Something mysterious (well, not really—but read on) has happened with regard to the corporate entity recognized under California law as the religious corporation sole associated with the Diocese of San Joaquin. Under California law, a “corporation sole” is a special kind of corporation—with just one shareholder, one officer and one director, who are all one and the same person—that can be formed by “a bishop . . . of any religious denomination, society, or church, for the purpose of administering and managing the affairs, property, and temporalities thereof.” (Calif. Corp. Code section 10002.)
There has been a corporation sole for the Diocese of San Joaquin in California ever since 1911. Each time a new bishop is elected, there is an amendment to the articles filed by the new bishop, naming him as the successor to the position. When the Rt. Rev. John-David Schofield was elected Bishop in 1988, the articles were amended (albeit in 1992); and preceding the first convention vote in December 2006 to change the Diocesan Constitution, the articles of the corporation sole were amended in March 2006 to change the method of electing his successor. (That amendment caused four other Episcopal Bishops in California to issue an ultimatum to Bishop Schofield that they would file a presentment against him unless he rescinded the changes—the documents may be seen here.) On January 22, 2008, Bishop Schofield filed another amendment to the articles, changing the name of the corporation from “The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole” to “The Anglican Bishop of San Joaquin, a Corporation Sole.”
Now, quietly and without any fanfare, the Secretary of State’s Web site lists the corporation again under a new name as of April 8, 2008: the name has changed back to “The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole”. Further research with this filing shows that it lists the sole member of the corporation as the Rt. Rev. Jerry A. Lamb, in Stockton, California, and that its agent for service of process is attorney Michael Glass of San Rafael, California.
Brilliant analysis, as usual. I’m coming to look forward to Mr. Haley’s penetrating insights. He ought to be read by anyone who is interested in these often unclear issues at stake, which ultimately will be sorted out in court.
Tricksy.
Here’s an ENS article on [url=http://www.episcopalchurch.org/79901_92634_ENG_HTM.htm] Michael Glass[/url]. He seems to be a David Booth Beers’ minion.
Oh the humanity.
bb
Oh, the abysmal depths to which some will sink in pursuit of their goals!
For what it’s worth, I have just sent an e-mail letter of strong protest to Bishop Lamb. Now let’s see where the chips fall!
“Now…the Secretary of State’s Web site lists the corporation again under a new name as of April 8, 2008: the name has changed back to “The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole”
But does that have any effect whatever on the Anglican Diocese of San Joaquin?
Think about it: Bp. Schofield relinquished the name “Protestant Episcopal Bishop of San Joaquin, a Corporation Sole.” Bp. Lamb has now filed a piece of paper claiming that name. That does not, in itself, seem consequential.
Schofield could argue that Lamb has not “changed back” the name of the diocese. Lamb has simply purported to act in the name of a corporation that he does not, in fact, control. It proves nothing. As best I can see, it changes nothing.
If Bp. Lamb would like, I can help him change his name to Chrysler or declare himself Czar of All the Russias.
http://www.arlo.net/resources/lyrics/chrysler.shtml
Irenaeus (#5), if only it were as simple as that. The conflict comes from the fact that the papers Bishop Lamb filed purported to change both the name [i]and the incumbency[/i]—the sole director, officer and shareholder—of Bishop Schofield’s corporation sole, which is the corporation that holds title to all of the Anglican DSJ’s property. It’s as you you were to file an amendment to Chrysler’s articles of incorporation, reciting that due to an authorized change, you were now the sole officer, director and shareholder of Chrysler—as the preliminary step in a campaign to assert title to all of Chrysler’s assets. If the papers were in proper form (and in my example, it wouldn’t work, because only a religious corporation can be a corporation sole), the Secretary of State would file them, and on paper, at least, you would own Chrysler! Yes, Bishop Schofield can file papers tomorrow changing everything back, but only the California courts will be able to decide who is really in charge of this particular corporation sole (the one incorporated in 1911 for the original Bishop of San Joaquin).
Chancellor, our Diocesan Council meets today, and I wouldn’t be surprised if Bishop Schofield does file papers changing everything back very soon.
I posted publicly on several blogs that this was going to happen. I pleaded with folks in the SC-DSJ to be proactive and not reactive. I am afraid SC-DSJ are in for a rude awakening and very nasty battle. Further, if I was in CA and had any kind of state filing as a entity, I would be very enraged that any common Joe can be the claimant to your business, organization, or glee club and the state doesn’t have a check and balance.
