Episcopal Church Asked to Pay for San Joaquin Lawsuit

From The Anglican Curmudgeon via VirtueOnline:

by A. S. Haley
http://accurmudgeon.blogspot.com/2009/01/episcopal-church-asked-to-pay-for-san.html
February 3, 2009

The litigation in San Joaquin has entered a new phase with the filing of a cross-complaint against the Episcopal Church (USA) by the parties it initially sued last April. The cross-complaint, brought by Bishop Schofield and two diocesan investment entities which he heads (the Episcopal Foundation and the Diocesan Investment Trust), seeks an award against ECUSA for the amount of attorneys' fees those defendants are being called upon to expend in defending the suit instigated by Bishop Jerry A. Lamb and a group calling itself the "Episcopal Diocese of San Joaquin", and joined in by ECUSA.

The cross-complaint states two claims for relief. The first asserts that ECUSA in effect put Bishop Lamb and his followers up to bringing the lawsuit that was filed in Fresno County Superior Court on April 24, 2008, by making false representations to them that they could be plaintiffs because they were now a genuine diocese of the Episcopal Church who had met in a legitimate "special convention" the previous month and approved a bishop.

The Presiding Bishop of the Episcopal Church, the Most Rev. Katharine Jefferts Schori, convened the special convention herself, and proposed the Rt. Rev. Jerry A. Lamb, the resigned (retired) bishop of the Diocese of Northern California, to be its "provisional bishop". After it concurred, the convention proceeded to adopt resolutions authorizing him to claim ownership of the corporation sole that holds title to diocesan real property, and to file the present lawsuit against Bishop Schofield and the investment entities, which manage the funds belonging to the diocese.

Bishop Schofield alone asserts the second claim for relief in the cross-complaint. It is a contingent claim, dependent on the outcome of the principal lawsuit against him. In essence, it asserts that Bishop Schofield simply followed the wishes of his employer, the Diocese of San Joaquin, in taking the steps for which he has been sued by the plaintiffs, and that he believed those steps were lawful. He has an agreement of indemnity with his employer, the cross-complaint alleges, whereby the Diocese is required to reimburse him for any legal expenses incurred as a result of his good-faith obedience to its decisions. Therefore, if the plaintiffs succeed in their lawsuit against him, and regain all the property and other assets of the diocese, he alleges that they will have to reimburse him for all his legal expenses under the provisions of California Labor Code section 2802 and the general indemnity statute, Civil Code section 2778 (4).

The cross-complaint also names as a defendant the Domestic and Foreign Missionary Society of ECUSA, which it alleges is the alter ego of ECUSA, and is the entity that actually holds its funds and property. In order to be able to collect any judgment awarded against ECUSA, the cross-complaint alleges, judgment would have to be awarded against the Domestic and Foreign Missionary Society as well.

The filing of the cross-complaint raises the stakes considerably in what is already a very high-stakes game being played by ECUSA, as I explained in this earlier post. Essentially, ECUSA was risking everything on its bet that the Fresno court would accept the legitimacy of the "Remain Episcopal" group in San Joaquin as a lawfully constituted diocese of the Episcopal Church, with full standing to claim title to the assets of the actual diocese, which had voted to disaffiliate. By lending its authority and recognition to that group, by installing Bishop Lamb as their titular head, and by bankrolling both of them from the outset, ECUSA may fairly be said to have been the driving force behind the current litigation.

Recently, ECUSA and its nominee plaintiffs added fuel to the fire by seeking leave of court to amend their complaint to go after a $500,000 retainer paid by the Diocese of San Joaquin to its attorneys in anticipation of having to defend any litigation that would be brought as a result of its vote to disaffiliate from the Church. Now with the cross-complaint against it, ECUSA will have to allow for the possibility that if its gamble loses, it could be stuck with the bill not only for the plaintiffs in the San Joaquin litigation, but also with the bill for the defendants and their attorneys as well.

