THE WEST BAPTIST CHURCH v. CHURCH OF GOD OF THE GARDEN STATE INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5428-07T15428-07T1

THE WEST BAPTIST CHURCH,

a Not for Profit Corporation,

Plaintiff-Appellant,

v.

CHURCH OF GOD OF THE GARDEN STATE,

INC., and CHURCH OF GOD, CLEVELAND,

TENNESSEE, USA,

Defendants-Respondents,

and

EDMUND J. HAMPTON,

Defendant/Third-Party

Plaintiff-Respondent,

and

CHURCH OF GOD NEW VISION, INC.,

Defendant/Third-Party

Plaintiff-Respondent/

Cross-Appellant,

v.

JUAN MARQUEZ,

Third-Party Defendant-Cross

Respondent.

_________________________________________________

 
Argued December 2, 2009 - Decided

Before Judges Cuff and Payne.

On appeal from Superior Court of New Jersey

Chancery Division, General Equity Part,

Cumberland County, Docket No. C-30-06.

David F. Raczenbek argued the cause for

appellant The West Baptist Church, a Not

for Profit Corporation, and for cross-respondent Juan Marquez (Casarow,

Kienzle & Raczenbek, attorneys; Mr. Raczenbek, of counsel and on the brief).

Katherine M. Morris argued the cause for

respondent Edmund J. Hampton and respondent/ cross-appellant Church of God New Vision, Inc. (Cooper, Levenson, April, Niedelman

& Wagenheim, attorneys; Ms. Morris, on

the brief).

James J. Madden argued the cause for

respondents Church of God of the Garden

State and Church of God, Cleveland,

Tennessee, USA (Madden & Madden, attorneys;

James J. Madden and Patrick J. Madden,

on the brief).

PER CURIAM

Plaintiff, claiming to be the West Baptist Church of Vineland, New Jersey, appeals from an order of a judge of the Chancery Division, General Equity Part, (1) dismissing its action seeking to invalidate the transfer of property formerly owned by the "original" West Baptist Church to The Church of God of the Garden State (COG-Garden State), the State organization overseeing the Church of God New Vision of Vineland (COG-New Vision), for the exclusive use and benefit of the church's parent organization, the Church of God, Cleveland, Tennessee, U.S.A. (COG-Tennessee), (2) determining that said transfer was valid and appropriate, and (3) granting clear title to the property to the Church of God of the Garden State. Defendant, third-party plaintiff, COG-New Vision, the occupier of the property, cross-appeals from the dismissal with prejudice of its claim of fraud against third-party defendant, Juan Marquez, the former pastor of COG-New Vision and, at time of trial, the present pastor of the allegedly reconstituted West Baptist Church.

I.

This matter has a lengthy history. The West Baptist Church was formed on April 4, 1895 as an independent church having a congregational form of governance. It thus could own property in its own name without any present or future ownership interest by a parent religious organization, as would be the case if a hierarchical church structure existed. On September 25, 1952, it acquired 15.3 acres of property including a tabernacle and parsonage located at 61 West Chestnut Avenue, Vineland. In or around 1978, defendant Edmund J. Hampton became the church's pastor. Over time, membership in the church declined until, in 1994, five members remained, including Pastor Hampton and his wife. The church's debt, including unpaid taxes, was considerable.

On July 17, 1994, the five remaining members of the church voted unanimously to dissolve the fellowship of the West Baptist Church and to "[s]ell all church properties including land, buildings and contents of buildings." Notice that the property was for sale attracted the interest of COG-New Vision, a church that lacked a permanent place of worship, and its pastor, Juan Marquez. Negotiations over price ensued and, in balloting conducted on January 15, 1995, the remaining members of the West Baptist Church voted to accept COG-New Vision's offer of $225,000 for the property. A resolution memorialized by Abner F. Ney, Jr., the sole remaining trustee of West Baptist Church stated:

BE IT RESOLVED that approval was made on the sale of 15.3 acres, two buildings, and inventoried contents of these two buildings located on Tabernacle Lane; Vineland, New Jersey for the sum of $225,000.00 to Rev. Juan Marquez, Church Of God New Vision; Vineland, New Jersey.

BE IT FURTHER RESOLVED that Rev. Edmund Hampton is authorized to sign and execute any documents for the West Baptist Church.