I think the challenge will be that Bishop Lamb signed a false document that he was the authorized agent or sole member of the company that was the Anglican corportation – that is of course fraud – I could file a document with the Secretary of State on any corporation in Texas claiming to be the owner – it would be a fraud but someone would have to make the claim. It may also be a plan to draw Shoefield into filing the first lawsuit enjoining any further filings by Bishop Lamb. This fight gets sicker every day – a settlement would be so easy and so Christian. 815 is run by some mean leftists.
An interesting issue. Under the prevailing California “neutral principles of law” theory, I gather the courts should look only to the title documents to determine ownership. If so, all the property of the diocese between 1988 and 1992 belonged to the [i]former[/i] bishop, the Rt. Rev. Victor Rivera, and not to Bp. Schofield. Did the diocese dutifully seek out Bp. Rivera to sign all its business documents during that four-year period, or did Bp. Schofield execute them?
California lawyers, help me out here. If Bp. Rivera had died before 1992 (rather than in 2005), would the property have passed to his three daughters, one of whom is indeed “a bishop of a religious denomination,” namely Bishop Suffragan of Olympia? I assume, instead, that the property would have passed to his successor in office.
Who would have had the authority to determine who the successor was if (as at present) there were two people both claiming to be the lawful Bishop of San Joaquin (not to mention the old Standing Committee, which also has a claim to be the Ecclesiastical Authority)? Under the older “defer to hierarchical church authority” legal theory, the answer is pretty clear–the denomination gets to determine who is the bishop. Under “neutral principles,” the court decides, but how is it to determine which of the multiple sets of competing church authorities is legitimate without excessive entanglement in a theological dispute?
Does California law not look outside the four corners of the title documents if the proprietor of the corporation sole starts acting for the benefit of himself as a private person, as distinct from acting for the benefit of the diocese in his official capacity as bishop? We had a case in Texas not long ago where a Roman Catholic diocese successfully sued to recover property appropriated by its former bishop while he was still in office. Would that suit have been unsuccessful in California?
If the acting Bishop of Kentucky in 1874 had been a corporation sole, could he have taken all the church property in the state over to the Reformed Episcopal Church? Could Bishop Ives of North Carolina in 1852 have conveyed all the Episcopal church property to the Holy See when he became a Roman Catholic? If the answer to these question is “no,” why is this situation different?
If a bishop is deposed for misconduct and sets up his own rival denomination, can he keep title to the diocesan assets? Does this depend on whether the misconduct is recognized as such by the criminal law, or are ecclesiastical offenses sufficient? If there is a question about the validity of his deposition, how do the courts decide it by “neutral principles” without (on the one hand) deferring to the denomination’s understanding of its own polity and theology or (on the other hand) establishing religious principles as a matter of state policy notwithstanding the impact on the ability of the church members to freely exercise the religion they have chosen?
Combining “neutral principles” analysis with a “corporation sole” sounds like a quagmire.
Dale, good theory on TEC’s legal tack. I hope that Haley’s example from the Bomar case will be the precedent relied upon by the courts, but TEC has a good shot at obfuscating what appears so black and white to so many of us.
From my personal experience in a different arena I predict that a well-funded entity like TEC will have no problem spending good money after bad to get their way. There is a description of similar battles of attrition, this time over patents, in the book on the development of radio “Empire of the Air.” In the end justice comes from God, not man; as much as Jesus warned us to be answerable to each other we don’t like to give up our selves.
I’m not a lawyer or a Californian, but it seems to me that there is more to it than just “a corporation sole.” It does not seem likely to me that the Bishop of California could decide on his own to disassociate the diocese from the Episcopal Church and convert the churches to Hindu temples, for example.
It seems to me that a judge would look at the facts that, beside the corporation sole, there are a constitution and canons, a standing committee (which can be the ecclesiastical authority — i.e., corporate sole) and a council. The facts are that the duly constituted council of the Diocese of San Joaquin, following procedures set forth in the constitution and canons, altered the name of the diocese, disaffiliated from the Episcopal Church, and affiliated with the Province of the Southern Cone, all with the assent of the standing committee.
No doubt a judge would also look at the fact that the affiliation with the Episcopal Church involved national constitution and canons. So one question would be, is there anything in the national constitution and canons which would prevent a diocesan convention, with the concurrence of the standing committee and the corporation sole, from amending their constitution and canons so as to disaffiliate from one Anglican province and affiliating with another? To the best of my knowledge, the national constitution and canons do not forbid that.
