No CV IN THE FOURTEENTH COURT OF APPEALS OF TEXAS AT HOUSTON PRESBYTERY OF NEW COVENANT, INC., Appellant,

Transcription

1 No CV ACCEPTED cv FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 10/13/2015 8:41:45 PM CHRISTOPHER PRINE CLERK IN THE FOURTEENTH COURT OF APPEALS OF TEXAS AT HOUSTON PRESBYTERY OF NEW COVENANT, INC., Appellant, v. FIRST PRESBYTERIAN CHURCH OF HOUSTON, Appellee REPLY BRIEF OF APPELLANT On Appeal from the 234th Judicial District Court Of Harris County, Texas Trial Court No Reagan M. Brown, TBN Norton Rose Fulbright US LLP 1301 McKinney, Suite 5100 Houston, Texas (713) ; (713) [Fax] Adam P. Schiffer, TBN Kenneth P. Held, TBN Penelope Nicholson, TBN Schiffer Odom Hicks & Johnson PLLC 700 Louisiana Street, Suite 2650 Houston, Texas (713) ; (713) [Fax] ATTORNEYS FOR APPELLANT PRESBYTERY OF NEW COVENANT, INC. Oral Argument Requested

2 IDENTITY OF PARTIES AND COUNSEL 1. Appellant: Presbytery of New Covenant, Inc. Represented at trial and on appeal by: Adam P. Schiffer Texas State Bar No Kenneth P. Held Texas State Bar No Penelope Nicholson Texas State Bar No SCHIFFER ODOM HICKS & JOHNSON PLLC 700 Louisiana Street, Suite 2650 Houston, Texas (713) (713) (fax) Reagan M. Brown Texas State Bar No NORTON ROSE FULBRIGHT US LLP 1301 McKinney, Suite 5100 Houston, Texas (713) (713) [Fax] i

3 2. Appellee: First Presbyterian Church of Houston Represented on appeal and at trial by: Kent C. Krause CRADDOCK DAVIS & KRAUSE LLP 3100 Monticello Avenue, Suite 550 Dallas, Texas (214) (fax) Thomas Paterson SUSMAN GODFREY L.L.P Louisiana Street, Suite 5100 Houston, Texas (713) (fax) Lloyd Lunceford TAYLOR, PORTER, BROOKS & PHILLIPS 451 Florida Street, 8 th Floor Baton Rouge, Louisiana (225) (fax) Represented on appeal by: David Gunn dgunn@beckredden.com Erin H. Huber ehuber@beckredden.com BECK REDDEN LLP 1221 McKinney Street, Suite 4500 Houston, Texas (713) (fax) ii

4 3. Other Parties to State Court Case Presbyterian School Represented by: Kristin L. Smith Tony L. Visage BRACEWELL & GIULIANI LLP 711 Louisiana Street, Suite 2300 Houston, Texas (713) (fax) iii

5 TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL... i TABLE OF CONTENTS... iv INDEX OF AUTHORITIES... vi INTRODUCTION... 1 ARGUMENT... 3 I. FPC Has Failed to Negate the Existence of a Trust Based on the 1925 PCUS Constitution... 3 A. FPC Devotes Much of Its Brief to False Issues B. The Summary Judgment Evidence at Least Raises Fact Issues about Intent to Create a Trust The language of the 1925 PCUS Constitution itself reflects intention to create a trust FPC s 1938 renewal of its charter reflects an intent to be bound by the trust contained in the 1925 PCUS Constitution Historical facts reflect an intent to create a trust C. FPC Cannot Explain Away the Testimony of Its Expert, Professor Stanley Johanson, Concerning the Meaning and Effect of Paragraph D. FPC Cannot Rescue Its Summary Judgment by Distorting the Meaning of the Phrases Dissolution or Otherwise Cease to Exist E. Nor Can the Summary Judgment Be Saved by an Absurd Interpretation of the Phrase, No Disposition Has Been Made of Its Property F. Masterson Does Not Mandate Affirmance of the Summary Judgment iv

6 II. The Trial Court Had No Jurisdiction: FPC Is Wrong When It Says that the Covenant Agreement and the GRD Procedure Had Nothing to Do with the Property Dispute A. The GRD Procedure Expressly Addresses Property Issues B. FPC Sabotaged and Abandoned the GRD Procedure III. The Permanent Injunction Unconstitutionally Prohibits the Presbytery From Taking Ecclesiastical Action A. The Permanent Injunction Tramples on the Presbytery s Constitutional Right to Take Ecclesiastical Action Mandated by Presbyterian Doctrine B. None of the Arguments Made by FPC Can Cure the Unconstitutionality of the Permanent Injunction FPC relies on cases that are not on point The cases cited by the Presbytery show that the Permanent Injunction is unconstitutional FPC cannot cure the unconstitutionality of the Permanent Injunction by pointing to language used by other trial courts FPC misuses Reverend Cole s testimony from the temporary injunction hearing C. The Permanent Injunction Is Unconstitutional Regardless of What Happens to FPC s Church Property CONCLUSION AND PRAYER CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE v

