Episcopal Diocese of Rochester v Harnish

[*1] Episcopal Diocese of Rochester v Harnish 2006 NY Slip Op 52600(U) [17 Misc 3d 1105(A)] Decided on September 13, 2006 Supreme Court, Monroe County Fisher, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 13, 2006
Supreme Court, Monroe County

The Episcopal Diocese of Rochester and the Rt. Rev. Jack M. Mckelvey, The 7th Bishop of the Espiscopal Diocese of Rochester, Plaintiff,

against

The Rev. David Harnish, Former Rector of All Saints Protestant Episcopal Church; Horace (Bud) Roberts and Frances Miller, Former Wardens of All Saints Protestant Episcopal Church, Al Bagdonas, Nancy Fox, Sue Hemphill, Tim Kearney, Hilda Mcleod, Jason O'Neil, and Gerald Quenell, Former Members of the Vestry of All Saints Protestant Epsicopal Church, and All Saints Protestants Church, Inc., Defendant.



2006/02669

Kenneth R. Fisher, J.

Plaintiffs have moved for summary judgment on the grounds that there are no viable defenses to the causes of action in the complaint and that there are no disputed material facts respecting plaintiffs' rights to recover possession of certain property allegedly held in trust by defendants. Plaintiffs seek an Order providing for declaratory, injunctive, and legal relief as sought in the WHEREFORE clause of the complaint, and for dismissal of the counterclaims. In support of its motion, plaintiffs include an Affidavit of The Rt. Rev. Jack McKelvey, the pleadings of the parties and exhibits attached thereto, an Affidavit of Rev. Canon Stephen Lane and attached exhibits, and a Memorandum of Law. Plaintiffs also include a Reply to defendants' counterclaims.

Plaintiffs commenced this action on March 6, 2006 via Summons and Verified Complaint for (1) declaratory relief that the real and personal property is impressed with a trust in favor of the Diocese and National Church, and that the amendment to the Certificate of Incorporation is illegal, ultra vires, and in breach of the individual defendants' fiduciary duties to the Diocese, [*2]National Church, and faithful members of the parish and thus null and void (2) breach of defendants' fiduciary duty to the Diocese and National Church, (3) conversion, (4) trespass (5) ejectment and enforcement of a trust, (6) injunctive relief prohibiting defendants from acting under invalid amendments to the Certificate of Incorporation, (7) an accounting, (8) an action to determine claim to real property pursuant to RPAPL Article 15, and (9) for dissolution pursuant to section 18 of the Religious Corporations Law ("RCL").

Defendants interposed a verified answer dated May 10, 2006 with corresponding exhibits and six defenses/counterclaims seeking: (1) to quiet title to land pursuant to RPAPL Article 15, (2) a declaratory judgment holding that certain provisions of the Religious Corporations Law null and void as violating the establishment clause of the First Amendment applied to the states by the 14th Amendment, (3) to enjoin plaintiffs from trespassing on the land and from taking personal property, and from interfering with the parishioners' right to worship, (4) damages for wrongfully expelling defendants from the Episcopal Diocese of Rochester and the Protestant Episcopal Church in the United States of America, (5) a determination that there were no grounds under RCL § 16 for the Diocesan Convention to vote to declare defendant extinct and ecclesiastically expel the parish from the Protestant Episcopal Church of the United States of America, and (6) a determination that there are no grounds under RCL § 18 nor any right or power in the Episcopal Diocese of Rochester to seek the formal dissolution of defendant.

In opposition to the summary judgment motion, defendants submit an Affidavit of Rev. David Harnish and a Memorandum of Law. Defendants do not make a cross-motion, but instead seek relief under an Article 78 petition (see next paragraph). In Reply, plaintiffs submit a second Memorandum of Law, a Reply Affidavit of Thomas G. Smith, Esq., a Reply Affidavit of David Booth Beers, Esq., who is Chancellor to the Presiding Bishop of the Episcopal Church in the United States of America, a Reply Affidavit of the Rev. Canon Stephen T. Lane, and a Reply Affidavit of the Rt. Rev. Jack M. McKelvey, who is Bishop of the Episcopal Diocese of Rochester. Finally, for the Sur-Reply, defendants submit an Affidavit from Eugene Van Voorhis, Esq., an Affidavit of the Rev. David Harnish, and another Memorandum of Law.

In a companion case, an Article 78 Petition was brought on March 17, 2006 by All Saints Anglican Church f/k/a All Saints Protestant Episcopal Church against The Episcopal Diocese of Rochester and the Rt. Rev. Jack M. McKelvey in his capacity as the Bishop of the Diocese of Rochester. The petitioners request that the court grant judgment declaring that respondents abused their discretion and failed to follow their own rules and New York Law in declaring petitioner extinct. The papers supporting and opposing the instant summary judgment motion also address the Article 78 Petition.

This action arises out of a property dispute in Irondequoit, New York between a local parish on one side and the Rochester Diocese and National Church on the other. In sum, plaintiffs allege that the defendant All Saints Protestant Episcopal Church is holding its real and personal property in trust for the benefit of the Episcopal Diocese of Rochester and the Protestant Episcopal Church of the United States of America. In contrast, defendants allege that they are the record title holder to the real and personal property and thus plaintiffs have no claim to this property. Defendants are currently in possession of all the real and personal property which is the subject matter of this dispute. The following facts regarding this matter are undisputed.

History/Background of Church [*3]

The Protestant Episcopal Church in the United States of America ("National Church") was founded in the late 1700s, has a hierarchical form of church governance, and its governing body, the General Convention, has adopted and has amended its Constitution and Canons ("National Canons"). The National Church is a member of the Anglican Communion, a group of churches that all have their roots in the doctrine, discipline, and worship of the Church of England's Book of Common Prayer.

The plaintiff Episcopal Diocese of Rochester ("Episcopal Diocese" or "Diocese") is a member of the National Church, is governed by Annual Conventions or Councils, and has also adopted its own Diocesan Canons ("Rochester Canons"). The Episcopal Diocese is a religious corporation that was duly organized under the Laws of the State of New York on November 15, 1931 (it's predecessor was the Episcopal Diocese of Western New York).

Defendant All Saints Protestant Episcopal Church ("All Saints") was incorporated under Article III [FN1] of the Religious Corporations Law on November 3, 1927. See Verified Answer, Exhibit A, Certificate of Incorporation. The governing body of All Saints is the vestry, consisting of the rector, two wardens, and six vestry persons.

