Opinion ID: 2769429
Heading Depth: 2
Heading Rank: 2

Heading: Hutterville’s State Court Litigation

Text: In August of 2009, Johnny Wipf and other Wipf faction members brought suit in South Dakota state court against Rev. Waldner, Tom Waldner, and Kenneth Waldner (Waldners), “seeking a declaration that [the Wipf faction members] were the properly elected directors of Hutterville.” Hutterville I, 791 N.W.2d at 172. Using Hutterville’s bylaws and articles of incorporation, the state trial court determined the Wipf faction members were its duly elected directors and officers. See id. After the unfavorable decision, Rev. Waldner, who remained minister of the Hutterville church, and Rev. Kleinsasser signed a “Resolution of Action Taken by Hutterian Church Group I,” which states: The undersigned, being duly authorized by Hutterian Church Group I to act on its behalf, hereby declare that Johnny Wipf, Alvin Hofer and Jake Hofer Sr., residents of Hutterville Hutterian Colony, are hereby excommunicated/removed as Members of the Hutterian Church, effective as of August 19, 2009. As a result of such excommunication, the said Johnny Wipf, Alvin Hofer and Jake Hofer Sr. shall no longer be considered Members of Hutterian Church Group I, nor shall they be entitled to attend services or participate in Church activities. See id. at 172. According to the Waldner faction, excommunication from the local church made these Wipf faction members ineligible for corporate membership in Hutterville and unable to hold a director or officer position. See id. at 173. Challenging the validity of the excommunication, the Wipf faction asked the state trial court to declare that the excommunication did not affect its conclusion that the Wipf faction members were the duly elected directors and officers of Hutterville. See id. at 172-73. Before a hearing could be held on the issue, the Waldners “moved to dismiss [the Wipf faction’s] complaint for lack of subject matter jurisdiction.” Id. at 173. The state trial court agreed jurisdiction was lacking and dismissed the Wipf faction’s lawsuit because the matter required the court to decide disputed religious -5- questions. See id. at 174. Accepting the Waldners’ argument, the South Dakota Supreme Court affirmed, reasoning the federal constitution and the South Dakota constitution prohibit state courts from resolving disputes of religious doctrine and ecclesiastical polity, despite the presence of a secular claim. See id. at 179-80. The court rejected the argument that control of the Hutterville corporation could be determined by a neutral reading of its articles of incorporation and bylaws because fundamental questions—such as status as a corporate member, director, or officer—were “inseparable” from disputed religious questions of church membership and leadership. Id. at 179. In a second state action, the Wipf faction alleged deadlock and misapplication of corporate assets were causing irreparable harm to Hutterville’s business and requested the dissolution of Hutterville and appointment of a receiver to wind up its business. See Hutterville II, 808 N.W.2d at 681. The trial court agreed and appointed a receiver, Harvey C. Jewett. See id.; see also Wipf v. Hutterville Hutterian Brethren, Inc. (Hutterville III), 834 N.W.2d 324, 328 (S.D. 2013). The South Dakota Supreme Court reversed, concluding “the underlying religious controversies over church leadership so pervade the dissolution of the religious corporation that the dissolution is beyond a secular court’s jurisdiction.” Hutterville II, 808 N.W.2d at 686. Before this ruling, Jewett moved for approval of his accounting and for payment of his fees and expenses. See Hutterville III, 834 N.W.2d at 329. The trial court approved Jewett’s actions and accounting. See id. In the ensuing months, the Waldners challenged aspects of the circuit court’s approval of Jewett’s accounting, but the trial judge stood by its initial ruling and, on October 25, 2012, terminated the receivership and discharged Jewett. See id. at 330-31. On appeal, the South Dakota Supreme Court affirmed the trial court, concluding the Waldners’ allegations that -6- Jewett was an interested party3 had been forfeited by a failure to object, reasoning any procedural errors in his appointment were harmless, concluding judicial immunity protected Jewett from liability, and rejecting on the merits the Waldners’ claims of Jewett’s bad faith. See id. at 334-36.