Court Opinion

ID: 3110762
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:47:57.547709+00
Date Added: 2024-06-11T12:27:01.014174
License: Public Domain

Opinion issued January 7, 2014.

                                   In The

                            Court of Appeals
                                   For The

                        First District of Texas
                          ________________________

                           NO. 01-10-00861-CV
                          ———————————
WINDWOOD PRESBYTERIAN CHURCH, INC., A TEXAS NON-PROFIT
               CORPORATION, Appellant
                                     V.
    THE PRESBYTERIAN CHURCH (U.S.A.) AND PRESBYTERY OF
               NEW COVENANT, INC., Appellees

                  On Appeal from the 281st District Court
                           Harris County, Texas
                     Trial Court Case No. 2008-53684

                                  OPINION

     We vacate and withdraw our opinion and judgment of August 30, 2012, and

issue this opinion and judgment in their stead.   In light of the new opinion,

                                      1
appellant’s motion for en banc reconsideration is dismissed as moot.          See

Brookshire Bros., Inc. v. Smith, 176 S.W.3d 30, 33 (Tex. App.—Houston [1st Dist.]

2004, pet. denied).

       This case involves a property dispute between a local church and its

parent denominational church. The local church, Windwood Presbyterian Church,

Inc.   (“Windwood”) filed suit against The Presbyterian Church (U.S.A.)

(“PCUSA”) and Presbytery of New Covenant, Inc. (“the Presbytery”) (collectively,

“the denominational church”), seeking a declaration that the denominational church

had no legal, equitable, or other interest in the property on which Windwood’s

church campus is located.     The denominational church moved for summary

judgment, contending that PCUSA is a hierarchical church, and, as such, its

decision on church property matters is entitled to deference by civil courts. The

trial court granted summary judgment, and this appeal followed. We reverse and

remand to the trial court.

                               BACKGROUND

       Windwood Presbyterian Church, Inc. is a non-profit corporation that

maintains the civil affairs for Windwood Presbyterian Church, which is located at

1055 Spring-Cypress Road in Houston, Harris County, Texas.        Windwood was

incorporated and its first trustees were elected in 1971.   The 1971 articles of

incorporation pledge the assets of the corporation to the establishment and

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maintenance of a place of religious worship. In the articles, Winwood trustees

were given the power to buy, sell, and mortgage property for the church.        The

articles further provide that the members of the corporation could assign other

duties to the trustees, “provided they do not infringe upon the powers and duties of

the Session or of the Board of Deacons as defined in the Book of Church Order,

Presbyterian Church in the United States.”

     Windwood was at the time of its incorporation a member of Presbyterian

Church of the United States (“PCUS”), which, because of a split at the time of the

Civil War, was comprised of churches in the southern part of the United States.

The PCUS did not have any trust provisions in its constitution at the time of

Windwood’s incorporation.      However, in 1983, the PCUS merged with the

churches from the northern part of the United States to form the Presbyterian

Church as it exists today, the PCUSA.        Windwood has been a member of the

PCUSA since the merger of the two churches in 1983.

      As a part of the reunification, PCUSA amended its church constitution—the

Book of Order—to provide:

      All property held by or for a particular church, a presbytery, a synod,
      the General Assembly, or the Presbyterian Church (U.S.A.), whether
      legal title is lodged in a corporation, a trustee or trustees, or an
      unincorporated association, and whether the property is used in
      programs of a particular church or of a more inclusive governing body
      or retained for the production of income, is held in trust nevertheless
      for the use and benefit of the Presbyterian Church (U.S.A.).

                                         3
      The Book of Order also contains a provision permitting a local church,

within eight years of the formation of the PCUSA, to opt out of the trust provision

if it had not been subject to a similar provision before the formation of the PCUSA.

Windwood never exercised this right.

      The property at issue in this case was given to Windwood by warranty deeds

dated December 27, 2000 and May 12, 2003, after Windwood joined the PCUSA,

and more than eight years after the amendments to the Book of Order. Neither

deed references a trust in favor of PCUSA.

