Two Rivers Baptist Church v. Jerry Sutton ( 2010 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
June 11, 2009 Session
TWO RIVERS BAPTIST CHURCH, ET AL. v. JERRY SUTTON, ET AL.
Appeal from the Chancery Court for Davidson County
No. 07-2088-I Claudia Bonnyman, Chancellor
No. M2008-01730-COA-R3-CV - Filed May 20, 2010
Officers of a church appeal the trial court holding that under Tenn. Code Ann. § 48-66-102the members of the church have a statutory right to church records. We find that the
members have a right to the records described in subsection (a) of the statute since such
access is unconditional and since enforcing this right does not entangle the court in religious
affairs in violation of the ecclesiastical abstention doctrine. However, the members failed
to articulate a “proper purpose” as required in Tenn. Code Ann. § 48-66-102(c) to gain
access to those records described in subsection (b) of the statute. Accordingly, we affirm the
trial court’s judgment in part and reverse in part.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed in Part, Reversed in Part
P ATRICIA J. C OTTRELL, P.J.,M.S., delivered the opinion of the court, in which A NDY D.
B ENNETT and R ICHARD H. D INKINS, JJ., joined.
Larry L. Crain, Abigail Southerland, Brentwood, Tennessee, for the appellants, Jerry Sutton,
et al.
Mark T. Freeman, Nashville, Tennessee, for the appellees, Two Rivers Baptist Church, et al.
OPINION
This suit began as a dispute between members of Two Rivers Baptist Church, (“the
Church”), a non-profit corporation, and its officers over governance of the Church. Initially,
fifty-four members (“the Members”) of the Church sued the senior pastor, Jerry Sutton, and
other Church officers (collectively “Church Officers”) under a variety of theories alleging
that the Church Officers had not governed the Church in accordance with internal governing
documents, mishandled Church finances, and acted in bad faith. The relief sought by the
Members included discovery to determine the extent of the Church Officers’ alleged
wrongdoing, the removal of the Church Officers, reimbursement of distributions previously
made to the senior pastor, and an order requiring the Church to hold a meeting “so that
certain governance issues can be addressed.” In addition, the Members also sought access
to Church records under the Non-Profit Corporation Act, specifically Tenn. Code Ann. §§
48-66-102 and 104 (“Act”).
The sole issue on appeal is whether the Members are entitled to access to Church
records under the Act, and it is important to understand the context of the request.
The Members filed motions to compel, and in its November 2007 order addressing
those motions, the trial court ordered the Church Officers to allow the Members access to
various Church records under the Act. The trial court found:
The Plaintiffs have met the requirements of Tenn. Code Ann. § 48-66-102(c).
The Plaintiffs stated they will use the records to determine their property rights
as members in the non-profit corporation church.
Consequently, the Church Officers were ordered to allow access to a variety of Church
records which included resolutions, minutes of meetings, accounting records, and
membership lists.
In response to a motion to dismiss, the trial court dismissed all of Members’ claims
by order February 4, 2008, except the claim pertaining to the records request under the Act.
The trial court found it lacked subject matter jurisdiction over the vast majority of the
Members’ claims because to rule on the claims against the pastor and the other Church
Officers would require the court to delve into internal governance of a religious group in
violation of the ecclesiastical abstention doctrine.
Although some of the records were produced, the Members later filed a motion to
compel regarding other records. On January 22, 2008, the trial court granted the Church
Members’ motion to compel finding that “pursuant to Tenn. Code Ann. § 48-66-101 et seq.,
the Plaintiffs sought to inspect and copy church records in order to address their member
property rights in the church building and its funds.” The court adopted the Members’ stated
reason for seeking the records and found:
The purpose for which the Plaintiffs are allowed access to these records, is not
to engage in lawsuit discovery, but rather to address their general property
rights as members of the non-profit corporation.
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Finally, on May 7, 2008, the trial court entered a final order on the inspection of the Church
records noting that most records had been made available to the Members, but ruling on final
points of disagreement.
The Members originally appealed the trial court’s decision to dismiss their numerous
claims against the Church Officers, but the Members’ appeal was later voluntarily dismissed.
The Church Officers, on the other hand, appealed the trial court’s decision that Tenn. Code
Ann. § 48-66-102 required the Church Officers to produce Church records. Consequently,
the only issue on appeal is whether the Church Officers were required by Tenn. Code Ann.
§ 48-66-102 to produce the records as ordered by the trial court. Although given an
extension at the time to file a brief on the issue whether Tenn. Code Ann. § 48-22-102required production of Church records, the Members did not file a brief or participate in oral
argument on appeal.