The congregation of All Saints was originally organized as a mission under the ecclesiastical canons of the National Church and the Diocese of Western New York (now the Episcopal Diocese of Rochester). So, in 1947, All Saints applied to the Rochester Diocese to be recognized as a parish in spiritual union with the Diocese. To be recognized as a parish, All Saints was required to and did in fact agree to abide by and conform to the Constitution and the Canons of both the National Church and Rochester Diocese. To this end, All Saints signed a document in 1947 "agree[ing] to abide by and conform to the Constitution and Canons in force in the Episcopal Diocese of Rochester and to conform to all the canonical and legal enactments thereof." See Lane Affidavit, Exhibit P; Harnish Affidavit, ¶ 35. The Bishop of the Diocese approved this union, and thereafter, granted All Saints its membership in spiritual with the Diocese.

In recent years, there have been serious theological disputes between the Episcopal Diocese and Bishop of the Diocese on one side and the rector and congregants of All Saints Protestant Episcopal Church on the other side. These disputes eventually led to the Diocesan Convention passing a resolution on November 19, 2005, which declared All Saints parish "extinct." Both parties acknowledge that the resolution was adopted by the Diocesan Convention and agree it was a purely ecclesiastical determination.[FN2] See Harnish Affidavit, ¶ 42 [*4]and Exhibit I.

Specifically, the resolution states that "upon the receipt of the recommendation of a majority of the members of the Diocesan Council . . . and in accordance with the Canons of the Diocese of Rochester," the parish is declared extinct, its vestry dissolved, and its real property and tangible and intangible assets transferred to the Trustees of the Episcopal Diocese of Rochester. Harnish Affidavit, ¶ 42 and Exhibit I. The parties, however, dispute the reasons for the declaration of "extinction." Defendants claim it was done in violation of Rochester Canon 13, Section 2, and of Section 16 of the Religious Corporations Law ("RCL"), but plaintiffs contend that RCL § 16 played no part in its determination.

Thereafter, in December 2005, All Saints Protestant Episcopal Church sought alternative ecclesiastical oversight by other bodies within the Anglican Communion. In a letter dated December 16, 2005, Rev. Harnish notified Bishop McKelvey that he and All Saints parish "are under the Ecclesiastical Authority of Archbishop Henry Orombi," who is the "Archbishop of the Church of the Province of Uganda" ("Church of Uganda"). Answer, ¶ 47; McKelvey Affidavit, Exhibit Q.

Finally, on January 23, 2006, All Saints Protestant Episcopal Church filed a Certificate of Amendment of the Certificate of Incorporation to change the name of the church corporation from All Saints Protestant Episcopal Church to All Saints Anglican Church. In addition, the Amendment states:

The parish shall be solely under the ecclesiastical governing body of the Church of Uganda and in full communion with all Anglican churches, dioceses, and provinces in communion therewith. The property of the parish is held by the vestry as a trust for the sole use by the parish and the members thereof, and no express or implied trust is granted, created or recognized to any diocese, national church body, province, ecclesiastical governing body, other church body, or organization, either within or without the United States.

It is not disputed that the Church of Uganda is an Anglican Church and part of the Anglican Communion, but plaintiffs deny any affiliation or relationship between All Saints Anglican Church and/or the Anglican Church of the Provence of Uganda and the National Protestant Episcopal Church and/or the Episcopal Diocese of Rochester. Defendants admit that, from a church governmental view point, the Church of Uganda has no affiliation with the National Protestant Episcopal Church or the Episcopal Diocese. See Sur-Reply Affidavit of [*5]Attorney Van Voorhis, ¶ 26.

Property At Issue

The real property at issue in this dispute consists of two lots, lot 81 and lot 82, located at the corner of Winona Boulevard and Chapel Hill Drive in the Town of Irondequoit. Lot 82, owned by Walter S. Colt and Silas B. Colt, was transferred by deed dated March 30, 1927, to nine named individuals as trustees for All Saints Protestant Episcopal Mission or Church to be thereafter erected in the Town of Irondequoit. See Verified Answer, Exhibit B. This deed was recorded on June 9, 1927 in the Monroe County Clerk's Office in Liber 1415 of Deeds at page 583, and contained the following express conditions:

This grant is made by the first parties [the Colts] to the said second parties [the nine named trustees of the Church] upon the express condition that the said second parties shall organize and erect upon the within described premises All Saints Protestant Episcopal Mission or Church to be incorporated under the Law of the State of New York, with full power to said Trustees to mortgage said premises for the sole purpose of erecting and building said All Saints Protestant Episcopal Mission or Church and to reconvey the said premises to the proper Episcopal authorities entitled by Law to accept the same.

This grant is made upon the further condition that in the event that said All Saints Protestant Episcopal Mission or Church should not be erected upon said premises or should said premises ever be abandoned for church purposes, then and in that event the title of said premises shall immediately revert to the said first parties or their heirs.

Thereafter, the same nine grantees of this March 30, 1927 deed, individually and as trustees for All Saints Protestant Episcopal Mission or Church, and their wives, respectively, transferred their interest in the property (lot 82) to "All Saints Protestant Episcopal Church, a religious corporation" by deed dated October 18, 1927. On the same day, a meeting was held for the purpose of incorporating All Saints Protestant Episcopal Church, and a Certificate of Incorporation was signed pursuant to Article III of the Religious Corporations Law. All Saints was officially incorporated on November 3, 1927, and the October 18, 1927 deed was recorded on December 22, 1927, in the Monroe County Clerk's Office in Liber 1441 of Deeds at page 295.

On November 2, 1927, The Protestant Episcopal Diocese of Western New York, the predecessor in interest to plaintiff the Episcopal Diocese of Rochester, "remise[d], release[d], and quitclaim[ed]" lot 82 to All Saints Protestant Episcopal Church, its successors and assigns forever.

On December 23, 1927, another quitclaim deed was executed and recorded. Defendants assert that this quitclaim deed was granted by the Silas brothers, the original grantors of lot 82, to All Saints Protestant Episcopal Church, Inc., wherein the Colt brothers released their reversionary rights in said property because all the conditions of the March 30, 1927 deed were met. Today, the church building is located on lot 82.

The second lot, lot 81, was bequeathed by the will of Walter S. Colt, dated March 30, 1927. Paragraph THIRD of the will states:

I [d]irect and empower my executor hereinafter named in the event that the All Saints Protestant Episcopal Mission or Church be actually erected upon the premises heretofore deeded [*6]to it, to pay to the Trustees of said All Saints Protestant Episcopal Mission or Church or the legal authorities entitled to receive the same, Ten thousand dollars ($10,000.00) unless I have previously during my life time advanced the said amount to the said Mission or Church.

