ACCEPTED
14-15-00178-cv
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
9/23/2015 5:35:28 PM
CHRISTOPHER PRINE
CLERK
NO. 14-15-00178-CV
FILED IN
14th COURT OF APPEALS
IN THE FOURTEENTH COURT OF APPEALSHOUSTON, TEXAS
9/23/2015 5:35:28 PM
HOUSTON, TEXAS CHRISTOPHER A. PRINE
Clerk
PRESBYTERY OF NEW COVENANT, INC.,
Appellant,
v.
FIRST PRESBYTERIAN CHURCH OF HOUSTON,
Appellee.
On Appeal from the 234th District Court, Harris County, Texas
Trial Court Cause No. 2014-30354
BRIEF OF APPELLEE
SUSMAN GODFREY L.L.P. BECK REDDEN LLP
Thomas W. Paterson David M. Gunn
State Bar No. 15571500 State Bar No. 08621600
tpaterson@susmangodfrey.com dgunn@beckredden.com
1000 Louisiana St., Suite 5100 Erin H. Huber
Houston, TX 77002 State Bar No. 24046118
(713) 651-9366 ehuber@beckredden.com
(713) 654-6666 (FAX) 1221 McKinney, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)
Counsel for Appellee First Presbyterian Church of Houston
IDENTITY OF THE PARTIES
In addition to the counsel identified in the Brief of Appellant, please note the
appearance of additional counsel for Appellee:
Erin H. Huber
State Bar No. 24046118
ehuber@beckredden.com
BECK REDDEN LLP
1221 McKinney, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)
997.115/567149
TABLE OF CONTENTS
Page
IDENTITY OF THE PARTIES ........................................................................................... i
TABLE OF CONTENTS ................................................................................................. ii
INDEX OF AUTHORITIES...............................................................................................v
STATEMENT OF THE CASE ......................................................................................... xi
STATEMENT REGARDING ORAL ARGUMENT ............................................................ xii
ISSUES PRESENTED .................................................................................................. xiii
STATEMENT OF FACTS.................................................................................................1
SUMMARY OF THE ARGUMENT ..................................................................................17
ARGUMENT ...............................................................................................................18
I. FIRST PRESBYTERIAN OWNS THE CHURCH PROPERTY FOR
ITSELF. .................................................................................................18
A. Neutral principles of law are applied in resolving
church property disputes. ..........................................................18
B. First Presbyterian does not hold any property in trust. .............20
1. A trust requires intent by the settlor to create a
trust. ................................................................................20
2. The deeds, the corporate documents for First
Presbyterian, and the governing documents for
the PCUS/PCUSA establish that there is no
trust imposed on the property. ........................................22
a. The deeds do not create any trust. .......................22
b. First Presbyterian’s corporate documents
do not create any trust. .........................................25
997.115/567149 ii
c. No provision in the governing documents
of PCUS or PCUSA creates a trust in
PCUSA..................................................................27
C. PNC’s arguments regarding paragraph 158 of the
PCUS Book of Church Order and its successors fail. ..............32
1. Paragraph 158 and its successors are dissolution
clauses, not trust clauses. ................................................32
2. First Presbyterian’s renewal of its charter in
1938 is not evidence of intent to create a trust. ..............35
3. The “dissolution clause” is in any event
inapplicable to a thriving local church such as
First Presbyterian. ...........................................................36
a. The ordinary meaning of the language
applies. .................................................................36
b. A local church is not dissolved and does
not cease to exist merely because of
strained or severed relations with a
denomination. .......................................................38
II. THE PROPERTY ISSUE IS JUSTICIABLE. ..................................................41
A. The general rule allows courts to resolve property
cases by applying neutral principles. ........................................41
B. The general rule has an exception. ............................................42
C. The narrow exception to neutral principles—for cases
where “ecclesiastical decisions effectively determine”
property rights—is inapplicable................................................43
1. The GRD process does not cover property
disputes. ..........................................................................43
2. Even if applicable, the GRD process was not
abandoned. ......................................................................47
997.115/567149 iii
III. THE ANCILLARY INJUNCTION IS VALID. ...............................................50
A. The trial court permissibly supported its declaratory
judgment with ancillary injunctive relief, as
authorized by statute. ................................................................50
B. The PNC’s objections to the injunctive relief are
unpersuasive. .............................................................................53
PRAYER FOR RELIEF ..................................................................................................58
CERTIFICATE OF SERVICE ..........................................................................................59
CERTIFICATE OF COMPLIANCE ..................................................................................60
997.115/567149 iv
INDEX OF AUTHORITIES
CASES Page(s)
Best Inv. Co. v. Hernandez,
479 S.W.2d 759 (Tex. Civ. App.—
Dallas 1972, writ ref’d n.r.e.).............................................................................. 22
Brown v. Clark,
102 Tex. 323, 116 S.W. 360 (1909) .............................................................19, 23
Carrollton Presbyterian Church
v. Presbytery of South Louisiana of
Presbyterian Church (USA),
77 So. 3d 975 (La. App. 2011) .........................................................49, 51, 52, 57
Christensen v. Roumfort,
20 Ohio App. 3d 107 (1984) .........................................................................37, 38
Christopher v. Davis,
284 S.W. 253 (Tex. Civ. App.—
Dallas 1926, writ ref’d) ....................................................................................... 21
City of Austin v. Cahill,
99 Tex. 172, 88 S.W. 542 (1905) .................................................................21, 33
City of Keller v. Wilson,
168 S.W.3d 802 (Tex. 2005) .............................................................................. 37
Clayton v. Ancell,
168 S.W.2d 230 (Tex. Comm’n App.
1943, opinion adopted) ....................................................................................... 22
Dulin v. Moore,
96 Tex. 135, 70 S.W. 742 (1902) .................................................................21, 35
The Episcopal Diocese of Fort Worth
v. The Episcopal Church,
422 S.W.3d 646 (Tex. 2013) .............................................................................. 19
997.115/567149 v
First & Calvary Presbyterian Church
v. John Calvin Presbytery,
Case No. 1531-CC00924, Circuit Ct.
Greene Cty., Mo.................................................................................................... 1
First Presbyterian Church of Greenwood,
Inc. v. Presbytery of St. Andrew,
Presbyterian Church U.S.A., Inc.,
Cause No. G15-0064, Chancery Ct.
Leflore Cty., Miss. ................................................................................................ 1
First Presbyterian Church PCUSA of
Starkville, Miss. v. Presbytery of St.
Andrew, Presbyterian Church U.S.A., Inc.,
Cause No. 2015-0151-D, Chancery Ct.
Oktibbeha Cty., Miss. ........................................................................................... 1
First Presbyterian Church of
Schenectady v. United Presbyterian
Church in the United States,
62 N.Y.2d 110, cert. denied,
469 U.S. 1037 (1984) ....................................................................................38, 48
First Presbyterian Church of Wichita Falls
v. Palo Duro Presbytery,
Cause No. 182,783-B, 788th Jud. Dist. Ct.,
Wichita Cty., Tex. ................................................................................................. 1
Fitz-Gerald v. Hull,
150 Tex. 39, 237 S.W.2d 256 (1951) ................................................................. 21
General Convention of the New Jerusalem in the
United States of America, Inc. v. MacKenzie,
449 Mass. 832 (2007) ......................................................................................... 39
Gillette v. United States,
401 U.S. 437 (1971) ......................................................................................55, 56
Hernandez v. Commissioner of Internal Revenue,
490 U.S. 680 (1989) ............................................................................................ 57
997.115/567149 vi
Highland Park Presbyterian Church Inc.
v. Grace Presbytery, Inc.,
2013 WL 5538716 (N.D. Tex. Oct. 7, 2013)........................................................ 1
Highland Park Presbyterian Church Inc.
v. Grace Presbytery, Inc.,
No. 13-10605, in the 298th Judicial District Court
of Dallas Cty., Tex. ............................................................................................. 52
Hope Presbyterian Church of Rogue River
v. Presbyterian Church (U.S.A.),
291 P.3d 711 (Or. 2012) ..................................................................................... 25
Hosanna-Tabor Evangelical Lutheran Church
and School v. EEOC,
132 S.Ct. 694 (2012) ........................................................................................... 56
Hotchkiss v. Nat’l City Bank of N.Y.,
200 F. 287 (S.D.N.Y. 1911)................................................................................ 37
Jones v. Wolf,
443 U.S. 595 (1979) ..........................................................................14, 19, 27, 41
Lacy v. Bassett,
132 S.W.3d 119 (Tex. App.—Houston
[14th Dist.] 2004, no pet.) .............................................................................18, 41
Lakeside Realty, Inc. v. Life Scape
Homeowners Ass’n,
202 S.W.3d 186 (Tex. App.—Tyler
2005, no pet.) ...................................................................................................... 50
Masterson v. The Diocese of Northwest Texas,
422 S.W.3d 594 (Tex. 2013) .......................................................................passim
McMurray v. Stanley,
69 Tex. 227, 6 S.W. 412 (1887) ......................................................................... 23
Mead v. Randolph,
8 Tex. 191 (1852).................................................................................................. 1
997.115/567149 vii
Meyers v. Baylor Univ. in Waco,
6 S.W.2d 393 (Tex. Civ. App.—
Dallas 1928, writ ref’d) .................................................................................20, 33
Monday v. Vance,
92 Tex. 428, 49 S.W. 516 (1899) ......................................................................... 1
New Covenant Presbyterian Church, Inc.
v. The Presbytery of S. La. of the
Presbyterian Church (USA),
Suit No.: 602832, § 27, 19th Jud. Dist. Ct.,
E. Baton Rouge Parish, La. ................................................................................... 1
North East Texas Motor Lines, Inc. v. Dickson,
148 Tex. 35, 219 S.W.2d 795 (1949) ................................................................. 53
Ohio Civil Rights Comm’n v. Dayton
Christian Schools, Inc.,
477 U.S. 619 (1986) ......................................................................................55, 56
Peters Creek United Presbyterian Church
v. Washington Presbytery of Penn.,
90 A.3d 95, 110 (Pa. Commw. Ct. 2014) ........................................................... 25
Phillips Petroleum Co. v. Gillman,
593 S.W.2d 152 (Tex. Civ. App.—
Amarillo 1980, writ ref’d n.r.e.) ......................................................................... 37
Phillips v. Sherman,
39 S.W. 187 (Tex. Civ. App. 1897, no writ) ...................................................... 22
Pottorff v. Stafford,
81 S.W.2d 539 (Tex. Civ. App.—
El Paso 1935, writ ref’d) ..................................................................................... 21
Presbyterian Church in United States
v. Hull Memorial Presbyterian Church,
393 U.S. 440 (1969) ............................................................................................ 41
997.115/567149 viii
Samuell v. Brooks,
207 S.W. 626 (Tex. Civ. App.—
Dallas 1918, writ ref’d) ....................................................................................... 21
Sherman Gin Co. v. Planters Gin
Co., Inc. of Indianola,
599 S.W.2d 348 (Tex. Civ. App.—
Texarkana 1980, writ ref’d n.r.e.) ......................................................................... 1
State v. Anderson Courier Serv.,
222 S.W.3d 62 (Tex. App.—Austin
2005, pet. denied)................................................................................................ 50
Tanglewood Homes Ass’n, Inc. v. Feldman,
436 S.W.3d 48 (Tex. App.—Houston
[14th Dist.] 2014, pet. denied) ............................................................................ 50
Tara Partners, Ltd. v. City of S. Houston,
282 S.W.3d 564 (Tex. App.—Houston
[14th Dist.] 2009, pet. denied) ............................................................................ 50
Texas West Oil & Gas Corp.
v. El Paso Gas Transp. Co.,
631 S.W.2d 521 (Tex. App.—El Paso
1982, writ ref’d n.r.e.) ......................................................................................... 37
Toledo Soc. for Crippled Children v. Hickok,
261 S.W.2d 692 (Tex. 1953) .............................................................................. 19
United States v. Seeger,
380 U.S. 163 (1965) ......................................................................................55, 56
Wheeler v. Haralson,
128 Tex. 429, 99 S.W.2d 885
(Tex. Comm’n App. 1937, opinion adopted) ..................................................... 20
Windwood Presbyterian Church, Inc.
