Opinion ID: 3010098
Heading Depth: 2
Heading Rank: 3

Heading: Analysis in Light of Neutral Principles

Text: The Conference contends that its dispute with Scotts Church is an intrachurch governance dispute, one over church organization or administration, and not simply one over ownership of property. It argues that, therefore, whether the forum state has adopted the approach requiring deference or neutral principles, a court is obligated to defer to superior church authority. We reject that argument, as did the trial court, because it is clear that this dispute is hardly one of governance. Unlike the issue in Kedroff, which entailed a decision whether the Russian Orthodox Archbishop in America had been properly selected, or in Milivojevich, which centered on whether the Serbian Orthodox Bishop in North America had been properly removed, this case is only incidentally ecclesiastical. Instead, it consists almost entirely of a raw dispute over property rights. In Milivojevich the Supreme Court distinguished between the two, stating, this case essentially involves not a church property dispute, but a religious dispute the resolution of which under our cases is for ecclesiastical and not civil tribunals. 426 U.S. at 709. The Conference suggests that its decision in April 1991 to require all the congregations to quitclaim their real property interests was one of governance, but that action was not nearly as doctrinally charged as that in Jones v. Wolf, 443 U.S. 595 (1975), where the Presbyterian Church declared one faction of a divided congregation to be the true congregation. Yet even in Jones, the United States Supreme Court authorized the Georgia courts to use neutral principles to override the hierarchical church's determination. More importantly, the extent to which a court may permissibly inquire into disputes of this kind turns on the specific elements of the inquiry itself and the degree to which it might trench upon doctrinally sensitive matters, rather than on conclusory labelling of the whole dispute as either secular or ecclesiastical. Examination of the trial court's determinations here shows that most of them were unquestionably free of doctrinal relevance. The trial court's finding that the phrase in Scotts Church's certificate of incorporation, to hold same in trust for the uses and purposes of said Church Body, referred to Scotts Church was based principally on the absence of any mention of the Conference in the certificate's text, and the reappearance of the phrase said Church Body in the same certificate's two-thirds vote and members-in-good-standing provisions. Neither consideration implicates questions of religious doctrine, polity, [or] practice. Jones, 443 U.S. at 603. The trial court used similar legal analysis of language in rejecting the Signature Resolution as a basis for the quitclaim deed's validity, noting that its text had nothing to say about property transfers. In doing so, the court accepted the representations of Conference officials regarding the Resolution's limited effect. Neither of these passive inferences was anything more than the neutral, fact-driven conclusion that every conventional property or contract suit demands. Although some aspects of the trial court's opinion -- interpreting provisions of the Book of Discipline, for example -- may have touched on the church-governance sphere, they were irrelevant to the ultimate determination. The trial court's alternative ground for decision, its application of the state-law conflict rule, was free of doctrinal implications and provides an adequate basis for affirmance. The trial court determined that even if the terms of the Book of Discipline, including the Property Resolution, were assumed effective and binding on Scotts Church, they simply functioned as Scotts Church's corporate bylaws. See N.J. Stat. Ann. § 15A:1-2(c) ('Bylaws' means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which these rules are designated[.]). Indeed, the Conference itself described the Book of Discipline as bylaws at oral argument. Because those terms conflicted with Scotts Church's certificate of incorporation, which requires a two-thirds vote by church members before any property is transferred, and because New Jersey law states that in such conflicts the certificate prevails, it followed that the two-thirds vote requirement had not been overridden, and no property transfer had been effected. See App. at 38-39. Since the Signature Resolution was an amendment to the Book of Discipline and the secession clause was one of its original provisions, they are also by-laws which under New Jersey law cannot override Scotts Church's certificate of incorporation. The trial court's application of the conflict rule was consistent with the well-established rule in New Jersey that provisions of a corporation's charter or articles of incorporation enjoy priority over contradictory or inconsistent by-laws. See Leeds v. Harrison, 87 A.2d 713, 717-18, 720 (N.J. 1952) (religious nonprofit corporation may adopt by-laws only if conformable and subordinate to corporation's charter); L.L. Constantin & Co. v. R.P. Holding Corp., 153 A.2d 378, 383 (N.J. Super. Ct. Ch. Div. 1959) ([W]here inconsistency exists between by-laws and certificate of incorporation, the latter ordinarily governs . . . .); see also Elkins v. Camden & Atlantic Railroad Co., 36 N.J. Eq. 467, 468-69 (N.J. Ch. 1883); Kearney v. Andrews, 10 N.J. Eq. 70, 72-74 (N.J. Ch. 1854); Model Business Corporation Act Annotated § 2.06(c) (3d ed. 1993); 18 C.J.S. Corporations §§ 112(a), 114(a), 115(d) (1990); 18A Am. Jur. 2d Corporations §§ 313, 314 (1985 & Supp. 1996). The trial court's holding was also consistent with the Delaware Court of Chancery's resolution of a case nearly identical to this one filed against the Conference by a local Delaware AUFCMP church that involved a quitclaim deed signed at the same April 6, 1991 meeting at issue here. See Mother AUFCMP Church v. Conference of AUFCMP Church, No. 12055, 1991 WL 85846 (Del. Ch. May 16, 1991). As in this case the Conference defended the validity of the quitclaim deed by reference to the Property and Signature Resolutions and, as in this case, the local church's certificate of incorporation pre-dated the incorporation of the Conference in 1941 and specified that property could not be transferred without the consent of two-thirds of the members of the local church. The court's language in that decision could apply equally to Scotts Church: [B]y the defendants' own characterization, those documents [the Property and Signature Resolutions] occupy, at best, the status of by-laws of the [local church]. Assuming without deciding the validity of that characterization, the January 12th by-law placing local church properties in trust for the Conference runs afoul of the principle that where a by-law conflicts with the provisions of the charter, the by-law is a nullity. Id. at ; see also St. Thomas AUMP Church v. Conference of AUFCMP Church, No. 13006-NC, 1995 WL 694390 (Del. Ch. Nov. 6, 1995) (applying collateral estoppel to the Conference's claims based on the adverse decision Mother AUFCMP Church). Thus, even if the Conference's claims regarding its Property Resolution, Signature Resolution, and secession clause are given full weight, under basic, well-established principles of state law, they cannot override the certificate of incorporation's two-thirds vote requirement. Application of this neutral rule of priority effectively disposes of the Conference's principal contentions without engagement of any ecclesiastically sensitive issues. Significantly, the Conference has not mentioned -- let alone challenged -- this independent basis for the trial court's decision. The Conference's remaining arguments are decidedly less compelling, and we discuss each of them only briefly. The Conference devotes much of its briefs to its contention that the magistrate judge erred in rejecting its claim that it is the legal successor to the 1813 Union Church of Africans, arguing that the judge erroneously failed to admit evidence proving that fact and that these errors caused most of its other errors. See Brief of Appellant at 14-16. Paradoxically, at oral argument, it conceded that this issue is not important. In any event, the argument is inconsequential. Even if the Conference were assumed to be successor to the Union Church, that at most suggests that the term said Church Body in Scotts Church's 1915 certificate of incorporation could have referred to a denominational church already extant at that time.