Virginia Supreme Court Allows Appeal in Falls Church Case

A writ panel of three Justices of the Virginia Supreme Court, who heard oral arguments on October 16 in favor of the Petition for Appeal filed by The Falls Church Anglican following the adverse judgment by the Fairfax County Circuit Court has issued an order granting review of the case.

The Court’s order grants review of the following six points of error raised by The Falls Church:

1. The trial court erred in enforcing canon law, rather than “principles of real property and contract law” used in all cases ... to award plaintiffs a proprietary interest in TFC’s property and to extinguish TFC’s interest in such property, even though TFC’s own trustees held title and TFC paid for, improved, and maintained the property.

2. The trial court’s award of TFC’s property to plaintiffs violates the Religion Clauses of the U.S. and Virginia Constitutions by enabling denominations to secure others’ property by means available to no other Virginia entity.

3. The trial court erred in finding that plaintiffs had proprietary interests in TFC’s real property acquired before 1904, when the legislature first referenced denominational approval of church property transfers. [Note: in the body of the Petition, this claim of error is restated in this way: “The trial court divested TFC of property by retroactively applying canons and statutes passed after the conveyances at issue, contrary to state law and the Contracts Clause.”]

4. The trial court erred in awarding plaintiffs TFC’s unconsecrated real property, which is exempt from plaintiffs’ canons.

5. The trial court erred in awarding TFC’s personal property to plaintiffs—even though plaintiffs never had any control over TFC’s funds or their use, and TFC’s donors, for religious reasons, gave on the express condition that their gifts not be forwarded to plaintiffs—in violation of Va. Code §57-1 and the Religion Clauses of the U.S. and Virginia Constitutions.

6. The trial court erred in awarding plaintiffs more relief than sought, including funds given after TFC disaffiliated and funds spent on maintenance, which plaintiffs stipulated TFC should keep.

In their response to the Petition, the Diocese of Virginia claimed that The Falls Church Anglican had “waived” Assignments of Error #3 and #4 above, for improperly presenting and/or preserving them in the record for appeal. The Supreme Court obviously disagreed with that contention, because there is no language in its order restricting the points of error which The Falls Church Anglican may raise on appeal.

Additionally, both the Diocese of Virginia and the Episcopal Church (USA) sought to have the Court review the one aspect of Judge Bellows’ ruling with which they disagreed: they contended that he erroneously concluded that Virginia Code Section 57-7.1 does not operate so as to give validity to denominational trusts.

That statute, enacted to replace a former one dealing with the same subject, provides in part: ““Every conveyance or transfer of real or personal property … to or for the benefit of any church, church diocese, religious congregation or religious society …
shall be valid.” The Diocese and ECUSA wanted the court to read this statute so as to give effect to the Dennis Canon and other trusts which they claimed applied to the all of the parish’s real and personal property, but Judge Bellows ruled that the legislature had not intended to change pre-existing Virginia law against general denominational trusts when it adopted the new statute.

By its order, the writ panel expressly refused to consider the Diocese’s and ECUSA’s cross-assignments of this claimed error, so Judge Bellows’ ruling on that specific point will stand. And as I explained in this earlier post, that means that the Dennis Canon has no effect in Virginia. Instead, according to Judge Bellows, Virginia courts will look to other indicia of “proprietary interests in” (i.e., actual ownership and control over) parish property.

The result, as we saw in Judge Bellows’ ruling, can still come out the same as if the Dennis Canon had applied. At least now, however, the degree to which Judge Bellows went, in holding that factors such as restraints on alienation, episcopal visits and even the furnishing of Sunday service bulletins were decisive, will receive a fresh review by the full Supreme Court.

Where an appeal is completely discretionary with the court of review, as this civil appeal is in Virginia, the fact that it has granted review may generally be taken that the higher court does not agree with everything in the lower court’s decision.

In this case, the sharpest point of disagreement may well be with the one aspect of Judge Bellows’ ruling in which the Virginia Attorney General joined in requesting review: the order that The Falls Church hand over to the Diocese all of the pledge money it had collected from and after February of 2008, regardless of the intent expressed by the Church’s donors that none of their gifts should go to the entity that was suing them for their property. No matter what the Virginia Supreme Court eventually decides, this news cannot be welcome either to the Diocese or to ECUSA and their attorneys.