      On October 1, 2007, Windwood amended its articles of incorporation to add

a declaration that all real property held by the corporation constituted a trust held

for the benefit and enjoyment of the members of the local church only.

      In 2008, Windwood filed suit against PCUSA and the Presbytery seeking a

declaration that (a) the denominational church has no legal, equitable, or other

interest in the property; (b) no trust interest of any kind exists in favor of the

denominational church, or if such a trust was created, it has been revoked; (c) all

property held by or titled in Windwood’s name is held by its ownership pursuant to

its 2007 Articles of Incorporation and the terms of the deeds; and (d) that neither

PCUSA nor the Presbytery has any right to determine the ownership of the

property.

      PCUSA moved for summary judgment, contending that (1) PCUSA is a

                                         4
hierarchical church, and as such (2) Texas courts must defer to the governing

church authority for resolution of property issues. Windwood responded that (1)

there are fact questions about whether PCUSA is a hierarchical church, and, even if

it is (2) the trial court should apply “neutral principles” of law in determining

ownership of the property, and (3) u n d e r “ n e u t r a l p r i n c i p l e s ”

PCUSA did not have a legally cognizable interest in the property.          The trial

court granted the PCUSA’s motion, and this appeal followed.

    THE FIRST AMENDMENT AND CHURCH PROPERTY DISPUTES

      To resolve the issues in this case, we first consider the historical

development of church property disputes and how they are affected by the First

Amendment.

      The First Amendment to the United States Constitution, applicable to the

states through the Fourteenth Amendment, Cantwell v. Connecticut, 310 U.S. 296,

303, 60 S. Ct. 900, 903 (1940), provides that “Congress shall make no law

respecting an establishment of religion, or prohibiting the free exercise thereof.”

U.S. CONST. AMEND. I. Following this constitutional mandate, civil courts may

not intrude into inherently “religious” or “ecclesiastical” matters. See Westbrook v.

Penley, 231 S.W.3d 389, 398–99 (Tex. 2007). In Texas, this doctrine has been

referred to as one of “ecclesiastical abstention” or “ecclesiastical exemption.” See

Lacy v. Bassett, 132 S.W.3d 119, 123 (Tex. App.—Houston [14th Dist.] 2004, no
                                         5
pet.); see also Patton v. Jones, 212 S.W.3d 541, 555 n.13 (Tex. App.—Austin

2006, no pet.); Schismatic & Purported Casa Linda Presbyterian Church v. Grace
Union Presbytery, Inc., 710 S.W.2d 700, 703 (Tex. App.—Dallas 1986, writ ref’d

n.r.e.). The ecclesiastical-abstention doctrine stands for the proposition that the

First Amendment prohibits civil courts from exercising jurisdiction over matters

concerning “theological controversy, church discipline, ecclesiastical government,

or the conformity of the members of the church to the standard of morals required

of them.” Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696, 713–14, 96
S. Ct. 2372, 2382 (1976). Similarly, the First Amendment prohibits civil courts

from resolving church property disputes on the basis of religious doctrine or

practice.

Watson v. Jones and Hierarchical Deference Review

      For over 100 years, church property disputes were governed by the seminal

case of Watson v. Jones, 80 U.S. (13 Wall.) 679 (1871). The Court in Watson

declared that, when asked, civil courts have jurisdiction to resolve secular church

disputes over ownership of church property:

      [T]he courts when so called on must perform their functions as in
      other cases.

      Religious organizations come before us in the same attitude as other
      voluntary associations for benevolent or charitable purposes, and their
      rights of property, or of contract, are equally under the protection of
      the law, and the actions of their members subject to its restraints.
                                        6
Id. at 714.
        To decide how to resolve such disputes, the Court drew a distinction

between “congregational” or “independent” churches and more hierarchical

churches. To determine property disputes in congregational churches or those

“governed solely within,” “the rights of such bodies to the use of the property must

be determined by the ordinary principles which govern voluntary associations.” Id.

at 724–25.