BE IT FURTHER RESOLVED that Rev. Edmund Hampton and Charlotte Hampton, church treasurer, were appointed to represent the West Baptist Church at the settlement of said property.

On January 15, 1995, four members of the West Baptist Church voted unanimously for "dismissal of [the] four members from the church roll."

A contract for sale of the property was entered in late July 2005 by Pastor Hampton, on behalf of the West Baptist Church, and Pastor Marquez, on behalf of COG-New Vision. The contract required a refundable deposit of $10,000, established September 29, 1995 as the closing date, and contained a mortgage contingency clause that provided "if Buyer has not obtained a commitment within 60 days, the parties may mutually agree to extend this contingency period for an additional period of time."

Difficulties in obtaining mortgage financing led to a first amendment to the contract of sale, extending the time for obtaining a mortgage. In a second amendment, executed only by Pastors Hampton and Marquez, COG-Garden State was added as a co-buyer; and in a third-amendment, executed by Pastors Hampton and Marquez on October 18, 1995, the parties agreed that, upon payment of an additional $10,000, COG-New Vision could take possession of the property. Thereafter, COG-New Vision would be responsible for payment of utilities, taxes and maintenance costs. The agreement provided that the total $20,000 deposit could be used by West Baptist Church to pay outstanding utility and tax bills. It also established an estimated closing date of November 30, 1995, subject to extension by mutual agreement, and it provided that COG-New Vision was entitled to return of the $20,000 if the property were sold to another entity.

Sale of the property never occurred, but COG-New Vision remained in possession. Over time, Nye died, and contact was lost with the other church member, the church pianist. Thus, the Hamptons remained as the sole known former members of the church. At various times, Daniel Hoffman, attorney for West Baptist Church, sought authorization to commence an eviction action against COG-New Vision. Authorization was refused by Pastor Hampton. As Pastor Hampton testified at the trial of this matter,

I said no, we want to keep this on a Christian level. We are working with them. Anything we can do for the Church of God New Vision to have this property, we want them to have it.

Pastor Hampton's position was "[n]o eviction under any circumstances." He testified that "our part was to be gracious. Our part was how can we help them, that kind of thing." In July or August 1997, attorney Hoffman was discharged from further representation of West Baptist Church.

In the ensuing years, various efforts were made by COG-New Vision to amass the funds necessary to purchase the property. On August 13, 2000, a church member, Ricky Torres, contributed $5,000 for the purchase of the property. The funds were not utilized for that purpose. In a letter dated May 8, 2001, addressed to Pastor Marquez, with a copy sent to the COG-Garden State, Torres recited a series of questionable financial transactions undertaken by Pastor Marquez, including misuse of his $5,000 donation, and he demanded its return. Subsequently, Torres filed a formal complaint against Pastor Marquez with the church. Following a preliminary investigation, an ecclesiastical trial was held on June 7, 2001 and a three-year audit was demanded. However, Pastor Marquez refused to relinquish the church's books and, on the day of the scheduled audit, June 10, 1995, Marquez signified that he was leaving the COG by stapling his credentials to the church door. Although Pastor Marquez sought to conduct a service at the church on June 17, he was not permitted to do so. As required by COG-Garden State, Marquez then quit the parsonage and, after living for several months in the area with his son-in-law, Marquez and his wife moved to Florida. The $5,000 donated by Torres was repaid to him by Marquez by means of a loan from his brother-in-law.

In July 2005, Marquez returned to New Jersey, taking employment as a truck driver. Upon Marquez's return, he established a small unaffiliated church congregation of approximately eight members and, after a failed attempt to purchase other property for his fledgling church, he commenced a further effort to acquire the West Baptist Church property, which COG-New Vision had continued to occupy, rent free, with the acquiescence of Pastor Hampton. Pastor Marquez justified his actions at trial by testifying that he was called upon by God to "find Pastor Hampton and tell him to pass on the ministry to us and that we continue with the church." After consulting with a member of Pastor Marquez's congregation, Fernando Cruz, Pastor Marquez sought out Pastor Hampton.

