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Iglesia Evangelica Latina, Inc. v. Southern Pacific Latin American District of the Assemblies of God

April 27, 2009


APPEAL from a judgment of the Superior Court of Los Angeles County. Elizabeth Allen White, Judge. Reversed and remanded with directions. (Los Angeles County Super. Ct. Nos. BC351174, BC352107 & 06U04893).

The opinion of the court was delivered by: Zelon, J.


Appellants Juan Reyes and Iglesia Latina Evangelica, Inc. (IEL) appeal the trial court‟s judgment in favor of Southern Pacific Latin American District of the Assemblies of God (SPLAD) on three consolidated actions arising out of SPLAD‟s takeover of IEL after an internal dispute at IEL and SPLAD‟s transfer of IEL‟s real property. Appellants contend that although IEL was affiliated with the national hierarchical church Assemblies of God, of which SPLAD was an intermediate governing body, SPLAD had no authority to take over its corporate governance and transfer its property to itself. We reverse the trial court‟s judgment and hold in favor of IEL on SPLAD‟s claims as well as IEL‟s claims arising from the wrongful transfer of its property to SPLAD, and remand for a new trial on IEL‟s remaining claims.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY The First Amendment prohibits civil courts from resolving church property disputes on the basis of religious doctrine and practice, and requires civil courts to defer issues of religious doctrine or polity to the highest court of a hierarchical church organization. While state secular courts may resolve church property disputes according to each state‟s law, the method chosen must not violate the First Amendment. In In re Episcopal Church Cases (2009) 45 Cal.4th 467, our state Supreme Court held that we must apply the "neutral principles" approach to resolving church property disputes in a hierarchical church organization.

The Assemblies of God church is a hierarchical church. Within this hierarchy are three levels: The General Council sits at the peak of the hierarchy; below this are District Councils that supervise specific geographic areas; on the third level are two types of churches, district council churches and general council churches. SPLAD is one of the intermediate-level district councils which covers portions of California, Nevada, Hawaii and Arizona; Region V of SPLAD supervises Los Angeles. (SPLAD Constitution, Art. V, § 4(c).) At the base of the hierarchy, the general council churches have their own boards and operate independently, while district council churches are subject to direct control by their district councils.*fn1 (SPLAD Bylaws, Art. VII, §§ 1, 2, 10.)

IEL incorporated in July 1975 as an independent church; in September 1979, IEL affiliated with SPLAD as a district council church; and in 2002, IEL affiliated with the national organization of Assemblies of God as a general council church. In December 2005, as a result of a dispute between IEL‟s pastors, SPLAD removed the pastors, converted IEL from a general council church to a district council church, and had IEL transfer to SPLAD 16 parcels of real property held by IEL. On April 23, 2006, members of IEL returned and took over the church, expelling SPLAD‟s interim pastor. Three separate legal actions resulted from these events: (1) IEL‟s action to recover its real property and other claims; (2) SPLAD‟s action against IEL‟s members for ejectment from the church property and quiet title; (3) SPLAD‟s action against IEL‟s members for forcible detainer.

1. The Parties' Governing Documents and Structure of Assemblies of God

To effectuate its hierarchical structure, the Assemblies of God church uses four different constitutions: (1) the superior authority, which is the constitution of the General Council of the Assemblies of God; (2) the District Council Constitution (in this case, SPLAD), and below that either (3) a district church‟s constitution, or (4) a general council church‟s constitution, each of which must be in accord with the two superior constitutions.

Assemblies of God‟s Constitution states that the "General Council of the Assemblies of God is a cooperative fellowship based upon mutual agreements voluntarily entered into by its membership." (The General Council of the Assemblies of God (AOG) Const., Art. II.) Assemblies of God is organized around an executive presbytery and a general presbytery. (AOG Const., Art. IX, §§ 2 and 3.) The Assemblies of God Constitution provides for district councils, which "shall have supervision over all the ecclesial and sacerdotal activities of the Assemblies of God in its prescribed field. . . ." (AOG Const., Art. X, § 2.) Further, the Constitution prohibits the district councils from violating the constitution or bylaws of the General Council, and "In the prosecution of its work the district council shall keep vigilant watch against any violation of the principles of spiritual unity and cooperative fellowship to which the Assemblies of God Fellowship is unalterably dedicated." (AOG Const., Art. X, § 6.)

