THE ISSUE OF THE PROPERTY
(revised Dec. 20)

Yesterday the Episcopal Church and the Church diocese (Episcopal Church in South Carolina) entered a motion in the circuit court to dismiss the independent diocese's (Diocese of South Carolina) Complaint of November 19, 2017, claiming payments from TEC/TECSC under the "Betterments Statute." This raised again the thorny issue of property that I think leaves many people in confusion of what this property business is all about. I would like to try to clarify the issue.

Once again, I need to remind everyone I am not a lawyer or legal expert and have no official connection to any diocese. I am only a layman giving my personal opinions, not advice.

I would define property as real estate, buildings, financial accounts, and furnishings, paraphernalia and the like.

There are two groups of properties at hand: 

1-properties of the diocese (as accounts, Camp St. Christopher, diocesan house on Coming St., the bishop's residence on Smith St.), and 

2-properties of the local parishes (as land, buildings, and accounts).

The pre-schism diocese had two separate legal entities incorporated under South Carolina law. 

---The first was the diocese itself. This was established in 1973 explicitly acceding to the Constitution and Canons of the Episcopal Church (in 2010, DSC revised the incorporation charter to remove reference to the Episcopal Church). 

---The second was the Trustees of the Protestant Episcopal Church in the Diocese of South Carolina. This set up a Board of Trustees to control the assets of the diocese including land, buildings, and accounts. Technically, the Board of Trustees owns the real and financial assets of the diocese. The Board is elected by the diocesan convention.

THE DENNIS CANON.

The Dennis Canon was adopted by the General Convention of the Episcopal Church in 1979 and has been church law ever since. "Canon" means church law.

It was named for Walter Dennis, a deputy in the GC of 1979 who was later bishop suffragan of New York.

The resolution was D024. According to the journal of the 1979 GC, (find it here ), the canon originated with the Committee on Canons of the House of Bishops (GC has two houses, House of Bishops and House of Deputies). The resolution was adopted by the House of Bishops and sent to the House of Deputies where it was also adopted making it effective. The Dennis Canon was added to the official Constitution and Canons of the Episcopal Church as Canon Title I, 7.4.

The Dennis Canon had two main parts:

---Trusteeship.

All Real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission or Congregation is located. The existence of this trust, however, shall in no way limit the power and authority of the Parish, Mission or Congregation otherwise existing over such property as long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.

Thus, the canon clearly states that all local properties are held in trust for two units, the Episcopal Church and the local Episcopal Church diocese. This is true even if the deed is held by the local church. In effect, this leaves the property with the local congregation as long as that group remains in the diocese AND the Episcopal Church. If the local congregation resolves to leave the diocese AND/OR the Episcopal Church, they cannot take the land and buildings without the permission of the trustees, the Church AND the diocese.

---Immediate validity.

The several Dioceses may, at their election, further confirm this trust declared under the foregoing Section 4 by appropriate action, but no such action shall be necessary for the existence and validity of the trust.

The Dennis Canon is immediately operative throughout the entire Episcopal Church whether or not the local dioceses adopt it. (DSC did adopt it, formally, in 1987, and voted to delete it by resolution of convention in 2010.)

The Dennis Canon established the Church and the local dioceses as trustees of parish properties. For a discussion of the legal term "trustee" see this article .

The Diocese of South Carolina explicitly acceded to the Dennis Canon from 1987 to 2010. The right of a diocesan convention to nullify a church law is highly dubious. The Church side would argue that he Dennis Canon remained in effect regardless of a vote of the diocesan convention.

What about the quit claim deeds?

In November of 2011, Bishop Lawrence issued quit claim deeds to all of the parishes of the diocese. These "quit" or surrendered any claim of trusteeship the diocese had on the properties. Whether he had the right to do this is highly dubious since it directly violated Episcopal Church law. Even if he did this legitimately, he could not surrender the Episcopal Church part of the trusteeship. Under the Dennis Canon, both the Church and the diocese are trustees of the property. I do not see what right Lawrence would ever have to surrender the trusteeship of the national Church over the local properties.

What will now happen to the quit claim deeds, at least of the 29 parishes to be returned to the Church, is an interesting question that a lawyer would need to explain to us. It seems to me that the deeds were illegal to start with because they directly violated the Dennis Canon.

THE MOTION TO DISMISS.

The TEC/TECSC Motion (Dec. 15, 2017) to Dismiss DSC's Complaint (Nov. 19, 2017) dealt with issues of property.

---The Motion pointed out that all diocesan property is actually held by the Trustees of the Diocese (diocesan property is not subject to the Dennis Canon that relates only to local church properties). The Trustees were not named as Defendants in the suit. The Betterments Statute holds that the owner of the property must repay the occupants for "improvements." The legal owner of the diocesan property is the Board of Trustees, not the Episcopal Church or the diocese (the diocese is a separate corporation under SC law). So, as I see it, if DSC wants payments for improvements in the diocese, they would have to sue the Board of Trustees.