Through an internet search, Pastor Marquez found an address for Pastor Hampton. One of Pastor Hampton's neighbors gave Pastor Marquez the name of Pastor Hampton's former employer, Ranch Hope for Boys, and that employer directed Pastor Marquez to Pastor Hampton's present church and parsonage in Alloway Township. At the time, Pastor Hampton was in poor health, having had three heart attacks and open-heart surgery for a valve replacement. He continued to suffer from dizzy spells, fainting spells, tiredness, and listlessness. His wife had died in 2002.

In late October 2005, Pastor Marquez and his wife appeared, unannounced, at Pastor Hampton's door. Although Pastor Hampton did not initially recognize Pastor Marquez, after Pastor Marquez introduced himself, he was warmly received. Pastor Marquez and his wife were invited by Pastor Hampton into his home, where conversation turned to the COG-New Vision and to the condition of the West Baptist Church property. Pastor Hampton testified at trial that Pastor Marquez had stated

he was no longer with the Church of God New Vision, that he had gone on to Florida. And he said that he had noticed at the former West Baptist Church that the property was in very poor condition and that the congregation was really at an all-time low. And he said I would like to restore all that under the name of the West Baptist Church, bring it back up like it was before. And so then I said, well, is the pastor who is there now going to meet with us? . . . I thought it odd that he wasn't with Pastor Marquez, you know. And, as I say, first his answer to that was no. . . . [B]ut then he didn't elaborate as to why the pastor wouldn't be meeting with us. And I never pursued it. Which is probably my fault.

According to Pastor Hampton, Pastor Marquez did not disclose that his plan was to evict the COG-New Vision from the church and parsonage and, at most, permit the church to conduct services at the tabernacle when it was not being used by Pastor Marquez's congregation, upon payment of rent a course of conduct directly contrary to Pastor Hampton's wishes. As he testified: "We never wanted eviction in the beginning. After so many years elapsed time, why would I want an eviction now if we never evicted all those years?"

Nonetheless, operating under the mistaken impression that Pastor Marquez planned to merge the two congregations, Pastor Hampton stated that Pastor Marquez was "the guy for the job." According to Pastor Marquez, Pastor Hampton stated:

Pastor Marquez, since I met you back in the years, I know by God that you are the man of God for that place. So at this time, at this precise moment, you are the pastor of West Baptist Church.

Both Pastor Hampton and Marquez agreed that the arrangement should be memorialized by a writing. A letter composed by Marquez and his wife, dated October 28, 2005 stated:

I, Rev. Edmund J. Hampton, Pastor of West Baptist Church and the only living trustee of the corporation appoint Rev. Juan Marquez as the new Pastor and trustee of the West Baptist Church Corporation and all its assets.

May the Lord bless and prosper the church under the leadership of Pastor Juan Martinez and its new Board of Trustees consisting of

1. Rev. Juan Marquez

2. Rev. Maria Marquez

3. Fernando Cruz

4. Ernesto E. Ortiz

5. Rebecca Rivera

6. Osvaldo Mori

By this means, I resign as the Pastor of the West Baptist Church and all responsibilities of the same. Effective immediately Rev. Juan Marquez will be taking care of all businesses concerning West Baptist Church and its properties located on 61 W. Chestnut Avenue, Vineland, NJ 08360 on this day of the Lord October 28, 2005.

However, Pastor Marquez did not immediately present the letter to Pastor Hampton for his execution. Instead, Pastor Marquez contacted his sister, who worked in City Hall, in an effort to confirm that Pastor Hampton had never deeded the property to anyone. She contacted the tax office, and on November 17, 2005, Pastor Marquez was furnished a copy of a deed confirming that ownership of the property remained with West Baptist Church. Additionally, Pastor Marquez ordered a title search "to make sure there was no judgment against the property." Title was found to be clear.

Thereafter, an appointment was made with Pastor Hampton to obtain his execution of the October 28 letter. That meeting occurred on November 30, 2005, at which time the agreement was signed by Pastor Hampton and notarized. Testimony disclosed that the trustees named in the October 28 letter had been appointed by Pastor Marquez immediately after he had reached a verbal agreement with Pastor Hampton. With the exception of Pastor Marquez and his wife, the trustees were not known to Pastor Hampton, who may have been introduced to some of them, but had not conversed otherwise with them.

