Court Rules in Favor of Dissenting UMC Congregation

The California 5th District Court of Appeal ruled in favor of a congregation that had been locked in property battles with the United Methodist Church (UMC) for over four years. The August 13 decision overturned the 2002 ruling made in favor of the denomination’s century-old clause that asserts all local church property is part of the denomination’s trust. While this ruling sets no legal precedent on a federal level, reverberations are likely to run deep across several denominations where local churches have voted to break ties with the national church over theological issues.

The recent ruling marks the second such decision made in favor of local congregations since 2000. In September 2000, the Maryland Court of Appeals ruled in favor of a dissenting African Methodist Episcopal church. In both cases, the secular courts ruled that the denominations couldn’t hold church property in their trust, all of which were paid for by the members of the congregations through offerings and gifts.

Most mainline denominations follow a “trust” system similar to that of the UMC, where the national church holds all offerings and property of local churches as part of the denominational assets.

The California case involves the St. Luke’s United Methodist Church in Fresno, a church that broke off from the UMC over theological discrepancies in 2000. St. Luke’s leaders and congregants withheld funding to the national church after it failed to discipline pastors who went against church law by blessing homosexual unions within the conferences.

St. Luke’s Rev. Kevin Smith said that he loved the UMC, but noted the denomination “picks and chooses” only the laws it wants to keep.

"I love the United Methodist Church," Smith said. "But they can’t just pick and choose which parts of the Discipline they want to adhere to. This has never been just about homosexuality."

After the congregations in St. Luke withheld their funding, the bishop of the California-Nevada conference Melvin Talbert retaliated by removing Smith from the pulpit and assigning another minister to serve the church. By the second day of the new pastor’s service, the congregation staged a “theological coup” and locked the new shepherd out of the chapel.

Subsequently, St. Luke’s incorporated an independent congregation called St. Luke’s Community Church, and continued to worship on the disputed grounds.

The UMC immediately sued the congregation for a breach of contract, and won their case in 2002 when a Superior Court judge ruled the local congregation could not revoke the trust clause.
St. Luke’s appealed, and the August decision marked a victory for the local congregation. In essence, the 5th circuit court reversed the earlier decision that the denomination owned St. Luke’s property.

St. Luke's revised its articles of incorporation "to establish and maintain a church … which … shall follow the tenets of Methodism, but which shall not be subject in any manner to the articles, rules, usage, discipline, or jurisdiction of the United Methodist Church or any organization or other entity which is part of and/or affiliated with the United Methodist Church,” the ruling stated.

The congregation also asserted its right "to acquire, manage, and hold in trust for the sole benefit of this Corporation property of every kind and nature, both real and personal …."

"In short, St. Luke's would not be affiliated with the United Methodist Church and would hold its property in trust for itself only," the 5th District Court said.

Rev. Smith said he feels the conference will probably appeal but wishes it would not.
"Enough money has been spent in this case already," he said.

Meanwhile, Robert M. Shannon, trial attorney for the California-Nevada UMC Conference said, "We believe the trial court [in June 2002] made the right decision after hearing all the evidence in the case and we strongly disagree with the contrary ruling by the Court of Appeal."

Attorneys for the conference, including Shannon, said they are reviewing the decision to determine what option they will exercise during these “stressful times.”

Smith himself said he was confident further rulings would support the local church since California corporate often favors the property owners.

"California corporate law allows us, as owners of the property, to change terms of the trust in which we hold the property,” said Smith.

According to the United Methodist News service, the trust clause has been “upheld by a variety of U.S. courts during the 200-plus history of the denomination in the United States.”