v. Presbyterian Church (U.S.A.),
438 S.W.3d 597 (Tex. App.—Houston
[1st Dist.] 2014, no pet.) ..................................................................................... 34
997.115/567149 ix
Wise v. Haynes,
103 S.W.2d 477 (Tex. Civ. App.—
Texarkana 1937, no writ) ........................................................................22, 28, 33
STATUTES
TEX. BUS. ORGS. CODE
§ 1.002(36) .......................................................................................................... 25
§ 3.005................................................................................................................. 25
§ 3.101................................................................................................................. 25
§ 22.102............................................................................................................... 25
§ 22.164................................................................................................................. 1
§ 22.301................................................................................................................. 1
§ 22.302................................................................................................................. 1
§ 22.305................................................................................................................. 1
TEX. CIV. PRAC. & REM. CODE
§ 37.011............................................................................................................... 50
TEX. PROP. CODE
§ 111.004(4) ..................................................................................................20, 33
§ 111.004(14) ...................................................................................................... 20
§ 112.001............................................................................................................. 20
§ 112.002............................................................................................................. 21
§ 112.051(a) ........................................................................................................ 29
OTHER AUTHORITIES
BLACK’S LAW DICTIONARY (7th ed.) ....................................................................... 38
MERRIAM-WEBSTER DICTIONARY ............................................................................ 38
RESTATEMENT (FIRST) OF TRUSTS
§ 17 (1935) .......................................................................................................... 20
§ 23 (1935) .......................................................................................................... 21
RESTATEMENT (THIRD) OF TRUSTS
§ 2 cmt. i (2003) .................................................................................................. 24
§ 41 cmt. b (2003) ............................................................................................... 24
997.115/567149 x
STATEMENT OF THE CASE
Nature of the case This case involves church property. The two sides
disagree about whether a local church owns its property
outright, as opposed to the property being owned in trust
for the denomination.
The two sides are a local church (First Presbyterian
Church of Houston) and a regional entity (Presbytery of
New Covenant, Inc. (“PNC”)) of the denomination,
Presbyterian Church (U.S.A.) (“PCUSA”).
Trial court Hon. Wesley Ward,
234th Judicial District Court, Harris County
Course of proceedings First Presbyterian requested a declaratory judgment that
its property belongs to it—free and clear—with no trust
obligations to any other entity. First Presbyterian moved
for summary judgment on the basis of the relevant deeds
and other papers, pursuant to Masterson v. The Diocese
of Northwest Texas, 422 S.W.3d 594 (Tex. 2013).
Presbytery of New Covenant, Inc. argued that (1) civil
courts cannot hear the case, and (2) the legal papers in
fact impose a trust on the property.
Trial court disposition The trial court first addressed justiciability. The court
conducted a hearing on a plea to the jurisdiction and held
the case justiciable. CR 2460-61.
Then the court granted summary judgment on the merits,
holding that First Presbyterian owns its property free and
clear, and that the property is not subject to a trust. CR
4452-64.
997.115/567149 xi
STATEMENT REGARDING ORAL ARGUMENT
Oral argument is unnecessary. The Court can readily resolve the issues
based purely on the stipulations and documentary record.
997.115/567149 xii
ISSUES PRESENTED
The judgment declares that First Presbyterian Church owns its property in
unfettered fee simple—i.e., not in trust for Appellant. The judgment then prohibits
Appellant from taking acts “to assert ownership” to the property or “affect the
property rights of First Presbyterian Church of Houston.”
Appellant has presented three issues:
1. Was the property question answered correctly on the merits?
2. Is the property question justiciable?
3. Is the injunctive component of the judgment unconstitutional?
997.115/567149 xiii
STATEMENT OF FACTS
This case presents a dispute about property rights. It calls on the courts to
read a number of documents and to decide who owns what—specifically, to decide
whether First Presbyterian owns its property in trust for the denomination. Some
of the documents may be difficult to read because of their age and because they are
handwritten. Worse, the district clerk’s office prepared a flawed clerk’s record,
with low-quality photocopies and an unreliable index.
Happily, the parties and the attorneys on both sides respect each other highly
and have worked well together in gathering the materials for the appeal. The
parties simplified the case by stipulating to dozens of facts. CR 2462-70. The
parties also agreed to admission of essentially all significant documents, such as
deeds and corporate charters. CR 2477-78. There is no dispute about what the key
documents say; the dispute is about their legal effect.
Appellant’s opening brief has a lengthy statement of facts. See PNC Br. at
1-12. That statement of facts contains many accurate assertions, but a few of its
claims are unsupported by citations, and a few go further than the record will fairly
support. Although this is no time to be contentious or hypertechnical, we
respectfully cannot acquiesce in all the assertions made there. As a result, it may
be best to begin with some common ground. We will walk through the facts to
which the two sides stipulated.
997.115/567149
The stipulations set out many of the facts
The parties stipulated to 61 facts. CR 2464-68. They agreed that these facts
may be used “throughout the pendency of this lawsuit.” CR 2462.
1. Plaintiff First Presbyterian Church of Houston (“FPC”) is a
non-profit corporation organized under the laws of the State of
Texas.
2. Plaintiff FPC’s domiciliary address is 5300 Main Street,
Houston, Texas 77004.
3. Defendant Presbytery of New Covenant, Inc. (“Presbytery”) is
[a] non-profit corporation organized under the laws of the State
of Texas.
4. Defendant Presbytery’s domiciliary address is 1110 Lovett
Blvd., Houston, Texas 77006.
5. FPC has been incorporated since January 4, 1887.
6. Before its incorporation, FPC had existed as an unincorporated
association of Presbyterian church members since the
congregation’s organization on March 31, 1839.
7. At the time of FPC’s founding, Texas was not yet a state, and
FPC was organized as an affiliated congregation of the
“Presbyterian Church in the United States of America.”
8. After Texas’s accession into the United States, that
denomination would later divide along Civil War boundaries in
the 1860’s to eventually become the northern “United
Presbyterian Church in the United States of America”
(“UPCUSA”) and the southern “Presbyterian Church in the
United States” (“PCUS”).
9. FPC followed the southern PCUS denomination until June 10,
1983, when the PCUS formally reunited with the UPCUSA to
form the Presbyterian Church (U.S.A.) (“PCUSA”).
997.115/567149 2
10. FPC has been affiliated with the PCUSA denomination since
that date.
11. Defendant Presbytery is a district administrative unit of the
PCUSA.
12. Presbytery’s membership includes approximately 96 local
Presbyterian congregations in 29 Texas counties.
13. Presbytery is one of approximately 173 such geographically-
organized presbyteries in the PCUSA.
14. Under the governing constitution of the PCUSA, the local
presbytery is responsible for waiving or seeking enforcement of
any trust claim of the denomination against a local
congregation.
15. The different administrative units in the PCUSA denomination
are variously called “courts,” “councils,” or “governing
bodies.”
16. PCUSA courts are of four types, each of widening geographic
scope: sessions, presbyteries, synods, and the General
Assembly.
17. Individual Presbyterian congregations operate through their
sessions, which are comprised of members of the congregation
elected as “elders” to govern and act on behalf of the
congregations.
18. Approximately 173 regional PCUSA presbyteries oversee the
spiritual and moral life of local congregations.
19. PCUSA presbyteries are in turn overseen by the 16
geographically-organized synods.
20. The PCUSA General Assembly is a body that convenes every
other year and operates on a national level.
21. The PCUSA General Assembly reviews the work of synods,
addresses spiritual controversies, and otherwise performs those
acts delegated to it by the PCUSA Constitution.
997.115/567149 3
22. The PCUSA Constitution is the governing document of the
PCUSA.
23. The PCUSA Constitution is divided into two parts: (1) Part 1 –
the Book of Confessions, and (2) Part 2 – the Book of Order.
24. The Book of Order was called the Book of Church Order in the
PCUS.
25. In 1983, the southern PCUS denomination merged with the
northern UPCUSA denomination to form the PCUSA.
26. The PCUSA “Articles of Agreement” formally created the
PCUSA from the merger of the PCUS and UPCUSA
denominations. DX 1 at Appendix A.1
27. In 1991, FPC held a vote whether to seek dismissal from
PCUSA. At the FPC congregation meeting on March 17, 1991,
the total votes to request dismissal was 760 (or 37%), and the
total votes not to request dismissal was 1,296. DX 17.
28. Presbytery adopted its [“]Gracious Reconciliation and
Dismissal Procedure” (“GRD Procedure”) (DX 38) in
December 2011. DX 20. Seven members of FPC served as
commissioners at the Presbytery meeting at which the GRD
Procedure was approved and adopted, and FPC minister Rev.
James T. Birchfield also attended the meeting.
29. Following years of disagreement with the PCUSA over a
variety of issues, on January 8, 2013, the FPC Session
recommended that the congregation enter into the Presbytery’s
“Gracious Reconciliation and Dismissal Procedure”) (“GRD
Procedure”). PX 13.
30. At a meeting of the congregation on January 27, 2013, the
church membership agreed and voted to enter into the
Procedure. DX 24.
1
The exhibits referenced in the stipulations are those filed in connection with First
Presbyterian’s application for a temporary injunction and the PNC’s opposition. See CR 1561-
64, 1639-46.
997.115/567149 4
31. FPC conducted a number of town hall meetings during the
discernment process, including conducting a “Learning
Journey” regarding property issues. Presbytery General
Presbyter Mike Cole attended a number of the informational
meetings at FPC.
32. After a year-long process under the GRD Procedure, the
congregation of FPC voted on whether to request dismissal on
February 23, 2014. Mike Cole attended the vote.
33. The congregation voted in favor of dismissal, 1085 to 596.
PX 15.
34. The congregation’s dismissal vote fell short of the super-
majority vote required to request dismissal under the GRD
Procedure.
35. FPC owns approximately thirteen parcels of real property, all in
the Houston, Texas area.
36. The face of the official deeds recorded in the Harris County
property records do not indicate that any of the properties
owned by FPC were conveyed to the church to hold in trust for
the benefit of the Presbytery, the PCUS, or the PCUSA. PX 16
and PX 17.
37. In one known instance, in 1843, FPC purported to limit its
ownership rights or acquire property for the benefit of a
denomination in a deed.
38. Paying $1 for the tract of land on which FPC had already been
allowed to erect its first church building, FPC’s trustees
acquired the land “for the sole use and benefit of the
Presbyterian denomination, adhering to the Westminster
Confession of Faith.”
39. On information and belief, the only such denomination at the
time of this instrument would have been the “Presbyterian
Church in the United States of America.”
40. The Presbyterian Church in the United States of America
ceased to exist as an entity in 1861.
997.115/567149 5
41. The referenced property was sold by FPC in 1894.
42. Since 1837, FPC has obtained the deeds to real property in its
own name.
43. FPC is a not-for-profit corporation whose sole purpose outside
of religious worship is the spiritual, moral, and emotional
edification of its members and non-members within its sphere
of influence.
44. FPC is highly dependent upon continuity of membership,
leadership, and fellowship.
45. FPC is dedicated exclusively to serving those in spiritual and
physical need.
46. Among the ministries and philanthropic causes which depend
on FPC are many that are dedicated to bettering the lives of
people in the city of Houston, the state of Texas, and even in
other countries throughout the world.
47. One ministry supported almost exclusively by FPC is The
Nehemiah Center, a resource center organized to “offer[]
academic, emotional, cultural, social and spiritual enrichment
for at-risk children and their families in Houston’s Third Ward
and beyond.”
48. One specialty program within the umbrella of The Nehemiah
Center is Mommy and Me, a program dedicated to targeting
“word poverty,” the tremendous and crippling gap in language
development seen in impoverished families.