7 INDEX OF AUTHORITIES Cases Carrollton Presbyterian Church v. Presbytery of South Louisiana of Presbyterian Church (USA), 77 So.3d 975 (La. App. 2011)...28 Cumberland Presbyterian Church v. North Red Bank Cumberland Presbyterian Church, 58 Tenn. App. 424, 430 S.W.2d 879 (1968)... 14, 15 Gilette v. United States, 401 U.S. 437 (1971)... 26, 29 Green v. United Pentecostal Church Intern., 899 S.W.2d 28 (Tex. App. Austin 1995, writ denied)... 27, 28 Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680 (1989)... 26, 29 Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C., 132 S. Ct. 694 (2012)... 27, 28, 29 Isbell v. Williams, 705 S.W.2d 252 (Tex. App. Texarkana 1986, writ ref d n.r.e.)... 6 Jerusalem Presbyterian Church v. Mission Presbytery, 2008 WL , No CV (Tex. App. San Antonio 2008, no pet.)...15 Jones v. Wolf, 443 U.S. 595 (1979)...18 Masterson v. The Diocese of Northwest Texas, 422 S.W.3d 594 (Tex. 2013)... 3, 15, 18, 24 McGill v. Johnson, 799 S.W.2d 673 (Tex. 1990)... 6 Myrick v. Moody Nat. Bank, 336 S.W.3d 795 (Tex.App. [1st Dist.] 2011, pet. denied)... 5 vi

8 Ohio Civil Rights Comm n v. Dayton Christian Schools, Inc., 477 U.S. 437 (1971)... 26, 29 Pottorff v. Stafford, 81 S.W.2d 539 (Tex. Civ. App. El Paso 1935, writ ref d)...5, 6 Presbytery of the Covenant v. First Presbyterian Church of Paris, Inc., 552 S.W.2d 865 (Tex. Civ. App. Texarkana 1977, no writ)... 14, 15, 28 Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696 (1976)... 19, 26, 27, 28 United States v. Seeger, 380 U.S. 163 (1965)... 26, 29 Windwood Presbyterian Church, Inc. v. Presbyterian Church (U.S.A.), 438 S.W.3d 597 (Tex. App. Houston [1st Dist.] 2014, no pet.)...10 Constitution U.S. CONST. AMEND. I... passim vii

9 INTRODUCTION In its Brief of Appellee, First Presbyterian Church of Houston ( FPC ) spends much of its time knocking down straw men by responding to arguments that Appellant Presbytery of New Covenant, Inc. ( the Presbytery ) is not even asserting. Indeed, FPC does not even reach the Presbytery s key arguments until page 32 of its Brief. By burying the real issues, FPC apparently hopes to obfuscate those issues. When FPC does finally respond to the arguments that the Presbytery is actually making concerning jurisdiction, the injunction, and the summary judgment, FPC s responses lack merit. Nowhere in its Brief does FPC even acknowledge the stringent standards for granting a motion for summary judgment or the de novo standard of review applied on appeal. Thus, FPC does not acknowledge that all that the Presbytery has to do in order to obtain reversal of the summary judgment is to demonstrate that there is at least one genuine issue of material fact with respect to at least one element of FPC s claims. See Br. App t In reality, the Presbytery has raised multiple issues of fact. The Presbytery showed in its Brief of Appellant and will further show in this Reply Brief that it established the following as a matter of law, or at least raised fact issues as to the following, and thus the summary judgment should be reversed: 1

10 In 1925, the PCUS Constitution was amended to create an irrevocable trust in favor of the Presbytery with respect to the property of dissolved congregations. The amendment created the trust by providing that if a church is dissolved or otherwise ceases to exist, its property goes to the Presbytery. In 1938, FPC manifested its intent to be bound by the irrevocable trust contained in the 1925 PCUS Constitution by adopting the PCUS Constitution in its corporate charter. The trust was irrevocable because it was adopted before 1943 (the year that the Texas Trust Code was enacted) and contained no mention of revocability. In 1983, PCUS and UPCUSA reunited to form PC(USA). PC(USA) s Articles of Agreement made it the successor-in-interest to both PCUS and UPCUSA. The Articles did not change preunification ownership principles, and so existing trusts (like the trust created by the PCUS Constitution in 1925 and adopted by FPC in 1938) continued to exist. In 1984, FPC joined the reunited denomination (PC(USA)), but passed a resolution reaffirming its adherence to all property provisions in the prior PCUS Constitution. Thus, FPC affirmed 2

11 that it continued to be bound by the irrevocable trust created in the 1925 PCUS Constitution. ARGUMENT I. FPC HAS FAILED TO NEGATE THE EXISTENCE OF A TRUST BASED ON THE 1925 PCUS CONSTITUTION. A. FPC Devotes Much of Its Brief to False Issues. The Presbytery is not relying on the trust provisions added to the PCUS Constitution in 1982/83 (section 6-3) to support the existence of a trust in this appeal. Nor is the Presbytery relying on a similar provision included in the PC(USA) Constitution in 1983/84 (G ). FPC knows that the Presbytery is not relying on these provisions because it admits as much on page 28 of its Brief of Appellee. Nevertheless, FPC devotes pages of its Brief to supposedly refuting an argument that the Presbytery is not even making. See Br. App ee Similarly, FPC begins the Argument section of its Brief by quoting the reaction of a Presbytery representative to the Texas Supreme Court s decision in Masterson v. The Diocese of Northwest Texas, 422 S.W.3d 594 (Tex. 2013). The representative (a non-lawyer) said that the effect of the Texas Supreme Court decision was to strike down the trust clause. CR As FPC undoubtedly knows, the reference to the trust clause was a reference to the trust clause added to the 1982/83 PCUS Constitution and carried forward into the 1983/84 PC(USA) Constitution (both of which used the word trust ). The reference was not to the 3