Paragraph SIXTH of Walter S. Colt's will states:

All the rest, residue and remainder of my estate, both real and personal, I give, devise and bequeath to All Saints Protestant Episcopal Mission or Church or its incorporated successor, to whom I give and bequeath the same after my brother's death. This fund so bequeather [sic] shall constitute a permanent fund to be known as the Sarah A. Colt Memorial Fund for the used [sic] and benefit of said All Saints Protestant Episcopal Mission or Church or its incorporated successor, the principal to be by its properly invested [sic] and the income applied to the used [sic] of said Church.

Plaintiffs' position

In its motion for summary judgment, plaintiffs assert that the real and personal property at issue is held in trust by the religious corporation All Saints Protestant Episcopal Church for the benefit of the National Church and Rochester Diocese, and therefore plaintiffs seek to regain possession and control of said property due to the fact that the parish of All Saints Protestant Episcopal Church was ecclesiastically dissolved.

Plaintiffs maintain that defendants chose to reject the ecclesiastical authority of both the Episcopal Diocese of Rochester and the National Protestant Episcopal Church based on a "serious theological dispute." According to plaintiffs, the actions constituting this defiance include defendants' refusal to pay the parish's 2005 apportionment as required of every congregation in the Episcopal Diocese, defendants' determination not to celebrate the Holy Eucharist with Bishop McKelvey at the time of his annual visit, and defendants' refusal to recognize Bishop McKelvey's authority when he requested the records of the church and the keys to the building. Based on these and other factors, the decision was made by the Episcopal Diocesan Convention to ecclesiastically dissolve All Saints Protestant Episcopal Church in November, 2005.

Thereafter, plaintiffs assert that defendants seceded from the National Church in December 2005, and placed themselves under the exclusive pastoral care and ecclesiastical authority of the Archbishop of the Church of the Province of Uganda, a foreign Church which has severed all ties to the Protestant Episcopal Church of the United States of America. In January 2006, the Amendment to the Certificate of Incorporation of All Saints Protestant Episcopal Church was filed.

Plaintiffs state that, while the congregants of All Saints have every right to break away from the Episcopal Diocese and National Church, they cannot retain possession and control of the real and personal property of the legal corporation All Saints Protestant Episcopal Church, Inc. Moreover, plaintiffs assert that the property has been held in trust by All Saints Protestant Episcopal Church, Inc. for the Rochester Diocese and the National Church since the time All Saints Protestant Episcopal Church was incorporated under Article III of the Religious Corporations Law.

Plaintiffs also argue that All Saints Protestant Episcopal Church, Inc. is subject to the trust doctrine of National Canons I.7.4 and I.7.5 (the "Dennis Canons"), and holds its property in [*7]trust for the Rochester Diocese and the National Church. Plaintiffs also point out that Rochester Canon 8 reaffirms this trust doctrine, and that section 42-a and section 5 of the Religious Corporations Law further support their contention that when a religious corporation is incorporated pursuant to Article III of the RCL, it holds its property in trust for the Rochester Diocese and the National Church.

Moreover, plaintiffs assert that there is both an express and implied trust in favor of the Rochester Diocese and the National Church based on the following events: (1) All Saints Protestant Episcopal Church was incorporated pursuant to Article III of the RCL, an article which applies only to Protestant Episcopal Parishes or Churches; (2) All Saints Protestant Episcopal Church received financial support from the Diocese; (3) the real property deed mandated establishment of a Protestant Episcopal Church; (4) All Saints Protestant Episcopal Church expressly agreed to abide by the Constitution and Canons of the Episcopal Diocese, and (5) All Saints Protestant Episcopal Church has remained a Protestant Episcopal parish for over 15 years since the adoption of the Dennis Cannons.

Finally, plaintiffs maintain that the ecclesiastical dissolution of All Saints Protestant Episcopal Church does not change this "held-in-trust" status, especially since Episcopal parishes cannot exist apart from a Diocese. Plaintiffs contend that, since a parish can only exist when it applies for and is admitted into union with the Diocesan Convention, the Convention has a similar power to dissolve that union and thus dissolve the parish. It is asserted that the Diocesan Convention was entitled to dissolve All Saints Protestant Episcopal Church pursuant to both its implicit authority and the authority of Rochester Canon 13.2.

Since the corporate entity still exists and is holding the real and personal property in trust, the Rochester Diocese contends that it is now entitled to revoke that trust and obtain sole title to and possession of all real and personal property of All Saints Protestant Episcopal Church, Inc.

Defendants' Position

Initially, defendants contend that they cannot be bound by National Canon I.7.4 (the Dennis Cannon) because it was adopted in 1979, almost 30 years after All Saints Protestant Episcopal Church was accepted as a parish in 1947. Moreover, defendants assert that there is a factual question as to whether or not an express or constructive trust was created or existed in favor of the Rochester Diocese and/or the National Church for the real and personal property at issue when All Saints Protestant Episcopal Church was allegedly expelled from the Diocese.

Defendants also contend that, in the Article 78 Petition, there is both a factual and legal question as to whether the action of the Diocesan Convention, so far as its effect on the temporalities of All Saints Protestant Episcopal Church, complied with section 16 of the RCL or could trigger the dissolution provisions of RCL section 18. Moreover, the defendants assert that in both actions, there is the legal question as to whether the provisions of the RCL as a whole and/or those sections thereof, are in violation of establishment clause of the First Amendment as applied to the states by the Fourteenth Amendment.

Defendants maintain that there is a legal question as to whether the enactment of the "Dennis Canons" by the National Church (Canons I.7.4 and I.7.5) and its local counter-part, Rochester Canon 8, could effectively create an express trust in the property so as to divest All Saints Protestant Episcopal Church of its property without violating the due process provisions of the Fifth and Fourteenth Amendments and the equivalent provisions of the New York State [*8]Constitution.

Defendants further allege that when the Convention of the Diocese declared All Saints Protestant Episcopal Church "extinct," it did so in violation of both Rochester Canon 13, section 2, and RCL section 16. Specifically, it is asserted that, even though the rector and congregation of All Saints Protestant Episcopal Church had disagreements with the plaintiff Bishop "over whether his exercise of certain authority as a bishop was appropriate," at no time before November 19, 2005 did All Saints Protestant Episcopal Church meet the criteria for being declared "extinct" under either Canon 13, section 2, or Section 16 of the RCL.