After meeting with Pastor Hampton, Pastor Marquez drafted a letter, dated November 30, 2005, to Roberto Torres, the pastor of COG-New Vision, terminating the contract for sale of the West Chestnut Avenue property and charging rent for the parsonage of $1,250 per month the exact amount of rent being paid on Marquez's home and $850 for the church, retroactive to November 1, 2005. The letter also notified Pastor Torres that he had until December 31, 2005 to quit the parsonage and that Pastor Marquez was willing to make arrangements for the COG-New Vision's continued use of the tabernacle, when not in use by Pastor Marquez and his congregation. All church property was to remain on site. Pastor Marquez's letter was followed by a December 13, 2005 letter from William Gilson, as attorney for the newly reconstituted West Baptist Church, terminating the contract of sale between West Baptist Church and COG-New Vision, providing a notice to quit the parsonage, and offering a shared usage agreement with respect to the tabernacle.

On January 3, 2006, Pastor Hampton received a call from COG-New Vision trustee Thomas Earl stating that "there was trouble now at the Church of God because of Pastor Marquez coming on the way he did." A meeting was requested, and on January 20, 2006, it took place at the West Chestnut Avenue property.

When Pastor Hampton arrived and pulled into the parking lot, he was surprised to see the good condition of the property. "[E]verything was painted. Everything looked so nice." Once inside, Pastor Hampton was met by Pastor Torres, a COG Bishop, and members of the congregation, who recounted Pastor Marquez's actions. Pastor Hampton stated that these disclosures were a "[t]otal surprise, total shock." Additionally, members of the group informed Pastor Hampton of how Pastor Marquez had left the COG-New Vision by posting his credentials. To this, Pastor Hampton responded that he would have expected proper notice to have been given, and that Pastor Marquez's conduct, in his view, was "unethical."

If you love your congregation, you love your people, why would you ever leave your church that way? A pastor with a heart for people would never do that.

Pastor Hampton testified that, although he was informed how Pastor Marquez had left the church, he was not informed why. He further testified that the reason for his departure was internal church business that Pastor Hampton had no reason to learn.

Believing that Pastor Marquez had misrepresented the condition of the tabernacle property and the size of the congregation, and that he had failed to disclose eviction plans that were contrary to Pastor Hampton's wishes, Pastor Hampton determined at the church meeting to rescind his appointment of Marquez as pastor of West Baptist Church and to deed the property to COG-New Vision. A statement to that effect was immediately drafted that declared:

I, Reverend Edmund J. Hampton, Pastor of West Baptist Church and the only living trustee of the corporation, upon conclusion of a meeting on January 20, 2005 with Bishop Selwyn Arnold, State Administrative Bishop of Church of God of New Jersey, Pastor Roberto Torres, Co-Pastor Daniel A. Rivera, District Overseer Marino Alicea, and Brother Ricky Torres, hereby turn over the property and all assets of West Baptist Church 61 West Chestnut Ave. to the Vineland Church of God. This is a temporary agreement until the legal documents can be processed according to the law of the State of New Jersey.

In a further statement, drafted on the same day, Pastor Hampton declared:

I, Reverend Edmund J. Hampton, Pastor of West Baptist Church and the only living trustee of the corporation upon receipt of new information hereby resign the appointment of Juan Marquez as pastor of the West Baptist Tabernacle in my letter of October 28, 2005.

A deed transferring ownership of the property was executed on March 27, 2006.

This suit followed. In a complaint filed on September 8, 2006, plaintiff sought a determination that plaintiff was the lawful owner of the property that was the subject of the suit, a determination that any conveyance to COG-Garden State in trust for COG-Tennessee was null and void, and for damages. Counterclaims seeking a declaration that COG-New Vision, COG-Garden State and COG-Tennessee had good and marketable title to the property were filed. Additionally, a third-party complaint was filed on behalf of COG-New Vision and Pastor Hampton against Pastor Marquez alleging fraud and seeking compensatory and punitive damages, and also seeking a judgment that Marquez individually and as alleged pastor of West Baptist Church had no interest in the property and that title in COG-New Vision, COG-Garden State and COG-Tennessee's title was good and marketable.