12 clause originating in the 1925 PCUS Constitution (which did not use the word trust and instead created a trust using other language). Thus, the quote that FPC has chosen to make a focal point of its Brief was referring to a provision that the Presbytery is not even relying on in this appeal. In spite of FPC s repeated references to this sound bite, it has no legal relevance. These are just a few examples of the many arguments in FPC s Brief that have nothing to do with the arguments that the Presbytery is actually asserting on appeal. When FPC finally begins responding to the arguments that the Presbytery really is making, FPC s responses cannot withstand scrutiny. B. The Summary Judgment Evidence at Least Raises Fact Issues about Intent to Create a Trust. The Presbytery does agree with FPC that intent to create a trust is essential to creating a trust. But, of course, intent is the quintessential fact issue and is normally not appropriate for summary judgment. Here, the summary judgment evidence at least raises fact issues about the existence of intent to create a trust. 1. The language of the 1925 PCUS Constitution itself reflects intention to create a trust. In 1925, the PCUS Constitution (the Book of Church Order) was amended to add a contingent trust obligation to the denomination s constitution via Paragraph 158, which states: 4

13 158 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. App. C; CR 4279 (emphasis added). Under Texas law, No particular form of words is required to create [a] trust, if it is reasonably certain as to the property, its object, and the beneficiary. Pottorff v. Stafford, 81 S.W.2d 539, 540 (Tex. Civ. App. El Paso 1935, writ ref d). Thus, a trust can exist under Paragraph 158 even though the word trust is not used as long as the intent to create a trust is sufficiently clear and the other requirements for a trust are satisfied. Trusts are construed in accordance with the rules of contract construction. See Myrick v. Moody Nat. Bank, 336 S.W.3d 795, 802 (Tex.App. [1st Dist.] 2011, pet. denied) (courts interpret trust instruments the same way as wills, contracts, and other legal documents ). Intent with respect to a trust is normally determined by first look[ing] to the four corners of the trust instrument. Id. The intent to create a trust expressed in Paragraph 158 could not be clearer. Paragraph 158 creates a classic trust/beneficial interest situation in which one party 5

14 is entitled to property unless and until certain events occur, and then, if and when those events occur, the property must be conveyed to another party. See McGill v. Johnson, 799 S.W.2d 673, 675 (Tex. 1990) (recognizing validity of trust arrangements that involve contingent remaindermen). More specifically, under Paragraph 158, an individual church is entitled to hold legal title to church property as long as it is a member of the denomination, but if the church is dissolved by the Presbytery or otherwise ceases to exist as a member of the denomination, then all the church s property must be conveyed to the Presbytery (unless, of course the church and the Presbytery have reached some other agreement regarding the property). Indeed, what else could Paragraph 158 possibly mean when it says that [i]f a church shall be dissolved by the Presbytery, or otherwise cease to exist,..., those who hold the title to the property shall deliver, convey, and transfer to the Presbytery... all property of the church? Nor can there be any doubt that Paragraph 158 sets out with sufficient certainty both a description of the property ( all property of the church ) and the beneficiary (the Presbytery). Thus, Paragraph 158 satisfies all the requirements of Texas law relating to the creation of an express trust. See Pottorff, 81 S.W.2d at 540. Moreover, because the trust was created before 1943 (the year that the Texas Trust Act became effective) and because no power of revocation was expressly reserved, the trust created by Paragraph 158 is irrevocable. See Isbell v. Williams, 6

15 705 S.W.2d 252, 255 (Tex. App. Texarkana 1986, writ ref d n.r.e.) (before the adoption of the Texas Trust Act in 1943, trusts were considered to be irrevocable unless an expressed power of revocation was reserved in the terms of the trust. ); Br. App ee 20 n.3 (admission by FPC that before a trust was presumed to be irrevocable ). 2. FPC s 1938 renewal of its charter reflects an intent to be bound by the trust contained in the 1925 PCUS Constitution. FPC incorporated as a Texas non-profit corporation in Its 1887 charter provided in relevant part that the purpose for which said Corporation is founded is the support of the public worship of God according to the form of government of The Presbyterian Church in the United States [PCUS]. App. D; CR (emphasis added). Through this language, FPC plainly expressed its intent to follow the form of government of the PCUS, which was set forth in the Book of Church Order (the PCUS Constitution). As of 1887, the Book of Church Order did not contain Paragraph 158 or an equivalent provision, but as of 1925 it did. App. C; CR 4232, See 4-5, supra. In 1938, FPC renewed its corporate charter without amendment. App. E; CR This written action by FPC is at least relevant evidence, if not dispositive evidence, of whether, as of 1938, FPC had expressed its intent to be bound by Paragraph

16 3. Historical facts reflect an intent to create a trust. FPC s Brief recites various historical facts that supposedly show that FPC never intended to create a trust. See Br. App ee But FPC s Brief tells only part of the story. There is summary judgment evidence reflecting that the denomination believed (and intended for its 1925 Constitution to reflect) that church property existed for the benefit of the entire denomination. See 8-9, infra. That summary judgment evidence indicates that, under the PCUS Constitution, it was permissible for individual congregations to hold title to their own property and even to buy, sell, and lease their own property as long as those congregations remained part of the denomination. However, if a congregation chose to leave the denomination or was dismissed, then its property reverted to the denomination. 1 This summary judgment evidence at least raised fact issues about intent to create a trust that precluded summary judgment. See 8-9, infra. There is strong evidence that the addition of Paragraph 158 to the PCUS Constitution in 1925 was intended to create a beneficial trust interest in church property based on various unsuccessful efforts to eliminate that beneficial trust interest over the ensuing years. After all, why would there be any need to get rid of an interest that did not exist? 1 FPC mistakenly relies on its right to buy, sell, or lease its property as establishing that no trust existed. As Professor Johanson testified, the Presbytery s beneficial interest in the property became effective only if the church were dissolved or otherwise ceased to exist. See 10, infra. 8

