Confusion (among Amateur Canonists) about California Ruling

Now comes a task I would rather not face, given that I count many non-canon lawyers who are bloggers on Episcopal matters at least as colleagues, if not as personal friends. But in the wake of my commentary on the recent St. James ruling, a host of lay would-be canonists have rushed in to assure everyone that the ruling is not as bad as it is, or that it does not really say what it says. The latest comes from the estimable Father Haller, but he and others have also been contributing to the comments on other blogs. (Note that no one has seen fit to come here and question me directly.)

Let's clear up one simple matter first: the ruling is not yet precedent for California courts, because it is only the decision of a single trial judge in Orange County, California. As I pointed out in my original post, it will become problematic only if it is affirmed upon appeal.  (But as I also pointed out in my post, all of the appeals taken thus far by St. James in this case were decided against them initially by the Court of Appeals.)

Next, let's wade into the legal realities. Forget all talk about "alienating parish property."  That never occurred in the St. James case.  Far from alienating any real property in 1991, St. James acquired it.  Those (like Fr. Haller) who cite Canon I.7.3 about needing the permission of the Standing Committee in addition to the permission of the diocesan bishop to waive the Dennis Canon upon the acquisition of property are barking up the wrong tree here. Unlike the Dennis Canon itself, that Canon simply does not apply to a parish's acquisition of property.

Because no alienation of property was involved, the Orange County judge did not rule upon the application or effect of Canon I.7.3 to the case. So nothing in her ruling bears on that Canon, either.

The narrow issue decided by the judge was that the trust automatically imposed by the Dennis Canon on all newly acquired parish property, from the moment that title is put into the parish's hands, cannot be waived by any diocese, or its bishop, with or without the "consent" of the diocesan standing committee.  She held that the only body competent to waive the application of the Canon to newly acquired property (or indeed, to any parish property whenever acquired) was the body that created the Canon, namely, General Convention itself.

Now, here is the first canonical problem which that ruling creates: if neither the Diocese of Los Angeles nor its bishop could waive the automatic imposition of the trust on the property which the donors acquired for St. James in 1991, then they made a false representation to those donors that they had the authority to do so.  And whether or not that representation was intentionally false (which I do not claim in the slightest, because the real problem here is the later "about face" performed at the instance of Bishop Bruno) does not matter. It was a misrepresentation upon a matter on which the bishop was supposed to be informed and competent, namely, his own Church's canons. And because it was not true (or because the Diocese and its later Bishop chose to make it false), the Diocese of Los Angeles could now very well become liable to the donors for a full return of all moneys they are out of pocket as a result of their reasonable reliance upon the bishop's and the Diocese's misrepresentation.

Next, here is the second canonical problem which the ruling creates: how can we now be certain that the Dennis Canon trust is automatically released when a parish stays in the Church, but sells its property with the advice and consent of the bishop and the diocesan standing commission, as per Canon I.7.3?  (Note that the judge's decision does not discuss this problem; instead, her precise holding raises it.)

Let us get the easy case out of the way first. The Dennis Canon applies by its terms to all parish property, both real property (land) and personal property (everything from candlesticks to old library books and Bibles). Canon I.7.3 applies only to real property.  So if the latter Canon helps us at all, it cannot save the case of how the Dennis Canon trust is automatically released upon the sale or alienation of personal property.

And how could Canon I.7.3 purport to release the Dennis Canon trust, if it does not mention the Dennis Canon? (The reason it does not do so is that Canon I.7.3 came before the enactment of the Dennis Canon.)  So the first real problem for those who tout its efficacy is that the Dennis Canon could be seen as an addition and alteration to Canon I.7.3, since it is later in time.

That is to say, Canon I.7.3 allows a parish to alienate its real property upon the proper consents, but even as so alienated, the property still remains subject to the terms of the national Church's Dennis Canon, i.e., a cloud remains upon the title until the trust is properly released (because the court held it may be so properly released only by General Convention).  A Diocese giving its consent pursuant to Canon I.7.3 would thereafter be estopped to assert its own Dennis Canon interest, to be sure, but no such estoppel doctrine could apply to ECUSA's interest under the Dennis Canon, absent action by General Convention.

Think that is far-fetched? Put yourself in the place of a title company attorney who is trying to make sense out of the mishmash of property law made by all the Dennis Canon cases brought by ECUSA and its Dioceses.  The Diocese of South Carolina, for example, issued quitclaim deeds to all of its incorporated parishes while it was still in ECUSA, as were the parishes also, but ECUSA is now challenging the validity and efficacy of those deeds at the time they were made.  In other words, ECUSA agrees with the Orange County judge that no Diocese or bishop may waive the Dennis Canon -- even though those deeds were issued under the consent of the diocesan bishop and the diocesan standing committee.

So please do not put any credence in Canon I.7.3.  ECUSA's current leadership does not think it applies, and that is all, if you are a title company attorney, you have to rely upon in refusing to guarantee that the buyer of church property would hold title free and clear of the Dennis Canon.