---Local parish properties are held for the trustees as per the Dennis Canon. They do not exist independently in and of themselves or separate from the two trustees. Therefore, the parishes cannot sue their trustees. It would be the same as suing oneself. 

---The Motion went on to remind the court that the South Carolina Supreme Court held that the Episcopal Church in South Carolina is the rightful successor of the pre-schism diocese. (Three of the five justices: Beatty, Pleicones, and Hearn.) This means the court recognizes TEC and TECSC as the trustees of the 29 named local parish properties. In other words, the court recognized the legal standing of the Dennis Canon.

One pertinent question involved in all of this was whether the Episcopal Church's Dennis Canon was automatically valid in South Carolina. There were two sides of this. 

1-One side held that sovereignty rested in the national Church. The Episcopal Church was hierarchical, that is, dioceses were subordinate to the body of the Church which was governed by the General Convention. All laws of the GC were immediately and equally applicable to all of the dioceses. In this view of church structure, the Dennis Canon was automatically enacted in the diocese of South Carolina. Thus, it did not matter what state law said. The hierarchical nature of the Church trumped that. In the Aug. 2 SCSC decision, Justices Pleicones and Hearn promoted this view. It is now crucial to the Church side that the courts recognize the Episcopal Church as hierarchical.

2-The other side held that the diocese should be judged first under state corporate and property laws. The legal approach called "Neutral Principles" held that courts had to approach property disputes in religious bodies "neutrally" and render judgments under the applicable laws. Under South Carolina law, the deed holder must enact a trust for the trustee. A trust cannot be imposed from the outside on the deed holder. In this view, the Dennis Canon could not be automatically valid because it had to be enacted by the individual deed holders, the parishes. Former Chief Justice Jean Toal made a major point of this in her All Saints decision of 2009 and again, in the Aug. 2, 2017 decision. In that decision, Justices Beatty and Kittredge took a different view. They agreed that the Dennis Canon was not valid in SC in and of itself, but both held that the 29 parishes had acceded to the Canon on their own, thus enacting trusts for the Church and the Church diocese it in their particular cases. Where these two split was on the question of whether the parishes could then revoke their accessions to the Canon, Beatty no and Kittredge yes. This left a majority of three (Pleicones, Hearn, Beatty) agreeing that the Dennis Canon applied in SC, at least to the 29 parishes.

Bottom line---South Carolina state court recognized the validity of the Dennis Canon as the parishes enacted it. This means that the state of South Carolina now recognizes the Episcopal Church and the Episcopal Church in South Carolina's trust control over the local properties, at least the 29 parishes.

So, what does this mean on a practical level for the 29 parishes that remain under the Church and the Church's diocese?

It means that unless the circuit court intervenes on DSC's side, something that is most unlikely, or the U.S. Supreme Court overturns the SCSC Aug. 2 decision, something that is extremely remote, the Episcopal Church diocese will regain everyday control over at least the 29 properties. These include all the now independent parishes of Charleston.

So, who "owns" the property of the old diocese in South Carolina? There are two sets of properties, diocesan and parochial. On the diocesan, the state supreme court did not act and, in fact, left standing the Temporary Injunction that Judge Goodstein had issued giving the independent diocese possession of the pre-schism diocesan entity. However, the state supreme court recognized the federal court's jurisdiction over the federal trademark issue, and at least implied that the federal court would settle the issue of who owns the diocesan properties. A decision of the U.S. District court in the case of vonRosenberg v. Lawrence should settle the issue of which side owns the entity of the old diocese. Given the fact that federal trademarks take precedent over state, it is likely the federal court will side with the Episcopal Church.

On the parochial question, to my knowledge all of the parishes "own" their own properties through deeds. The Episcopal Church and the Church diocese do not own the properties and have never claimed to own them. What they claim, and the state supreme court has affirmed, is that they have trust control over the properties. So, it is not really a question of who "owns" the property. It is a question of who controls the property. The Church and its diocese maintain that they control the property. The state high court has agreed, at least for 29 of the 36 parishes in question.

There are 13,000 communicants in these 29 parishes. When the Church regains the keys to the churches, which I think is just a matter of time, these people will have to decide whether to stay with the buildings and recognize the Episcopal Church bishop's authority, or leave the buildings and form separate communities in exile presumably following Bishop Lawrence.

I hope this helps you get a clearer picture of the murky issue of the properties. In the Episcopal Church, all local property, even if held by deed, is under the trusteeship of the diocese and the national church. All this really means on an everyday level is that the local congregation cannot dispose of the property without permission of the diocese and cannot take the property out of the Episcopal Church.

The leaders of DSC misled their people into thinking they had the right to violate Episcopal Church law. The high court of South Carolina has ruled that this was wrong. The property remains with the Episcopal Church. That is the reality, however upsetting it may be, in South Carolina now. The leaders of the schism misled the people and now these people have to deal with the consequences. They have my prayers and best wishes.