A bench trial took place on April 16 and 17, 2008 at which testimony was given by Fernando Cruz, an alleged trustee of the reconstituted West Baptist Church, Pastor Hampton and Pastor Marquez. Following the submission of written closings and legal arguments, the trial judge, in a written opinion, ruled in defendants' favor, finding the initial purported property transfer was invalid, and as a result, issues surrounding the revocation of that transfer were moot. Additionally, the judge held that if the initial transfer were found to be valid, then Pastor Hampton acted appropriately in revoking the transfer, and as a consequence, the subsequent sale by West Baptist Church to the COG was valid. In reaching this conclusion, the judge expressly incorporated the findings of fact set forth in post-trial briefing by counsel for the defense. He resolved issues of credibility favorably to Pastor Hampton.

After retelling the early history of the matter, up to the time of the return of Marquez to New Jersey, the judge found:

It is entirely plausible that Pastor Hampton concluded that Pastor Marquez was reviving the prior Agreement of Sale for the benefit of his prior congregation, which was totally untrue. As a result of their communications, Pastor Hampton executed a document purportedly transferring the control of the West Baptist Church Corporation to Pastor Marquez. Not having been executed based on adequate information but on misrepresentations, that document is determined to be invalid. Equitable concerns and this court's evaluation of all the facts mandate this result. Churches are governed pursuant to Title 16 of the New Jersey Statutes. There are corporate procedures set forth in the statute as well as in the common law that in order to transfer property, corporate entities must follow certain procedures. N.J.S.A. 16:1-11 assumes the appointment of trustees, which Pastor Marquez argues was accomplished in the initial letter from Pastor Hampton. This procedure and the circumstances surrounding it do not comply with the corporate statute or appropriate equitable principles.

The judge then found that Pastor Marquez had obtained control of West Baptist Church "through misrepresentations," whereas the church was actually controlled by Pastor Hampton. Moreover, the judge found the entire procedure equitably "inappropriate" as the result of the transformation of Pastor Marquez's position from buyer to seller. The judge concluded:

The members of the congregation of the Church of God had the right to control the acquisition of the property. Pastor Hampton as the sole living trustee of the West Baptist Church had the right to make the appropriate decision to sell it to them. There is also an issue regarding the $20,000 deposit that was necessary under the prior agreement. To simplify the complex factual situation, it is again indicated that this court adopts the specific factual arguments contained in Ms. Morris's closing brief and determines that legally and equitably the subsequent transfer by the West Baptist Church to New Church of God of the Garden State is a valid and appropriate transfer.

Although unmentioned in the judge's opinion, in the order of judgment, the judge dismissed the third-party complaint of COG-New Vision and Pastor Hampton against Pastor Marquez with prejudice.

II.

Resolution of this appeal is complicated by the somewhat informal manner in which West Baptist Church sought dissolution and by issues as to Pastor Hampton's authority to act on the church's behalf. A Baptist church "is an independent self-governing body whose affairs are administered by the membership acting together, and whose will is expressed by the majority vote of its members." Hardwick v. First Baptist Church of Perth Amboy, 217 N.J. Super. 85, 92 (App. Div. 1987) (quoting Baugh v. Thomas, 56 N.J. 203, 209 (1970)). As noted previously, in a vote held on July 17, 1994, the remaining members of the church voted unanimously to dissolve the fellowship. N.J.S.A. 16:2-16 provides in part that "[a]ny Baptist church incorporated under any law of this state may dissolve by a two-thirds vote of the members, entitled to vote, present and voting at a meeting held in its meetinghouse or usual place of assembly for worship." Compliance with this aspect of the statutory provision appears to exist. However, although dissolution of the church was authorized by a vote of the church's board and members, and a plan for disposition of the church's assets was formulated, a certificate of dissolution was never prepared and, consequently, no certification was filed with the Clerk of Cumberland County as N.J.S.A. 16:2-16 also requires. Governing statutes also provide a mechanism for dissolving an "extinct" Baptist church through a summary action in the Superior Court. See N.J.S.A. 16:2-20 and -21. However, such an action was not filed. As a consequence, the West Baptist Church, as a corporate entity, appears to have survived extinction.

Testimony discloses that Pastor Hampton was not a trustee of the church. However, as stated, he was authorized, without limitation, "to sign and execute any documents for the West Baptist Church." According to the Pastor's testimony, although he designated himself as the "only living trustee" on documents that he executed, he recognized that his authority was derived solely from the resolution of the church's remaining members that we previously mentioned.

