Court Opinion

ID: 9584625
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:50:48.517816+00
Date Added: 2024-06-11T15:10:33.731795
License: Public Domain

Justice HUDSON
dissenting.
Because I believe that the Court of Appeals correctly dismissed this case as interlocutory, I respectfully dissent.
Defendant does not dispute that there was no final judgment in this case and that his appeal is thus interlocutory. However, “N.C.G.S. § 1-277 and N.C.G.S. § 7A-27(d) allow an appeal to be taken from an interlocutory order which affects a substantial right although the appeal may be interlocutory.” DKH Corp. v. Rankin-Patterson Oil *280Co., 348 N.C. 583, 585, 500 S.E.2d 666, 668 (1998). Defendant contends, and the majority agrees, that adjudication of this matter would require a court to impermissibly delve into and entangle itself in ecclesiastical matters in violation of the First Amendment. While I agree that such entanglement would affect a substantial right under the First Amendment, I do not agree that at this stage of this lawsuit, any such entanglement appears, or that a substantial right of defendant’s would be threatened or impaired, if this case proceeds.
Although the First Amendment prohibits courts from becoming entangled in ecclesiastical matters, “[i]t nevertheless remains the duty of civil courts to determine controversies concerning property rights over which such courts have jurisdiction and which are properly brought before them, notwithstanding the fact that the property is church property.” Atkins v. Walker, 284 N.C. 306, 318, 200 S.E.2d 641, 649 (1973). “Neither the First Amendment to the Constitution of the United States nor the comparable provision in Article I, Section 13, of the Constitution of North Carolina deprives those entitled to the use and control of church property of protections afforded by government to all property owners alike . . . [including] access to the courts for the determination of contract and property rights.” Id. (citing Presbyterian Church in the U.S. v. Mary Elizabeth Blue Hull Mem’l Presbyterian Church, 393 U.S. 440, 89 S. Ct. 601, 21 L. Ed. 2d 658 (1969)). The pleadings and attached affidavits here indicate that the disputed issues in this case involve whether defendant used church property without proper authority. There is no reference in any of the pleadings or other supporting documents to any doctrinal issue. Rather, the issues as developed thus far involve, purely and simply, property matters.
I cannot agree with the majority’s contention that “First Amendment rights are implicated when a party asserts that a civil court action cannot proceed without impermissibly entangling the court in ecclesiastical matters,” even though the pleadings reflect otherwise. (Emphasis added.) First, the cases the majority relies on do not support such a broad holding. Further, I fear that this approach could have the unintended consequence of allowing, or even inviting, misbehavior by church officials who could then avoid court review by baldly asserting that further review would result in impermissible entanglement in ecclesiastical matters.
The majority cites Priest v. Sobeck in support of its argument that when First Amendment rights are asserted, this Court has allowed appeals from interlocutory orders. 357 N.C. 159, 579 S.E.2d 250 *281(2003), rev’g per curiam for the reasons stated in the dissenting opinion, Priest v. Sobeck, 153 N.C. App. 662, 571 S.E.2d 75 (2002). However, Priest is distinguishable. In Priest, union members sued a union representative alleging that she defamed them in a union newsletter by falsely and maliciously blaming them for the hiring of non-union members. 153 N.C. App. at 664-65, 571 S.E.2d at 77. The Court of Appeals concluded that regardless of the trial court’s certification of the matter for interlocutory review, the partial grant of summary judgment neither constituted a final judgment nor affected defendants’ substantial right to free speech. Id. at 667-69, 571 S.E.2d at 78-80. The dissent disagreed, concluding that the judgment was final as to one or more of plaintiff’s claims and furthermore, that denial of defendants’ summary judgment motion based on the trial court’s misapplication of the “actual malice” standard would have a chilling effect on their First Amendment rights of free speech. Id. at 670-71, 571 S.E.2d at 80-81 (Greene, J., dissenting). This Court, per curiam, reversed the Court of Appeals “[f]or the reasons stated in the dissenting opinion.” 357 N.C. at 159, 579 S.E.2d at 250.