As far as the deed to lot 82 is concerned, defendants assert that the language "to reconvey the said premises to the proper Episcopal authorities entitled by Law to accept same" in the March 30, 1927 deed means that they are the proper Episcopal authorities to convey to, and not the plaintiffs as plaintiffs argue. Moreover, defendants contend that there is nothing in any of the deeds to All Saints, in the will of Walter S. Colt, or in the Articles of Incorporation that establish a trust of any kind over the property of All Saints Protestant Episcopal Church for the benefit of the Rochester Diocese or the National Church.

In addition, defendants assert that no implied trust is created in the National Canons because the Dennis Canon was adopted long after All Saints Protestant Episcopal Church became affiliated with the Diocese. And, defendants contend that there are no facts which support a determination for the imposition of a constructive trust. Furthermore, the defendants assert that there are no provisions in Article III of the RCL which purport to create a trust in the property of a corporation, but do acknowledge that section 42-a references the trust doctrine.

Defendants also point out that all the funds for building the church, the small endowment funds, and land for the church were either donated or paid for by the parishioners of All Saints Protestant Episcopal Church without any grants from the Episcopal Diocese. Except for receiving a stipend from the Diocese for the rector's salary which was renounced in 1947, defendants assert that all of the money to build and maintain the church and property was and has been borrowed from banks or individuals, or raised as donations from parishioners. See Affidavit of Rev. Harnish, ¶¶ 53-65.

Defendants admit that they borrowed funds from the Diocese in the form of a note and mortgage, but assert that the loan has since been paid in full and the mortgage discharged. Id. at ¶ 55. In fact, defendants point out that the loan by the Diocese to All Saints Protestant Episcopal Church, Inc. required a mortgage on the latter's real property, and argue that if the Diocese owned this land by trust or otherwise, then the Diocese wouldn't have had to take back a mortgage to secure the note.

Analysis

It is well settled that "the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact." Alvarez v. Prospect Hosp., 68 NY2d 320, 324 (1986) (citations omitted); see also Potter v. Zimber, 309 AD2d 1276 (4th Dept. 2003) (citations omitted). "Once this showing has been made, the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial for resolution." Giuffrida v. Citibank Corp., 100 NY2d 72, 81 (2003), citing Alvarez, 68 NY2d at 324. "Failure to make such showing requires denial of the motion, regardless of the sufficiency of the responsive papers." Wingrad v. New York Univ. [*9]Med. Ctr., 64 NY2d 851, 853 (1985) (citation omitted). See also Hull v. City of North Tonawanda, 6 AD3d 1142, 1142-43 (4th Dept. 2004). When deciding a summary judgment motion, the evidence must be viewed in the light most favorable to the nonmoving party. See Russo v. YMCA of Greater Buffalo, 12 AD3d 1089 (4th Dept. 2004). The court's duty is to determine whether an issue of fact exists, not to resolve it. See Barr v. County of Albany, 50 NY2d 247 (1980); Daliendo v. Johnson, 147 AD2d 312, 317 (2d Dept. 1989) (citations omitted).

It is also well settled that courts can decide property disputes between local churches and the general church. Presbyterian Church in U.S. v. Mary Elizabeth Blue Hull Mem. Presbyt. Church, 393 U.S. 440, 449 (1969); North Central New York Annual Conference v. Felker, 28 AD3d 1130 (4th Dept. 2006); see also Jones v. Wolf, 443 U.S. 595, 602-604 (1979); First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., 62 NY2d 110, 120 (1984), rearg. denied 63 NY2d 676, cert. denied 469 U.S. 1037. States are free to adopt any approach to resolving church property disputes "so long as it involves no consideration of doctrinal matters." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, 250 AD2d 282, 285 (3d Dept. 1999), citing Jones v. Wolf, supra, at 602.

"New York has adopted the neutral principles of law' analysis, crafted by the United States Supreme Court, for use in resolving church property disputes." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 285-286, citing First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., supra, at 120-121; see also Park Slope Jewish Ctr. v. Congregation B'nai Jacob, 90 NY2d 517, 521 (1997). "Under this analysis, courts should focus on the language of the deeds, the terms of the local church charter, the State statutes governing the holding of church property, and the provisions in the constitution of the general church concerning the ownership and control of church property.'" Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 286, quoting First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., supra, at 122; see also Park Slope Jewish Ctr. v. Congregation B'nai Jacob, supra, at 521-522. "The court must determine from them whether there is any basis for a trust or similar restriction in favor of the general church, taking special care to scrutinize the documents in purely secular terms and not to rely on religious precepts in determining whether they indicate that the parties have intended to create a trust or restriction." First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., supra, at 122.

"Courts, however, should also take special care not to become involved in internal religious disputes or implicate secular interests in matters of purely ecclesiastical or religious concerns such as church governance or polity." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 286; see Presbyterian Church v. Hull Church, supra, at 449; Archdiocese of Ethiopian Orthodox Church v. Yesehaq, 232 AD2d 332, 333 (1st Dept. 1996); Upstate NY Synod of Evangelical Lutheran Church v. Christ Evangelical Lutheran Church, 185 AD2d 693, 694 (4th Dept. 1992).

The neutral principles of law analysis was applied by the Third Department in Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, 250 AD2d 282, 286 (3d Dept. 1999). The Trinity case is similar to the case at bar in that it involves a dispute over the ownership of real and personal property in the possession and control of the defendant Trinity Episcopal Church. In Trinity, there were four parcels of land, three of which were deeded to the local church, and the other parcel was deeded to the Diocese upon which the church was built. [*10]As with All Saints Protestant Episcopal Church in the instant case, the local Trinity Episcopal Church was incorporated under Religious Corporations Law in accordance with the canons and constitution of the Protestant Episcopal Church in the United States of America and with the consent of the Bishop and the Standing Committee of the Diocese. As in the case at bar, there was a dispute in the Trinity case which eventually terminated the parish's relationship with the Diocese and led the local church to become affiliated with another church.

Initially, the Trinity court noted that "the Protestant Episcopal Church in the United States of America is a hierarchical form of church government in which local parishes are subject to the constitution, canons, rules and decisions of their dioceses, which, in turn are presided over by a bishop who receives advice and counsel from a diocesan standing committee." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, 250 AD2d 282, 284 (3d Dept. 1999) (citations omitted).