But, say others, surely the Dennis Canon itself contains the language guaranteeing its release upon a proper sale (i.e., by a parish still in ECUSA at the time, and with the consents required by I.7.3)?  It says that so long as the parish remains "a part of, and subject to, this Church and its Constitution and Canons," the Canon places no limit upon its power "otherwise existing over such property ..." (emphases added). 

What does that little word "otherwise" accomplish?  It means the power the parish has over its property apart from the Dennis Canon.  But according to stalwart Episcopalians like Fr. Haller and David Booth Beers, the Dennis Canon  was not a "new" trust in 1979, but simply "expressed", or "formalized", a trust relationship that had existed since the very first property Canons in the 1860's (Fr. Haller), or since the Revolutionary War (Beers).

And that means: even apart from the Dennis Canon, the power of a parish over its own property was still subject to a pre-existing trust in favor of ECUSA. And only ECUSA, speaking through its only authorized body (the General Convention), could release that trust -- again, since (in Mr. Beers and 815's current view) no diocese, or diocesan, has the authority to speak on behalf of ECUSA. (Vide the prosecutions of the nine Fort Worth and Quincy bishops for daring to imply otherwise.)

So once again, as the attorney for a title company, you are asked to opine whether any sale of real property made by any Episcopal parish in Orange County since 1980 could have been free and clear of the pre-existing trust "formalized" by the adoption of the Dennis Canon in 1979. You have already concluded that, for the reasons stated above, Canon I.7.3 is of no assistance. And now, for the reasons just given, you have to conclude that the language of the Dennis Canon itself provides no assistance, either.

That is why this decision, if upheld, will place a cloud on the title of all such property in California.  (It is bad enough that it is effective now upon all such property in Orange County.)

And that is also why those who are not trained in law and the canons, and how they interact with each other when the issues are forced upon the civil courts, should forbear from wading into such complex waters.

Post scriptum: As a real property lawyer of more than forty years' experience, the only means of circumvention which I could suggest for a hapless buyer of property from an Episcopal parish subject to this ruling would be to convince the title company attorney that I (as buyer) gave reasonably equivalent value in exchange for the property, so that the Dennis Canon switched from the property sold to me to the funds the parish acquired in exchange for it. Alternatively, I could argue that I (as a secular buyer, again) had no notice of the Dennis Canon trust, and gave reasonably equivalent value for the property, so that I qualify as a bona fide purchaser whose acquisition without notice extinguished the Dennis Canon trust then and there. But either of those is an uphill argument to have to make, and could require either a contemporary appraisal of the property, or a court judgment, or both, to back up such a position. (It does solve the rummage-sale problem, at least: de minimis non curat lex.) And the inquiry would still have to be made (and satisfied) in each and every instance.

A Musical Break in Dispiriting Times

Somehow, with all the shame surrounding the lamestream media's handling of Benghazi (notice how the truth will shine like a beacon through the fog -- every time?), and the mixed news from all the church litigation that is ongoing, I cannot find it in me to write anything just now about either law or politics. There is little there to celebrate, and much to lament.

In such moments, I find it lifts up one's spirit to take refuge in music. One of my favorite pieces for the cello is a piece written over 130 years ago by the great Franco-German cellist and composer, Jacques Offenbach, called "Les Larmes de Jacqueline," or "The Tears of Jacqueline." Here is a superb version of it, arranged for cello and ensemble and played by Werner Thomas-Mifune (unfortunately no longer in distribution, but misattributed here to Jacqueline du Pré, no doubt due to the name of the piece):





A few years back, I imagined and wrote a short story about how such beautiful music may have come to be written (apart, that is, from the fact that one of Offenbach's daughters was named "Jacqueline" -- that seemed to be too easy). If, after hearing the piece, you would like to read it, the link is here.

Judge's Ruling in St. James Case Puts Cloud on Many Former Episcopal Properties in California

Judge Kim Dunning of the Orange County Supreme Court handed down on May 1 a surprise ruling in the case involving the property of St. James's parish in Newport Beach, and held that St. James could not retain title to its property after it voted in 2004 to disaffiliate from the Episcopal Church (USA). But due to the bizarre reasoning she used to reach that conclusion, the ruling -- if upheld on appeal -- would put a cloud on the title of every previous sale or disposition of any Episcopal parish property in the State since 1980.

The wrinkle in the St. James case -- a feature which distinguished it from the cases of two other parishes in the Diocese of Los Angeles (St. David's Hollywood; and All Saints, Long Beach) which Judge Dunning ruled last September could not retain their properties either -- was that St. James had been given an explicit letter from the Diocese in 1991 prior to purchasing the property at issue here, and undertaking the multi-million-dollar expense of developing it. The letter, written by then Canon to the Ordinary D. Bruce MacPherson (who resigned last year from his later jurisdiction as the bishop diocesan of Western Louisiana), told the parish (its text is reproduced on page 5 of the opinion linked above, and a facsimile of the original may be viewed on page 12 of the brief linked here; I have added the bold emphasis below):

The Rector, Wardens and Vestry of Saint James' Parish, Inc. of Newport Beach, are given permission by the Bishop of Los Angeles, the Rt. Rev. Frederick H. Borsch, to purchase and own the property on 32nd Street in Newport Beach, in the name of the Rector, Wardens and Vestry of Saint James' Parish, Inc. and not held in trust for the Diocese of Los Angeles, or the Corporation Sole.