49. The Nehemiah Center’s Academic Enrichment Program
provides inner-city children between kindergarten and fifth
grade with the personalized homework instruction, reading and
math remediation, and mentoring that are critically important to
later scholastic success.
50. Another Nehemiah Center initiative, the College Prep Program,
offers advanced academic tutoring and preparation for college
entrance exams and admissions decisions.
997.115/567149 6
51. Among the Family Service Programs also offered by the
Nehemiah Center are adult education classes, computer literacy
instruction, financial responsibility training, entrepreneurial
workshops, English as a second language (ESL) assistance,
parenting seminars, life skills workshops, mental health fairs,
and a Father-and-Son Camp.
52. The philanthropic services offered above serve hundreds of
Houston residents every year.
53. Another ministry that is almost exclusively dependent upon
FPC is Main Street Ministries, which itself administers or
supports three more programs.
54. One Main Street Ministries program, Operation ID, is an
organization formed to help Houston’s homeless, indigent, and
recently-released prisoners obtain the vital documents needed to
integrate into modern society.
55. Another Main Street Ministries program, The Shepherd’s
Center, operates a crisis service for those facing financial need
and unemployment.
56. Holy Ground is an FPC-supported ministry dedicated to
physically and spiritually feeding Houston’s impoverished and
hungry.
57. Main Street Ministries devoted more than $930,000 to
supporting its programs last year alone.
58. Other ministries and causes supported by FPC include Bridges
International (a student organization which helps international
students integrate through service activities, social networking,
and spiritual involvement); African Renewal Ministries (a
ministry initiative aimed at training and transforming African
leaders); The Micah Project (a charter organization of
Honduran children’s homes); Hillcrest AIDS Centre (a South
African comprehensive AIDS outreach program); Millennium
Relief and Development (an international catastrophe support
service); and Cullen Middle School (a Houston school boasting
a 92 percent rate of student economic disadvantage).
997.115/567149 7
59. FPC’s leadership expressed disappointment, but upheld the vote.
60. During the GRD Procedure, FPC was informed that the
Presbytery would not dismiss the church without an additional
“voluntary” payment, not set forth in the GRD Procedure, that
was related to the value of FPC’s property.
61. FPC has contributed $9.6 million to the PCUSA or its
predecessor denomination since 1968.
CR 2464-68. As stipulation 36 notes, all the relevant deeds in the Harris County
real property records identify First Presbyterian as the landowner, with no mention
of a trust. So if a trust exists, it must have come about from elsewhere.
First Presbyterian Has Never Created or Accepted a Trust on this Land
First Presbyterian, which began in 1839, was incorporated as a Texas non-
profit corporation in 1887. CR 2743. From those days all the way to the 1980s,
there was no trust clause in the constitution of the various Presbyterian
denominations with which First Presbyterian has been affiliated.
In 1982, the PCUS (the Southern denomination) unilaterally put a trust
clause in its Book of Church Order. CR 2697. That clause (known as § 6-3 in the
1982/83 PCUS Book of Church Order) announced that all property held by a local
church “is held in trust nevertheless” for the benefit of the PCUS. Id. However,
First Presbyterian never voted for, approved, or otherwise consented to that trust
relationship. CR 2702-13.
997.115/567149 8
In 1983, the PCUS merged with the UPCUSA (the Northern denomination)
to form the PCUSA. CR 2464. The new PCUSA constitution contained a trust
clause and an additional provision forbidding local churches to buy, sell, mortgage,
or encumber real property without the permission of the presbytery. CR 1758-59;
2700, 3774.
Meanwhile, to make the merger more attractive, denominational authorities
promised local churches that there would be a “grandfather” provision so that
historical property rights would not be compromised. CR 2759-60. Thus, the new
PCUSA constitution contained an “opt out” clause. CR 2701, 3775.
First Presbyterian took this opportunity to make crystal clear that the merger
would not be used as a basis to alter its long-standing property rights. First
Presbyterian’s Session recommended that the congregation pass a resolution
rejecting any hint of a trust arrangement. CR 2702-12. The congregation promptly
did so. CR 2713. The PNC did not agree with this development, but it
acknowledged it. CR 2967-68.
Matters came to a head after the Supreme Court’s decision in Masterson v.
The Diocese of Northwest Texas, 422 S.W.3d 594 (Tex. 2013). After that opinion,
First Presbyterian acted to reiterate its unwavering rejection of any trust
arrangement. First Presbyterian again rejected any trust in favor of any
997.115/567149 9
denominational beneficiary, and its Session adopted a resolution stating that it
“strenuously denies the creation of a trust of any kind.” CR 3070-73.
The PNC’s top official recognized Masterson as what could be called the
writing on the wall for those who wanted to impose a trust by unilateral actions:
The effect of the Texas Supreme Court decision was to strike down
the trust clause. What they said was that unless a congregation has in
their bylaws and articles of incorporation a clause that specifically
states that there is an irrevocable trust for the denomination, the trust
clause in our BOO [Book of Order] is unenforceable. That … puts the
presbytery in an untenable position legally.
CR 3013.
Meanwhile, First Presbyterian took additional steps to reiterate its rejection
of any trust. In late 2014, the church’s Session amended its corporate bylaws to
provide for the disposition of all corporate assets in the event of any future
dissolution. CR 3074-75.
First Presbyterian Went Through the GRD Process
The preceding chronology deals with the issue of property ownership. But
in the past several years, there have also been developments on a different track,
involving the issue of the First Presbyterian / PNC relationship.
In 2011, the PNC fashioned a plan for addressing the relationship between a
local church and the denomination. It calls this the Gracious Reconciliation and
Dismissal Procedure. CR 1422-34. The GRD process provides a framework for a
local church to use in answering the question: Should we stay or should we go?
997.115/567149 10
On January 8, 2013, First Presbyterian’s Session recommended that the
congregation enter into the GRD process. CR 2466. At a meeting of the
congregation on January 27, 2013, the church membership agreed and voted to do
so. Id. First Presbyterian and the PNC then agreed in writing to go through the
GRD process. They did this by signing a one-page agreement entitled “Covenant
Agreement.” That agreement commits the two sides to follow the GRD procedure
“and abide by its terms as a way of discerning God’s will for the relationship
between the congregation and the Presbytery of New Covenant.” CR 1466.
Stipulations 29 through 34 relate what happened next, over the course of a
full year. Id. The PNC and First Presbyterian formed a group called the
Discernment Team, with four representatives from each side, per page 4 of the
GRD process. They held the various meetings and town-hall assemblies called for
by pages 4 and 5 of the GRD process. They talked and listened to each other.
In the end, the congregation came together for a vote on the relationship
question—Should we stay or should we go? On February 23, 2014, a majority
voted to go. Id. The vote was 1085 to 596. Id. But that 64.5 percent outcome fell
just 36 votes short of the required two-thirds referred to on page 7 of the GRD
process. Clause 4 of that page states that if at least two-thirds of those voting
request dismissal from the denomination, “the Presbytery shall agree to the
dismissal, permitting the congregation to depart with all of its property intact.”
997.115/567149 11
CR 1428. It then provides for a contribution schedule for the congregation to make
to the denomination over the next five years after its departure (i.e., “dismissal”)
from the denomination. Id.
But because the vote did not reach two-thirds, there was no dismissal. CR
2466. The congregation did not go; it stayed, and it has done so ever since. As
stipulation 59 observes, First Presbyterian’s leadership was disappointed but
“upheld the vote.” CR 2468.
The Session then prepared a covenant of reaffirmation and met with the
Discernment Team to discuss it, pursuant to the GRD procedure. 3 RR 181-82.
The process had taken just over a year, in keeping with the timeline provided for
on page 4 of the GRD procedure: “this process should take no less than six months
and no more than two years.” CR 1425.
This declaratory judgment action
On May 29, 2014, First Presbyterian asked the courts to resolve the trust
issue once and for all. CR 11. Its petition sought “a final adjudication of its
property rights as currently held by the congregation of FPC, regardless of its
denominational affiliation.” CR 22. The petition also requested a temporary
restraining order and a temporary injunction to preserve the status quo. CR 46.
Contemporaneous with filing this suit, the court granted the restraining order and
set the injunctive request for a hearing. CR 485, 1570.
997.115/567149 12
A few days later, First Presbyterian filed a 32-page memorandum of legal
arguments to show a probable right to relief. CR 488-519. It included an affidavit
from Professor Stanley Johanson, who teaches trust law at the University of Texas
Law School. CR 520-42. Professor Johanson examined a spectrum of documents
from the 1800s to the present, such as the church’s minutes, its corporate charter,
the deeds to the properties, and the denomination’s governing documents.
Although his affidavit is long, his opinion can be reduced to a nutshell: (1) a trust
comes about only as a matter of the settlor’s clear intent, and (2) the documents
show no such intent on the part of First Presbyterian.
“Based on my examination of the relevant documents, it is my conclusion
that at no time in the history of FPC has its Articles of Incorporation, or any other
official FPC document, contained any provision creating or establishing a blanket
trust, express or implied, in favor of a national denomination upon the property
held by or for the local church or its civil corporation.” CR 542. “Applying
generally applicable principles of Texas trust law, it is my opinion that no valid,
legally cognizable trust of any kind arises from the [various documents] in favor of
the PCUS, PCUSA or Presbytery of New Covenant with respect to any property
held by or for FPC.” Id.
997.115/567149 13
The PNC opposed the request for injunctive relief and filed a plea to the
jurisdiction. CR 621, 629. The court heard extended arguments on the plea to the
jurisdiction. 2 RR 5-110. A day later, the court had a hearing on the request for
temporary injunctive relief. 3 RR 9-301. The court admitted many exhibits and
took live testimony from six witnesses, including Professor Johanson and the
Presbytery’s top official, Reverend Mike Cole.
At the end of the hearing, the court stated: “Masterson and Jones v. Wolf
provide for this case to be decided under neutral principles, and it can be decided
under neutral principles without any und[ue] entanglement in ecclesiastical issues.
Therefore, at this time, I’m inclined to deny defendant’s plea to the jurisdiction.
But I am going to review some things before I decide.” 3 RR 299-300. “I also, in
looking through the GRD and the arguments that are made in the brief concerning
the GRD as it relates to potential or arbitration or ADR or contract or something
like that, as a grounds to abate or dismiss the case, I’m – I’m leaning to deny that
motion.” 3 RR 300. The next day, the court granted the temporary injunction (CR
2457) and denied the plea to the jurisdiction. CR 2460, 2461.
Following extensive discovery, First Presbyterian moved for summary
judgment. CR 2789. On February 16, 2015, the court held a hearing on the
motion. See SJ hearing RR 1-31. First Presbyterian asked for a declaration about
ownership of the property. Id. at 6. “The relevant issue before you,” First
997.115/567149 14
Presbyterian argued, “really has nothing to do with denominational affiliation. The
issue before you here relates to property; property that is held in FPC’s name, that
was paid for exclusively by FPC, and it was purchased solely for the benefit of
First Presbyterian Church. To rule on the motion before you, the Court doesn’t
need to interpret or apply any religious doctrine.” Id. at 6-7.
The PNC responded by arguing three points: (1) express trust, (2) waiver,
and (3) ratification. Id. at 19. The second and third points play no role in the
appeal and need not be discussed further. On the express trust point, something
curious occurred. For decades, the PCUSA and its local presbyteries had relied on
the express trust provision in the Book of Order (G-4.0203) to argue that local
churches held their property in trust for the denomination. See CR 2700, 3774.
Now, after Masterson, the PNC abandoned the trust clause and was forced to glean
the Book of Order to search for a provision, any provision, that might support its
trust theory. At summary judgment, the PNC argued that First Presbyterian tacitly
agreed to a trust arrangement because of a clause in the 1925 PCUS Book of
Church Order. SJ hearing RR 22-25.
The 1925 PCUS Book of Church Order refers to property going to the
Presbytery if a church should be “dissolved by the Presbytery, or otherwise cease to
exist.” CR 4279. The PNC argued that being “dissolved” does not have the meaning
it would have for a corporation. SJ hearing RR 23. “Dissolution is a term of art.” Id.