I think in hearing this case, a judge would also look at whether the officers of the Episcopal Church, the Presiding Bishop in particular, acted in accordance with the constitution and canons of the Episcopal Church. In particular, do the constitution and canons of the Episcopal Church give the presiding bishop authority to (1) remove duly elected members of a diocesan standing committee, (2) to call a “special diocesan council” for the purpose of electing a “corporation sole” and (3) to appoint an acting bishop? And, again, to the best of my knowledge there is nothing in the constitution and canons that gives her such authority, which would, I think, gravely prejudice the case against the Episcopal Church.
And I also think that the failure of the House of Bishops to follow the provisions of the constitution and canons of the Episcopal Church in deposing the corporate sole of the Diocese of San Joaquin would also work against any favorable ruling for the Episcopal Church.
Ken Peck, the process leading to our actions this year was long and drawn out. Nothing was done without very carefully considering the consequences of our actions, and believe me, I had some sleepless nights before and after convention in 2006 and 2007! And I was only a delegate from a small mission church!
We made very sure that all of the “Ts” were crossed and all of the “Is” were dotted…..and we made doubly certain that every statement was properly parsed……we have some excellent attorneys available to us. As far as I know, we left nothing to chance, and all of our bases were covered.
The leaders of TEC are going to have a very tough sell in court.
I agree pretty much with the previous post (#12). The first question for the California courts, I think, will not be so much a hierarchical one (who is the rightful Bishop of San Joaquin?), but one of corporate law: did the unincorporated association that was the (formerly Episcopal) DSJ properly amend its Constitution and Canons? That is, as in the [i]Bomar[/i] case, was there a properly noticed meeting of its members, was there a quorum present and voting, and did the amendments pass by the required majority? I think we can safely predict that the court, following [i]Bomar,[/i] will be able to answer each of those questions in the affirmative.
The corporation sole is, in California law, a creature of the unincorporated religious association: it exists solely to govern it pursuant to California law and its own rules. The unincorporated association (or the religious corporation, if incorporated) must [i]authorize[/i] the corporation sole to file its articles naming how the successor of the denomination will be chosen. So if the California court finds that the unincorporated association followed proper procedures in amending its Constitution and Canons, its authority to authorize its governing corporation sole under California law will continue as before.
As Mr. Haley’s analysis notes, the only way that Bishop Lamb could challenge the amendments would be to get the court to decide that in some way they were [i]ultra vires,[/i] or beyond the power, of the association [i]as a Diocese of the Episcopal Church[/i] to enact, regardless of the fact that the changes were made according to California law. The court would have to be persuaded that there was something in the body’s former Constitution, or in TEC’s Constitution, that put an outer limit on the types of amendments that could be properly enacted. Here is the “restated” [url=http://s3.amazonaws.com/dfc_attachments/public/documents/12/Restated_Diocesan_Constitution__final_.pdf] Constitution of the Diocese[/url]—I do not see any such limiting language in Art. XIII. And as for Art. II, “accession” is a voluntary act. Nor does TEC’s own Constitution purport to restrain dioceses from “deaccessing”, [i]i.e.,[/i] performing another voluntary act.
So the difference between this situation and the hypotheticals posed by Dale Rye is that we have not just a bishop, but [i]a whole Diocese,[/i] that is leaving the Episcopal Church—and not leaving it to start a new Church that is out of communion with TEC, but to align itself temporarily with another Church with which TEC considers itself to be in communion. Indeed, the best argument for both Bishop Schofield and the Anglican DSJ might be to say that they have always held the diocesan assets in trust, that they continue to hold those assets in trust, for the benefit of the Episcopal Church as it existed when the Diocese was created and while it grew to maturity, and that the present course of action was the only one that would assure they could continue to fulfill their fiduciary obligations while the current questions about TEC get sorted out.
Just las a egal placeholder, should a fraud lawsuit be immediately filed against Messrs. Glass and Lamb?
oops – finger check in post 15. Beginning should read “Just as a legal placeholder…”
I would agree with Chancellor’s (#14) and Ken Peck’s (#12) analyses. Dale says
Except that it is not clear at all how the “heirarchical church” can resolve this situation. What is the highest authority in TEC? The constitution and canons? The Presiding Bishop? General Convention? Does the Presiding Bishop get to ignore TEC’s canons to declare a bishop? What if a diocese takes action which is not forbidden by the canons, but which another body claims it can’t? Talk about a quagmire. It sounds like Dale’s version of the heirarchical church theory would require the courts to recognize the ecclesiastical strongman tyrant, regardless of the church rules, OR inquire into just what are the governing rules of the heirarchical church. There is no way for the courts to adopt a “heirarchical church theory” and NOT get involved in the quagmire of TEC and be required to make theological determinations about what exactly a “heirarchical church” is.