On the strength of that letter, St. James said in its papers opposing the Diocese's motion for summary adjudication as to the ownership of the property, it had "changed its position to its substantial detriment" by investing millions of dollars in the acquisition and development of what was then (and still is) prime real estate in one of the wealthiest areas of Orange County.

But after St. James voted to disaffiliate in 2004, the current Bishop of Los Angeles, the Rt. Rev. J. Jon Bruno, reneged on the prior understanding and filed suit for all of the parish's properties -- including that which it had purchased in 1991. ECUSA added its voice to the property claims by filing a complaint in intervention. And now Judge Dunning has ruled that the letter, "as a matter of law ... was not effective to erase the trust under which the St. James Parish properties were held" (italics added).

The trust that the letter could not erase was, of course, the Dennis Canon, purportedly passed by General Convention in 1979 (the key records that would show its consideration and passage by both houses of that body have since mysteriously been lost, or else never existed in the first place). California courts have held that its unilateral declaration of a universal trust on all Episcopal parish properties everywhere was authorized by a specific statute which took effect in 1980 (Corporations Code Section 9142 [c]), and that the Dennis Canon has the force and effect of law in California as a consequence.

Now comes Judge Dunning, however, and rules that a diocesan bishop is without authority to release the trust on behalf of ECUSA, no matter what. She bases this conclusion on the authority of affidavits  submitted by ECUSA's well-paid historian, Prof. Bruce Mullin, and by the Rt. Rev. John Buchanan (provisional bishop of the rump diocese of Quincy), which contended that no one Episcopal bishop has any authority to alter or suspend the canons in his diocese, or to speak for or to bind ECUSA in any matter.

(Those opinions might come as a surprise to those bishops who have suspended the marriage canons in their diocese to provide a "pastoral response" to gay couples, or who have suspended the applicability of the canon requiring that all persons partaking of Holy Eucharist be baptized. And of course, no one said anything about the self-contradiction inherent in Bishop Buchanan's proclaiming, on behalf of ECUSA, that no one bishop may speak for ECUSA.)

So according to Judge Dunning's May 1 ruling, the trust imposed on all Episcopal parishes in California may only be dissolved in the manner by which it was imposed in the first place -- by a canon duly enacted by General Convention.

Do you understand now the huge impact this ruling could have if it is affirmed on appeal?

According to it, since no sale of any California property owned by an Episcopal parish ever received any release of the Dennis Canon by General Convention, then all of those properties that have been marketed and sold since 1980 -- parking lots, rectors' residences, and auxiliary properties, to say nothing of church buildings themselves -- are still subject to the Dennis Canon trust, no matter what any diocesan bishop or standing committee purported to allow. They were not the General Convention.

To reach her ridiculous conclusion, therefore, that no one diocesan or standing committee may waive or release the Dennis Canon on behalf of any Diocese, or on behalf of the national Church, Judge Dunning has managed at one stroke to cloud the titles of hundreds, perhaps thousands, of pieces of property sold and conveyed by Episcopal parishes in California since 1980.

And that is just one problem with her seriously flawed decision, which relies upon circular reasoning and deliberate misreadings of parish governing documents, as well. The decision is not only a travesty of justice, but as I say, it should make title companies all across California fear for all of the various policies they have issued to buyers of church property since 1980.

[UPDATE 05/03/2013: Of course, the impact of this ruling on the Diocese of Los Angeles itself has probably not yet dawned upon Bishop Bruno and his allies. It means that the Diocese will not be able to offer free and clear marketable title to any of the properties it has confiscated over the years from so many of its former parishioners: St. Luke’s in the Mountains, St. David’s, All Saints ... and now St. James. Unless and until the Diocese can obtain an amendment to the Dennis Canon from General Convention, the Court’s ruling means that all those properties remain impressed with a trust in favor of ECUSA, which cannot be modified, altered, waived or released in any way. Moreover, lenders will now not loan against ECUSA parish properties for purchase or construction unless General Convention agrees to subordinate its Dennis Canon to the loan in every case. Watch out what you ask for, Bishop Bruno! And good luck with recovering the millions you have spent on property fights.]

Making a mish-mash of the law of the several States in this fashion must be what ECUSA really wants, because that is just what it has systematically been doing over the past ten years (and more). It cares not about the effects or difficulties that its arguments may cause for other law-abiding property owners, just so that it can pursue its scorched-earth policy to let no disaffiliating parish go unpunished, anywhere.

And God save us from unthinking and unaware judges who have no clue to what they are holding, finding, or deciding. Save for a random and capable judge here and there, the majority of them have shown themselves less than equipped for the tasks which these cases present.