997.115/567149 15
According to the PNC’s legal argument, a church is dissolved and ceases to
exist if it leaves the denomination. “A dissolution is meant in that sense, not in some
corporate sense.” Id. at 24. In other words, “if you leave the denomination, and you
and the Presbytery haven’t worked out a way to deal with your property, then the
Presbytery gets the property.” Id.
The court granted First Presbyterian’s motion. CR 4452-64. It declared the
property free of any trust interest. Id. The PNC appealed. CR 4472. The legal
arguments in the PNC’s brief are discussed later, but one of its factual assertions
may deserve particular mention so that the Court does not take it as true. Page 1 of
the PNC brief quotes from the 1843 deed. The brief then says, “From this seed
grew today’s First Presbyterian Church of Houston. First Presbyterian sold that
original property to buy its second property and so on through the present day.”
Br. at 1.
The 1843 deed, however, did not involve any of the 13 tracts at issue here.
The church sold that tract in 1894, as the parties stipulated, and there is no overlap
or connection between the land covered by the 1843 deed and the 13 tracts of land
at issue here. CR 2466-67.
997.115/567149 16
SUMMARY OF THE ARGUMENT
1. Property. The trial court applied neutral principles of law, as required
by Masterson v. The Diocese of Northwest Texas, 422 S.W.3d 594 (Tex. 2013).
After examining the relevant materials, the court found that they do not create a
trust over First Presbyterian’s property. A trust is a matter of the settlor’s intent,
and nothing indicates such intent on the part of First Presbyterian. Appellant relies
on a 1925 clause that addresses situations where a local church is “dissolved” or
“ceases to exist,” but neither of those situations exists here.
2. Justiciability. The court correctly found the case justiciable. As a rule,
courts have jurisdiction to decide church property disputes. There is an exception
for cases in which the property question is too closely connected to ecclesiastical
issues, but that exception does not apply. Although Appellant says that the parties
agreed to resolve their property disputes through an ecclesiastical process known
as the GRD procedure, that is inconsistent with the record. The parties agreed to
use the GRD procedure only for determining their relationship, not for adjudicating
disputed issues of title to property.
3. Injunction. The court correctly granted an injunction as ancillary relief.
First, the language at issue has been used in prior church property cases. Second,
the injunction contains a savings clause to limit its reach, as a way of preventing
any constitutional difficulties.
997.115/567149 17
ARGUMENT
The trial court faithfully followed Masterson v. The Diocese of Northwest
Texas, 422 S.W.3d 594 (Tex. 2013). Once Masterson was decided, the outcome
here was predictable—and Appellant predicted it: “The effect of the Texas
Supreme Court decision was to strike down the trust clause.” CR 3013. The
opinion “puts the presbytery in an untenable position legally.” Id.
I. FIRST PRESBYTERIAN OWNS THE CHURCH PROPERTY FOR ITSELF.
Issue 1 raises the question whether the Presbytery of New Covenant, Inc.
(“the PNC”) holds a trust interest in First Presbyterian’s property on behalf of the
denomination, PCUSA. The answer is No. Applying neutral principles of Texas
law, the trial court ruled correctly that no such trust exists.
A. Neutral principles of law are applied in resolving church property
disputes.
Under the First Amendment, the courts are prohibited from intruding into
religious matters, which include “theological controversy, church discipline,
ecclesiastical government, or the conformity of the members of a church to the
standard of morals required of them.” Masterson, 422 S.W.3d at 601. On the
other hand, courts may and should “review matters involving civil, contract, or
property rights even though they stem from a church controversy.” Lacy v.
Bassett, 132 S.W.3d 119, 123 (Tex. App.—Houston [14th Dist.] 2004, no pet.)
(quotation omitted). This case involves church property rights.
997.115/567149 18
Texas uses “the neutral principles methodology to determine property
interests when religious organizations are involved.” Masterson, 422 S.W.3d at
607. Under this approach, property ownership is decided by “applying generally
applicable law and legal principles.” Id. at 603. The court rejected the “deference”
approach, which defers to and enforces the decision of the highest authority of the
ecclesiastical body to which the matter has been carried, determining that Brown v.
Clark, 102 Tex. 323, 116 S.W. 360 (1909), followed the neutral principles
approach. See Masterson, 422 S.W.3d at 602, 604-07.
Thus, “ownership of disputed property is to be determined by considering
evidence such as deeds to the properties, terms of the local church charter
(including articles of incorporation and bylaws, if any), and relevant provisions of
governing documents of the general church.” The Episcopal Diocese of Fort
Worth v. The Episcopal Church, 422 S.W.3d 646, 651 (Tex. 2013). The method is
“completely secular in operation” and relies “exclusively on objective, well-
established concepts of trust and property law familiar to lawyers and judges.”
Jones v. Wolf, 443 U.S. 595, 603 (1979).
Because this case is about ownership of property, this Court should apply the
neutral principles methodology. This means examining Texas trust and corporate
law because the property is in Texas. See Toledo Soc. for Crippled Children v.
Hickok, 261 S.W.2d 692, 696-97 (Tex. 1953).
997.115/567149 19
B. First Presbyterian does not hold any property in trust.
Under Texas law, First Presbyterian owns its property outright and does not
own the property in trust for the denomination.
1. A trust requires intent by the settlor to create a trust.
A trust is a fiduciary relationship in which one person holds property subject
to an equitable obligation to keep or use that property for the benefit of another.
Meyers v. Baylor Univ. in Waco, 6 S.W.2d 393, 394-95 (Tex. Civ. App.—Dallas
1928, writ ref’d)2; see TEX. PROP. CODE § 111.004(4). The hallmark of a trust is
that legal title and equitable title are separated: legal title is in the trustee, but
beneficial title is in the beneficiary. Wheeler v. Haralson, 128 Tex. 429, 432, 99
S.W.2d 885, 886 (Tex. Comm’n App. 1937, opinion adopted).
To create a trust, the settlor (the person who wishes to create the trust)
transfers property to a trustee or declares that he holds the property for the
beneficiary. See RESTATEMENT (FIRST) OF TRUSTS § 17 (1935); TEX. PROP. CODE
§§ 111.004(14), 112.001. Whether a trust is created before or after the Texas Trust
Act of 19433, one thing has not changed: intent to create a trust must exist.
2
A “writ refused” history has the force of Supreme Court precedent after June 14, 1927 forward.
3
The PNC relies on trust law as it existed before enactment of the Texas Trust Act in 1943. Br.
at 20 n.7, 27-28. The PNC perceives this law to be more favorable to its case because before
1943: (1) a writing was not required to create a trust, and (2) a trust was presumed to be
irrevocable. See Mead v. Randolph, 8 Tex. 191, 196-99 (1852); Monday v. Vance, 92 Tex. 428,
433, 49 S.W. 516, 518 (1899). But these differences do not matter to the resolution of this case
because, as shown infra at 20-40, First Presbyterian has never created a trust in favor of PCUS.
997.115/567149 20
The settlor must have intended to create a trust. City of Austin v. Cahill, 99
Tex. 172, 189, 88 S.W. 542, 548 (1905) (“plain intention of the parties”);
Christopher v. Davis, 284 S.W. 253, 257 (Tex. Civ. App.—Dallas 1926, writ ref’d)
(same); RESTATEMENT (FIRST) OF TRUSTS § 23 (1935) (“A trust is created only if
the settlor properly manifests an intention to create a trust.”); see TEX. PROP. CODE
§ 112.002 (same); see also Fitz-Gerald v. Hull, 150 Tex. 39, 46, 237 S.W.2d 256,
260 (1951) (“an express trust ‘can come into existence only by the execution of an
intention to create it by the one having legal and equitable dominion over the
property made subject to it.’” (quotation omitted)).
A settlor’s intent to create a trust must be “as clearly manifested as if express
terms had been employed.” Dulin v. Moore, 96 Tex. 135, 139, 70 S.W. 742, 743
(1902). The settlor must “employ language which shows unequivocally an
intention on his part to create a trust in a third person or to declare a trust in
himself.” Samuell v. Brooks, 207 S.W. 626, 629 (Tex. Civ. App.—Dallas 1918,
writ ref’d). This does not mean that a person has to use magic words. See Pottorff
v. Stafford, 81 S.W.2d 539, 540 (Tex. Civ. App.—El Paso 1935, writ ref’d) (“No
particular form of words is required to create the trust, if it is reasonably certain as
to the property, its object, and the beneficiary.”). But by demanding that intent be
“clearly manifested,” Dulin, 96 Tex. at 139, the courts ensure that the property
owner gets to decide what happens to his or her property.
997.115/567149 21
This rule—that the settlor’s intent is paramount—comes with a corollary.
Third parties cannot unilaterally impose a trust on someone else’s property. Wise
v. Haynes, 103 S.W.2d 477, 483 (Tex. Civ. App.—Texarkana 1937, no writ)
(“declarations of the cestui que trust are not competent to establish the trust.”);
Phillips v. Sherman, 39 S.W. 187, 188 (Tex. Civ. App. 1897, no writ) (same); see
also Best Inv. Co. v. Hernandez, 479 S.W.2d 759, 763 (Tex. Civ. App.—Dallas
1972, writ ref’d n.r.e.) (same).
2. The deeds, the corporate documents for First Presbyterian,
and the governing documents for the PCUS/PCUSA
establish that there is no trust imposed on the property.
These principles are enough to resolve the legal issue. First Presbyterian
proved as a matter of law that there is no trust on its property.
a. The deeds do not create any trust.
Start with the deeds to the 13 tracts of land. “It is settled in Texas that the
presumption of law is that a deed conveys the property therein described to the
grantee named in the deed and that he is the owner thereof.” Clayton v. Ancell,
168 S.W.2d 230, 232-33 (Tex. Comm’n App. 1943, opinion adopted). None of the
deeds in the summary judgment evidence shows that FPC currently holds any
property in trust for PCUSA. Rather, the deeds establish that FPC owns the
property outright.
997.115/567149 22
First Presbyterian owns 13 parcels of real property in the Houston area. CR
2466-67, 2740-42. According to the deeds recorded in Harris County, none of the
deeds was conveyed to First Presbyterian to hold in trust for the benefit of PNC,
PCUS, PCUSA, or any other denomination. Id.; CR 2517-72, 2579-625, 2851-
947. A review of the 55 instruments relating to 33 separate properties owned over
175 years shows that First Presbyterian owned or owns those tracts in its name
only. Id. This means that it has not held the property for the benefit of anyone
else. See Brown v. Clark, 102 Tex. 323, 343, 116 S.W. 360, 364-65 (1909) (“the
church to which the deed was made still owns the property, and that whatever body
is identified as being the church to which the deed was made must still hold the
title.”)
The only arguable exception would be for the 1843 deed. The PNC brief
does not put weight on the 1843 deed, but its summary judgment response did, so
we will address it to be comprehensive. In 1843, First Presbyterian acquired a
specific tract of land for the use and benefit of the “Presbyterian denomination,
adhering to the Westminster Confession of Faith.” CR 2466, 2655. There are
three reasons why this deed does not create a trust for Appellant’s benefit.
First, the Appellant (the PNC), the PCUSA, and its predecessors were not
clearly identified as a beneficiary, as is required to create a trust. See McMurray v.
Stanley, 69 Tex. 227, 235, 6 S.W. 412, 416 (1887). The entity referred to in the
997.115/567149 23
1843 deed appears to be a defunct group, the “Presbyterian Church in the United
States of America.” CR 2466. That group, however, “ceased to exist” in the
1860s. Id. Any trust on that tract of land would have run in favor of that entity,
but not others.
Second, First Presbyterian sold the property in 1894, terminating any trust
that may have been created in 1843. Id.; see RESTATEMENT (THIRD) OF TRUSTS § 2
cmt. i (2003) (“If a trust is created and subsequently the whole of the trust property
ceases to exist, the trust is terminated because the trustee no longer holds anything
in trust.”).