      However, in a hierarchical form of church organization, the Court said, the

local church “is itself part of a large and general organization of some religious

denomination, with which it is more or less intimately connected by religious

views and ecclesiastical government.” Id. at 726. In such instances, “we are bound

to look at the fact that the local congregation is itself but a member of a much

larger and more important religious organization, and is under its government and

control, and is bound by its orders and judgments.” Id. at 726–27.

      The Court then held that:

      All who unite themselves to such a body do so with an implied
      consent to this government, and are bound to submit to it. But it
      would be a vain consent and would lead to the total subversion of
      such religious bodies, if any one aggrieved by one of their decisions
      could appeal to the secular courts and have them reversed. It is of the
      essence of these religious unions, and of their right to establish
      tribunals for the decision of questions arising among themselves, that
      those decisions should be binding in all cases of ecclesiastical
      cognizance, subject only to such appeals as the organism itself
      provides for. Id. at 729. Thus, the Court in Watson adopted an
                                         7
      approach to resolving property disputes in hierarchical churches that
      has since been described as “hierarchical deference.” Under the rule of
      hierarchical deference, a civil court must first determine the
      organizational structure of the church and then, if it determines that the
      church is hierarchical, it must defer to the decision of the highest
      judicatory body of the hierarchical church.

Post-1969 Cases and the “Neutral Principles of Law” Review

      In 1969, the Supreme Court indicated that neutral principles of property law

might be used to resolve church property disputes so long as application of those

principles did not draw state courts into religious controversies.       Presbyterian

Church in the United States v. Mary Elizabeth Blue Hull Mem’l Presbyterian

Church, 393 U.S. 440, 89 S. Ct. 601 (1969) involved a property dispute between

two Georgia churches and the Presbyterian Church in the United States, with

which they were affiliated. The two local churches had withdrawn from the general

church over doctrinal disputes. 393 U.S. at 442, 89 S. Ct. at 602. The local

churches sought a judicial determination that the general church had substantially

departed from the tenets of faith that existed at the time of the local church’s

affiliation and that, as a result, the implied trust through which church property is

held for the general church had terminated. 393 U.S. at 443–44, 89 S. Ct. at 603. In

resolving the dispute, the Georgia Supreme Court agreed with the local churches

                                          8
that the “substantial abandonment” standard applied and submitted to the jury the

question of whether the general church organization had substantially abandoned

the tenets of faith and practice as they existed at the time of affiliation. 159 S.E.2d
690, 695 (Ga. 1968), rev’d, 393 U.S. 440, 89 S. Ct. 601 (1969). In so doing, the

Georgia court permitted a jury examination into tenets of faith of the parent

church.

      Citing Watson, the Supreme Court reversed, explaining that Georgia’s

“departure-from-doctrine” approach was unconstitutional because it required the

civil court to determine matters “at the very core of a religion—the interpretation

of particular church doctrines and the importance of those doctrines to the

religion.” 393 U.S. at 450, 89 S. Ct. at 607. The Court remanded the case, holding

that the Georgia court needed to develop a method of resolving church property

disputes that did not draw state courts into religious controversies. In so holding,

the Supreme Court noted that “there are neutral principles of law, developed for

use in all property disputes, which can be applied without ‘establishing’ churches

to which property is awarded.” Id. at 449, 89 S. Ct. 606.

      In a concurring opinion to Maryland and Virginia Eldership of Churches of

God v. Church of God at Sharpsburg, Inc., 396 U.S. 367, 90 S. Ct. 499 (1970), a

case dismissed for lack of a federal question, Justice Brennan cautioned that the

hierarchical deference approach should be used “only if the appropriate church
                                           9
governing body can be determined without the resolution of doctrinal questions

and without extensive inquiry into religious policy.” Id. at 370, 90 S. Ct. 501.

