Appeals court upholds ruling in East Carolina parish property dispute

June 4, 2003

In a unanimous decision issued June 3, a three-judge panel of the North Carolina Court of Appeals has upheld a lower-court ruling declaring that St. Andrew's Episcopal Church in Morehead City belongs to the Diocese of East Carolina.

Although the ruling favors the diocese and the St. Andrew's members who chose to remain in the Episcopal Church, the faction that left and later affiliated with the Province of Rwanda through the Anglican Mission in America still has the right of appeal and it is not yet clear how the ruling from the appeals panel may play out.

'I rejoice that the Episcopalians of St. Andrew's Church may soon find themselves restored to their parish home, which had been seized by members of the Anglican Mission in America,' said Bishop Clifton Daniel III in a statement. 'It is my hope that both groups will engage such transitions which may arise from this decision with charity, goodwill, and peaceful intent, being faithful stewards of the charge given to us by Jesus: that we love one another.

'To this end, it has been and remains my constant desire that Episcopalians will once again find a church home on Arendell Street in Morehead City which welcomes all who seek to practice their faith as members of the Episcopal Church in the United States of America. Any members of the departing congregation who wish to remain and renew their membership in the Episcopal Church will be welcomed as brothers and sisters in Christ.'

Trial court ‘did not err'

In January of 2002, Superior Civil Court Judge John Jolly issued a summary judgment stating that the disputed property belongs to the diocese. A summary judgment means that there are no disputed facts to be decided by a jury and that the judge is left to apply the applicable laws to the case.

In the summary judgment, Jolly ordered that all property being held by the faction that left the Episcopal Church be turned over to the Diocese of East Carolina. When the breakaway faction appealed the judge's ruling to the Court of Appeals, Jolly issued a stay of his orders pending the appeal.

Writing for the panel in the case Daniel vs. Wray, Judge Robert C. Hunter said: '. . . The trial court did not err in denying defendants' motion to dismiss plaintiffs' action for failure to allege the Diocese in an assumed name certificate. Nor did the court commit prejudicial error by not joining PECUSA as a real party in interest. Moreover, the court did not err in granting plaintiffs' summary judgment motion with respect to ownership of the St. Andrew's property and enjoining defendants from using the name ‘St. Andrew's Episcopal Church' or any name confusingly similar.'

The defendant in this case is the breakaway faction and the plaintiff is the Diocese of East Carolina and members of the parish that chose to remain in the Episcopal Church.

Hunter continued, 'The canons clearly established a form of governance impliedly assented to by defendants that precluded the seceding vestry from taking control of the St. Andrew's property.'

ECUSA canons upheld

The ruling appears to support the so-called Dennis Canon (Canon I.7.4) of the Episcopal Church USA, which states: 'All real and personal property held by or for the benefit of any Parish, Mission or Congregation is held in trust for this Church and the Diocese thereof in which such Parish, Mission or Congregation is located.'

Additionally, Canon II.6.2 of the Episcopal Church states: 'It shall not be lawful for any Vestry, Trustees, or other body authorized by laws of any State or Territory to hold property for any Diocese, Parish or Congregation, to encumber or alienate any dedicated and consecrated Church or Chapel, or any Church or Chapel which has been used solely for Divine Service, belonging to the Parish or Congregation which they represent, without the previous consent of the Bishop, acting with the advice and consent of the Standing Committee of the Diocese.'

If the breakaway group does choose to appeal, they can appeal first to the full Court of Appeals (since the appeal was heard by a three-judge panel of the court), and then to the North Carolina Supreme Court. Since the decision is unanimous with no dissent, the appeal to the Supreme Court is discretionary, that is, within the Supreme Court's discretion to grant or deny appeal. Without a dissent in the appeals court, there is no automatic right of appeal to the Supreme Court.

See Documents Relating to St. Andrew's Morehead City Dispute for more information.