The Trinity court applied the "neutral principals of law" analysis enumerated above and concluded that both an express and implied trust existed for the benefit of plaintiffs regarding the real and personal property held by the defendant local church, and that upon defendant's schism from the Protestant Episcopal Church and the Diocese, defendants forfeited the property in their possession to plaintiffs under the "Dennis Canons." Id. at 289-90. Moreover, the court concluded that there was enough evidence "to create an implied trust to hold church property in favor of the Protestant Episcopal Church and its dioceses based upon defendants' actions in conformity with the tenets and canons of the Protestant Episcopal Church and the national church's more recent establishment of an express trust." Id. at 289. It is important to note that under the neutral principles of law analysis, the Trinity court still found an express trust existed under the Dennis Canons even though three of the deeds granted the property to the local church and the fourth deed granted the land and church building to the Diocese.

Neutral Principles of Law Analysis

The Deeds

Based on a review of the deeds and will set forth above under the heading "Property At Issue," lots 81 and 82 were conveyed to All Saints Protestant Episcopal Church, Inc. There were no express trusts created in the language of such documents for the benefit of the Diocese or National Church.

The Local Church Charter

In examining the local church charter under neutral principles of law, the 1927 Certificate of Incorporation of All Saints Protestant Episcopal Church does not indicate in any way how church property is to be owned. Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 287, citing First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., supra, at 122. However, the Certificate does expressly state that it was drawn pursuant to Article III of the Religious Corporations Law, an article which is titled "Protestant Episcopal Parishes or Churches" and only applies to such a denomination. This confirms that at least up until November 19, 2005, All Saints was an "integral part of the Protestant Episcopal Church and the Diocese." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 287, citing Board of Mgrs. of Diocesan Missionary & Church Extension Socy. of Protestant Episcopal Church in Diocese of NY v. Church of Holy Comforter, 164 Misc 2d 661, 667 (Sup. Ct. Dutchess County 1993).

Statutes Governing Holding Church Property [*11]

The next step in the neutral principles of law analysis requires the Court to examine New York State statutes governing the holding of church property. Article II of the Religious Corporations Law, titled "General Provisions," applies to all religious denominations, including the Protestant Episcopal Church. There are several sections in Article II that discuss church property, but none provide whether or not the local church holds its property in trust for the national church or diocese.

For example, section 5 of Article II, originally enacted in 1909, is titled "General Powers and Duties of Trustees of Religious Corporations." It provides that the trustees of a religious corporation shall have custody and control of all church property and revenues therefrom, and shall administer the same in accordance with the discipline, rules and usages of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject.

Section 12(2) of Article II "requires approval by the bishop and standing committee of the diocese to which the local parish belongs before the trustees of a local Protestant Episcopal Church parish can sell, mortgage or lease its real property." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 287. As indicated, neither of these cited provisions establish that the local church holds its property in trust for the Diocese or National Church.

Article III of the RCL, titled "Protestant Episcopal Parishes or Churches," applies only to Protestant Episcopal Churches. Section 42-a of Article III, enacted in 1991, sets forth the powers of the corporate trustees and vestry in administering the temporalities and real and personal property that belong to the corporation. It also acknowledges a trust relationship between the local church and the Diocese and National Church. Itstates:

Notwithstanding and in addition to the provisions of section five of this chapter, and subject always to the trust in which all real and personal property is held for the Protestant Episcopal Church and the Diocese thereof in which the parish, mission or congregation is located, the vestry or trustees of any incorporated Protestant Episcopal parish or church, the trustees of every incorporated governing body of the Protestant Episcopal Church and each diocese are authorized to administer the temporalities and property, real and personal, belonging to the corporation, for the support and maintenance of the corporation and, provided it is in accordance with the discipline, rules and usages of the Protestant Episcopal Church and with the provisions of law relating thereto, for the support and maintenance of other religious, charitable, benevolent or educational objects whether or not conducted by the corporation or in connection with it or with the Protestant Episcopal Church (emphasis added).

Despite this acknowledgment, section 42-a does not conclusively establish the ownership of property as between the local church and its diocese and national church, and the remaining sections of Article III are silent on this matter.

National Church's Constitution Regarding Church Property

The last step in the neutral principles of law analysis requires the Court to examine the provisions in the Constitution of the Protestant Episcopal Church concerning the ownership and control of church property. "The court may look only to provisions relating to property and it must interpret them in a secular light." First Presbyt. Church of Schendectady v. United Presbyt. Church in U.S., supra, at 122.

In 1979, the "Dennis Canons," or National Canons I.7.4 and I.7.5, were adopted by the [*12]General Convention of the National Church. The Dennis Canons provide:

Sec. 4-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 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 so long as the particular Parish, Mission or Congregation remains a part of, and subject to, this Church and its Constitution and Canons.

Sec. 5-The several Dioceses may, at their election, further confirm the 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.[FN3]

Significantly, the Third Department held in the Trinity case that the "Dennis Cannons" were adopted in response to the U.S. Supreme Court's decision in Jones v. Wolf, 443 U.S. 595 (1979), "which held that the constitution of a hierarchical church can be crafted to recite an express trust in its favor concerning the ownership and control of local church property." Trustees of Diocese of Albany v. Trinity Episcopal Church of Gloversville, supra, at 285. The Trinity court also observed that "[a]lthough this express trust provision [the Dennis Canon] was absent from the national canons at the time [the local Episcopal church] acquired the parcels of land . . . , retroactive application of such trust provisions would not . . . extinguish the real property rights of every local church or parish throughout New York, so long as a court finds that the trust provisions were declaratory of existing church policy." Id. at 288. The Trinity court concluded that "the record supports the conclusion that the Dennis Canon' amendment expressly codifies a trust relationship which has implicitly existed between the local parishes and their dioceses throughout the history of the Protestant Episcopal Church in the United States of America." Id. at 288.

The Trinity court also found that there was sufficient evidence of an intent to create an implied trust to hold church property for the benefit of the National Protestant Episcopal Church based on the defendants' actions "in conformity with the tenets and canons of the National Church," and on the National Church's establishment of an express trust by way of the Dennis Canons. Id. at 289-290.

Accordingly, plaintiffs have established that they are entitled to the real and personal property at issue in this case that is currently held in trust by All Saints Anglican Church, Inc. (formerly All Saints Protestant Episcopal Church, Inc.) for the benefit of the Diocese and National Church. Defendants have not raised any triable issues of fact to preclude this [*13]determination.