Justice Brennan also noted that a state could adopt any of several approaches for

resolving church property disputes, including (1) Watson’s hierarchical deference

approach, (2) the use of “neutral principles of law” under which civil courts can

determine ownership by studying deeds, reverter clauses, and general state

corporations law, and (3) the passage of special statutes governing church property

arrangements. Id. at 368–70, 90 S. Ct. 500–01.

      In Jones v. Wolf, 443 U.S. 595, 99 S. Ct. 3020 (1979), the majority of the

court adopted Justice Brennan’s position that the hierarchical deference view was

one of several possible methods for resolving church property disputes. Once

again, the Court emphasized that state courts must not resolve church property

disputes on the basis of religious doctrine and practice. Subject to that restriction,

the Court said that the First Amendment does not otherwise dictate that a state

must follow a particular method in resolving church property disputes. A state may

adopt “any one of various approaches for settling church property disputes so long

as it involves no consideration of doctrinal matters, whether the ritual and liturgy

of worship or the tenets of faith.” Id. at 602 (quoting Maryland & Va. Churches,
396 U.S. at 368, 90 S. Ct. at 500 (Brennan, J., concurring)) (emphasis in original).

                                         10
      One acceptable approach, referred to as the “neutral principles” approach,

permits the state courts to examine legal documents of title, state statutes

governing the holding of church property, and the secular provisions of church

documents, including the terms of the local church charters and the provisions of

the constitution of the general church concerning the ownership and control of

church property. Jones, 443 U.S. at 603, 99 S. Ct. 3025. A neutral-principles

approach, the Court explained, “relies exclusively on objective, well-established

concepts of trust and property law familiar to lawyers and judges. It thereby

promises to free civil courts completely from entanglement in questions of

religious doctrine, polity, and practice.” Id.

Texas Cases Involving Church Property Disputes

      In Brown v. Clark, 116 S.W. 360, 363 (Tex. 1909), the court cited Watson in

resolving a dispute between rival factions of a local Presbyterian church. The

court carefully avoided any ecclesiastical issues, including whether the local

church possessed the authority to enter into a union with the Presbyterian

denominational church. Id. at 364. The court then considered “perhaps the only

question in the case of which this court has jurisdiction,” i.e., how the union with

the denominational church affected the possession and control of the local church

property. Id. The court examined the deed, which was in the name of the local

church, but recognizing that the local church “was but a member of and under the
                                           11
control of the larger and more important Christian organization,” held that only

those members of the local church loyal to the denominational church were entitled

to use and possession of the property. Id. at 365.

      Several courts since Brown interpreted it as adopting the hierarchical

deference approach. See Green v. Westgate Apostolic Church, 808 S.W.2d 547,

551 (Tex. App.—Austin 1991, writ denied) (“Appellate courts have consistently

followed the deference rule in deciding hierarchical church property disputes since

the Texas Supreme Court adopted the rule in Brown.”); Schismatic & Purported

Casa Linda Presbyterian, 710 S.W.2d at 707 (holding Texas law “has

consistently followed the deference rule” and declining to adopt the “neutral

principles” application).

      However, in Masterson v. Discese of Northwest Texas, No. 11-0332,

___S.W.3d. ___, 2013 WL 4608632, at *11 (Tex. Aug. 30, 2013), which we

discuss in detail below, the Supreme Court of Texas put the issue to rest by stating,

“We hold that Texas courts should use the neutral principles methodology to

determine property interests when religious organizations are involved. Further, to

reduce confusion and increase predictability in this area of the law where the issues

are difficult to begin with, Texas courts must use only the neutral principles

construct.” Id.

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                   PROPRIETY OF SUMMARY JUDGMENT

       The denominational church moved for summary judgment, arguing:

      Under Jones v. Wolf, there are two recognized approaches from which
      each state may choose: “hierarchical deference” and a “neutral
      principles” approach. See Jones v. Wolf, 443 U.S. 595 (1979); Watson
      v. Jones, 80 U.S. 679 (1871). Texas has explicitly adopted the
      “hierarchical deference” approach. Green v. Westgate Apostolic
      Church, 808 S.W.2d 547, 551 (Tex. Ct. App. 1991). Consequently,
      there is only one issue before this Court, and that is whether Texas
      courts have held that the PCUSA is a hierarchical church, since under
      the “hierarchical deference” approach, the PCUSA and the Presbytery
      are entitled to a summary judgment.

