property. Given our 

conclusion that the trial court did not abuse its discretion in dismissing the action as to the 

Individual Defendants, we deny as moot the motion to dismiss as to several named 

defendants.