17 In 1932 and then again in 1938, the PCUS General Assembly proposed amendments that would have prohibited a beneficial interest by the Presbytery in local church property. CR However, a majority of the presbyteries voted against this amendment both times. Id. In 1944, the digest of the General Assembly stated that in the final analysis the right in and to all property belongs to the Church as a whole the entire denomination. CR That overriding principle was reinforced in 1950 when the General Assembly rejected local churches proposed amendments to their corporate charters that attempted to hold property for their own sole and exclusive benefit as contrary to the church s historic practice. CR In 1953, the General Assembly emphasized that local church property cannot be held in a manner that is in violation of the obligation of such congregation to the body of the Presbyterian Church in the United States as established by the Constitution of such Church. CR 4039 (emphasis in original). 2 The bottom line is that there is ample summary judgment evidence of historical facts that reflect that Paragraph 158 of the 1925 PCUS Constitution was 2 As for the language in the 1887 charter relied on by FPC, the charter characterizes the powers granted as incidental to the purpose of the Corporation, which is the public worship of God according to the form of government of The Presbyterian Church in the United States. App. D; CR (emphasis added). Thus, the corporation s powers to hold property must be construed with reference to the requirements of the PCUS form of government, which places limitations on those powers. 9

18 intended to create a beneficial trust interest in church property. 3 If there is also summary judgment evidence pointing the other way, that only means that a fact issue exists about intent, and the summary judgment should be reversed. C. FPC Cannot Explain Away the Testimony of Its Expert, Professor Stanley Johanson, Concerning the Meaning and Effect of Paragraph 158. At his deposition, FPC s expert, Professor Stanley Johanson, agreed with the Presbytery that if FPC were dissolved or otherwise ceased to exist, then the Presbytery would have a beneficial interest in FPC s property and would have the right to compel delivery, conveyance, or transfer of that property to the Presbytery. CR 4374, Professor Johanson s conclusion was based on the language in Paragraph requiring that, upon the dissolution of a church, those who hold title to the [church] property (e.g., FPC) must deliver, convey, and transfer to the Presbytery... all property of the church. App. C; CR 4232, FPC cites a statement in Windwood Presbyterian Church, Inc. v. Presbyterian Church (U.S.A.), 438 S.W.3d 597, 599 (Tex. App. Houston [1 st Dist.] 2014, no pet.) that the PCUS did not have any trust provisions in its constitution at the time of Windwood s incorporation [in 1971]. ). Br. App ee 34. Apparently, however, no one contended that Paragraph 158 of the 1925 Constitution created a trust because the court never considered that issue. Instead, the court focused exclusively on the trust provision included in the PCUSA Book of Order in See 438 S.W.3d at Although most church trust litigation has focused on that or similar trust clauses, trusts could be created by other clauses too. 4 Paragraph 158 was re-numbered as Section 6-3 in the version of the Book of Church Order used at Professor Johanson s deposition. At different times, the substance of Paragraph 158 has been numbered as Section 6-3 and as Section 6-4. App. J. For clarity, this Brief consistently refers to the substantive provision by its original number. 10

19 FPC accuses the Presbytery of stretch[ing] Professor Johanson s testimony (Br. App ee 34), but the professor said what he said, and the Presbytery has quoted him correctly in its Brief. Compare Br. App t 12, with CR The Presbytery submits that Professor Johanson just drew the only logical conclusion from the language of Paragraph 158. It is true that, in addition to the specific testimony that Professor Johanson gave with respect to Paragraph 158, he also gave broad general testimony that FPC holds all of its property as full exclusive owner, without any trust of any kind in favor of the presbytery or the national church. See Br. App ee 34, citing CR However, a review of the cited portions of his testimony reveals that he was basing those opinions on Texas law [s]ince 1943, the year in which the Texas Trust Code was enacted. CR As discussed, the Presbytery is contending that a trust came into existence as a result of the insertion of Paragraph 158 into the 1925 PCUS Constitution and as a result of FPC s adoption of that Constitution in See 4-7, supra. It is also true that about a year before his deposition, Professor Johanson signed an affidavit that could be viewed as inconsistent with his later testimony. See CR , cited in Br. App ee However, that inconsistency cannot negate his subsequent testimony. The bottom line is that Professor Johanson gave testimony that supports the Presbytery s contention that Paragraph 158 created a 11

20 beneficial trust interest in church property requiring FPC to convey that property to the Presbytery if FPC were ever dissolved or otherwise ceased to exist. Professor Johanson s testimony even if contradictory provides another reason to reverse the summary judgment. D. FPC Cannot Rescue Its Summary Judgment by Distorting the Meaning of the Phrases Dissolution or Otherwise Cease to Exist. FPC argues that Paragraph 158 comes into play only when a church is dissolved by the Presbytery or otherwise cease[s] to exist, and that neither circumstance is present in this case, so Paragraph 158 is irrelevant. FPC also argues that neither circumstance would be present even if FPC left the denomination because, of course, FPC does not want to lose its property if it attempts to withdraw from or is expelled from PC(USA). FPC s arguments turn on the meaning of dissolved and cease to exist. The definitions that FPC tries to pin on those terms are simplistic and improperly ignore the context in which they are used. See Br. App t At the very least, fact issues exist about the meaning of the terms dissolved and cease to exist that should have precluded summary judgment. Id. FPC glibly tells this Court that the term dissolved is easily understood, but then never tells the Court what the term means. See Br. App ee According to FPC, dissolved should be given its ordinary meaning (whatever 12

