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Strike 2: TEC loses for a second time in Illinois with a precedent-setting victory for Quincy

Strike 2: TEC loses for a second time in Illinois with a precedent-setting victory for Quincy
Quincy Chancellor says: “This is a huge victory, there is no way to get around that.”

By Mary Ann Mueller
VOL Special Correspondent
July 26, 2014

SPRINGFIELD, IILLINOIS — The ACNA Diocese of Quincy (DIO Quincy) garnered a huge victory Thursday (July 24) when the Illinois Fourth District Appellate Court thoroughly rejected The Episcopal Church's appeal to the Illinois Adams County Eighth Judicial Circuit Court ruling in favor of the realigned Anglican diocese.

On Sept. 9, 2013, Associate Judge Thomas J. Ortbal ruled, “There is no provision in TEC's Constitution or Canons which require prior approval of a diocesan constitution or its canons. There is no express prohibition against withdrawal of a diocese.”

Then barely 10 days later, on Sept. 20, 2013, the Diocese of Chicago, which had reabsorbed the TEC Diocese of Quincy (TEC Quincy) on Sept. 1, 2013, filed a motion for a stay of judgment indicating its intention to appeal Judge Ortbal's ruling which gave sole title of bank accounts and diocesan property to DIO Quincy.

" We continue to maintain, despite that ruling, that the assets in dispute rightfully belong to the [TEC] Episcopal Diocese of Quincy, now reunited with the Diocese of Chicago," Bishop Jeffrey Lee (XII Chicago) posted to his diocesan website on Sept. 27, 2013. "This will ultimately be decided by the appellate court."

On Thursday (July 24), the Illinois Fourth District Appellate Court definitively decided that Judge Ortbal's ruling is to stand as written. The Diocese of Quincy, neither the Peoria Deanery nor the Episcopal Diocese of Chicago, had ownership of the approximately $4.5 million held by the PNC Bank, formerly National City bank; nor did the Diocese Chicago have the right to step in as the substitute appellant.

The Episcopal Church stated the banked money was to be used for the mission of The Episcopal Church and TEC Quincy; so in January 2009, at the specific request of TEC, the bank froze the distribution of $3,579,778 in financial assets of DIO Quincy. Those frozen assets could not be released and used until the legal ownership and leadership of the Diocese was resolved in the courts. Since then the original sum has grown due to on-going investments and accumulating interest. Income is still being generated, but the funds cannot be used until the court releases them.

When Judge Ortbal's original 2013 ruling was announced, some of the funds were freed up; however, The Episcopal Church quickly swooped in and requested they be frozen again until an appellate court ruled. Judge Ortbal ordered the release of $1.1 million so that DIO Quincy could pay bills and legal fees. Then the appellate court ordered the remaining $1.1 million to be frozen, along with the other assets, until it could render its decision.

"In sum, the evidence presented demonstrates title to the funds and real property lies with the [ACNA] Diocese," wrote Justice Carol Pope. "Following our review of the record, we cannot say the trial court's findings were arbitrary, unreasonable, or not otherwise based on the evidence. Nor can we say the opposite conclusion is clearly apparent in this case. As a result, the court did not err in finding in favor of the Diocese.”

Her judgment and opinion were concurred with by fellow Appellate Court Justices Lisa White and Thomas Harris. It was a unanimous ruling for the ACNA Diocese of Quincy with the Diocese of Chicago and The Episcopal Church coming up short. Again, the Diocese of Chicago/TEC argument that The Episcopal Church is hierarchical holds no weight in Illinois, a state that litigates church property issues according to neutral principles of law.

"This is a huge victory, there is no way to get around that," explained DIO Quincy Chancellor Tad Brenner. "This is the first time there has been an appellate court decision in this country that can be cited as a precedent in other jurisdictions. This is huge in terms of victory."

The "huge victory" came when the appellate court sustained Judge Ortbal's ruling that determined that The Episcopal Church is not hierarchical, as argued by a high powered and highly paid Episcopal Church legal team. If TEC is not hierarchical, the court can use neutral principles of law to determine land ownership and corporate diocesan leadership, thus allowing the court to look into the legality of paperwork and not deal with thorny theological questions or issues of church doctrine.

Therefore, according to the appellate court's decision, diocesan assets — real estate and monetary resources — legally belong to DIO Quincy. However, it will be at least four weeks before the appellate court's ruling is made final.