Finally, 13 tracts at issue in this case have no link to the 1843 tract. The
grantor of the 1843 deed had no legal authority to create a trust over all the real
property that First Presbyterian owned or might ever own in the future. That
person had no right to create a trust on other people’s property. See RESTATEMENT
(THIRD) OF TRUSTS § 41 cmt. b (2003) (“one cannot create a trust of property of
which another has sole and complete ownership”). Only First Presbyterian itself,
as a settlor creating a trust, could do that.
To put it another way, the owner of Blackacre may well have the right to
create a trust over Blackacre when he conveys that tract to the grantee. But he
cannot create a trust over Whiteacre, Greenacre, Redacre, and all other lands that
the grantee owns (or will ever own in the future).
997.115/567149 24
For these reasons, the 1843 deed to a tract of land no longer owned by the
church is not evidence that First Presbyterian currently holds its current property in
trust for anyone else.
b. First Presbyterian’s corporate documents do not create
any trust.
First Presbyterian’s corporate charter and bylaws establish that it does not
own its property in trust for PCUSA. The corporate charter and bylaws form the
foundational statement of a church corporation’s purpose and powers. See TEX.
BUS. ORGS. CODE §§ 1.002(36), 3.005, 3.101, 22.102. If First Presbyterian wanted
limits on its corporate ownership rights, these foundational documents would be
the place to include a universal denominational trust in favor of PCUSA. See
Peters Creek United Presbyterian Church v. Washington Presbytery of Penn., 90
A.3d 95, 110 (Pa. Commw. Ct. 2014) (incorporation of PCUSA constitution and
trust clause into bylaws established trust); Hope Presbyterian Church of Rogue
River v. Presbyterian Church (U.S.A.), 291 P.3d 711, 714, 724-25 (Or. 2012)
(addition of trust clause to articles of incorporation created trust). The PNC is
aware of this requirement. CR 2955.
The evidence establishes that First Presbyterian’s charter and bylaws have
never created, recognized, or referenced a trust. CR 2743-58. Rather, First
Presbyterian has a history of firmly—perhaps even adamantly—rejecting any trust
arrangement.
997.115/567149 25
First Presbyterian’s first corporate charter is dated January 4, 1887. CR
2464, 2743-48. It contains no trust language. CR 2743-48. Instead it states that
“all of the property, right and estate of this Church, as now vested in this
Congregation, shall pass to and vest in said Corporation.” CR 2747. By vesting
First Presbyterian with “all” the property rights held by the congregation, the
corporate charter negates any inference that First Presbyterian holds a trust interest
for any third party. The 1886 congregational resolution approving the charter
emphasized this conclusion by explaining that the congregation decided to “pursue
this course to protect the interests of the Congregation.” CR 2748.
First Presbyterian’s assertions of property ownership continued. It amended
its corporate charter in December 1887 to its current form to add one provision to
support its right of ownership:
The purposes for which said Corporation is formed is the support of the
public worship of God according to the form of Government of “The
Presbyterian Church in the United States,”4 and as incidental thereto,
shall have power to purchase and own and enjoy in any way it may
seem fit, an estate in fee, or any less estate or interest in lands or
real estate in the said City of Houston, and to sell mortgage or
convey the same or any estate or interest therein, … and to give as
security for the payment of said borrowed money a deed of trust or
mortgage on the property both real and personal, of said Corporation
now owned or held by it, or that may be hereafter acquired by it.
CR 2750-51 (emphasis added); see CR 2753-56.
4
This is the only mention of a denomination anywhere in the charter. The PCUS constitution in
1887 contained no property provisions anywhere, much less a trust clause. See CR 4037.
997.115/567149 26
First Presbyterian’s corporate charter and bylaws do not support any claim
that it holds property in trust for PCUSA. Such an assertion is incompatible with
the express assertions in the charter that First Presbyterian owns its property
outright and has the power and authority to determine how any property is held.
Far from limiting its ownership rights, First Presbyterian’s charter and
bylaws reflect an intent to incorporate as an autonomous Texas corporation,
complete with all the powers bestowed by Texas law, including the explicit right to
take and hold property in full ownership.5 See CR 2743-58.
c. No provision in the governing documents of PCUS or
PCUSA creates a trust in PCUSA.
A proper application of neutral principles of law may include examining the
pertinent denominational constitution. But if the constitution is used to establish an
enforceable trust, it has to comply with Texas law. The document should be viewed
through a secular lens and without reliance on religious precepts. Jones, 443 U.S. at
601-04. The current PCUSA constitution and the past constitutions of its predecessor,
PCUS, do not establish that First Presbyterian holds any property in trust for PCUSA.
5
FPC’s corporate charter contrasts starkly with the language found in the “model” Articles of
Incorporation advocated by PCUSA. CR 2954-60. Acknowledging the well-settled autonomy of
the corporate form and the importance of securing a church’s consent to create a trust, PCUSA
encourages local churches to include a provision in their charters that states: “All property, both
real and personal, held by or for the particular church, whether title is lodged in the Corporation,
the board of trustees or a trustee, or an unincorporated association, and whether the property is
used in programs of the particular church or retained for the production of income, is held in trust
nevertheless for the use and benefit of the Presbyterian Church (U.S.A.).” CR 2955. FPC has
never amended its charter to conform to the PCUSA “model.”
997.115/567149 27
Current constitution. The current PCUSA Book of Order purports to
contain an express trust clause. CR 3774 (G-4.0203). The clause is entitled:
“Church Property Held in Trust,” and provides:
All property held by or for a congregation, 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 congregation or of a higher council or retained for the
production of income, is held in trust nevertheless for the use and
benefit of the Presbyterian Church (U.S.A.).
Id. This clause was first added to the PCUS Book of Church Order in 1982/83 as
section 6-3 and was included in the 1983/84 edition of the PCUSA Book of Order
and subsequent editions. CR 2697 (§ 6-3); CR 2716-17 (G-8.0201). But in its
appellate brief, the PNC does not rely on this clause because this clause does not
suffice under Texas law. See CR 3013 (PNC’s corporate representative, Reverend
Cole, admitted that Masterson precludes reliance on the express trust clause).
First, this clause constitutes a unilateral statement by PCUSA, the purported
beneficiary. The beneficiary’s unilateral statement cannot create a trust. Wise, 103
S.W.2d at 483. Instead, a trust depends on the intent of the settlor. But First
Presbyterian did not manifest any intent to create a trust. Instead, it voiced its
disagreement to the trust clauses immediately and over the last thirty years
whenever this issue arose. CR 2702-34, 2963-77, 3039-46.
997.115/567149 28
Further, any trust created during the 1980s is presumed to be revocable. See
TEX. PROP. CODE § 112.051(a) (“A settlor may revoke the trust unless it is
irrevocable by the express terms of the instrument creating it or of an instrument
modifying it.”). As Masterson recognized, “[t]he Texas statute requires express
terms in making it irrevocable.” 422 S.W.3d at 613 (emphasis orig.). The trust
clauses in the PCUS and PCUSA constitutions in no way purport to be irrevocable.
If First Presbyterian were somehow considered to have intended a trust, it
has revoked any such intent in two ways: (1) the congregational resolution passed
on March 11, 1984, rejecting all new PCUSA or PCUS property provisions; and
(2) the FPC Session’s formal revocation of any trust on August 19, 2014, after the
Masterson opinion was issued. CR 2702-12, 2713-15, 3070-73.
In addition, First Presbyterian timely invoked the PCUSA constitution’s
exception to the trust clause (G-4.0208 (formerly G-8.0701)). CR 2701, 2702-28,
3775. This exception allowed former PCUS churches to be excused from
PCUSA’s new property provisions and to be governed by PCUS’s property
provisions in the pre-reunification constitution. CR 3775. Specifically, this meant
that First Presbyterian could rely on former section 6-2, which gives a local church
control in “buying, selling, and mortgaging of the property for the church” without
having to seek approval. CR 3011, 4174-75.
997.115/567149 29
Past constitutions. Just as the current constitution fails to establish a trust
for PCUS/PCUSA, so do past constitutions and governing documents. From First
Presbyterian’s founding in 1839 to 1982, no trust clause of any kind appeared in
the any of the constitutions of the Presbyterian denominations with which the
church has been affiliated. Rather, beneficial ownership remained with individual
congregations, as the summary judgment evidence establishes.
For instance, PCUS formed a committee in 1950 to study church property
ownership, and the 1952 report stated: “The legal title to property of a particular
church is in its trustees on behalf of that congregation. Therefore, the property is
actually controlled by that congregation. This is recognized by both Civil and
Ecclesiastical courts. The right to hold and dispose of property is granted by the
State.” CR 2686, 4039. This does not evidence a trust.
A second committee studied this question, and its 1953 report became the
General Assembly’s “declaratory statement” on the property issue:
The beneficial ownership of the property of a particular church of the
[PCUS] is in the congregation of such church and title may properly
be held in any form, corporate or otherwise, consistent with the
provisions of civil law in the jurisdiction in which such property is
situated. The congregation, with respect to such property may
properly exercise any privilege of ownership possessed by property
owners in such jurisdiction.
Id. The General Assembly reaffirmed the declaratory statement in 1967 and 1971.
CR 2686-87, 4039-40; see CR 2981 (“In the years leading up to reunion in 1983,
997.115/567149 30
the PCUS General Assembly repeatedly reaffirmed a statement adopted in 1953
which said that title to church property could be held in any legal form, the
congregation was the beneficial owner with all the rights of a property owner.”).
These statements are not indicative of a trust, either.
Furthermore, when PCUS proposed to amend its Book of Church Order to
add the trust clause for its own benefit, the denomination’s chief officer and top
elected official (the Stated Clerk) assured that adoption of the trust clause would
not change the 1953 declaratory statement. CR 2760 (“These amendments do not
give Presbytery, Synod, or General Assembly any jurisdiction over property.”).
Likewise, he also informed the General Assembly that “[t]he language dealing
with trust does not in any way establish any kind of an encumbrance on church
property as that term is understood in connection with real estate.” CR 3000.
In sum, an express trust clause was inserted in the early 1980s in both the
PCUSA and PCUS constitutions, and nothing about trusts was included in the prior
constitutions. But PNC has searched past and current constitutions of the
PCUS/PCUSA for another clause to call a trust clause. PNC now bases its argument
on a peculiar clause about church dissolution that first appeared in the 1925 PCUS
Book of Church Order and was carried forward in later versions of the PCUSA
Book of Order. For the reasons explained below, all of PNC’s arguments fail.
997.115/567149 31
C. PNC’s arguments regarding paragraph 158 of the PCUS Book of
Church Order and its successors fail.
Because the express trust clause in the Book of Order will not suffice to
create a trust, PNC now argues that (1) a clause dealing with church dissolution in
the 1925 PCUS Book of Church Order is a trust clause, and (2) when FPC renewed
its corporate charter in 1938, it consented to that clause and thereby created an
irrevocable trust for all time. Br. at 17-34. Those arguments have no merit. The
dissolution clause is not a trust clause; First Presbyterian has not consented to it;
and, in any event, First Presbyterian has not been dissolved.
1. Paragraph 158 and its successors are dissolution clauses,
not trust clauses.
Paragraph 158 is a dissolution clause, not a trust clause. Its plain language
makes its purpose obvious:
If a church shall be dissolved by the Presbytery, or otherwise cease to
exist, and no disposition has been made of its property, those who
hold the title to the property shall deliver, convey, and transfer to the
Presbytery of which the church was a member, or to the authorized
agents of the Presbytery, all property of the church; and the receipt
and acquittance of the Presbytery, or its proper representatives, shall
be a full and complete discharge of all liabilities of such persons
holding the property of the church. The Presbytery receiving such
property shall apply the same or the proceeds thereof at its discretion.
CR 4279.