21 that is) because courts should give words their ordinary meaning unless a specialized meaning is clear from the instrument itself. Br. App ee 37. But it is clear from the face of Paragraph 158 itself that the term dissolved was being used in a specialized sense when it was added to the PCUS Constitution in 1925, and that a jury would need help in understanding what the term meant. FPC concedes that, under Paragraph 158, dissolution must occur as a result of action taken by the Presbytery. See Br. 33 (Paragraph 158 applies... if the presbytery acts to dissolve a local congregation ). A fact-finder would need guidance in figuring out what it meant for a Presbytery to dissolve a church, how that would happen, and what the consequences would be. Rev. Dr. Hooker (the Presbytery s expert on Presbyterian terms, customs and usages) provided that guidance in his deposition testimony. His testimony demonstrates that dissolution and otherwise cease to exist are terms that have special meaning within the Presbyterian denomination. The term dissolved refers to the termination of the relationship between the local church and the denomination. Rev. Hooker testified that the act of dissolving means to bring the existence of [a] congregation to a conclusion, at least as far as being a PCUSA congregation is concerned. CR 4387, Otherwise cease to exist means that the local church ceases to exist as a congregation that is a member of the 13

22 PC(USA) denomination. CR Both terms focus on the cessation of existence as a PCUSA congregation. CR 4391, FPC insists that it cannot have been dissolved or have cease[d] to exist since it is alive and well and active. See Br. App ee 36. But as Dr. Hooker explained, the terms dissolved and cease[d] to exist refer to the termination of the church s existence as a member of PC(USA). When a married couple gets a divorce, both the husband and the wife continue to exist, of course, but they no longer exist as a married couple; their marriage has been dissolved. A similar situation exists when a Presbyterian church is dissolved by a presbytery. The church has cease[d] to exist as a member of PC(USA). See Cumberland Presbyterian Church v. North Red Bank Cumberland Presbyterian Church, 58 Tenn. App. 424, 430 S.W.2d 879, (1968) (equating ceased to exist and dissolution with congregation s withdrawal from denomination). FPC says that [c]ourts have faced [the] language [in question] before, and discusses several out-of-state cases. Br. App ee 38. Curiously, FPC does not even cite the relevant Texas authority dealing with that language. 5 In Presbytery of the Covenant v. First Presbyterian Church of Paris, Inc., 552 S.W.2d 865 (Tex. Civ. App. Texarkana 1977, no writ), a majority of the members of the local 5 Moreover, the out-of-state authority cited by FPC is distinguishable. None of those cases involved the PCUS, and so all involved different provisions. 14

23 Presbyterian church sought to withdraw from PCUS and take church property with them. The local church and presbytery then sued each other. The court of appeals ruled in the presbytery s favor, holding that the presbytery alone has power to organize new churches, receive and dismiss churches, and dissolve churches. Id. at 868. Apparently interpreting the same provision of the PCUS Constitution that is involved in this case, the court went on to conclude: Even if the action of withdrawal had amounted to a dissolution of the local church, the PCUS Constitution provides that upon such a dissolution the church property shall be transferred to the appropriate presbytery. Id. at 872. In other words, the court reached the same conclusion that the Presbytery is urging the Court to reach here. 6 See Jerusalem Presbyterian Church v. Mission Presbytery, 2008 WL , No CV (Tex. App. San Antonio 2008, no pet.) (citing First Presbyterian Church of Paris and stating that in accordance with the Book of Order, the presbytery assumed control of property of local church following dissolution of local church). In Cumberland Presbyterian Church v. North Red Bank Cumberland Presbyterian Church, a Tennessee appellate court reached the same conclusion that the Texarkana court of appeals reached in First Presbyterian Church of Paris. The 6 Although some portions of First Presbyterian Church of Paris may have been affected by the Masterson decision, Masterson did not involve Paragraph 158 or other similar provisions. 15

24 Tennessee court, which was also apparently interpreting the same provision of the PCUS Constitution that is at issue here, held that when a local congregation... withdraw[s] from the church... the congregation has ceased to exist, and there has been a dissolution of the local congregation, with the result that title to property of the local church passes to the parent organization for the advancement of the purposes of the trust. 430 S.W.2d at 882. The Presbytery submits that its interpretation of Paragraph 158 is correct as a matter of law. But at the very least, faced with conflicting evidence concerning the meaning of various terms, the trial judge should have permitted a jury to determine the parties intent. E. Nor Can the Summary Judgment Be Saved by an Absurd Interpretation of the Phrase, No Disposition Has Been Made of Its Property. FPC argues that Paragraph 158 does not apply because that provision only applies where no disposition has been made of [church] property, and FPC has made a disposition of [its] property. Br. App ee 40. FPC explains that it 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. Id. But, as discussed, the word dissolved, as used in Paragraph 158, is a term of art that has a specialized theological meaning. See 12-14, supra. 16