Here, I see no such chilling effect and in fact, no infringement on a First Amendment right. Should it appear at a later stage in the lawsuit that matters of church doctrine seem to be at issue, any party or the court on its own motion may raise the issue of subject matter jurisdiction. At this point, though, it is difficult to see how we or the trial court would venture into ecclesiastical waters in order to decide whether defendant’s expenses for clothing, airfare, or hotel rooms were authorized by the church. Defendant has not shown how these issues bear on his freedom to exercise his religion. Instead, these matters appear to bear entirely on defendant’s exercise of personal and fiscal responsibility toward the very secular assets of the church. Thus, I conclude that this appeal does not threaten or impair a substantial right, and I would dismiss it as interlocutory.
Turning to the merits, defendant here appeals from the denial of his Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Both Presbyterian Church and Atkins involved cases which went to the jury, and in both cases, the Courts made clear that “[c]ivil courts do not inhibit free exercise of religion merely by opening their doors to disputes involving church property.” Presbyterian Church, 393 U.S. at 449, 89 S. Ct. at 606, 21 L. Ed. 2d at 665. In Atkins, this Court emphasized that it is “the duty of civil courts to determine controversies concerning property rights . . . notwithstanding the fact that the property is church property.” 284 N.C. at 318, 200 S.E.2d at *282649. In Presbyterian, two local churches withdrew from the general church over serious doctrinal differences and then sought to enjoin the general church from trespassing on disputed church property. 393 U.S. at 442-43, 89 S. Ct. at 602-03, 21 L. Ed. 2d at 661-62. The Georgia Supreme Court affirmed “a civil court jury decision as to whether the general church abandoned or departed from the tenets of faith and practice it held at the time the local churches affiliated with it.” Id. at 441, 89 S. Ct. at 602, 21 L. Ed. 2d at 661. The United States Supreme Court concluded that the Georgia courts violated the First Amendment because the “church property litigation [wa]s made to turn on the resolution by civil courts of controversies over religious doctrine and practice.” Id. at 449, 89 S. Ct. at 606, 21 L. Ed. 2d at 665 (emphasis added). Similarly, in Atkins, this Court held that the First Amendment forbids a court decision about church property which depends on “a judicial determination that one group of claimants has adhered faithfully to the fundamental faiths, doctrines and practices of the church . . . while the other group of claimants has departed substantially therefrom.” 284 N.C. at 318, 200 S.E.2d at 649. There, the issues submitted to the jury were:
1. Did the Plaintiffs remain faithful to the doctrines and practices of the Little Mountain Baptist Church recognized and accepted by the Plaintiffs and Defendants prior to the division?
2. Have the Defendants departed radically and fundamentally from the characteristic usages, customs, doctrines and practices of the Little Mountain Baptist Church accepted by all members prior to the division as alleged in the complaint?
Id. at 308, 200 S.E.2d at 643. Clearly, the court and jury were delving into matters of doctrine and belief.
Here, by contrast, no party alleged such doctrinal or ecclesiastical issues in the pleadings or affidavits. While there could conceivably be some impermissible infringement into doctrinal issues at some later point in this case, such possible future infringement is merely speculative. The record as developed thus far indicates no such infringement if this case were allowed to proceed beyond the Rule 12(b)(1) motion to dismiss.
This Court has held that church property disputes must be decided “pursuant to ‘neutral principles of law.’ ” Atkins, id. at 319, 200 S.E.2d at 650 (quoting Presbyterian, 393 U.S. at 449, 89 S. Ct. at 606, 221 L. Ed. 2d at 665). The majority contends that “[b]ecause a *283church’s religious doctrine and practice affect its understanding” of the “concepts” of “the role of the pastor, staff, and church leaders, their authority and compensation, and church management,” none of the issues here can be addressed using neutral principles of law. The majority then asserts that because no neutral principles of law exist, we must defer to the church’s internal governing body, the Council for Ministry. However, it appears to me that the courts could easily apply neutral principles- of law in this case to determine whether the Council for Ministry acted within the scope of its authority, which is an appropriate area of action for courts. Indeed, this Court, in Atkins, held that “[w]here civil, contract or property rights are involved, the courts will inquire as to whether the church tribunal acted within the scope of its authority and observed its own organic forms and rules.” Id. at 320, 200 S.E.2d at 651 (citations and internal quotation marks omitted).