997.115/567149 32
The later PCUS and PCUSA constitutions contain a similar clause. CR
4175 (§ 6-3); CR 2697 (§ 6-4); CR 2700, 3774 (G-4.0205). This clause applies
only in two instances: (1) if the presbytery acts to “dissolve” a local congregation,
and (2) if the congregation “cease[s] to exist.” The clause does not create a trust.
First, a trust is a fiduciary relationship in which one person, a trustee, holds a
property interest for the benefit of another. Meyers, 6 S.W.2d at 394-95; see TEX.
PROP. CODE § 111.004(4). However, paragraph 158 says nothing about First
Presbyterian or anyone else acting as a trustee over any of First Presbyterian’s
property for the benefit of PCUS/PCUSA.
Second, a trust is created only if the settlor properly manifests an intention to
create a trust. Cahill, 88 S.W. at 548. There is nothing in paragraph 158 whereby
First Presbyterian manifested an intent to create a trust over all its present and
future property. Just like the unenforceable express trust clauses inserted into the
PCUS and PCUSA constitutions in the early 1980s, paragraph 158 and its
successors are merely unilateral statements by the beneficiary, which are
insufficient to create a trust. See Wise, 103 S.W.2d at 483.
Third, the PNC and PCUS/PCUSA have never treated Paragraph 158 and its
successors as trust clauses. Rather, the past governing documents show that they
never claimed a beneficial interest in a congregation’s property based on these
sections when church property issues arose. See supra at 30-31.
997.115/567149 33
Chief Justice Radack alluded to this in Windwood Presbyterian Church, Inc.
v. Presbyterian Church (U.S.A.), 438 S.W.3d 597 (Tex. App.—Houston [1st Dist.]
2014, no pet.). There, she recounted the history of the PCUS. Id. at 599. After
that historical examination, her court indicated that no trust clause existed before
the early 1980s. Id. (“The PCUS did not have any trust provisions in its
constitution at the time of Windwood’s incorporation [in 1971].”).
Finally, the PNC stretches Professor Johanson’s statements regarding the
dissolution clause. Br. at 24-26, 33. Johanson opined only that the dissolution
clause would apply if the trial court determined that there was no trust and then
FPC was dissolved thereafter. CR 4378-79. But he did not opine that PCUSA
would be entitled to the property. Instead, Johanson stated without exception that
there was “zero evidence” of any trust at any time: “First Presbyterian Church of
Houston holds all of its property as full exclusive owner, without any trust of any
kind in favor of the presbytery or the national church.” CR 3023-24; see also id. at
3018 (“no express trust, implied trust, constructive trust, resulting trust, or any
other form of trust in favor of the PCUSA or the Presbytery arose…by reason of
any facts, circumstances, documents or events arising or occurring from 1839 until
the present time.”).
997.115/567149 34
Moreover, Johanson stated in his affidavit that the dissolution clause did not
give PNC any enforceable right over FPC’s property. CR 3018-19 (“§ 6-3 of the
1981/82 PCUS Book of Church Order cannot by its own force ever impose any
civilly enforceable right by the Presbytery to determine the disposition of FPC
property” (emphasis added)).
2. First Presbyterian’s renewal of its charter in 1938 is not
evidence of intent to create a trust.
The PNC contends that when First Presbyterian renewed its charter in 1938,
it created a trust by the act of consenting to the 1925 PCUS constitution with the
dissolution clause. Br. at 26-27. This argument fails.
As noted earlier, the dissolution clause does not create any sort of trust at all,
so there was no trust arrangement to which First Presbyterian could consent. A
trust is created only if the settlor has “clearly manifested” an intention to create a
trust. Dulin, 70 S.W. at 743. The renewal of a corporate charter is not a clear
manifestation of an intent by First Presbyterian to create a trust over all of its
present and future property for the benefit of PCUS/PCUSA.
Furthermore, nothing in the charter renewal mentions creating a trust in
property for the benefit of PCUS. Instead, First Presbyterian reiterated its
ownership of its property when it extended its corporate existence by affirming “all
the privileges, powers, immunities, right of succession by its corporate name, and
997.115/567149 35
rights of property, real and personal, exercised and held by the corporation at
the expiration of the period of existence specified in its said original charter.” CR
2754 (emphasis added). The events of 1938 did not create a trust.
3. The “dissolution clause” is in any event inapplicable to a
thriving local church such as First Presbyterian.
Last, the notion of First Presbyterian being “dissolved” rests on a myth.
First Presbyterian has not been “dissolved” or anything approaching dissolution in
the ordinary sense of the word. The PNC wants to give the word “dissolved” a
strange and idiosyncratic meaning, but that effort is unpersuasive.
a. The ordinary meaning of the language applies.
Paragraph 158 speaks of a church that is “dissolved” or “cease[s] to exist.”
CR 4279. Those terms are easily understood. When given their ordinary meaning,
those terms do not remotely apply. First Presbyterian is alive and well. It runs
vibrant and ongoing service programs for the benefit of the local community, as
the stipulations demonstrate. It has not been dissolved or ceased to exist in any
accepted sense of those terms.6
6
First Presbyterian is a Texas corporation, governed by the statutory provisions that apply to
corporations, including those that involve dissolution and winding up. See TEX. BUS. ORGS.
CODE §§ 22.164, 22.301, 22.302, 22.305; see also Sherman Gin Co. v. Planters Gin Co., Inc. of
Indianola, 599 S.W.2d 348, 350 (Tex. Civ. App.—Texarkana 1980, writ ref’d n.r.e.)
(“Dissolution is a function of the state which created the corporation, therefore, it is a proceeding
unique and exclusive to the forum state.”).
997.115/567149 36
But the PNC wants to give this language a special meaning, and for support
it points to the testimony of one of its witnesses (Rev. Dr. Hooker). See PNC Br.
at 20-21. The PNC says that a church is “dissolved” or non-existent when it
becomes disaffiliated with the denomination. Id. Nonsense.
Courts give words their ordinary meaning unless a specialized meaning is
clear from the instrument itself. See Texas West Oil & Gas Corp. v. El Paso Gas
Transp. Co., 631 S.W.2d 521, 523 (Tex. App.—El Paso 1982, writ ref’d n.r.e.)
(“The terms the parties used are to be given their plain, ordinary and generally
accepted meaning unless the instrument itself shows the terms are used in a
different sense.”); Phillips Petroleum Co. v. Gillman, 593 S.W.2d 152, 154 (Tex.
Civ. App.—Amarillo 1980, writ ref’d n.r.e.) (same).
The PNC cannot end-run neutral principles by simply declaring that words
mean what it wants them to mean. Learned Hand’s example of the twenty bishops
rule comes to mind. See Hotchkiss v. Nat’l City Bank of N.Y., 200 F. 287, 293
(S.D.N.Y. 1911) (“If, however, it were proved by twenty bishops that either party,
when he used the words, intended something else than the usual meaning which
the law imposes upon them, he would still be held, unless there were some mutual
mistake, or something else of the sort.”) (quoted with approval in City of Keller v.
Wilson, 168 S.W.3d 802, 816 (Tex. 2005)). The trial court was not compelled to
let the PNC dictate the meaning of words.
997.115/567149 37
b. A local church is not dissolved and does not cease to
exist merely because of strained or severed relations
with a denomination.
Courts have faced this language before. In Christensen v. Roumfort, 20
Ohio App. 3d 107 (1984), the Presbytery relied on the Book of Order and argued
that a church was dissolved by merely severing ties with the denomination. The
court had none of it. The local church “still maintains a place of worship and its
members are clearly not dispersed.” Id. at 110.
The court’s reasoning could have been chosen for our case: “Tabernacle
held title to the property free of any competing interests. The deeds all named
Tabernacle as the grantee and contained no forfeiture or reversionary clause in
favor of appellants nor does the record indicate that the property was acquired by
any kind of restrictive gift. The language of the deed contains no restrictions. The
Book of Order relied upon by the appellants does not apply in this instant case.”
Id.
To like effect is First Presbyterian Church of Schenectady v. United
Presbyterian Church in the United States, 476 N.Y.S.2d 86, cert. denied, 469 U.S.
1037 (1984). There, the local congregation withdrew from the denomination. The
Presbytery pointed to a dissolution clause in the denomination’s Book of Order,
but the court was unpersuaded: “That provision is inapplicable because plaintiff
church is not undergoing a dissolution or extinction.” Id. at 93.
997.115/567149 38
Nor has First Presbyterian ceased to exist. See BLACK’S LAW DICTIONARY
(7th ed.) (“cease” means to “stop, forfeit, suspend, or bring to an end” or to
“become extinct; to pass way”); MERRIAM-WEBSTER DICTIONARY (“exist” means
“to have being” or “to continue to be”).
This issue arose in General Convention of the New Jerusalem in the United
States of America, Inc. v. MacKenzie, 449 Mass. 832 (2007). There, a bylaw
entitled “Dissolution” referred to the case of a church ceasing to exist. When the
church cut ties with the denomination, did it cease to exist? No. “We do not locate
an ambiguity in the language of the dissolution bylaw, and hold that it is triggered
only upon dissolution, and not by disaffiliation.” Id. at 836. “More importantly, it
is undisputed that the church continues to exist, and that it engages in religious and
charitable activities, much as it had done before disaffiliation.” Id. “Turning to the
plain text of the bylaw, it is entitled ‘Dissolution,’ and disaffiliation is mentioned
nowhere in the text.” Id. at 836-37. “To read disaffiliation into this text is to strain
the plain words more than contract law permits.” Id. at 837.
By its own terms, the dissolution clause is not triggered if a church is
dismissed to another denomination. Dissolution and dismissal to another
congregation are not synonymous. The PNC agrees that the two words are not the
same. CR 4389-97. So even if First Presbyterian were dismissed to another
denomination on some future date, that would not mean that it is dissolved.
997.115/567149 39
In addition, paragraph 158 places a congregation’s property with the PCUSA
only if “no disposition has been made of its property.” CR 4279. Here, FPC has
made a disposition of that property. In accordance with Texas law and its
corporate charter, FPC amended its bylaws at a Session meeting called on
November 18, 2014, to provide for the disposition of all corporate assets in the
event of a dissolution of the corporation. CR 3074-75. The PNC’s argument that
the phrase means a “possibility” that a presbytery and local church “might” agree
on a property disposition is contrary to the plain meaning of the phrase and has no
support. See Br. at 22-23.
The PNC argues impliedly that FPC could not take this action without its
consent. See id. But that is not true. FPC could take this action without PCUSA’s
consent because FPC voted in 1984 to be exempt from the PCUSA constitution’s
new property clauses. CR 2713, 3775. By doing so, FPC elected to be governed
by section 6-2 of the 1981/82 PCUS constitution, under which there is no question
that FPC had control over “buying, selling, and mortgaging of the property for the
church” without having to seek approval. CR 3011, 4174-75.
To sum up: Texas law has always required a clear expression of intent by
the settlor to create a trust. No such clear expression has ever come from First
Presbyterian. The trial court ruled correctly in holding that no trust exists on First
Presbyterian’s property.
997.115/567149 40
II. THE PROPERTY ISSUE IS JUSTICIABLE.
Issue 2 presents the question of whether the courts may hear this case. The
answer is Yes. The trial court correctly held that it could resolve the property issue
without crossing the constitutional boundary line between church and state.
A. The general rule allows courts to resolve property cases by
applying neutral principles.
After Masterson, all agree that courts have the power to apply ordinary,
neutral legal rules in church property cases. This general power allows courts to
construe contracts, deeds, articles of incorporation, and other legal instruments.
See Jones, 443 U.S. at 602 (“There can be little doubt about the general authority
of civil courts to resolve this question.”); Lacy, 132 S.W.3d at 123 (“Courts do
have jurisdiction to review matters involving civil, contract, or property rights even
though they stem from a church controversy.” (quotation omitted)).
In fact, the state “has an obvious and legitimate interest in the peaceful
resolution of property disputes, and in providing a civil forum where the ownership
of church property can be determined conclusively.” Jones, 443 U.S. at 602 (citing
Presbyterian Church in United States v. Hull Memorial Presbyterian Church, 393
U.S. 440, 445 (1969)); see Masterson, 422 S.W.3d at 606 (“Texas courts are bound
to exercise jurisdiction vested in them by the Texas Constitution and cannot
delegate their judicial prerogative where jurisdiction exists.”).