Illinois has a 28-day grace period before any appellate ruling rendered can be mandated to be enforced by the lower trial court, in this case the Eighth Judicial Circuit Court in Adams County, IL. This time frame allows the losing side — TEC — to file motions for a rehearing before the entire seven-member appellate court or to seek relief in a higher court, such as the Illinois Supreme Court or even the US Supreme Court.

The appellate court has to accept any case filed with it, whereas the Supreme Court — Illinois or US — can pick and choose which cases it will decide to hear and adjudicate.

In filing its appeal, The Episcopal Church claimed that the Adams County Circuit Court's ruling erred in three ways — by failing to defer to and enforce TEC's insistence that DIO Quincy had no power to withdraw from The Episcopal Church; by concluding the Court has no authority to enforce TEC's claim as to the identity of the "true" diocesan leadership; and by failing to enforce Dennis Canon commitments between TEC and DIO Quincy regarding the ownership of diocesan property.

The Episcopal Church's case rested primarily on its lynchpin hierarchical argument. For several weeks during the spring of 2013, TEC's legal team, headed by the Presiding Bishop's chancellor David Booth Beers, tried to convince Judge Ortbal that The Episcopal Church is top-down hierarchical so that the court would rule according to the "deference approach" in resolving church property disputes.

"A court applying the deference approach must defer to church hierarchy in the resolution of any ecclesiastical matter," the appellate court ruling explains.

Ever since 2006, the State of Illinois has joined a growing number of states that employ "neutral principles" in dealing with church property quarrels. "Illinois courts have adopted the 'neutral principles of law' approach, in which a court may examine church charters, constitutions and bylaws, deeds, state statutes and other evidence to resolve the matter in the same way as it would a secular, or nonreligious, dispute," the Chicago Appellate Court ruled eight years ago. "As a general rule, neutral principles may be applied to two types of church property disputes:  ownership disputes and control disputes."

Justice Pope explained that Springfield's Fourth Appellate Court could use neutral principles even if a church is hierarchical "so long as the court need not decide a religious matter involving church doctrine, polity or practice."

She also wrote: "...the deference approach is unavailable where the determination of a church's hierarchical structure is not easily discernible."

Last year, Eighth Circuit Court Judge Ortbal waded through 15,000 pages of trial transcripts, canons, documents, briefs, motions, and case law to discern that TEC's hierarchy is indiscernible.

“In sum, reviewing the governing documents from a secular perspective, there is no explicit or clearly delineated expression of TEC's claim that the General Convention is the ultimate authority or judicatory of the Church,” he ruled last September.

"Contrary to the Church's [TEC] position, this is not a 'documents only' case. In addition to reviewing numerous exhibits, the trial court heard an extensive amount of conflicting testimony and argument from the parties and made factual finding therefrom," Justice Pope wrote in praising Judge Ortball's tenaciousness and grit in doing the voluminous research necessary in coming to his decision. "In this case, much, if not most, of the 15,000-page record on appeal deals with the Church's [TEC] structure, history and polity."

The appellate court also had to deal with TEC's insistence that DIO Quincy's trustees and corporate officers were not truly diocesan officers and that the Diocese did not have the legal right to rewrite the diocesan constitution and canons nor make changes to the articles of incorporation to facilitate its disaffiliation from The Episcopal Church in 2008.

In 1893 the Diocese of Quincy was originally incorporated as a not-for-profit corporation called "The Trustees of Funds and Property of the Diocese of Quincy" with the original corporate bylaws stating the organizational purpose was "to receive, manage, and disburse all funds and property acquired by it for use of the Diocese of Quincy of the Protestant Episcopal Church in the United States according to the expressed intention of the donors or as directed by the Synod [(the diocesan council)], in accordance with the Constitution and Canons of the Diocese."

In 2005, under the leadership of Bishop Keith Ackerman (VIII Quincy), DIO Quincy was incorporated as a non-profit corporation as "the Diocese of Quincy", reflecting a corporate name change that was registered to do business in the State of Illinois. Its stated purpose was "to carry out church and religious functions and operations as a duly constituted diocese, a constituent member of the Anglican Communion and the one Holy, Catholic and Apostolic Church."