25 Dissolved, as used in the PCUS Constitution written in 1925, certainly does not have the same specialized meaning that it has in today s corporate laws. 7 As the Presbytery explained in its Brief of Appellant, the phrase no disposition has been made of its property must refer to the possibility that a presbytery and a local church might reach a mutual agreement concerning what is to be done with church property in connection with the dissolution of the church because any other interpretation would lead to absurd results. See Br. App t If the phrase gave the local church the unilateral right to dispose of its property, then the rest of the provision would be nullified since any departing local church would always make other disposition of its property (i.e., take it with them), rather than allowing the presbytery to keep the property. Courts should not consider a provision in isolation or render a provision meaningless, but should instead consider each provision relative to the agreement as a whole and harmonize them. See id. FPC argues that it is entitled to dispose of its property unilaterally under Paragraph 158 because, under the PCUS Constitution, it has the unilateral right to buy, sell, and mortgage property without seeking approval from the Presbytery or any other higher authority. See Br. App ee 40. But the issue is not whether FPC 7 When discussing the meaning of dissolved earlier in its Brief, FPC does not argue that the corporate statutory meaning should apply (although it does hedge its bets with an ambiguous footnote). See Br. App ee & n.6. 17

26 generally has the right to buy, sell, and mortgage property as it chooses; the issue is whether FPC has the right to take church property with it if it leaves the denomination. Because the entire point of Paragraph 158 is to make it the norm for church property to pass to the presbytery when a church is dissolved, it would make no sense to give individual churches the right to make unilateral decisions concerning what is to happen to church property upon dissolution. The Presbytery submits that its interpretation of the phrase no disposition has been made of its property is right as a matter of law. However, at the very least, the phrase is ambiguous and not the proper subject for summary judgment. F. Masterson Does Not Mandate Affirmance of the Summary Judgment. In Masterson v. Diocese of Northwest Texas, 422 S.W.3d 594 (Tex. 2014), the Texas Supreme Court held that, in deciding church property disputes, Texas generally applies the neutral principles of law approach, as articulated by the U.S. Supreme Court in Jones v. Wolf, 443 U.S. 595 (1979). Under that approach, courts decide church property disputes based on the same neutral principles of law that apply to non-church property disputes. Application of neutral principles of law here demonstrates that the trial court erred in granting summary judgment. See Br. App t As Professor Johanson s testimony reflects, Paragraph 158 (as adopted by FPC in 1938) created a beneficial trust interest in church property that required FPC to convey its 18

27 property to the Presbytery if the church were dissolved or otherwise ceased to exist. Because the trust was created before 1943, it is irrevocable. The property that is the subject of the trust is reasonably clear (all church property) as is the beneficiary (the Presbytery). Under neutral principles of law, a trust exists or at the very least there is a fact question about whether a trust exists. The summary judgment should be reversed. II. THE TRIAL COURT HAD NO JURISDICTION: FPC IS WRONG WHEN IT SAYS THAT THE COVENANT AGREEMENT AND THE GRD PROCEDURE HAD NOTHING TO DO WITH THE PROPERTY DISPUTE. FPC does not deny that where the right to control of church property turns on the [r]esolution of... religious disputes, the courts cannot get involved because it is the prerogative of ecclesiastical and not civil tribunals to resolve such disputes. Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696, (1976). See Br. App ee 42. Nor does FPC deny that the Covenant Agreement and the GRD Procedure are inherently ecclesiastical. See Br. App ee Rather, FPC contends that the Covenant Agreement and GRD Procedure have nothing to do with property issues. See Br. App ee 43. FPC is incorrect. A. The GRD Procedure Expressly Addresses Property Issues. In the Covenant Agreement, FPC and the Presbytery 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 19

28 Presbytery of New Covenant. App. L; CR 1466, By agreeing to follow the GRD Procedure, the parties obviously made that procedure a part of the Covenant Agreement. And contrary to FPC s assertions, the GRD process does cover property disputes. The inclusion of property issues is hardly surprising since the GRD Procedure deals with the relationship between FPC and the Presbytery generally, and what happens to church property is an inherent part of the relationship between the church and the Presbytery. FPC tells this Court that the GRD Procedure does not even refer to property until pages 7-8 (Br. App ee 46), but that is not true. On the very first page of the Procedure after the Prologue, the GRD Procedure addresses property issues and makes what happens to church property an overarching aspect of the process. App. K, p. 3; CR The GRD Procedure states that congregations who faithfully follow [the GRD Procedure] as a way of discerning if God would have them affiliate with another Reformed denomination are not engaged in schism and... therefore... G (Property of a Church in Schism) does not apply to congregations faithfully following this process. Id. Section G gives the Presbytery the right to allocate church property to the faction of a congregation that it believes represents the true church. App. G, pp. 3-4; CR Thus, by following the GRD Procedure, FPC could avoid the risk of having the Presbytery assume control over its property. 20

29 The first page of the GRD Procedure after the Prologue also addresses what happens to church property if a congregation decides not to follow the GRD Procedure: If a session chooses not to follow this Gracious Reconciliation and Dismissal process or abandons these processes before completion, then the Alternative Process for a Church Seeking Dismissal from the Presbyterian Church (U.S.A.) will apply. App. K, p. 3; CR The Alternative Process is set forth in the last three pages of the GRD Procedure. App. K, pp ; CR Pursuant to a section entitled, Disposition of Church Property, the church s property may be sold, transferred, or leased to a third party, or used for another church, among other things. App. K, p. 13; CR Again, FPC could avoid that disposition of its property if it followed the GRD Procedure and refrained from abandoning that procedure. Thus, the GRD Procedure set forth what would happen to church property if a congregation followed the Procedure and also what would happen to church property if the Procedure were not followed or were abandoned. By signing the Covenant Agreement, FPC agreed that the disposition of its property would be governed by the ecclesiastical GRD Procedure. 8 8 FPC noted in an internal memo that the Covenant Agreement is a contract in which both sides agree to follow the GRDD and abide by its term for the relationship between the congregation and presbytery. CR See also CR 1493, Video, Learning Session No. 3 at 21:40 (attorney member of congregation states, We signed a contract with Presbytery that we are going under this [GRD] policy. So we re contractually bound at this point. ) 21