When the Diocesan Convention declared All Saints Protestant Episcopal Church ecclesiastically dissolved in November 2005, and still later when Rev. Harnish announced to Bishop McKelvey in December 2005 that he and his followers were under the sole ecclesiastical authority of Archbishop Henry Orombi of the Church of the Province of Uganda, the vestry (trustees) of All Saints Protestant Episcopal Church, Inc. held all personal and real property of the parish for the benefit of the Diocese and National Church. So too does the current vestry of the All Saints Anglican Church, Inc. The vestry also owed the National Church and the Diocese a fiduciary duty, which they have breached by failing to turn over the property when demanded. Defendants are ordered to turn over to the Episcopal Diocese all of the real and personal property of the former All Saints Protestant Episcopal Church. In addition, an accounting is also appropriate under the circumstances.

Ecclesiastical Declaration that Parish is Extinct

Defendants have not cross-moved for any relief on any of their counterclaims, including their fourth and fifth counterclaims regarding the ecclesiastical declaration that the parish is extinct. They have, however, commenced an Article 78 petition seeking a declaration that the action of November 19, 2005 is a legal nullity and has no effect on the petitioner-defendant, the title to its property, or the status of its corporate existence. Separate decision issued herewith.

Amendment to Certificate of Incorporation

On January 23, 2006, All Saints Protestant Episcopal Church Inc. filed an amendment to its Certificate of Incorporation and changed its name to All Saints Anglican Church, Inc. The Amendment was expressly drawn under Article III of the RCL, an article which pertains only to Protestant Episcopal Churches, and under Section 803 of the Not-for-Profit Corporations Law.

In the Amendment, All Saints Anglican Church Inc. expressly stated that it was "solely under the ecclesiastical governing body of the Church of Uganda and in full communion with all Anglican churches, dioceses, and provinces in communion therewith." The amendment also expressly provided how church property was to be held, i.e., held by the vestry as a trust for the sole use by the parish, and no express or implied trust was created for any governing body. It was signed by The Rev. David Harnish as Presiding Officer, and by two Qualified Voters Present at the January 22, 2006 meeting, Horace Roberts and Nancy Fox.

Plaintiffs contend that the Amendments are null and void because they are in violation of the Canons of the Diocese and National Church, not in compliance with the consent requirements under § 804(a)(i) of the Not-For-Profit Corporation Law, and outside the scope of the powers of a corporation organized pursuant to Article III of the Religious Corporations Law. In addition, plaintiffs assert that if the current congregation and lay leadership of the former All Saints Protestant Episcopal Church seeks to incorporate under the RCL, then they must do so under an Article other that Article III, as it is reserved for Protestant Episcopal Churches and requires the consent of the Bishop. Finally, plaintiffs remind the court that the parish no longer exists as an Episcopal parish of the Episcopal Diocese within the National Protestant Episcopal Church.

Section 804(a)(i) of the Not-For-Profit Corporation Law provides:

A certificate of amendment shall not be filed if the amendment adds, changes or eliminates a purpose, power or provision the inclusion of which in a certificate of incorporation requires consent or approval of a governmental body or officer or any other person or body, or if [*14]the amendment changes the name of a corporation whose certificate of incorporation had such consent or approval endorsed thereon or annexed thereto, unless such consent or approval is endorsed on or annexed to the certificate of amendment (emphasis added).

Sections 40 and 41 of Article III of the Religious Corporations Law govern the incorporation of a Protestant Episcopal Church. Section 40 sets forth the notice requirements for a meeting to incorporate, and § 41 sets forth the requirements to be included in a Certificate of Incorporation. It states in pertinent part:

Such certificate [of incorporation], when accompanied by a certificate of the bishop of the diocese within which the principal place of worship of the proposed corporation is, or is intended to be located, to the effect that he consents to the incorporation of such church, shall be filed in the office of the clerk of the county specified in the certificate of incorporation; but in case the see be vacant, or the bishop be absent or unable to act, the consent of the standing committee, with their certificate of the vacancy of the see or of the absence or disability of the bishop, shall suffice (emphasis added).

The original 1927 Certificate of Amendment included a Consent to Incorporate dated October 25, 1927, approved by the Standing Committee rather than the Bishop because the latter was absent. See Lane Affidavit, Exhibit J. The 2006 Amendment did not include such consent as required pursuant to both § 804(a)(i) of the Not-For-Profit Corporation Law and § 41 of the RCL. See McKelvey Affidavit, Exhibit R. Since defendants admit that the Church of Uganda has no affiliation with the National Protestant Episcopal Church or the Episcopal Diocese, see Sur-Reply Affidavit of Attorney Van Voorhis, ¶ 26, then they cannot incorporate under Article III of the RCL. Based on the foregoing, the Certificate of Amendment of the Certificate of Incorporation is null and void.

Plaintiffs also seek to enjoin defendants from conducting any activity and/or business for or on behalf of the former All Saints Protestant Episcopal Church under the corporation All Saints Anglican Church, Inc. To obtain an injunction, a party must establish that (1) there is a likelihood of ultimate success on the merits, (2) that there is a prospect of irreparable harm if the relief is not granted, and (3) that the balance of equities favor the moving party. Doe v. Axelrod, 73 NY2d 748 (1988). It is also a general rule that a preliminary injunction is a drastic remedy and should be issued cautiously. Uniformed Firefighters Assn. of Greater New York v. City of New York, 79 NY2d 236 (1992).

Moreover, if a litigant can be fully recompensed by a monetary award, then the litigant has an adequate remedy of law, and thus is not irreparably harmed. D& W Diesel, Inc. v. McIntosh, 307 AD2d 750, 751 (4th Dept. 2003); Main Evaluations, Inc. v. State of New York, 296 AD2d 852, 854 (4th Dept. 2002); Elpac Ltd. v. Keenpac North America Ltd., 186 AD2d 893, 895 (3d Dept. 1992). Finally, where it is demonstrated that the opposing party would be likely to suffer more damage than the movant, then the balancing of equities rests with the non-moving party and thus a preliminary injunction should not be issued. Price Paper and Twine Co. v. Miller, 182 AD2d 748, 750 (2d Dept. 1992).

Plaintiffs have established that they would likely succeed on the merits. In addition, this court finds that the balance of the equities rests with plaintiffs, especially since the property is held in trust for the National Church and the Diocese, and defendants have no claim to the real [*15]and personal property. Moreover, plaintiffs cannot be fully recompensed by a monetary award for defendants actions, and thus there is no adequate remedy at law. Plaintiffs' request for an injunction is granted.