997.115/567149 41
B. The general rule has an exception.
This general rule nevertheless has an exception: it is conceivable that a deed
or other legal document could incorporate religious concepts so heavily as to make
the case unfit for judicial decision. The court noted this possibility in Masterson:
“We recognize that differences between ecclesiastical and non-ecclesiastical issues
will not always be distinct, and that many disputes of the type before us will
require courts to analyze church documents and organizational structures to some
degree. Further, deferring to decisions of ecclesiastical bodies in matters reserved
to them by the First Amendment may, in some instances, effectively determine the
property rights in question.” Masterson, 422 S.W.3d at 606.
The phrase “effectively determine” comes up a second time later in the
Masterson opinion, where the court discusses the possibility of overlap between
religious matters and property rights:
So what happens to the relationship between a local congregation that
is part of a hierarchical religious organization and the higher
organization when members of the local congregation vote to
disassociate is an ecclesiastical matter over which civil courts
generally do not have jurisdiction. Milivojevich, 426 U.S. at 713-14,
96 S.Ct. 2372. But what happens to the property is not, unless the
congregation’s affairs have been ordered so that ecclesiastical
decisions effectively determine the property issue.
Masterson, 422 S.W.3d at 607 (emphasis added).
How often does this exception exist? Not very. The denomination tried to
invoke the exception in Masterson, with no success: “But although we agree with
997.115/567149 42
the court of appeals as to these conclusions [about certain ecclesiastical issues], we
disagree with its determination that the question of who owns the property is
inextricably linked to or determined by them.” Id. at 608.
C. The narrow exception to neutral principles—for cases where
“ecclesiastical decisions effectively determine” property rights—is
inapplicable.
The PNC seeks to fit within the loophole recognized in Masterson.
According to the PNC, this is one of those rare instances where the property issue
depends on a religious issue. See PNC Br. at 34 (“This case is not the typical
church property dispute case over which courts generally have jurisdiction”).
To support this contention, the PNC points to the GRD process. See PNC
Br. at 34-40; CR 1422-34. The premise of its argument is that the GRD process
covers more than just the relationship between a congregation and the
denomination. Roughly speaking, the PNC casts the GRD process as a broad form
of universal alternative dispute resolution, like arbitration.
1. The GRD process does not cover property disputes.
But that premise is invalid. Nobody signed an arbitration clause. Nothing in
the GRD process trumps the normal role of the courts in deciding property cases.
The GRD process does not adjudicate or resolve disputes about property rights.
Rather, it addresses only the issue of denominational affiliation, i.e., whether a
local congregation should stay or go.
997.115/567149 43
The PNC, however, portrays the GRD process as one that covers all disputes.
Thus, the PNC says that the two sides “agreed to have their disputes resolved
through an ecclesiastical process called the Gracious Reconciliation and Dismissal
(‘GRD’) Procedure.” PNC Br. at 35. The PNC says that the parties will resolve
“their disputes” through a collaborative exercise in “discerning God’s will.” Id.
But the documents at issue do not reach nearly that far. They do not bind the
parties categorically to resolve all “their disputes” through the GRD. Nor do they
make the outcome of every dispute depend on “discerning God’s will.” A fuller
quotation from the Covenant Agreement reveals that the only purpose of seeking
God’s will is to determine the relationship between the local church and the
denomination:
PNC Brief at 35 Covenant Agreement text (CR 1466)
… therefore, the General Council of the
Presbytery of New Covenant and the
congregation of the First Presbyterian
Church of Houston, Texas, covenant to
The Covenant Agreement calls upon the follow the Gracious Reconciliation and
participants to abide by the procedure Dismissal Procedure and abide by its
“as a way of discerning God’s will.” terms as a way of discerning God’s will
App. L; CR 1466, 4080. for the relationship between the
congregation and the Presbytery of
New Covenant.
Our case does not ask the courts to determine the relationship between the PNC
and the congregation. That issue has nothing to do with this property case.
997.115/567149 44
The two documents that bear on this issue are the one-page document
entitled “Covenant Agreement” and the longer document that recites the GRD
procedure. In the covenant agreement, the two sides stated in writing that they
“covenant to follow the Gracious Reconciliation and Dismissal Procedure and
abide by its terms as a way of discerning God’s will for the relationship between
the congregation and the Presbytery of New Covenant.” CR 1466.
The GRD papers, in turn, are all about the relationship between the
congregation and the PNC. CR 1422-30. The GRD process deals with a
relationship, not with property rights. It does this on page after page.
On page 1, the GRD document refers to events that have “caused some
congregations to reconsider their connection” with the denomination. CR 1422.
On page 3, its first sentence speaks of congregations that “are considering
dismissal from the denomination.” CR 1424. It addresses the prospect of a
congregation choosing to “affiliate with another Reformed denomination.” Id. It
lists three paramount questions, each of which uses the words “congregation” and
“Presbyterian Church (U.S.A.),” with none of those three questions referring to
property. Id.
Page 4 begins with a reference to a local “session seeking or considering
dismissal from the denomination.” CR 1425. But page 4 says nothing about
property or associated disputes. Likewise, page 5 speaks of seeking common
997.115/567149 45
ground “between the congregation and the denomination.” CR 1426. It ends by
referring to the congregation either staying in a “relationship with the Presbyterian
Church (U.S.A.)” or calling a meeting “to recommend dismissal to another
Reformed body.” Id. Once again, property never comes up.
Page 6 of the GRD procedure is more of the same. CR 1427. Its caption
uses bold print and all capitals in referring to the “PRESBYTERY-
CONGREGATIONAL RELATIONSHIP.” Id. It never mentions property
disputes. And it would not be applicable here because the vote for First
Presbyterian to be dismissed from the PCUSA did not pass. CR 1526, 2466.
The only references to property appear on pages 7-8, in a section entitled,
PROCEDURE FOR SEEKING DISMISSAL. CR 1428-29. Clauses 4 and 6 refer
to property. Clause 4 says that if two-thirds of the congregation vote for dismissal,
the PNC will agree to it and let the congregation “depart with all of its property
intact.” CR 1428. Clause 6 addresses the situation in which a congregation leaves,
but a minority stays and starts a new church, using funds made available “before
dismissal of the majority with property.” CR 1428-29. (Clause 6 adds that “‘the
church’ in a particular area is not its building or financial assets, but the people of
the congregation.”)
Neither of these references to property indicates any intention to use the
GRD process as the exclusive and general method for resolving disputes about
997.115/567149 46
who owns what. Clauses 4 and 6 do not even come into play unless a congregation
has decided to leave the denomination by a two-thirds vote. But no such two-
thirds vote has occurred. To the contrary, the congregation voted and remains right
where it has been for many, many years.
2. Even if applicable, the GRD process was not abandoned.
Based on its flawed premise that the GRD process applies in the first place,
the PNC next contends that the congregation abandoned the GRD process and
therefore surrendered to the “Alternative Process.” PNC Br. at 35-36. But the
record shows no abandonment.
The PNC floats this contention in two places. First, in its factual narrative, it
says that the discernment team was supposed to create and conduct a process for
reaffirmation to the Presbytery-congregational relationship, but that this allegedly
“never happened.” PNC Br. at 11. The brief cites nothing to support its claim that
this “never happened.” It then goes on to point to the filing of the declaratory
judgment action, with no further citation to the claim about the actions of the
discernment team.
Second, the PNC brief devotes a paragraph to the assertion that First
Presbyterian “did not complete the GRD Procedure and instead abandoned that
procedure.” Br. at 36. The brief cites to testimony from a PNC witness who took
the stand in the temporary injunction hearing. Id. (citing 3 RR 270-75).
997.115/567149 47
The witness, Rev. Mike Cole, referred to a draft document that was sent to
the PNC by a representative of First Presbyterian. The document deals with
reaffirmation of the relationship between the congregation and the presbytery,
pursuant to page 6 of the GRD procedure. Reverend Cole described the document
as perhaps “a very first initial baby step” in reconciling the two sides, but not
enough to satisfy his standards. 3 RR 272.
Reverend Cole went on to indicate that since the litigation began, he and the
PNC had avoided contact with the First Presbyterian’s leadership: “Since the TRO
was put in place, I’ve had virtually no contacts with any of the leadership.” 3 RR
284. “I – so, perhaps I’ve erred on the – on the side of caution.” 3 RR 285. “I just
wanted to – to be – make sure that we were not doing anything that the Court
would construe as in violation of the TRO.” Id.
As the Court can see, this evidence does not show abandonment by First
Presbyterian. If anything it shows that the PNC stopped participating during the
life of the TRO, which expired long ago. But nothing shows that First
Presbyterian abandoned the process or, again, that the “process” had anything
whatsoever to do with deciding whether First Presbyterian owns its property in
trust for the PCUSA.
997.115/567149 48
The GRD process says on page 6 that “the Discernment Team will create
and conduct a process” for reaffirming the Presbytery-congregational relationship.
CR 1427. If the Discernment Team needs to do something further to improve
relations between the PNC and the congregation, that is all well and good, but that
does not even approach showing abandonment by First Presbyterian. In fact, when
asked directly whether First Presbyterian abandoned the GRD process, Reverend
Cole expressed uncertainty: “That’s still a question in my mind.” 3 RR 118. That
agnostic answer is no evidence of abandonment.
Nor did the trial court make any factual finding of abandonment after taking
evidence on the PNC’s challenge to the court’s subject-matter jurisdiction. The
court received evidence—in the form of both exhibits and testimony from the
witness stand—and was entitled to sit as fact-finder regarding the issue of
abandonment. The evidence just mentioned shows that First Presbyterian did not
abandon the GRD process.
In sum, the property rights issue in this case falls within the competence of
the courts to adjudicate. Just as in Masterson, the property decision depends on
neutral principles of law, not on ecclesiastical determinations. Issue 2 should be
overruled.
997.115/567149 49
III. THE ANCILLARY INJUNCTION IS VALID.
Issue 3 presents the question whether the injunctive component of the
judgment constitutes error. CR 4454-56. The answer is No. The trial court did
what prior courts have done.7 Its decree tracks the language from Carrollton
Presbyterian Church v. Presbytery of South Louisiana of Presbyterian Church
(USA), 77 So. 3d 975 (La. App. 2011). Nothing requires a contrary result here.
A. The trial court permissibly supported its declaratory judgment
with ancillary injunctive relief, as authorized by statute.
In the final section of the statute, the Declaratory Judgments Act empowers a
court to supplement a declaration with “[f]urther relief” whenever doing so is
“necessary or proper.” TEX. CIV. PRAC. & REM. CODE § 37.011. Further relief
normally takes the form of an injunction. State v. Anderson Courier Serv., 222
S.W.3d 62, 66 (Tex. App.—Austin 2005, pet. denied); see Tara Partners, Ltd. v.
City of S. Houston, 282 S.W.3d 564, 578 (Tex. App.—Houston [14th Dist.] 2009,
pet. denied) (“‘further relief’ under section 37.011 is typically injunctive relief”).
7
See, e.g., New Covenant Presbyterian Church, Inc. v. The Presbytery of S. La. of the
Presbyterian Church (USA), Suit No.: 602832, § 27, 19th Jud. Dist. Ct., E. Baton Rouge Parish,
La.; First Presbyterian Church PCUSA of Starkville, Miss. v. Presbytery of St. Andrew,
Presbyterian Church U.S.A., Inc., Cause No. 2015-0151-D, Chancery Ct. Oktibbeha Cty., Miss.;
First Presbyterian Church of Greenwood, Inc. v. Presbytery of St. Andrew, Presbyterian Church
U.S.A., Inc., Cause No. G15-0064, Chancery Ct. Leflore Cty., Miss.; First & Calvary
Presbyterian Church v. John Calvin Presbytery, Case No. 1531-CC00924, Circuit Ct. Greene
Cty., Mo.; First Presbyterian Church of Wichita Falls v. Palo Duro Presbytery, Cause No.
