In a ruling that may be significant across the country, the South Carolina Supreme Court issued a long-awaited decision on church property in the Diocese of South Carolina. But the matter is far from settled.

The Beat Goes On

The Episcopal Church has been granted permission to join a federal lawsuit that seeks to reclaim Episcopal Diocese of South Carolina as the name of its administrative unit in the eastern part of that state.

That name has been claimed under state trademark law by the bishop and parishes that voted in 2012 to leave the Episcopal Church and join the Anglican Church in North America.

The Aug. 23 ruling is a minor procedural development in the five-year-old struggle, but it comes on the heels of a more substantial ruling on Aug. 2.

On that date, the South Carolina Supreme Court ordered the ACNA diocese to hand over the church buildings of 29 parishes to the Episcopal Church in South Carolina, the current name of the TEC diocese.

ACNA, which was granted continued custody of eight other church properties, is expected this week to move for a rehearing by the state supreme court.

The federal lawsuit, which alleges false advertising and other claims against the ACNA bishop, is expected to go to trial in March.

Kirk Petersen

In a highly fractured and confusing decision, the court ruled that the Diocese of South Carolina (ACNA) must turn over 29 churches to the Episcopal Church in South Carolina, as well as the enormously valuable, 314-acre St. Christopher Camp and Conference Center.

A smaller number of parishes — six, or seven, or eight, depending on the interpretation — will keep the church buildings they have been using for years, since before the Rt. Rev. Mark Lawrence led a majority of the diocese out of the Episcopal Church in 2012. The court’s opinions came nearly two years after oral arguments in September 2015.

The Supreme Court made no ruling about which party is entitled to use the name Episcopal Diocese of South Carolina, thereby letting stand a prior decision that the ACNA diocese held the trademark on that name.

Lawrence announced plans to file for a rehearing with the state supreme court. The Rev. Jim Lewis, canon to the ordinary, said that a rehearing is warranted because of the complexity and confusion of the separate opinions published by each of the five justices.

Among other things, he said, the justices disagreed on “how many congregations had been set free, if you will.” The lead opinion said seven, while a dissenting justice insisted it was eight.

“Six of our congregations are affected,” Lewis said, explaining that a seventh, St. Andrew’s of Mount Pleasant, had left TEC earlier. That parish is led by the Rt. Rev. Steve Wood, Bishop of the ACNA’s Diocese of the Carolinas, which overlaps with Bishop Lawrence’s diocese.

There are two categories of churches because some had not explicitly accepted the Dennis Canon, a governing change made by General Convention in 1979. The canon — formally Title I.7.4 — reads in part: “All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission or Congregation is located.”

Some of the justices held that to be valid under South Carolina trust law, “a trust of real property … must be proved by some writing signed by the party creating the trust.” Most parishes changed their bylaws to agree to be governed by the revised canons, but no record of agreement could be found for the seven or eight congregations. The carve-out of a handful of churches was ordered by a 3-2 majority composed differently than the 3-2 majority of the main decision.

If the court does not agree to the rehearing, an appeal to the U.S. Supreme Court is “very much on our radar screen,” Lewis said, but the nation’s highest court agrees to hear only about 1 percent of the cases brought to it.

By email, the Rt. Rev. Gladstone B. “Skip” Adams III, bishop of the Episcopal Church in South Carolina, said “We are keeping our options open.” He declined further comment because the case is not resolved.

The ruling does not directly affect the other property disputes in the four other dioceses that withdrew from the Episcopal Church, but litigants often cite decisions from other jurisdictions to bolster their case.

This is a summary of the status of litigation in those dioceses.

Fort Worth
Just days after the South Carolina decision, the Episcopal Church’s diocese filed a letter with a Texas appeals court hearing its case, describing South Carolina as “a case with important similarities to the case before this Court.”

The Episcopal diocese is fighting an uphill battle, because a trial court ruled in 2015 that virtually all diocesan property belonged to the ACNA diocese. An appeals court heard arguments in March 2016, but has not yet ruled.

After the 1979 enactment of the Dennis Canon, “This new Episcopal Diocese and every congregation within it” signed a resolution accepting the canons in their entirety, said a letter for the Episcopal diocese. The Diocese of Fort Worth was created in 1983 by splitting 24 counties from the massive Diocese of Dallas.

The letter said, “All parties agree, and Defendants have repeatedly argued … [that] the disputed property only in trust for the Episcopal Diocese of Fort Worth and its congregations,” the letter added.