The doctrine under which the cross-complaint proceeds is known as the "tort of another" theory in California law. It was discussed by the California Supreme Court in a case called Gray v. Don Miller & Associates, Inc., 35 Cal.3d 498 (1984), and described there as follows:

A fourth established exception, sometimes referred to as the "tort of another" or "third party tort" exception, allows a plaintiff attorney fees if he is required to employ counsel to prosecute or defend an action against a third party because of the tort of the defendant. (Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618, 620-621 [30 Cal.Rptr. 821, 381 P.2d 645].) This rule is embodied in the Restatement of Torts and is generally followed in the United States. (Rest.2d Torts, § 914, subd. (2), and appen.)

The lawsuit filed by ECUSA, Bishop Lamb and the unincorporated association which styles itself as "the Diocese of San Joaquin" in its complaint places directly into play the legitimacy of the moves used by Bishop Jefferts Schori to "prove" her assertion that "dioceses cannot leave the Church; only people can." The cross-complaint hones in on that assertion by charging her Church with the legal consequences of carrying it into effect.

Bishop Schofield had announced, prior to the December 2007 vote by the Diocesan Convention to disaffiliate, that any parish wishing to remain with ECUSA would be allowed to do so without rancor or legal consequences, so long as it did not owe any debt to the Diocese. Had ECUSA's Presiding Bishop not insisted on recruiting and financing the group that remained to serve as a plaintiff to sue Bishop Schofield, it is doubtful in the extreme that the group alone, which constituted around a third of the parishes in the Diocese before the vote, would have marshaled the resources (and the will) to maintain a lawsuit.

In quite a few previous posts, I have gone into the manifold legal difficulties which I believe ECUSA will face in trying to make Bishop Jefferts Schori's claim stand up in court. The problem essentially is that there are two aspects to what Episcopalians understand as a "diocese": it is an entity that has a canonical status in the Church itself, and which is wholly apart from its legal status as an entity under a state's secular law. It is not possible to have one without the other, and still be a diocese of the Episcopal Church (USA).

A church itself has to have a legal existence, in order to be able to hold title to property and to have bank accounts, for one thing. In just the same way, a diocese has to have a legal existence as well. The flaw in ECUSA's theory in San Joaquin (as well as in Pittsburgh, Fort Worth and Quincy) is that an entity recognized as such in the law cannot be two entities at the same time, just as one person cannot be two people at the same time. Sam Jones, for example, may legally change his identity to Sam Smith, but the law will then cease to recognize Sam Smith as Sam Jones.

And that is just what happened when the dissenters from the vote in San Joaquin left and formed their own unincorporated association under California law, with its headquarters in Stockton. They were not the association who had held the vote, because that association continued to exist and to have its headquarters where they had always been---in Fresno. They were a new association in the eyes of the secular law. They cannot, in the eyes of California law, be the same association as the one that disaffiliated---because the deputies who voted to disaffiliate all stayed with that group, and are still meeting and functioning as that same group under California law today. It was the dissenters who had to come together in a new group, elect new officers and committees, find new headquarters, start new minute books, order stationery, and attend to all the other myriad details of starting a new organization.

The next step is to ask: if they are a new association under California law, how did they get to be the same old Episcopal Diocese of San Joaquin in the eyes of ECUSA? For ECUSA spells out procedures by which an entity becomes one of its dioceses, and part of that procedure is a vote to accept the new diocese by ECUSA's General Convention. No such vote has been held, because General Convention does not even come into existence until next July.

But ECUSA wants the court, along with everyone else, to believe that the group is one of its dioceses because it held a supposedly legal convention at Lodi on March 29 under the old diocesan Constitution and Canons. Once it was assembled in convention, the group voted to adopt the following resolution (I have added the bold for emphasis):

Whereas, at previous meetings of this Convention, this Convention made the following purported amendments and additions to the Diocesan Constitution and Canons, which this Convention now recognizes are contrary and otherwise inconsistent with the Constitution and Canons of the General Convention of the Episcopal Church (hereinafter collectively referred to as the "Purported Modifications"):

[the changes approved at the last two annual conventions are set forth]

Whereas, this Convention finds that the Purported Modifications were invalid, ultra vires, and without effect;

Resolved, that this Convention hereby restates, ratifies, and confirms that the Constitution and Canons of the Diocese with the deletion of the Purported Modifications and reversion to the original provisions constitute the true, correct, and effective Constitution and Canons of this Diocese . . .