30 Further, it is contrary to the language of the GRD Procedure and quite frankly absurd for FPC to suggest that discerning God s will had nothing to do with the property issues. Both immediately before and immediately after the GRD Procedure sets forth the property ramifications of the process, the GRD Procedure stresses the importance of the will of God, the Mission of God, and pray[er]. App. K, p. 3; CR In the section of the GRD Procedure that immediately follows the discussion of property issues, the GRD Procedure states: In all matters relating to this subject, discerning answers to the following three questions will be deemed paramount. Id. The GRD Procedure then sets out three questions that deal with where God is leading. Id. The entire GRD Procedure is suffused with an ecclesiastical quest to discover God s will, including with respect to the property aspects of the dispute. B. FPC Sabotaged and Abandoned the GRD Procedure. Nor is there merit to FPC s argument that FPC did not abandon the GRD process and therefore the property provisions in the GRD Procedure are irrelevant. As a preliminary matter, under the ecclesiastical abstention doctrine, civil courts do not even have jurisdiction to consider the abandonment issue because it is a part of the inherently ecclesiastical GRD process. See 26-27, infra; Br. App t Under that doctrine, courts cannot review or involve themselves in such processes 22

31 because doing so would entangle them in internal church matters and religious practices in violation of the First Amendment. Id.; U.S. CONST. AMEND. I. Moreover, as explained in the Presbytery s Brief of Appellant, FPC did, in fact, abandon the GRD procedure. See Br. App t Accordingly, the disposition of church property is governed by the Alternative Process. App. K; CR 1424, , 4153, FPC faults the Presbytery for not doing more to pursue the reconciliation process itself, but Reverend Cole explained that the Presbytery could not do more because of the TRO that FPC had obtained. 3 RR FPC points out that the TRO expired, but it was replaced with an equally chilling temporary injunction. CR The truth is that FPC did not just abandon the GRD process; it torpedoed that process by sneaking down to the courthouse, filing a lawsuit, and obtaining an ex parte TRO in its quest to obtain through litigation what it had failed to obtain through the voluntarily-agreed GRD Procedure. See App. M. The trial court should have granted the Presbytery s plea to the jurisdiction and dismissed this case. The court lacked jurisdiction because the parties agreed to resolve their disputes through a religious process over which the court had no authority. Injecting itself into that process impermissibly entangled the court in an inherently ecclesiastical matter in violation of the First Amendment. 23

32 III. THE PERMANENT INJUNCTION UNCONSTITUTIONALLY PROHIBITS THE PRESBYTERY FROM TAKING ECCLESIASTICAL ACTION. A. The Permanent Injunction Tramples on the Presbytery s Constitutional Right to Take Ecclesiastical Action Mandated by Presbyterian Doctrine. FPC has missed the point. If this Court were to rule that FPC has unfettered ownership of the property involved in this lawsuit and that the Presbytery has no beneficial trust interest in that property, then obviously the Presbytery would not try to change the locks, whether an injunction is in place or not. Br. App ee 53. The Presbytery strongly believes that FPC is not entitled to the injunction granted by the trial court. However, the Presbytery s primary concern is not with the physical, propertyrelated aspects of the injunction. Rather, the Presbytery s primary concern is that the injunction prohibits it from taking ecclesiastical action mandated by its religious beliefs in violation of its First Amendment rights. In Masterson, the Texas Supreme Court held that what happens to the relationship between a local congregation that is part of a hierarchical religious organization and the higher organization... is an ecclesiastical matter over which civil courts generally do not have jurisdiction. 422 S.W.3d at 607. The Permanent Injunction violates that principle. By precluding the Presbytery from dissolving FPC as a PC(USA) church or taking other ecclesiastical action with respect to FPC, the trial court did, in fact, unconstitutionally involve the civil court 24

33 system in determining what happens to the relationship between a local congregation [FPC] that is part of a hierarchical religious organization and the higher organization [the Presbytery and PC(USA)]. See App. A; CR If FPC were to decide that it was going to worship Buddha or Muhammad instead of Christ, there would be no doubt that the Presbytery could dissolve FPC as a PC(USA) church for violating a core tenet of the Presbyterian faith, and any interference by the courts would violate the First Amendment. Something comparable has occurred here. As the Presbytery explained in its Brief of Appellant, FPC violated a fundamental tenet of PC(USA) s religious doctrine when FPC rejected the religious principle that the right in and to all property within [the denomination s] ecclesiastical jurisdiction belongs to the Church as a whole the entire denomination. CR See Br. App t 41. Ecclesiastical matters fall within the exclusive province of churches, not courts. See 26-27, infra. It is difficult to imagine a matter that is more inherently ecclesiastical than deciding which churches are entitled to belong to a particular denomination and which are not. Because the injunction intrudes into this constitutionally protected area and limits the Presbytery s right to make this vitally important decision, the injunction violates the First Amendment. 25