Here, plaintiffs, as members of a non-profit corporation church, brought suit in a derivative capacity pursuant to N.C.G.S. § 55A-7-40(a), alleging the following causes of action: that defendant converted church funds, breached a fiduciary duty owed to the church and its members, and engaged in a civil conspiracy to convert money and assets of the church. The majority argues'that “in order to address plaintiffs’ claims, the trial court would be required to interpose its judgment as to both the proper role of these church officials and whether each expenditure was proper in light of Saint Luke’s religious doctrine and practice, to the exclusion of the church’s duly constituted leadership.” To the contrary, I conclude that each of plaintiff’s claims could be resolved through the application of neutral principles of law.
Conversion is “an unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or the exclusion of an owner’s rights.” In re Legg, 325 N.C. 658, 669, 386 S.E.2d 174, 180 (1989), cert. denied, 496 U.S. 906, 110 S. Ct. 2589, 110 L. Ed. 2d 270 (1990) (citation and internal quotation marks omitted). Here, the law of conversion can be neutrally applied to this case to inquire whether defendant exercised a right of ownership over funds belonging to the church without authorization. The church’s bylaws explicitly address expenditures, and a court can review whether or not the bylaws were followed, and thus whether the expenditures were authorized, without delving into the church’s “religious doctrine and practice.”
*284Next, this Court has described the necessary elements for a claim of breach of fiduciary duty as follows:
For a breach of fiduciary duty to exist, there must first be a fiduciary relationship between the parties. Such a relationship has been broadly defined by this Court as one in which “there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence . . . ,[and] ‘it extends to any possible case in which a fiduciary relationship exists in fact, and in which there is confidence reposed on one side, and resulting domination and influence on the other.’ ”
Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707-08 (2001) (ellipses and brackets in original) (citations omitted) (emphasis added). I believe that a court could apply neutral principles defining fiduciary duty as the Court did in Dalton to consider whether defendant acted in good faith by looking at whether he followed the church’s bylaws regarding spending and authorization for spending, and that such inquiry would not delve into ecclesiastical matters.
Finally, this Court has defined civil conspiracy as follows:
A conspiracy has been defined as “an agreement between two or more individuals to do an unlawful act or to do a lawful act in an unlawful way.” The common law action for civil conspiracy is for damages caused by acts committed pursuant to a conspiracy rather than for the conspiracy, i.e., the agreement, itself. Thus to create civil liability for conspiracy there must have been an overt act committed by one or more of the conspirators pursuant to a common agreement and in furtherance of a common objective.
Dickens v. Puryear, 302 N.C. 437, 456, 276 S.E.2d 325, 337 (1981) (citations omitted). Plaintiffs assert that the object of the civil conspiracy here was to convert church money and assets. I agree with the majority that this claim is premised on the conversion claim; thus, as discussed above regarding the conversion claim, I believe this claim could also be decided without implicating the First Amendment.