With respect to the subordinate churches, Assemblies of God directs general council churches to adopt corporate documents compatible with those of Assemblies of God. (AOG Const., Art. XI, § 1(a)(4).) "Each General Council affiliated assembly has the right of self-government under Jesus Christ, its living head, and shall have the power to choose or call its pastor, elect its official board, and transact all other business pertaining to its life as a local unit. . . . The fact it is affiliated with The General Council of the Assemblies of God shall in no way destroy its rights . . . or interfere with its sovereignty." (AOG Const., Art. XI, § 1(c).) District council churches are "under the supervision of the district council in accordance with the provisions of the district council constitution and bylaws." (AOG Const., Art. XI, § 2.) Assemblies of God encourages such local assemblies to achieve general council status, and the executive presbytery of SPLAD has the exclusive power to determine when "a local church has reached a state of growth, stability and maturity qualifying it for affiliation with the General Council of the Assemblies of God as a sovereign local church." (AOG Const., Art. XI, § 2; SPLAD Bylaws, Art. VII, § 2(e).)

At the intermediate level, SPLAD‟s constitution provides that its directive is to "promote and maintain standards of doctrine and conduct, and to apply discipline according to the Holy Scripture and this Constitution and Bylaws. . . ." (SPLAD Const., Art. III, § 1.) SPLAD is also governed by executive presbytery and district presbytery. (SPLAD Const., Art. VII, VIII.) SPLAD‟s constitution provides that it is subordinate to Assemblies of God. "This District Council hereby adopts and acknowledges as superior authority the Constitution and Bylaws of The General Council of the Assemblies of God, as such is now or may from time to time be amended, hereinafter for simplicity occasionally referred to as "General Council Bylaws,‟ for conduct of all business and administration . . . and establishment of standards of doctrine and conduct, and this corporation is likewise subject to legislation and directives of that parent organization." (SPLAD Const., Art. IV, § 2.)

With respect to local churches, SPLAD‟s bylaws provide that "District sponsored local churches shall be recognized as District council affiliated churches, under supervision of the District Council bylaws. District council affiliated programs may include . . . former sovereign Assemblies of God churches that have surrendered their sovereignty temporarily or otherwise that seek District Council assistance. . . ." (SPLAD Bylaws, Art. VIII, § 10(a).) SPLAD‟s bylaws provide it may remove from the roster any district council church which ceases to qualify for recognition, and likewise may request "sovereign" churches that are disapproved be removed from the roster. (SPLAD Bylaws, Art. V, § 5(b)(2).) SPLAD has the exclusive authority to resolve disputes between factions of a church and the church board. (SPLAD Bylaws, Art, XVI, § 2(b).) "When in need of counsel and advice in administrative or other matters, the local sovereign church may appeal to the District Officers." (SPLAD Bylaws, Art. VII, § 8.)

IEL‟s Articles of Incorporation filed in 1975 provide that its purpose is to establish and operate a church for the worship of Jesus Christ and to proclaim and spread the good news of salvation by faith in Jesus Christ. (IEL Articles of Incorporation, Art. II, § (A)(1).) IEL‟s Articles give it the power to, among other things, hold and invest money and property; sell and convert property; and purchase or encumber property. The Articles provide that "Upon the dissolution or winding up of the corporation, its assets remaining after payment or provision for payment of all debts and liabilities of this corporation, shall be distributed to a non-profit fund, foundation, or corporation which is organized and operated exclusively for charitable purposes and which has established its tax exempt status under Section 501 (c)(3) of the Internal Revenue Code." (IEL Articles of Incorporation, Art. VI.) With respect to any assets held in trust, such trust assets must be disposed of pursuant to court order upon petition by the Attorney General or any other person in a proceeding to which the Attorney General is a party. The Articles of Incorporation contain no other provisions for the disposition of IEL‟s property. (IEL Articles of Incorporation, Art. VI.)

At the local level, IEL‟s constitution and bylaws, adopted May 21, 1990, provide that it is affiliated with the General Council of the Assemblies of God. (IEL Const., Art. II.) The board consists of five members, and IEL‟s board represents the legal entity of the church in the State of California, while the Board of Deacons represents the "spiritual life and service" of the church. The board conducts the activities and affairs of the corporation, functions as an interface with the secular community, oversees church finances, employs a secular accountant, and is responsible for processing all documents regarding the purchase and sale of real property. (IEL Const., Art. 6; IEL Bylaws, Art. 3, §§ 1, 2.) The bylaws empower the board to execute any instruments or contracts on behalf of the corporation. (IEL Bylaws, Art, 6, § 1.)

