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Court Says It Can Apply Neutral Principles To Fiduciary Claim Against Church Trustees

By Howard M. Friedman

In Askew v. Trustees of the General Assembly of the Church of the Lord Jesus Christ of the Apostolic Faith, Inc., (ED PA, July 21, 2009), a Pennsylvania federal district court concluded that it could use neutral principles of law to resolve breach of fiduciary duty and unjust enrichment claims brought against church trustees and officers, as well as a claim that Church Articles do not comply with Pennsylvania's non-profit corporation law. It therefore rejected a 1st Amendment challenge to its jurisdiction. The court did dismiss certain other claims, concluding that they needed to be brought derivatively by a formal member who had standing to do so. Describing the Church's continuing factional dispute over leadership, the court said: "Litigation ensued, starting a Dickensian legal saga of which this case is only the most recent skirmish." In this case, plaintiff alleges that the faction now in control after winning earlier litigation have "misappropriated funds, wasted assets, paid themselves salaries and stipends that are contrary to the word and spirit of the Articles and By-Laws, funded private expenditures with Corporation assets, and violated state and federal law."

Full post as published by Religion Clause on July 24, 2009 (boomark / email).