Dissolution of Religious Corporation Pursuant to RCL § 18

Plaintiffs seek dissolution of the Religious Corporation All Saints Protestant Episcopal Church, Inc., now known as All Saints Anglican Church, Inc. pursuant to RCL § 18. Without even addressing the merits, plaintiffs' motion for summary judgment on this claim is denied without prejudice, since plaintiffs admit they have not followed the publication requirement in section 18. See Verified Complaint, ¶ 143; Smith Affidavit Regarding Claim Under RCL § 18, ¶¶ 7, 8. Accordingly, the relief plaintiffs seek under § 18 is denied without prejudice.

Defendants' Counterclaims & Constitutional Arguments

The interpretation of defendants' counterclaims do not raise an issue of fact. However, in light of the court's decision that All Saints holds its property in trust for the Diocese and National Church, defendants' counterclaims one (quiet title) and three (enjoin from trespassing) are dismissed pursuant to plaintiffs' request in its summary judgment motion. Nonetheless, defendants do raise some constitutional arguments which must be addressed. Defendants assert that there have been violations of the Establishment Clause of the First Amendment, the Due Process Clauses of the First and Fourteenth Amendments, and the corresponding provisions of the NY Constitution.

Establishment Clause

Defendants argue that the entire Religious Corporations Law and, in particular, sections 5, 16, and 42-a, and Article III of the RCL violate both the Establishment Clause of the First Amendment to the U.S. Constitution, as applied to the states by the Fourteenth Amendment, and article I, section 3 of the NY Constitution. Answering Memorandum of Law, 2, 25-30.[FN4]

Defendants argue that "many provisions, if not the entire statute, fail to meet the three prong test enunciated in . . . Lemon v. Kurtzman, 403 U.S. 602 (1971), which requires laws involving churches and religious activities (1) to have a secular legislative purpose, (2) that their principal or primary effect neither advances nor inhibits religion, and (3) that [the statutes] do not entail an excessive government entanglement with religion." Answering Memorandum of Law, 25-26. While defendants summarily conclude that the provisions of the RCL do not satisfy the three-prong test of Lemon, defendants do not sufficiently explain at pages 25-31 of their Answering Memorandum of Law why or how each stated provision of the RCL fails to satisfy each prong of the Lemon test. Nonetheless, even if it were assumed that defendants have satisfied their burden of explaining how each stated provision of the RCL violates the Establishment Clause within the framework of the Lemon test, this court concludes that said provisions do not violate the Establishment clause.

New York religious groups may organize into corporations pursuant to the Religious Corporations Law. "The primary purpose of the Religious Corporations Law is to provide an [*16]orderly method for the administration of the property and temporalities dedicated to the use of religious groups, and to preserve them from exploitation by those who might divert them from the true beneficiaries of the corporate trust." Morris v. Scribner, 69 NY2d 418, 423 (1987); Congregation Yetev Lev D'Satmar, Inc. v. Jacob, 31 AD3d 541, 2006 WL 1899142 (2d Dept. 2006). "Constitutional problems are avoided because the Religious Corporations Law governs a religious corporation's temporal affairs, while spiritual affairs remain with the religion's leadership." Congregation Yetev Lev D'Satmar, Inc. v. Jacob, 31 AD3d 541, 2006 WL 1899142 (2d Dept. 2006), citing Religious Corporations Law § 5; Westminster Presbyt. Church of W. Twenty-Third St. v. Trustees of Presbyt. of NY, 211 NY 214 (1914); Islamic Ctr. of Harrison v. Islamic Science Found., 216 AD2d 357, 357-358 (2d Dept. 1995). Moreover, "[t]here is a well settled distinction between a church as a religious corporation and the same church as a religious society. The corporation, its trustees, and any other persons entitled to vote at corporate meetings have jurisdiction over the property and temporal affairs of the church, while the religious society consisting, inter alia, of the worshipers, has authority over spiritual matters." Islamic Ctr. of Harrison, 216 AD2d at 357-358. With this in mind, the court turns to the text of the statutes at issue.

Section 5 of the RCL was originally enacted in 1909, and is titled "General Powers and Duties of Trustees of Religious Corporations." It states in pertinent part:

The trustees of every religious corporation shall have the custody and control of all the temporalities and property, real and personal, belonging to the corporation and of the revenues therefrom, and shall administer the same in accordance with the discipline, rules and usages of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject, and with the provisions of law relating thereto, for the support and maintenance of the corporation, or, providing the members of the corporation at a meeting thereof shall so authorize, of some religious, charitable, benevolent or educational object conducted by said corporation or in connection with it, or with the denomination, if any, with which it is connected; and they shall not use such property or revenues for any other purpose or divert the same from such uses.

Section 16 of the RCL, originally enacted in 1909 and currently titled "Property of Extinct Churches", discusses factors for declaring a church, parish, or society extinct. It states in pertinent part:

Such incorporated governing body may decide that a church, parish or society in connection with it or over which it has ecclesiastical jurisdiction, has become extinct, if it has failed for two consecutive years next prior thereto, to maintain religious service according to the discipline, customs and usages of such governing body, or has had less than thirteen resident attending members paying annual pew rent, or making annual contributions towards its support, . . . or in case of a parish of the Protestant Episcopal Church, if such parish has ceased for two consecutive years next prior thereto, to have a sufficient number of men qualified to elect or to serve as wardens and vestrymen therein, and may take possession of the temporalities and property belonging to such church, parish or religious society, and manage the same; or may, in pursuance of the provisions of law relating to the disposition of real property by religious corporations, sell or dispose of the same and apply the proceeds thereof to any of the purposes to which the property of such governing religious body is devoted, and it shall not divert such property to any other object. [*17]

Section 42-a of the RCL, entitled "Additional Powers of the Corporate Trustees and Vestry," provides:

Notwithstanding and in addition to the provisions of section five of this chapter, and subject always to the trust in which all real and personal property is held for the Protestant Episcopal Church and the Diocese thereof in which the parish, mission or congregation is located, the vestry or trustees of any incorporated Protestant Episcopal parish or church, the trustees of every incorporated governing body of the Protestant Episcopal Church and each diocese are authorized to administer the temporalities and property, real and personal, belonging to the corporation, for the support and maintenance of the corporation and, provided it is in accordance with the discipline, rules and usages of the Protestant Episcopal Church and with the provisions of law relating thereto, for the support and maintenance of other religious, charitable, benevolent or educational objects whether or not conducted by the corporation or in connection with it or with the Protestant Episcopal Church.