      In three issues on appeal, Windwood contends the trial court erred in

granting summary judgment because (1) there is a fact question about whether

PCUSA is a hierarchical church; (2) the trial court erred by not applying the

“neutral principles” standard for resolving this dispute; and (3) PCUSA failed to

establish that is has a “legally cognizable” trust in the property. Because we find

Windwood’s second issue dispositive, we address need only address it.

Standard of Review

      We review the trial court’s decision to grant summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). To prevail on a

summary judgment motion, the movant must demonstrate that there are no genuine

issues of material fact and that it is entitled to judgment as a matter of law. TEX. R.

CIV. P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678

(Tex. 1979) (movant must conclusively prove all “essential elements of his cause
                                          13
of action or defense as a matter of law”). In deciding whether there is a disputed

material fact issue precluding summary judgment, we must take evidence favorable

to the nonmovant as true, indulge every reasonable inference in favor of the

nonmovant, and resolve any doubts in the nonmovant’s favor. Dorsett, 164
S.W.3d at 661; Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.

1985). If the movant shows that it is entitled to judgment as a matter of law, the

burden shifts to the nonmovant to present evidence to raise a material fact issue

that precludes summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d
195, 197 (Tex. 1995).

Hierarchical Deference or Neutral Principles—An Analysis of Masterson

       In its second issue, Windwood contends the trial court erred by not applying

neutral principles of law to resolve this dispute. We agree based on the Texas

Supreme Court’s holding in Masterson v. Diocese of Northwest Texas, 2013 WL
4608632.

      In Masterson, the Texas Supreme Court considered a property dispute between

a local Episcopal church and the national Episcopal church and diocese, from which

a majority of the local church had voted to withdraw. 2013 WL 4608632, at *1. The

local church held title to the property through a Texas non-profit corporation, which

made no reference to a trust in favor of the national church or diocese. Id. at *2.

However, a canon of the national church provided that “[a]ll real and personal

                                         14
property held by or for the benefit of any Parish, Mission or Congregation is held in

trust for [the national church].” Id. at *15. Due to doctrinal differences with the

national church, the local church voted to disassociate from the national church, and

the corporation that held the property of the local church amended its bylaws to

remove all references to the national church, withdraw its membership with the

national church, and revoke any trusts that may have been imposed on its property.

Id. at *2.

       The diocese of the national church filed suit against the leaders of withdrawing

members and the corporation seeking a declaratory judgment that the local church’s

property could not or used for any purpose other than the mission of the national

church and that the property was held in trust for the national church. Id. at *2.

       The national church moved for summary judgment alleging that it was a

hierarchical church, that its cannons required that all property of a local parish be

held in trust for the national church, and that when congregations of hierarchical

churches split, Texas courts must defer to the decision of the national church’s

superior hierarchical authority in determining which faction of the church constitutes

the “true” church, which would be entitled to the property held in trust for the

national church. Id. at *3. The national church’s motion asserted that “the sole legal

issue [for the trial court] is whether or not the Episcopal Church is hierarchical.” Id.

It did not plead or assert as grounds for summary judgment that it was entitled to the

                                           15
property based on an application of neutral principles of law. Id.

      The trial court granted the national church’s motion for summary judgment,

which the court of appeals affirmed.       Id. at *3. The supreme court, however,

disagreed by first deciding that neutral principles of law should be used to determine

property interests when religious organizations are involved, and stating that “Texas

courts must use only the neutral principles construct.” Id. at *11. In so holding, the

court recognized that its earlier opinion in Brown, which many courts had considered

to be an application of hierarchical deference, was actually following the neutral

principles construct because it considered which entity held title to the property. Id.

at *10.

