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General Conference of the Evangelical v. New Heart Community Fellowship

July 17, 2012

GENERAL CONFERENCE OF THE EVANGELICAL METHODIST CHURCH, A NOTFOR-PROFIT INDIANA CORPORATION, PLAINTIFF,
v.
NEW HEART COMMUNITY FELLOWSHIP, INC., NOW KNOWN AS, THE CROSSING CHURCH, INC, A NOT-FOR-PROFIT IDAHO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Honorable Ronald E. Bush U. S. Magistrate Judge

ORDER RE: MEMORANDUM DECISION AND RULE 12(b)(6) MOTION TO DISMISS (Docket No. 5)

MOTION TO COMPEL ARBITRATION(Docket No. 4)

Pending before the Court is Defendant's Motion to Dismiss (Docket No. 5) and Plaintiff's Motion to Compel Arbitration (Docket. No. 4). Having reviewed the record, heard oral argument, and otherwise being fully advised, the Court enters the following Memorandum Decision and Order:

I. BACKGROUND*fn1

What happens to the tangible property of faith when a local church decides to leave its ecclesiastical parent? Such is the question presented in this case involving a property dispute between a Christian faith denomination and those involved with one of its member churches.

In early 2004, representatives of the Evangelical Methodist Church ("EMC") met with Randy Reams and others regarding the possibility of forming (referred to as "planting") an EMC church in Nampa, Idaho. Williamson Aff., ¶ 8, Ex. A-4, (Docket No. 4-2).Subsequently, Reams and his group created the "New Heart Community Fellowship Evangelical Church of Nampa" and signed an "Affiliation Resolution" agreement with EMC in which it agreed to follow "that collection of rules and procedure and organization entitled Discipline of the Evangelical Methodist Church, which shall be called the Discipline." Compl., ¶ 6(Docket No. 1). Later that year, New Heart became a corporate entity registered with the Idaho Secretary of State as New Heart Community Fellowship, Inc. ("New Heart"). See id. at ¶ 7. Reams was the new pastor of the church, and continued in that capacity at all times otherwise pertinent to this case.

Some five years later, Reams informed an EMC Conference Superintendent that he had resigned as pastor of New Heart and was serving as pastor for a new church. The new church, named "The Crossing" ("Crossing), was incorporated on July 10, 2010. At the time Reams told EMC of his resignation from New Heart, the "new church" was already holding its services in the same leased space where New Heart had conducted its services and operated its church.New Heart, on the other hand, was no longer conducting services or other church activities. See id. at ¶¶ 12, 14. Additionally, the members of New Heart now made up the membership of Crossing. Crossing had the same president, secretary, and directors. Crossing created its own website; however, many of its pages were identical to pages found on the New Heart website. Cowell Aff., Exs. B-1 and B-2, (Docket No. 4-3).

EMC sues "New Heart Community Fellowship Inc., now known as The Crossing Church, Inc.,"contending that Crossing is simply a continuation of New Heart under a new name, not a "new church" as Pastor Reams claimed. Mem. in Support of Mot. to Compel Arb. (Docket No. 4-1). EMC's dispute with New Heart/Crossing involves a disagreement as to whether New Heart has withdrawn from its association with EMC, the status of an outstanding debt allegedly owed by New Heart to EMC of $93,340.20, and the ongoing use of real property originally leased to New Heart, now being used as worship space for Crossing. Id. at ¶ 30.

In 2011, after the disagreement first arose, EMC Conference Superintendents sent a letter requesting that New Heart participate in an alternative dispute resolution process, pursuant to section 701 of the Discipline. See id. at ¶ 24. The Disciplineprovides two avenues for a local church to depart from, and to remove property from, the EMC denomination: EMC's General Council can choose to disaffiliate the local church under § 609 of the Discipline, or the local church can withdraw from the EMC by conducting a withdrawal vote following the requirements of § 209 of the Discipline. Compl. ¶ 9. However, before a local church may take a withdrawal vote, a Conference Superintendent must certify that the local church has repaid all "grants, loans and monies disbursed to that local church by the denomination for any and all purposes." Memo. Mot. to Compel Arb, (Docket No. 4-2). If a church withdraws from EMC, then "all conference funding must be returned to the appropriate conference." Id. Additionally, § 209 of the Discipline requires that an EMC superintendent preside over any vote regarding "the local church's conveying, selling, exchanging or encumbering of property in connection with, or in any way related to, a withdrawal." Compl. at ¶ 19.

EMC contends that neither of these steps for withdrawal was followed. EMC has not disaffiliated New Heart under § 609 of the Discipline as no vote to withdraw, presided over by an EMC Superintendent, has occurred, nor has a proper local church withdrawal election been held Id. at ¶ 10.New Heart has not repaid the $93,340.20 it received from EMC between 2004 and 2009. Id. at ¶ 17. Additionally, the building and real property which New Heart leased for worship during its affiliation with the EMC was sublet to Crossing without the approval of the Conference Superintendent. Id. at ¶ 19.

Now, EMC seeks an order enforcing the alternative dispute resolution process called for by § 701 of the Discipline. Crossing seeks to dismiss the action, contending that EMC has no right to seek relief against Crossing, because New Heart, not Crossing, was the entity which affiliated with EMC. Def.'s Mem. on Mot. to Dismiss (Docket No. 6-2).

II. DISCUSSION

A. Defendant's Motion to Dismiss ...


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