The congregation's initial decision, in 1995, to sell the tabernacle, parsonage and associated property to COG-New Vision appears to have complied with N.J.S.A. 16:2-7, requiring acts of the board to be by majority vote, and N.J.S.A. 16:2-8, permitting the alienation of church property upon authorization of the board of trustees. However, the 1995 purchase and sale agreement was not immediately followed by a transfer of title. The property thus remained under West Baptist Church's ownership until Pastor Hampton conveyed it by deed to COG-Garden State in 2007.

In its appeal, plaintiff focuses on Pastor Hampton's resignation, his appointment of Marquez as new pastor and trustee of the West Baptist Church Corporation, and his naming of a new board of trustees. Plaintiff contends as the result of this action, occurring on November 30, 2005, Pastor Hampton lacked the authority to convey the property elsewhere. In deeming this transfer of power invalid, the trial judge relied on N.J.S.A. 16:1-11, which requires that (1) trustees be "attending members of the congregation and contribute to the support of the church," and (2) that a majority of the trustees "shall be members of the church in good and regular standing." None of the trustees named by Pastor Marquez were then attending members of the West Baptist Church. As a consequence, their appointment was invalid.

In reaching this conclusion, we reject the argument that N.J.S.A. 16:1-13.2, governing vacancies, controls. That statute provides:

In the event of any vacancy on the board of trustees or among the officers occasioned by the death, resignation, moving out of the limits of such society or congregation, or any other cause or reason, such vacancy may be filled for the unexpired term by the trustees . . . .

However, as stated, Pastor Hampton was not a trustee, and he was not granted the power of appointment by the West Baptist Church's board and members. Moreover, "[c]onsistent with principles of statutory construction," N.J.S.A. 16:1-11 and 16:1-13.2 "must be read in pari materia, that is, as laws dealing with the same subject, they must be construed together as a unitary and harmonious whole." Finderne Heights Condominium Ass'n v. Rabinowitz, 390 N.J. Super. 154, 162 (App. Div. 2007) (citing Ricci v. Ricci, 96 N.J. Super. 214, 226 (Juv. & D.R. Ct. 1967)). See also Pascucci v. Vagott, 71 N.J. 40, 51 (1976). Doing so compels the conclusion that, although the power to fill vacancies resides with the board of trustees, it must nonetheless exercise that power in compliance with N.J.S.A. 16:1-11. Because none of the trustees, including Pastor Marquez were members, attendees or contributors to West Baptist Church at the time of their appointment, the appointments were invalid. We thus affirm the trial judge's similar resolution of this issue.

III.

In his written opinion, the trial judge also concluded that any agreement between Pastors Hampton and Marquez was void as the result of the commission of equitable fraud. Again, we agree.

"Every fraud in its most general and fundamental conception consists of the obtaining of an undue advantage by means of some act or omission that is unconscientious or a violation of good faith." Jewish Center of Sussex Cty. v. Whale, 86 N.J. 619, 624 (1981) (citing, 3 J. Pomeroy, A Treatise on Equity Jurisprudence 421 (5th ed. 1941)). "Depending on the remedy sought, an action for fraud may be either legal or equitable in nature." Ibid.

A misrepresentation amounting to actual legal fraud consists of a material representation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting in reliance by that party to his detriment. The elements of scienter, that is, knowledge of the falsity and an intention to obtain an undue advantage therefrom are not essential if plaintiff seeks to prove that a misrepresentation constituted only equitable fraud. Thus, "[w]hatever would be fraudulent at law will be so in equity; but the equitable doctrine goes farther and includes instances of fraudulent misrepresentations which do not exist in the law"

[Id. at 624-25 (internal citations omitted)].

"One who engages in fraud, however, may not urge that one's victim should have been more circumspect or astute." Id. at 626 n.1 (citing Pioneer Nat'l Title Ins. Co. v. Lucas, 155 N.J. Super. 332, 342 (App. Div.), aff'd, 78 N.J. 320 (1978)). See also Judson v. Peoples Bank & Trust Co., 25 N.J. 17, 27 (1957). Moreover, "[s]ilence in the face of an obligation to disclose amounts to equitable fraud." Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 610 (1989).