The resolution then offers the following partial explanation for what its function is:

As the effect of this resolution is merely acknowledges that the Purported Modifications were invalid, it is not an amendment and thus does not require two Convention votes as an amendment to the Constitution.

At the same meeting, the group voted to place themselves under the Rt. Rev. Jerry A. Lamb as their provisional Bishop.

Do you see the problem here? Look at the language I have put in bold above, and read again the explanation of the purpose of the resolution. With that language, the group is saying that it is a continuation of the prior Diocesan Conventions, and not a "new" group at all.

All right, let us take the group at its word, and pretend for a minute that it was the only true continuation of the group that voted by more than an 80% majority to amend the Constitution and Canons so as to leave ECUSA in December 2007. This is the same bunch that argues the Dennis Canon is legally binding on parishes who have never heard about it, because in the years since it was enacted they did not object to it. And it is also the group that argues that Bishops Cox and Schofield were validly deposed in March 2008, because again, no one objected to the fact that there were not enough bishops there to vote for the resolution at the time it passed by a simple shout of "Yeas" versus "Nays".

Let us therefore give them a little bit of their own medicine. They were also present at the Annual Convention in December 2006 when the same Constitutional changes were first passed (by another large majority). And before those changes, conventions in 2003, 2004 and 2005 adopted amendments which (in their final form) qualified the accession clause so that only those enactments of General Convention that were consistent with the Constitution and Canons of the Diocese of San Joaquin would be recognized as valid within the Diocese. But if the constitutional changes were "invalid" and ultra vires when they were enacted in 2007, were they not just as invalid in December 2006, or in October 2005, or in 2004, or in 2003? And if that is the case, why did not this same group that now calls itself the "Diocese of San Joaquin" call together a "special convention" then, back in 2003, and declare the measures invalid? Or why was there not a special convention called to do that in 2004, 2005, 2006, or 2007? Why are dissenters not bound by the "illegal acts" taken in December 2007, in the same way that Bishop Schofield is supposed to be "bound" by the illegal vote to depose him?

Moreover, after the first change to the Diocese's accession clause became effective in October 2005, the General Convention of ECUSA still seated the deputies from San Joaquin at GC 2006, and continued to recognize its bishop until March 2008. So under the liberals' way of arguing the matter, why is not ECUSA itself, as represented by its "highest authority" embodied in General Convention, bound by the changes that it did not object to from 2005 onward? There needs to be some consistency here, which perhaps it will take the courts to apply---so be it.

Oh, I know---logic is not the liberals' strong suit. They are as impervious to logic as a duck is to water, and they employ it the same way ducks employ water: to paddle around in when it suits them, but to ignore it when it does not. Just as water never kept a duck from going ashore, so logic never keeps a liberal from going for more. If they can get what they want through logic, well and good; but if logic would stop them from getting what they want, it is suddenly not important---or in other words, results outweigh logic every time. Now substitute the word "law" for "logic" in that last sentence, and you will understand the "refinement" (more correctly, the predicament) that the Presiding Bishop has brought to the Church that elected her.

But now back to the convention that the Presiding Bishop convoked at Lodi on March 29, 2008. Since it purported to act as though it were a continuation of the previous diocesan conventions, and to pass a resolution declaring the actions of those prior conventions going back to 2003 null and void, it must have been meeting in conformity with the Diocesan Constitution and Canons, correct? (Because if it was not so meeting, then all of its actions would be "null and void".)

In the next installment on this topic, I shall inquire more closely into the procedures used to call the meeting, and into who was actually there.. Then I hope you will be able to understand why ECUSA's whole game is just a charade, trumped up just so a lawsuit could be quickly filed against those who left, in order to deter others who might be planning to do the same. In such a maneuver, the timing of the threat was more important than following the canons---just as it was with all of the other uncanonical moves of the Presiding Bishop, about which you may read at your leisure here.

Strategies have consequences. Whether it happens next month, or six months or a year from now, those who have been relying so heavily on a strategy that trashes the canons for short-term advantage will find out just what those consequences are.

END