The Episcopal Church did not interfere with that incorporation process, nor could TEC meddle in DIO Quincy's incorporation process because no member of the larger Episcopal Church — General Convention, Executive Council or the officers of the Domestic and Foreign Missionary Society — served as a director or trustee of DIO Quincy.

Illinois is unique in the fact that churches can incorporate either as a religious organization — under the Religious Corporation Act; or as a non-profit corporation — under the General Not For Profit Corporation Act of 1986, where the diocese has the right under Illinois non-profit corporation law to withdraw from voluntary associations. The Episcopal Church disagrees with this. TEC's firm mantra is that individuals can leave the fold, but dioceses and churches cannot depart, even if they want to move laterally within the Anglican Communion.

The appellate court also upheld the trial court's understanding of the Dennis Canon.

“The [trial] court finds the Dennis Canon is, as between Diocese of Quincy and The Episcopal Church, a far cry from the ‘explicit mutual understanding of the property rights’” Judge Orbital ruled last September. “The court does not find that the law of Illinois would establish an implied trust based upon the evidence before the court. The court has concluded that the supreme and ultimate authority of the General Convention over the property of the Diocese of Quincy cannot be constitutionally determined.”

"An examination of the evidence reveals nothing to demonstrate an express trust, an implied trust, or any other interest vested in the Church. As stated, neither the deed nor the Discretionary Agency Agreement provides for an express trust in favor of the Church. Further, our review of the Diocese's constitution and canons does not suggest diocesan assets were ever impliedly held in trust for the Church." Justice Pope wrote. "In addition ... the Dennis Canon does not apply to property owned by a diocese."

She found that the Dennis Canon specifically "provides 'parish' property is held in trust for the Diocese and [the Episcopal] Church and restricts a parish's ability to dispose of its property," but that "the Church's canons do not contain similar language with respect to diocesan property being held in favor of the Church."

Since the Dennis Canon purported reach doesn't extend to diocesan property, neither the Diocese of Chicago nor The Episcopal Church can touch DIO Quincy’s Diocesan House in Peoria.

"OK ... what next?" Chancellor Brenner wonders expecting that The Episcopal Church will not let the Fourth Appellate Court ruling stand unchallenged. "We know that TEC never gives up, even when they should."

Even though the appellate court has rendered its opinion, DIO Quincy is still dealing with two more circuit court property lawsuits filed by the Diocese of Chicago in both the 10th Judicial Circuit Court (Peoria) and the 14th Judicial Circuit Court (Rock Island).

“In our society, we invest a great deal of energy in an impartial legal system designed to help parties settle matters about which they cannot agree,” Bishop Lee said last November when filing the Peoria lawsuit. “Although we are prepared to litigate this matter, ultimately we still hope that God will use even these legal proceedings to bring us to a place of reconciliation and mutual respect in Christ.”
Bishop Lee is hoping to apply the Dennis Canon to parish properties in Macomb (St. George); Galesburg (Grace); Rock Island (Trinity); Moline (Christ Church); and Peoria (St. Andrew's Cathedral) and is relying on the Illinois circuit courts to make it happen.

"For the Diocese of Quincy the foundation of this trial has been prayer. When I consider the amount of time and money that has been expended by the Episcopal Church in its numerous litigations I think of the many people who have given sacrificially for the purpose of extending the Kingdom both here and abroad,” Bishop Ackerman commented following the appellate court's decision. "I sincerely doubt that they would see litigation against fellow Christians to be good stewardship."

“We have left God in charge of our defense in the litigation brought against us — we have simply prayed, carried out the work of the Kingdom, and tried to be faithful to our calling,” Bishop Alberto Morales, OSB, (Quincy IX) added. “We are so grateful for God's protection, for the work of the judges in ruling in our favor, and for the tireless work of our gifted legal team.”

"I am grateful that the Church of England did not sue the Episcopal Church for seizing church property in the late 18th century. I am glad that the Roman Catholic Church did not spend 450 years in litigation with the Church of England over property," Bishop Ackerman continued. "At some point the Episcopal Church needs to be gracious and set an example. New converts come to a Church not because of litigation but because of Jesus. Litigation is the antithesis of evangelization, and is not one of the Gifts of the Holy Spirit."

Mary Ann Mueller is a journalist living in Texas. She is a regular contributor to VirtueOnline

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