In the present case, the trial judge, who had the benefit of observing the live testimony of the witnesses, resolved issues of credibility in favor of Pastor Hampton and against Pastor Marquez. Further, the judge found that the transfer of control of the West Baptist Church by Pastor Hampton to Pastor Marquez was invalid as the result of its "[n]ot having been executed based on adequate information but on misrepresentations." We find that conclusion to have been based on sufficient credible evidence in the record, Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974), and the equitable remedy that was imposed to have been within the trial judge's discretion. Sears Mortgage Corp. v. Rose, 134 N.J. 326, 354 (1993). In particular, we find that Pastor Marquez misrepresented the condition of the property of West Baptist Church while occupied by COG-New Vision and the dwindling nature of the COG-New Vision's congregation in order to induce Pastor Hampton to authorize him to revitalize the church as West Baptist's pastor and appoint him and his existing parishioners as West Baptist's trustees. Additionally, we find that Pastor Marquez failed to disclose his intention to evict COG-New Vision, and he failed to correct Pastor Hampton's evident misunderstanding that Pastor Marquez had arranged a merger with COG-New Vision, instead obfuscating the role that COG-New Vision was to play in the future of the church. A determination to void the agreement between Pastor Marquez and Pastor Hampton was thus amply within the trial judge's discretion.

IV.

As a final matter, we address the cross-appeal of COG-New Vision from the dismissal with prejudice of their claim of fraud on the part of Pastor Marquez. In the third-party complaint filed on behalf of COG-New Vision and Pastor Hampton, relief consisting of rescission of the November 30, 2005 agreement together with compensatory and punitive damages was sought. However, in post-trial briefing, counsel for third-party plaintiffs took the position that "the defendants seek only an equitable remedy, rescission of the October 28/November 30, 2005 letter and, as such, only need to meet the lesser burden of proving equitable fraud." As such, monetary damages were not available. Daibe v. Karsch, 316 N.J. Super. 580, 588 (App. Div. 1998) (limiting an award of monetary damages to claims of legal fraud). Because the equitable relief sought in the third-party complaint was, in essence, granted, and because third-party plaintiffs relinquished their claim to monetary damages, the third-party complaint was properly dismissed with prejudice.

 
Affirmed.

The resolution stated that it was passed on December 18, 1994. However, that date appears to be in error, since COG-New Vision's offer of $225,000 was made by letter dated January 5, 1995, and acceptance of the offer occurred in a special business meeting held on January 15, 1995. However, the date discrepancy does not affect this appeal.

The Hamptons were not trustees of the church. The fourth then-remaining church member was its pianist. It is unclear what happened to the fifth member, present for the July 17 vote.

Pastor Marquez testified at one point that his intention to occupy the parsonage was disclosed. However, elsewhere, he implied that disclosure had not occurred, stating in answer to a question whether Pastor Marquez needed to advise Pastor Hampton of the intended eviction: "He [Hampton] already resigned from this position. I was acting as senior pastor of West Baptist Church."

The $20,000 deposit was not refunded.

We reject the argument that the trial judge failed to make the factual findings required by Rule 1:7-4 to support his decision. We have held in deciding motions for a new trial, "there is no requirement for a statement of the court's grounds when a trial judge grants or denies a new trial motion for the reasons posited by the parties." Vartenissian v. Food Haulers, Inc., 193 N.J. Super. 603, 612 (App. Div. 1984). "The court should, however, make the fact of such reliance explicit and in any case should follow the practice of making its own statement." Pressler, Current N.J. Court Rules, comment 1 on R. 1:7-4 (2010). In the present case, the trial judge did not follow the preferred course, but he did express his reliance on defendants' findings of fact in explicit terms. We thus find no reversible error to have occurred.

N.J.S.A. 16:2-1 through 21, governing Baptist and Seventh-Day Baptist Churches appears to be only partially applicable in this case, because it assumes the existence of a hierarchical church structure that is absent here. In particular, provisions relating to the reversion of property to the parent organization appear inapplicable. No argument to the contrary has been made in connection with this appeal.

Moreover, the appointment, in fact, of the trustees by Pastor Marquez, rather than the appointment of Marquez as pastor by the board violated N.J.S.A. 16:1-4d (delineating board powers).

(continued)

(continued)

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A-5428-07T1

March 1, 2010