      The court then considered the propriety of the summary judgment in light of

its holding that church property disputes should be resolved by applying neutral

principles of law. Id. at *11. The court concluded that the record conclusively

established that the Episcopal Church was hierarchical, and that the trial court had

properly deferred to the bishop’s determination as to members of the vestry and

ecclesiastical matters of church governance. Id. at *12. However, the court also

concluded that applying deference to those issues did not necessarily determine who

owned the property. Id. The court then held that, because the national church’s

motion for summary judgment was based on its argument that the bishop’s

determination of property ownership should be afforded deference, and that the

                                          16
national church did not plead or urge as grounds for summary judgment that it was

entitled to the property on the basis of neutral principles, the trial court erred in

granting the national church’s motion for summary judgment. Id. Therefore, the

supreme court reversed the court of appeals’ judgment and remanded the case to the

trial court.1 Id.

Application of Masterson to This Case

       In this case, as in Masterson, the denominational church’s motion was based

solely on the contention that this property dispute should be resolved by applying the

hierarchical deference approach and deferring to governing church authorities on the

issue. Indeed, the denominational church’s motion states that “there is only one issue

before this Court, and that is whether Texas courts have held that the PCUSA is a

hierarchical church, since under the ‘hierarchical deference’ approach, the PCUSA

and the Presbytery are entitled to a summary judgment.” Because this was the only

ground urged for summary judgment, under Masterson, the denominational church’s

summary judgment must be reversed and remanded to the trial court. “Because the

1
       After holding that the summary judgment must be reversed, the Masterson
       court went on to address several issues that would “feature prominently on
       retrial” in order to “provide guidance to the trial court,” even though those
       issues were not necessary to the resolution of the appeal. Id. Specifically, the
       court addressed (1) who controlled the corporation, and (2) who controlled the
       property. Id. at *13–14. In so doing, the court recognized that whether a trust
       was established under Texas law and whether that trust was irrevocable would
       be issues on remand. Id.
                                          17
deference methodology is not to be used to determine this type dispute, the [national

church’s] pleadings and motion will not support summary judgment.” Id.

      The denominational church nonetheless argues that “the summary judgment

record is broad enough for the court to affirm the trial court’s grant of summary

judgment under both neutral principles and Masterson.”              Specifically, the

denominational church points out that, in its response to summary judgment,

Windwood requested that the trial court apply neutral principles of law to determine

the property issue and attached as summary judgment evidence the documents of title

which would allow the trial court to do so. Masterson also had summary judgment

evidence showing documents of title, references by the nonmovant to neutral

principles, and a reply by the national church arguing that it was entitled to summary

judgment under both the deference and neutral principles analyses. See id. at *3.

Despite the fact that the neutral principle analysis was discussed in the summary

judgment briefing and the evidence included some of the documents that would be

necessary to conduct such an analysis, the supreme court reversed the national

church’s summary judgment because its motion was strictly based on an application

of hierarchical deference. Id. at *12. The same is true in this case. We decline to

perform a neutral principles analysis because that was not the grounds alleged or

asserted in the denominational church’s motion or pleadings. Such issues should be

addressed and properly raised in the trial court with the guidance given by the

                                          18
Masterson opinion.

      The denominational church also argues that Masterson is not controlling

because “there is no schism and property disputes are governed by the Presbyterian

church.” While it is true that Masterson involved a church schism and this case

arguably does not because Windwood has yet to leave the PCUSA, the Masterson

holding is not so limited. Indeed, the court stated, “We hold that Texas courts should

use the neutral principles methodology to determine property interests when religious

organizations are involved.” Id. at *1. This case is a property dispute involving a

religious organization, thus we conclude that Masterson is applicable and mandates

reversal of the denominational church’s summary judgment.

                                  CONCLUSION

       We reverse the trial court’s judgment and remand for further proceedings.

                                               Sherry Radack
                                               Chief Justice

 Panel consists of Chief Justice Radack and Justices Bland and Huddle.

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