After reviewing each of these provisions, the court concludes that each (1) has a secular legislative purpose, (2) has a principal or primary effect that neither advances nor inhibits religion, and (3) does not foster an excessive government entanglement with religion. Lemon v. Kurtzman, 403 U.S. 602, 612-613 (1971).

Defendants argue that section 42-a "seems to create a religious test for determination of what one can do with certain church property so that almost any controversy under section 42-a of Article III will involve resolution of religious disputes," and "the rights extended to the . . . corporation under section 42-a are conditioned upon such corporation being in accordance with the discipline, rules and usages of the Protestant Episcopal Church and with the provisions of law relating thereto, . . . .'" Answering Memorandum of Law, 27-28. Defendants also argue that section 16 creates a religious test. Answering Memorandum of Law, 28-29.

Contrary to defendants' assertions, the phrase "in accordance with the discipline, rules and usages of the Protestant Episcopal Church" does not create a religious test or establish a religion. Rather, it provides the trustees guidelines for administering church property according to the church's constitutions and canons, whatever they may be. The mere mention in a statute of a church's "discipline, rules and usages," without specifying what they are, does not involve an excessive government entanglement with religion, or advance or inhibit religion.

Moreover, since the primary purpose of the Religious Corporations Law is "to provide an orderly method for the administration of the property and temporalities dedicated to the use of religious groups," Morris v. Scribner, supra, 69 NY2d at 423, defendants' Establishment Clause argument is without merit and does not preclude summary judgment.

Due Process

The Fifth Amendment of the U.S. Constitution provides in pertinent part: "nor [shall any person] be deprived of life, liberty, or property, without due process of law." Section 1 of the Fourteenth Amendment provides in part: "nor shall any State deprive any person of life, liberty, or property, without due process of law." Finally, the New York Constitution, article I, § 6 provides: "No person shall be deprived of life, liberty or property without due process of law."

Defendants argue that the enactment of the Dennis Canon (Canon I.7.4-5) and its local counterpart, Diocesan Canon 8, violate the Due Process Clauses of the Fifth and Fourteenth Amendments of the U.S. Constitution, and the "equivalent provisions of the NY Constitution" [*18][article I, section 6]. Answering Memorandum of Law, 2. Defendants question whether these canons "could effectively create an express trust in All Saints' property so as to divest All Saints of its property" without violating due process. Answering Memorandum of Law, 2, 22. Specifically, defendants argue that "[i]n the absence of express consent, the mere affiliation of the defendant church with the Diocese[,] and the defendant's All Saints' consent to the Diocesan and national canons existing at that time could not have been intended to divest All Saints of its property, nor could the subsequent enactment by the General Convention of the Episcopal Church in the United States ("ECUSA") of the Dennis Canon or similar canons at the Diocesan level act to divest the local church of its property rights." Answering Memorandum of Law, 31.

Moreover, defendants argue that the trust language in RCL § 42-a is not pertinent or controlling in this matter, and then go on to argue that the NY State Legislature doesn't have the authority to create a trust through such a statute when there is no underlying agreement without also violating the due process clause. Answering Memorandum of Law, 18.

Defendants' due process argument is flawed because the Fifth and Fourteenth Amendments, as well as section 6 of Article I of the NY Constitution, prohibit the federal and state governments, respectively, from depriving any person of property without due process of law. See e.g., Harvey & Corky Corp. v. Erie County, 56 AD2d 136, 138-139 (4th Dept. 1977). Due Process does not apply to private actors, unless "there is such a close nexus between the State and the challenged action that seemingly private behavior may be fairly treated as that of the State itself." Brentwood Academy v. Tennessee Secondary School Athletic Association, 531 U.S. 288, 295 (2001); Harvey & Corky Corp., supra, 56 AD2d at 138-139.

Here, the Rochester Diocese, pursuant to the Dennis Canons and Rochester Canon 8, is trying to recover the property held in trust by the All Saints corporation for the benefit of the Diocese and National Church. There is no federal or state involvement here, nor do defendants allege or even argue that the actions taken by the Diocese are state related. Indeed, the Diocese is a private actor, and has acted in accordance with the church's own constitution and canons.

With respect to defendants' assertion that § 42-a violates due process, this argument is also without merit. As concluded earlier, there is no language creating an express trust in § 42-a. Rather, the statute merely acknowledges the express trust relationship that has existed within the Protestant Episcopal Church hierarchy and subsequently "codified" in the National Church's Dennis Canons. Moreover, 42-a authorizes the vestry or trustees of the Protestant Episcopal Church, whether from the local church corporation, national church corporation or diocese corporation, to administer the temporalities and real and personal property belonging to the corporation. There is no taking of property in section 42-a.

Accordingly, defendants' due process argument is without merit and does not preclude summary judgment.

SO ORDERED.

______________________

Kenneth R. Fisher

Justice Supreme Court

DATED:September 13, 2006

Rochester, New York Footnotes

Footnote 1: Article III, titled "Protestant Episcopal Parishes or Churches," consists of sections 40-49 of the RCL and applies only to Protestant Episcopal Churches. On the other hand, Article II, titled "General Provisions," consists of sections 3-27 of the RCL and pertains to all religious denominations. Article IV only applies to Presbyterian Churches, Article V applies only to Roman Catholic Churches, and so on.

Footnote 2: In its Verified Petition in the Article 78 proceeding, at paragraph 25, All Saints Episcopal Church states that it "seeks no review of any purely ecclesiastical action of the [Diocese or Bishop McKelvey] or of the Convention which declared [All Saints Protestant Episcopal Church] extinct', since it would be inappropriate and in violation of the First Amendment of the United States Constitution, and the corresponding provisions of the New York State Constitution, to force [the Diocese] as a church body to accept [All Saints Protestant Episcopal Church] as a member of the diocese in the face of [the Diocese's] clear declaration for purely ecclesiastical purposes that the relationship between [All Saints Protestant Episcopal Church] and the Diocese is now extinct.'" Verified Petition, ¶ 25.

Footnote 3: The Rochester Diocese did confirm the trust declared in the Dennis Canons, and enacted Rochester Canon 8, which provides: "In conformity and consistent with the provisions of Title I, Canon 7, of the General Convention, it is hereby explicitly reaffirmed that all real and personal property held by or for the benefit of any Parish, Mission, or Congregation located in the Diocese of Rochester is held in trust for the Episcopal Church and the Diocese of Rochester."

Footnote 4: Although defendants assert that the NY Constitution is implicated, defendants' Memoranda of Law do not set forth any argument based on the NY Constitution. Thus, defendants' Establishment Clause argument will be considered only under the First Amendment.