34 B. None of the Arguments Made by FPC Can Cure the Unconstitutionality of the Permanent Injunction. 1. FPC relies on cases that are not on point. None of the cases cited by FPC comes close to holding that it is constitutional for a court to limit the right of a higher ecclesiastical body to exercise its authority to dismiss or discipline a church. See Br. App ee Two of the cases Gilette v. United States, 401 U.S. 437, 457 (1971) and United States v. Seeger, 380 U.S. 163, 185 (1965) are conscientious objector cases interpreting conscription statutes. Ohio Civil Rights Comm n v. Dayton Christian Schools, Inc., 477 U.S. 437, 457 (1971), is an abstention case dealing with whether a federal district court should have enjoined a state proceeding. Hernandez v. Commissioner of Internal Revenue, 490 U.S. 680, 693 (1989), is a tax case about whether certain expenses qualified as charitable donations. These cases have little, if anything, to do with the issues involved in this appeal and were apparently chosen for sound-bite value. 2. The cases cited by the Presbytery show that the Permanent Injunction is unconstitutional. The cases cited by the Presbytery stand for the principle that it violates the First Amendment for courts to interfere in matters that are inherently ecclesiastical. Perhaps most relevant is Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696 (1976). In that case, the Illinois Supreme Court had overturned the defrocking of a bishop and the reorganization of dioceses. Id. at The U.S. Supreme 26

35 Court reversed after concluding that the Illinois court had engaged in improper judicial interference with church matters in violation of the First Amendment. Id. at 698. In reaching that conclusion, the U.S. Supreme Court noted that decisions about such matters as church organization involve issue[s] at the core of ecclesiastical affairs. Id. at 721. The U.S. Supreme Court reversed even though [r]esolution of the religious dispute over [the bishop s] defrockment... determine[d] control of [church] property. Id. at 709. The U.S. Supreme Court s decision in Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C., 132 S. Ct. 694, (2012), is also instructive. The Supreme Court held that it would violate the First Amendment to permit a person qualifying as a minister to recover against a church for employment discrimination because allowing recovery would interfere[] with the internal governance of the church and its right to shape its own faith and mission. Id. at 706. Intervening in a decision to dismiss a church from a denomination would intrude even more. See also Green v. United Pentecostal Church Intern., 899 S.W.2d 28, 30 (Tex. App. Austin 1995, writ denied) (decision to terminate minister was purely ecclesiastical matter" with which courts could not interfere). In the present case, the PC(USA) Constitution gives presbyteries the authority to decide whether a church should be dissolved as a PC(USA) congregation. CR (Section G a). Texas courts have recognized 27

36 this exclusive right of the presbyteries. See First Presbyterian Church of Paris, 552 S.W.2d at 868. The Permanent Injunction s interference with this exclusive ecclesiastical right violates the First Amendment. Just as in Serbian, Hosanna- Tabor, and Green, the courts must accept the ecclesiastical decision as final. 3. FPC cannot cure the unconstitutionality of the Permanent Injunction by pointing to language used by other trial courts. FPC argues that this Court should allow the injunction to stand because other trial courts have used similar injunctive language. Apparently, a Louisiana trial court came up with that language, and other trial courts have copied it. See Br. App ee 50 & n.7, 52. But the fact that other courts may have used unconstitutional language does not cure the problem. Calling an injunction narrowly focused and constitutional does not make it so. See Carrollton Presbyterian Church v. Presbytery of South Louisiana of Presbyterian Church (USA), 77 So.3d 975, (La. App. 2011) (holding injunction constitutional without citing a single U.S. Supreme Court case). Tellingly, FPC does not deny that the injunction would limit the Presbytery s right to dissolve FPC as a member of PC(USA) or to take other ecclesiastical action. Nor can the so-called savings clause save the Permanent Injunction. The clause does not cure the fatal defects in the injunction for all the reasons set forth in the Brief of Appellant. See Br. App t The clause s reference to nonpretextual ecclesiastical cause is especially problematic. As the Supreme Court 28

37 held in Hosanna-Tabor, strictly ecclesiastical decisions are the church s alone to make, and it is unconstitutional for courts to analyze allegedly pretextual motives. Id. at 132 S.Ct. at FPC misuses Reverend Cole s testimony from the temporary injunction hearing. FPC also tries to salvage the Permanent Injunction by wrongly suggesting that Reverend Cole basically agreed to it. FPC cites testimony that Reverend Cole gave at the temporary injunction hearing, not at the hearing for a permanent injunction, which is the subject of this appeal. See Br. App ee 54, citing 3 RR Parties often are willing to agree to restrictions on a temporary basis during the pendency of litigation, even though they would strongly oppose such restrictions on a permanent basis. Moreover, circumstances (or at least the Presbytery s awareness of the circumstances) changed drastically after the temporary injunction hearing held in September At the time of the hearing, the Presbytery was unaware that, just one month before, the FPC had, without informing the Presbytery, passed a resolution purporting to revoke any express trusts between FPC and PC(USA). See CR As explained in Reverend Hooker s affidavit (attached as App. N), that action was fundamentally contrary to the polity of PC(USA), made it impossible 9 Hosanna-Tabor defeats FPC s pretextual argument. The cases cited by FPC (Ohio Civil Rights Comm n, Gilette, Seeger, Hernandez) are not on point. See 26, supra. Moreover, Hosanna-Tabor is the Supreme Court s latest pronouncement and trumps the other cases. 29