2. The Events Preceding the Litigation

Until December 15, 2005, IEL was a general council church affiliated with Assemblies of God, operating with its own Constitution and Bylaws. IEL had an elected five-member board, consisting of Moises Sandoval, Juan Reyes, Misael Portillo, William Ruiz, and Ernesto Ramirez. Moises Sandoval was the senior pastor at IEL and Juan Reyes was the assistant pastor.

In November 2005, Ernesto Ramirez, corporate secretary of IEL, accused Juan Reyes, the assistant pastor, of stealing money from IEL. Reyes contended that the monies were sent to a "sister church" in Guatemala, but Ramirez and Moises Sandoval alerted SPLAD to Reyes‟ alleged theft. Ramirez removed the records and corporate books of IEL, and Nelson Sandoval, the son of Moises Sandoval, removed musical instruments and computer equipment from the church.

SPLAD suspended Reyes from his position as assistant pastor and asked him to stay away from the church. On December 4, 2005, Pastor Moises Sandoval asked SPLAD to change IEL back to a district counsel church, and SPLAD appointed Raul Castro as IEL‟s interim pastor. SPLAD superintendent Sergio Navarette convened IEL‟s board to discuss Sandoval‟s request.

On December 16, 2005, Navarette, Castro, and Espinoza met with three members of the IEL Board (William Ruiz, Ernesto Ramirez, and Misael Portillo). The two other board members, Moises Sandoval and Reyes, were not present because Navarette, acting on behalf of SPLAD, had advised them to stay away. At this meeting, Navarette told the IEL Board that the National Secretary of the Assemblies of God Church, George Wood, had told Navarette that he was aware of the situation at IEL, and that "if the violence and threats do not calm down," SPLAD should take control and schedule an appointment with the church board to vote and make the change in the status of IEL to district affiliated.

At the meeting, the board members present agreed that SPLAD should take control and supervision of IEL, and voted that the church should change its status from general counsel to district church. SPLAD asserted that as a result of this action -- because a general council church which becomes a district affiliated church has no independent board -- Navarrete, Castro and Espinosa became the officers and Board members of IEL, and IEL no longer had a board.

On January 11, 2006, IEL transferred 16 properties held in its name to SPLAD pursuant to a Grant Deed executed by Moises Sandoval and Ernesto Ramirez.*fn2

On January 27, 2006, Navarette told the congregation of IEL that Reyes had appealed to the General Council of the Assemblies of God regarding his credentials and ministry, and that Assemblies of God was analyzing his case; Moises Sandoval had moved his ministry to another church; and SPLAD would be, for an indefinite time period, overseeing and supervising the ministries of IEL until "all is back into its biblical order." Moises Sandoval had left IEL to start another ministry because he had received threats and feared for his personal safety.

In spite of SPLAD‟s December 2005 actions purporting to oust IEL‟s board, on April 23, 2006, the members of IEL held an election at which they elected to IEL‟s board Reyes and four other church members (Epifanio Zepeda, Victoria Carias, Misael Portillo and Gioconda Lopez).*fn3

On April 23, 2006, during Sunday services, Reyes and about 15 of his supporters entered the church and attempted to seize the microphone from Pastor Castro. Reyes took another microphone and addressed the congregation. Pastor Castro left the pulpit and proceeded to his office, where he was barricaded until the police were called. Reyes admitted SPLAD had told him to stay away from the church, but several witnesses at trial disputed the assertion that Castro was imprisoned in his office.

On April 19, 2006, Reyes had agreed to accept discipline for one year for ethical misconduct, as stipulated on the Assemblies of God Constitution and Bylaws. At an April 24, 2006 Executive Board of Administration meeting of SPLAD, Navarette, Castro, and Espinoza agreed to return Moises Sandoval to his position as pastor; to dismiss Reyes for failing to comply with his discipline agreement; and to close the church for an indefinite period.

However, on April 23, 2006, SPLAD was unsuccessful in its attempts to change the locks on the church, and Reyes and his supporters continued to use and occupy the church property. They had not sought or ...

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