Trial Court: San Francisco Superior Court No. CGC-07-461315 Trial Judge: Hon. Peter J. Busch.
The opinion of the court was delivered by: Reardon, J.
CERTIFIED FOR PUBLICATION
This case brings to light a variation on a local church's effort to disaffiliate from a national denomination. The church's bylaws confirmed that it was subject to and governed by the constitution of the denomination, and forbade amending or modifying this provision "in any manner" absent the written consent of the entity within the denominational hierarchy that oversaw the church. Seeking to accomplish an end run around these provisions, the governing board of the local church attempted to amend its articles of incorporation and bylaws to sever its denominational ties. Applying neutral principles of law, the trial court ruled that the local church did not have the power to amend its governing documents to terminate affiliation with the national denomination, and the oversight entity was empowered to supersede the church's governing board. In light of these rulings, the court entered a permanent injunction forbidding certain actions. On appeal, appellants profess their right under state corporations law to amend the church's governing documents and control its affairs. We conclude under established California law that the disaffiliation attempt was ineffective and the oversight entity superseded the governing board. Accordingly, we affirm the judgment entering a permanent injunction.
A. Denominational Structure
The Reformed Church in America (RCA) is the oldest continuous evangelical Protestant denomination in this country. It is organized according to a Presbyterian polity into four governmental units, each of which exercises judicial as well as legislative powers. These units are the consistory, the classis, the regional synod and the General Synod. The consistory is the governing body of a local church, comprised of the church's installed minister(s) serving under a call, and certain elders and deacons who typically are elected to specified terms by the voting members of the church. The consistory runs the day to day affairs of the RCA-affiliated church. The classis is an assembly and judicatory*fn1 comprised of all the enrolled ministers within its bounds, and elder delegates representing the churches within its bounds. It is the body under whose jurisdiction every individual church affiliates with the RCA. Churches are either formally organized by a classis, or, in the case of existing unaffiliated churches, by being received under the jurisdiction of the classis. In forming new churches, the classis must determine that the church's organizational document includes a provision substantially in the form of formulary 15, set forth below.*fn2 The various classes exercise a general superintendence over the interests and concerns of the churches within their bounds, and are empowered to enforce the governance requirements of the RCA. The classes exercise original and appellate supervisory power over the proceedings, acts and decisions of the consistories, both as to nonecclesiastical matters and those relating to Christian discipline.
Classes in turn are arranged into geographic units called regional synods, comprised of ministers and elders delegated by each classis within their bounds. The synods exercise a general superintendence over the interests and concerns of the classes in their regions; exercise appellate supervisory powers over the acts, proceedings, judgments and decisions of its classes; and may form, combine and disband classes or transfer churches from one classis to another. The General Synod is the highest assembly and judicatory of the RCA. We take judicial notice that under the Book of Church Order, the General Synod exercises a general superintendence over the interests and concerns of the whole church as well as appellate supervisory power over the acts, proceedings and decisions of the lower assemblies. It forms the regional synods, and alone determines denominational policy.
The RCA and all its component entities and agencies, including local churches, are governed by and organized in accordance with the Constitution of the RCA (RCA Constitution), which includes chapters 1 and 2 of the Book of Church Order, namely "The Government" and "The Disciplinary and Judicial Procedures."
Pursuant to the Book of Church Order, a consistory cannot sell, transfer or encumber real property without the approval of the classis of which the church is a member. The Book of Church Order also sets forth procedures by which a consistory can petition to withdraw from the RCA in order to affiliate with another denomination. Petitioners can propose that the applicant church take with it all or part of its real and personal property, free of any claim of the RCA. The classis has ultimate authority to decide whether it is in the best interests to allow the church to withdraw and retain all or part of its property. Finally, whenever a church is disbanded or dissolved, all real and personal property becomes vested in the appropriate classis, if permitted by state law.
B. Miraloma Community Church
Appellant Miraloma Community Church (Miraloma Church or Church) was incorporated as Grace Reformed Church in 1942. It later changed its name to Miraloma Community Church. *fn3 In the founding articles of incorporation and as subsequently amended, the Church announced its allegiance to the RCA. Prior to March 4, 2007, the articles stated that the "specific and primary purposes [of Miraloma Church] are to operate and maintain a Reformed Church in accordance with the doctrines, laws, rules, usages and disciplines of the Reformed Church in America, as from time to time established, made, and declared by the lawful authority of said church and as set forth in its Constitution."
The bylaws of Miraloma Church provide at the outset as follows: "Notwithstanding anything to the contrary contained herein, this Miraloma Community Church is a member church in the Reformed Church in America; is and at all times shall be subject to and governed in accordance with the Constitution of the Reformed Church in America; and agrees that the provisions of this Article 1, Paragraph 2, shall not be amended or modified in any manner without the prior written consent of the Classis of which this church is a member."
Over the years, Miraloma Church conducted itself as an RCA- affiliated church in accordance with the hierarchical structure of the denomination, paying regular dues, providing annual statistical reports and submitting pastoral contracts and appointments to respondent Classis of Central California (Classis) for its consent and approval. As well, the Consistory sought and obtained permission from the Classis to sell a parsonage. And, in November 2006, the Consistory asked for permission to set aside its bylaws in order to hold over expiring members; permission was granted.
Over the years, Miraloma Church has also enjoyed the fruits of financial assistance, grants, and assistance in the pastoral search process, all as provided by the RCA and its constituent bodies. For example, in the early years the General Synod Council of the RCA made three loans totaling $46,000 to help establish Miraloma Church. The council later subordinated its liens and altered the terms of a loan to make it more favorable to the local church. Miraloma Church also received grants from an arm of the RCA for construction of a new church building. As a condition of these grants, the Church agreed that if it dissolved or sought to leave the RCA, it would return the funds. More recently, in May 2004, the General Synod Council approved a $15,000 matching grant to help fund a cafe ministry, vacation Bible school program and play group.
The Classis has also assisted the Church. In September 2003, the Classis approved a 15-year, $40,000 loan at below market interest to enable the Church to rebuild its bell tower. Additionally, since January 2002, the Classis has extended over $36,000 in various grants to Miraloma Church.
C. Supersedure Process and Response
The Book of Church Order empowers a classis, in its judgment, to supersede a consistory and replace it with an administrative body designated by the classis. This procedure can only occur under limited, specified conditions including the "[l]ong-term or rapid decline in participation or membership" of the church in question. The Book of Church Order spells out detailed procedures for accomplishing this process.
In January 2007, and in accordance with the Book of Church Order, the Classis notified the Consistory that it was considering superseding the Consistory due to " `long-term decline in participation and membership' which make[s] it unable to fulfill the functions of a local church . . . ." Between 1991 and 2006, the number of communicant or confessing members declined from 84 to 20, five fewer than the minimum for a quorum for general membership meetings as stated in the Church's bylaws. Average attendance dropped from 102 in 1997, to 48 in 2006.
A Classis team convened in February 2007 to give the Consistory an opportunity to show cause why it should not be superseded. Following the Consistory's presentation, and on the motion of the Classis team, the Classis voted on March 10, 2007, to supersede the Consistory and appoint interim trustees to serve as the interim board of directors. However, the ...