182,783-B, 788th Jud. Dist. Ct., Wichita Cty., Tex.; see Highland Park Presbyterian Church Inc.
v. Grace Presbytery, Inc., 2013 WL 5538716 (N.D. Tex. Oct. 7, 2013).
997.115/567149 50
Rulings under § 37.011 are reviewed for abuse of discretion. Lakeside
Realty, Inc. v. Life Scape Homeowners Ass’n, 202 S.W.3d 186, 190 (Tex. App.—
Tyler 2005, no pet.); see Tanglewood Homes Ass’n, Inc. v. Feldman, 436 S.W.3d
48 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (“The granting or denial of
a request for a permanent injunction is within the trial court’s sound discretion”).
The trial court acted permissibly in exercising its discretion the way it did.
Courts routinely issue ancillary injunctions to supplement and enforce their
declarations. Sometimes the need for an injunction might be unclear, because it
may be debatable whether there is a real risk of noncompliance with the court’s
judgment. But not here. The PNC now claims to feel bound to act on its views
about property ownership:
“The Presbytery believes that ‘[i]n the final analysis, the right
in and to all property within its ecclesiastical jurisdiction
belongs to the Church as a whole – the entire denomination.’”
Br. at 41.
“The basis for this belief is theological.” Id.
“how can the Presbytery allow a local church to reject the
denomination’s Constitution when other Presbyterian churches
are faithfully adhering to the Presbyterian principle that the
denomination as a whole has a beneficial interest in church
property?” Id. at 42.
The PNC does not fault the trial court for misreading its intentions. Instead, the
PNC apparently claims a First Amendment right to subject First Presbyterian to
what would be a hostile takeover.
997.115/567149 51
The trial court acted sensibly in granting the supplemental relief. The
language of the injunctive decree essentially tracks the language of similar decrees
in earlier cases. The most notable is the Carrollton case from 2011, which upheld
the injunction: “The injunctive relief is narrowly focused and restricted to actions
affecting the property that is the subject matter of this litigation.” Carrollton, 77
So. 3d at 984. “The prohibited actions enumerated in the injunction are
specifically limited to instances affecting the instant church property dispute.” Id.
The same form of injunctive relief was granted in 2013 in a Dallas case
called Highland Park Presbyterian Church Inc. v. Grace Presbytery, Inc., No. 13-
10605, in the 298th Judicial District Court of Dallas County.
To ensure that the decree does not intrude on the PNC’s rights, the trial court
included a savings clause: “Nothing in this Permanent Injunction shall preclude
the Presbytery of New Covenant, Inc. from taking ecclesiastical action for non-
pretextual ecclesiastical cause that is unrelated to this litigation or any property
issue raised in, prompted by, related to, or affecting the ownership, control, use, or
disposition of the Personal or Real Property held by, for or in the name of First
Presbyterian Church of Houston.” CR 4456.
This savings clause mirrors the one in Carrollton. It should be upheld for
the reasons given by that court. If courts are to have the authority to resolve
property issues by rendering a judgment, they need the concomitant authority to
997.115/567149 52
see that their judgments mean something. There is no point in letting trial courts
issue decisions that the loser can promptly disregard and take steps to undermine.
Given the savings clause and given the decision in Carrollton, the Court should
overrule Issue 3.
Nevertheless, in the event that the Court finds the injunction to go further
than it should, the Court should construe it in a way that upholds its basic intent as
much as possible. The Supreme Court did this in North East Texas Motor Lines,
Inc. v. Dickson, 148 Tex. 35, 219 S.W.2d 795 (1949), which involved an injunction
against picketing. The court chose to construe the injunction so as to be
constitutionally valid: “it is in fact to be construed only as an injunction against
picketing unless and until some ground arises therefor.” Id. at 798.
No one wishes to interfere with anybody’s free exercise of religion. The
trial court simply acted to prevent the PNC from undercutting the judicial
resolution of this property rights dispute. If it is necessary to read the injunction in
a particular way in order to comply with constitutional requirements, the Court
should follow North East Texas Motor Lines and do so here.
B. The PNC’s objections to the injunctive relief are unpersuasive.
The PNC appears to claim a constitutional right to retaliate and change the
locks. See Br. at 43. It phrases this in terms of the right to impose church
discipline however it wishes, including by dissolving a church.
997.115/567149 53
No one quarrels with the right of any church to impose discipline in keeping
with the tenets of the church’s faith. But in the trial court, the PNC disclaimed
holding any belief that its faith required it to take the steps that the injunction
inhibits:
Q Does Presbytery have any intent to seek an administrative
commission with respect to First Presbyterian Church?
A No.
***
A ... We’ve had a good longstanding relationship with First
Presbyterian Church. Have never, neither I nor our leadership
have ever felt any particular need to resort to an administrative
commission or any kind of, what some would term hardball
tactics, in dealing with folks that we count as friends.
Q If the – if there were no injunction in this case, would – would
Presbytery change the locks on the property at First
Presbyterian Church?
A No.
Q Would it [seiz]e the property at First Presbyterian Church?
A No.
Q Would it fire the ministers?
A No.
Q Would it replace the Session?
A No.
Q Would it seek to dissolve First Presbyterian Church?
A No.
3 RR 282-84.
997.115/567149 54
This testimony came from Reverend Mike Cole, the PNC’s General
Presbyter. He is the PNC’s top official (3 RR 92), so he should surely know what
constitutes a fundamental tenet of the church’s faith. His sworn testimony is hard
to square, however, with PNC’s appellate spin. The appellate brief hints at a desire
on the PNC’s part for “taking ecclesiastical actions that it may conclude are
necessary as a consequence of the First Presbyterian’s actions with respect to
church property.” Br. at 42; see id. at 45 (“might be compelled”).
Be that as it may, nothing in the injunction prohibits the PNC from going
about its ordinary business. See CR 4452-56. All the injunction does is to enforce
the property-rights declaration. As it states in the savings clause, nothing in the
injunction keeps the PNC from taking any ecclesiastical action that is “unrelated to
this litigation.” CR 4456.
The courts cannot and should not tell the PNC what to believe, but the trial
court had every right to take the PNC’s top official at his word when he
demonstrated that the PNC does not in fact believe that it is compelled to take the
kinds of actions that it now openly discusses. A court may inquire into “whether
the ascribed religious-based reason was in fact the reason” for challenged action by
a religious organization. Ohio Civil Rights Comm’n v. Dayton Christian Schools,
Inc., 477 U.S. 619, 628 (1986); see Gillette v. United States, 401 U.S. 437, 457
(1971) (“‘[T]he “truth” of a belief is not open to question’; rather, the question is
997.115/567149 55
whether the objector’s beliefs are ‘truly held.’” (quoting United States v. Seeger,
380 U.S. 163, 185 (1965))).
Despite earlier having disclaimed its interest in taking adverse actions
against First Presbyterian and its personnel, the PNC now says that it may have to
take such actions anyway. The PNC asserts a constitutional right to do this under
Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 132 S.Ct. 694
(2012), on the theory that church discipline is categorically off-limits to the courts.
See PNC Br. at 44-45. But that reading of Hosanna-Tabor goes further than the
Supreme Court went.
Hosanna-Tabor holds that employment-discrimination laws are subject to a
“ministerial exception” to judicial involvement. 132 S.Ct. at 706. But it did not
extend the ministerial exception to cases outside the employment-discrimination
setting: “The case before us is an employment discrimination suit brought on
behalf of a minister, challenging her church’s decision to fire her. Today we hold
only that the ministerial exception bars such a suit. We express no view on
whether the exception bars other types of suits, including actions by employees
alleging breach of contract or tortious conduct by their religious employers. There
will be time enough to address the applicability of the exception to other
circumstances if and when they arise.” Id. at 710.
997.115/567149 56
Outside the employment-discrimination setting, the practice continues to be
that courts may determine whether challenged actions are pretextual. That is the
holding of Dayton Christian Schools, Gillette, Seeger, and a line of similar cases.
See, e.g., Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680, 693
(1989) (“under the First Amendment, the IRS can reject otherwise valid claims of
religious benefit only on the ground that a taxpayers’ alleged beliefs are not
sincerely held, but not on the ground that such beliefs are inherently irreligious.”).
The trial court’s injunction did nothing more than follow this established legal
principle.
The PNC appears to want the power to end-run a loss at the courthouse by
not just changing the locks. Rather, it now claims a right to destroy its opponent
through a hostile takeover. More particularly, the PNC claims that, but for the
permanent injunction now in place, it would be entitled to demand that First
Presbyterian reverse the actions that it has taken to protect its property and, if First
Presbyterian declined, to act as its sister presbytery in this synod has done (i.e.,
Carrollton, 77 So. 3d at 984), and presumably form an Administrative
Commission to take over First Presbyterian, fire the pastors and the governing
session, appoint a new session and then file a brief in this Court that it agrees with
Appellant and urges that the trial court’s judgment be reversed. Can there be any
other meaning to what the PNC asserts on pages 44-45 of its brief? That kind of
997.115/567149 57
subversion would turn neutral principles into a meaningless charade. There is no
constitutional right to destroy the other side’s very existence after the courts have
resolved a disputed issue. Issue 3 should be overruled.
PRAYER FOR RELIEF
The judgment should be affirmed.
Respectfully submitted,
BECK REDDEN LLP
By: /s/ David M. Gunn
David M. Gunn
State Bar No. 08621600
dgunn@beckredden.com
Erin H. Huber
State Bar No. 24046118
ehuber@beckredden.clom
1221 McKinney, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)
SUSMAN GODFREY L.L.P.
Thomas W. Paterson
State Bar No. 15571500
tpaterson@susmangodfrey.com
1000 Louisiana St., Suite 5100
Houston, TX 77002
(713) 651-9366
(713) 654-6666 (Fax)
COUNSEL FOR APPELLEE, FIRST
PRESBYTERIAN CHURCH OF HOUSTON
997.115/567149 58
CERTIFICATE OF SERVICE
I hereby certify that on September 23, 2015, a true and correct copy of the
above and foregoing Brief of Appellee was forwarded to all counsel of record, by
the Electronic Filing Service Provider if registered, otherwise by email, as follows:
Reagan M. Brown Adam P. Schiffer
reagan.brown@nortonrosefulbright.com aschiffer@sohjlaw.com
NORTON ROSE FULBRIGHT US LLP Kenneth P. Held
1301 McKinney St., Suite 5100 kheld@sohjlaw.com
Houston, TX 77010 Penelope Nicholson
(713) 651-5469 pnicholson@sohjlaw.com
(713) 651-5246 SCHIFFER ODOM HICKS
Counsel for Appellant & JOHNSON PLLC
Presbytery of New Covenant, Inc. 700 Louisiana St., Suite 2650
Houston, TX 77002
(713) 357-5150
Kristin L. Smith (713) 357-5160 (Fax)
kristin.smith@bgllp.com Counsel for Appellant
Tony L. Visage Presbytery of New Covenant, Inc.
tony.visage@bgllp.com
BRACEWELL & GIULIANI LLP
711 Louisiana St., Suite 2300
Houston, TX 77002
Counsel for Presbyterian School
/s/ David M. Gunn
David M. Gunn
997.115/567149 59
CERTIFICATE OF COMPLIANCE
1. This brief complies with the type-volume limitation of
Tex. R. App. P. 9.4 because it contains 14,015 words, excluding the parts of the
brief exempted by Tex. R. App. P. 9.4(i)(2)(B).
2. This brief complies with the typeface requirements of Tex. R. App. P.
9.4(e) because it has been prepared in a proportionally spaced typeface using
Microsoft Word 2007 in 14 point Times New Roman font.
Dated: September 23, 2015.
/s/ David M. Gunn
David M. Gunn
Counsel for Appellee
First Presbyterian Church of Houston
997.115/567149 60