Much better to be honest about it and do the neutral analysis advocated by Ken Peck and Chancellor. I think that the questions to be asked are: first, does Jerry Lamb have any standing to make this claim? To resolve this, the court needs to consider whether Jerry Lamb was legitimately made bishop of the Diocese of San Joaquin according to TEC’s constitution and canons. I think it quite clear that he was not. The courts will probably end their inquiry here. But if they did continue, the next question is: did the Diocese of San Joaquin clearly violate any TEC canon or constitutional provision in doing what it did? There is no canon or constitutional provision which prohibits a diocese from leaving TEC.
Therefore, if the courts want to avoid making theological determinations and becoming involved in the quagmire of TEC’s polity and the theological questions of what makes a “heirarchical church” heirarchical, then the resolution to this should be relatively easy.
Rats! I tried to print out the article for more careful study…and nothing prints but the headline. Any ideas on how to print the entire text, too? Thanks, elves.
Chancellor: Your analysis in #14 looks right to me. So does your analogy to my purporting to amend Chrysler’s certificate of incorporation [#6].
Returning to another aspect of #6]: We have expected all along that ECUSA would go to court to contest Bp. Schofield’s control of the diocese and the validity of the steps by which he took the diocese out of ECUSA. The purported amendments help define the initial battlefield, but I don’t see how they tilt the terrain.
The amendments do cloud title to diocesan property. But ECUSA will presumably file notices of lis pendens once it goes to court.
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Dale [#10]: Bp. Schofield had apparent authority to conduct diocesan business during the period in question. Bp. Rivera ratified Schofield’s acts both by transferring title and by failing to object.
For a dramatic example of ratification under California law, see O’Melveny & Myers v. FDIC, 512 U.S. 79 (1994), in which the Supreme Court held that two corporate malefactors had ratified their own misconduct by failing to sue themselves. Very different from this case, but quite emphatic about the effect of failure to object. http://www.law.cornell.edu/supct/html/93-489.ZO.html
Note also that California has short statutes of limitation.
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Many, many thanks to Br. Haley for his recent series of articles!
PS to #19: The Supreme Court’s O’Melveny opinion does not dwell on ratification. But Court really does let the crooks ratify their own misconduct. It rejects the Ninth Circuit’s attempt to disentangle the corporation from the crooks. 969 F.2d 744, 749-51 (9th Cir. 1992).
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Does anyone know, given the odd use of the canons, whether there was a consent process for Bp Lamb? There is usually a requirement that the majority of standing committees and diocesan bishops must consent to the election of a bishop before he/she can be seated–and invested with corporation sole. I have not heard anything about consents etc. Any comments?
LCF, for starters, Lamb was already a bishop, so the consent process for creation of a new bishop did not apply. He is already a member of the House of Bishops. What is puzzling is that he was named to his new bishopric before it even existed, by the presiding bishop, without any specific canonical authority. In addition, was there the consent even of the people of his new bishopric? I have assumed that he would be ‘elected’ at the ‘convention’ but I don’t remember if that actually happened. So now, he’s a diocesan bishop instead of a retired bishop, all on the authority of the PB, I assume.
[size=1][color=red][url=http://resurrectioncommunitypersonal.blogspot.com/]The Rabbit[/url][/color][color=gray].[/color][/size]
Bishop Lamb was appointed by PB Jefferts Schori.
#18 Little Cabbage,
An easy way to print out the Haley article:
(1) Highlight the first line or two (by dragging the mouse to light up the beginning of the text you want to copy).
(2) Scroll down to the bottom line (the court decision), hold down the SHIFT key, and click on the end of the last line of the text. The entire article should now be highlighted.
(3) Right click anywhere on the highlighted text and choose COPY from the right-click menu.
(4) Open Wordpad or Notepad, right click on the blank page, and choose PASTE from the right-click menu. Voila. You now have the document in printable form. Edit as you wish (if there’s some cleaning up you want to do). Then choose Print from the File menu.
w.w.
Dale Rye, I am not sure that you can declare California a “neutral principles” state or even that “neutral principles” is the prevailing theory in CA vs hierarchical preference. The CA Supreme Court will hear the St. James case now that the two appellate courts have disagreed so, I guess the jury is still out on that?