In similar types of claims, courts in other jurisdictions have concluded that judicial consideration of whether a church followed its own internal procedures or governing documents does not violate the First Amendment. Murphy v. Green, 794 So. 2d 325, 330 (Ala. 2000) (holding that trial court properly concluded that defendants improp*285erly converted church funds in violation of church’s “purpose” clause); Abyssinia Missionary Baptist Church v. Nixon, 340 So. 2d 746, 748 (Ala. 1976) (trial court erred in not allowing plaintiffs to present evidence as to “the proper established procedures of the Baptist Church on the issue of the validity of expulsion from membership”); Ervin v. Lilydale Progressive Missionary Baptist Church, 351 Ill.App.3d 41, 46, 813 N.E.2d 1073, 1078 (2004) (“The court can decide the issue by applying neutral legal principles to interpret the church’s bylaws, handbook and covenant”); Libhart v. Copeland, 949 S.W.2d 783, 793 (Tex. App. 1997) (“ ‘[T]he proceedings of the association are subject to judicial review where there is fraud, oppression, or bad faith, or property or civil rights are invaded, or the proceedings in question are violative of the laws of the [association], or the law of the land, or are illegal.’ ” (brackets in original) (citations omitted))
The majority concludes that plaintiffs have not adequately preserved any challenge to the authority of the church’s Council for Ministry, or advanced any argument that the Council did not follow its own internal governance procedures, because plaintiffs did not make such allegations in their complaint. However, in his first motion to dismiss, under Rule 12(b)(6), defendant asserted that the bylaws of the church provide that “the business and affairs for the corporation shall be managed by its Council on [sic] Ministry . . . [and that] [t]he Council on [sic] Ministry, has, in fact, performed that responsibility.” Furthermore, plaintiffs submitted affidavits from numerous members asserting that since defendant became pastor, there have been no congregational elections of the Council for Ministry, and that “[t]he individuals who serve as members of the Council of [sic] Ministry and other official positions of the church are appointed by Reverend Clifford Matthews, Jr. ánd serve at his pleasure.” These affidavits also state that there has not beén proper notice for church meetings, that no budget has been presented, and that votes are not being counted and minutes not being kept or published. The 4 November 2003 order of the trial court indicates that it considered the affidavits filed by plaintiffs in denying defendants’ 12(b)(6) motions. Thus, although the complaint itself did not specifically allege that the church’s internal governance body was not properly elected and was not following the bylaws, defendant himself raised these issues in his motion to dismiss, and plaintiffs submitted affidavits regarding these issues. See Sutton v. Duke, 277 N.C. 94, 102, 176 S.E.2d 161, 165 (1970) (“Under the ‘notice theory of pleading’ a statement of claim is adequate if it gives sufficient notice of the claim asserted ‘to enable the adverse *286party to answer and prepare for trial, to allow for the application of the doctrine of res judicata, and to show the type of case brought’ ” (citation omitted)); Taylor v. Gillespie, 66 N.C. App. 302, 305, 311 S.E.2d 362, 364, disc. rev. denied, 310 N.C. 748, 315 S.E.2d 710 (1984) (“A formal amendment to the pleadings ‘is needed only when evidence is objected to at trial as not within the scope of the pleadings.’ . . . Because no objection was made to the introduction of the evidence, the pleadings were amended by implication.” (citations omitted)) Moreover, as plaintiffs allege in their complaint that defendant misappropriated funds and acted without proper authorization in spending church funds, whether or not the internal governance of the church was followed is an essential issue in determining whether or not the use of the funds was “authorized.” These matters are clearly before the Court.
As I believe the courts can resolve plaintiffs’ claims by applying neutral principles of law and without impermissibly entangling themselves in ecclesiastical issues in violation of the First Amendment, I conclude that the Court of Appeals correctly dismissed the appeal as interlocutory. In so concluding, I also note that this Court has previously twice dismissed defendant’s notice of appeal to this Court on the basis that this appeal lacks a substantial constitutional question. 360 N.C. 576, 635 S.E.2d 599 (2006); 360 N.C. 175, 626 S.E.2d 297 (2005). Furthermore, I reiterate that defendant seeks to have this case dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction. The majority argues that if this case is allowed to proceed, defendant’s First Amendment rights will be irreparably injured because the court would become entangled in ecclesiastical matters from which it should have abstained. The majority cites no law and gives no concrete explanation for the proposition that allowing this case to proceed beyond a Rule 12 motion affects a substantial right which will be irreparably lost if the case proceeds. The majority asserts that the trial court “properly opened its door to this church property dispute,” and that “once it became clear that no neutral principles of law existed to resolve plaintiffs’ lawsuit, continued involvement by the trial court became unnecessary and unconstitutional.” As discussed above, I do not believe that this case, as pleaded, involves any ecclesiastical or doctrinal disputes and, to the contrary, it appears that the property dispute at issue can be resolved using neutral principles of law. I believe, as did the Supreme Court of Alabama in Abyssinia, that “[p]laintiffs are entitled to present evidence as to the proper established procedures of the [church].” 340 So.2d at 748. *287For the reasons discussed above, I respectfully dissent and would affirm the Court of Appeals.
Justice TIMMONS-GOODSON joins this dissenting opinion.