The disagreement concerns which diocese may use the name Episcopal Diocese of Fort Worth. Both parties use the name on their websites.

The letter also cited a 1976 U.S. Supreme Court decision holding that, under the First Amendment, the courts must defer to church authorities on matters of church governance, even if doing so settles a secular property dispute that might otherwise be decided differently.

Pittsburgh
In 2008, the Rt. Rev. Robert Duncan and more than half the congregations left the Episcopal Church and took the name Anglican Diocese of Pittsburgh. Litigation on property ownership began the next year, and in October 2009 a state court ruled entirely in favor of the Episcopal diocese.

Specifically, the court enforced a 2005 stipulation negotiated between the parties that established two categories of churches: those in which property was held or administered by the diocese and a smaller number of churches in which the title to the property was formally held by the congregation. Under the agreement, properties in the first category remained with the Episcopal Church even if the congregation had left. The court ruling did not settle the status of the other properties.

An appeals court upheld the trial court, and when the Supreme Court of Pennsylvania declined to take the case, the Anglican Diocese decided not to appeal further.

Approximately two dozen church properties were then returned to the Episcopal diocese. Negotiations between the parties continue on the dozen or so property titles held by congregations.

San Joaquin
In 2007, a large majority of the delegates at the Diocesan Convention voted to leave the Episcopal Church and organized themselves as the Anglican Diocese of San Joaquin. In the litigation that followed, a judge ordered that 28 church properties be returned to the Episcopal diocese.

Then an appeals court sent the case back to be retried based on different legal principles. The Episcopal Church prevailed again at the new trial, and in the appeals that followed. On July 13, 2016, the California Supreme Court refused to hear the case, and the Anglican diocese announced that it would not pursue further litigation.

Quincy
The Episcopal Diocese of Quincy no longer exists, but its litigation lives on.

Quincy already was one of the smallest dioceses in the country when the bishop and 18 congregations left the Episcopal Church in 2008, and organized as the Anglican Diocese of Quincy. The five remaining congregations soldiered on as a diocese until 2013, when Quincy merged into the Diocese of Chicago.

The rift led to three related property lawsuits and appeals, which are being argued sequentially. ACNA prevailed in the first suit, in Adams County, which focused on a diocesan trust fund and the diocesan headquarters. In May 2016, the Episcopal Church lost an appeals court ruling and decided not to pursue the Adams case further.

The suit affecting most of the property, filed in Peoria County, was stayed pending resolution of the first suit. The parties have been trading briefs on ACNA’s motion to dismiss the Episcopal Church’s lawsuit, with a hearing and potentially a trial to follow. The third suit focuses on a single church, and has been stayed pending the Peoria case.

Conclusion
Partisans on both sides of the issue have been known to say or imply that the courts have uniformly ruled in their favor, but that clearly is not true. The cases involve a swirl of property law, ecclesiastical authority, and a yearning for justice, and there are meritorious arguments on different sides. Perhaps there are no winners when Christians sue Christians.

The various rulings reflect subtle, and sometimes random, differences in state law and in the interpretation of laws.

For example, a key issue in some of the suits has been whether the Episcopal Church is a hierarchical or congregational organization. Loosely speaking: Are the dioceses governed by the church, or are they largely independent entities?

If the Episcopal Church is hierarchical, as it has consistently asserted, then case law has established that under the First Amendment the secular courts cannot overrule the church’s highest ecclesiastic authority on matters of church governance. This is known as the rule of “deference to religious authority.”

If the Episcopal Church is not hierarchical, then property disputes should be settled under “neutral principles of law,” meaning the court will weigh the evidence of ownership as it would in any secular litigation.

In San Joaquin, judges ruled that the church is hierarchical, and the court awarded the disputed property to it. In Quincy, judges ruled that the church is not hierarchical, and the disputed property was awarded to ACNA, although an appeal continues.

In the five fractured opinions from the five-member South Carolina Supreme Court, the justices either agreed that the church is hierarchical or expressed no opinion on the matter. In that case, the critical issue was whether each local church had agreed to be subject to church canons after the 1979 adoption of the Dennis Canon. Under state trust law, such an agreement must be signed and in writing.

Each South Carolina church had been asked to accept the revised canons, and there is no evidence that any of them refused to do so. Rather, seven (or eight) churches were placed in a different category because there was no written record of acceptance.

By a single vote in a patchwork majority, the ownership of churches in the Diocese of South Carolina hinges on whether the clerk of the vestry bothered to record a vote more than three decades ago on a resolution that would have sounded like boilerplate.

Kirk Petersen