The issue before us is the extent to which Tennessee Code Annotated § 48-66-102
grants Members access to Church records. That statute, which governs access by members
to records of non-profit corporations, provides as follows:
48-66-102. Inspection of records by members. - (a) Subject to §
48-66-103(c), a member is entitled to inspect and copy, at a reasonable time
and location specified by the corporation, any of the records of the corporation
described in § 48-66-101(e) if the member gives the corporation a written
demand at least five (5) business days before the date on which the member
wishes to inspect and copy.
(b) A member is entitled to inspect and copy, at a reasonable time and
reasonable location specified by the corporation, any of the following records
of the corporation if the member meets the requirements of subsection (c) and
gives the corporation written notice at least five (5) business days before the
date on which the member wishes to inspect and copy:
(1) Excerpts from any records required to be maintained under §
48-66-101(a), to the extent not subject to inspection under subsection
(a);
(2) Accounting records of the corporation; and
(3) Subject to § 48-66-105, the membership list.
(c) A member may inspect and copy the records identified in subsection
(b) only if:
(1) The member's demand is made in good faith and for a proper
purpose;
(2) The member describes with reasonable particularity the purpose and
the records the member desires to inspect; and
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(3) The records are directly connected with the purpose for which the
demand is made.
(d) The right of inspection granted by this section may not be abolished
or limited by a corporation’s charter or bylaws.
(e) This section does not affect:
(1) The right of a member to inspect records under § 48-57-201 or, if
the member is in litigation with the corporation, to the same extent as
any other litigant; or
(2) The power of a court, independently of chapters 51-68 of this title,
to compel the production of corporate records for examination.
Thus, under Tenn. Code Ann. § 48-66-102, a Member’s right to access a record is
dependent upon the type of record involved. Tenn. Code Ann. § 48-66-102(a) and (b) create
two classes or types of records, with different requirements for their production. The records
described in subsection (a) are available to a member without condition; but a member is
entitled to access to the records described in subsection (b) only if the conditions in
subsection (c) are met.
Under subsection (a), a member may have access to the records listed in another
statute, Tenn. Code Ann. § 48-66-101(e), without condition.1 The records available to
members without condition are those that the corporation is required to keep at its principal
office, specifically:
(1) Its charter or restated charter and all amendments to it currently in effect;
(2) Its bylaws or restated bylaws and all amendments to them currently in
effect;
(3) Resolutions adopted by its board of directors relating to the characteristics,
qualifications, rights, limitations and obligations of members or any class or
category of members;
(4) The minutes of all meetings of members and records of all actions
approved by the members for the past three (3) years;
(5) All written communications to members generally within the past three (3)
years, including the financial statements furnished for the past three (3) years
under § 48-66-201;
(6) A list of the names and business or home addresses of its current directors
and officers; and
1
This right is subject to Tenn. Code Ann. § 48-66-103(c) which allows the non-profit corporation
to charge for the copies.
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(7) Its most recent annual report delivered to the secretary of state under §
48-66-203.
Tenn. Code Ann. § 48-66-101(e).
On the other hand, a member’s statutory right to access certain other records of the
non-profit (but which are not included in subsection (a)) is governed by subsection (b) of
Tenn. Code Ann. § 48-66-102 and is explicitly conditioned upon the member’s request
meeting the conditions in subsection (c) of that statute. Tenn. Code Ann. § 48-66-102(b) .
Those records include accounting records, membership lists, and other records set out in the
statute. The conditions of subsection (c) require, among other things, that the request be
made “in good faith and for a proper purpose” and that the records must be “directly
connected” with this “proper” purpose.
On appeal, the Church Officers argue the trial court erred in ordering them to produce
the records described in subsection (a) of Tenn. Code Ann. § 48-66-102, by reference to
Tenn. Code Ann. § 48-66-101(e), on the basis that the order violated the ecclesiastical
abstention doctrine.
The ecclesiastical abstention doctrine (sometimes called the church autonomy
doctrine, see, e.g., Bryce v. Episcopal Church in the Diocese of Colorado, 289
F.3d 648 (10th Cir. 2002)), is rooted in the First Amendment to the United
States Constitution, and its purpose is to prevent the civil courts from engaging
in unwarranted interference with the practices, internal affairs, and
management of religious organizations.2 Kedroff v. St. Nicholas Cathedral,
344 U.S. 94, 116 (1952); Murrell v. Bentley, 286 S.W.2d 359, 365 (Tenn. Ct.
App. 1954). Civil courts cannot adjudicate disputes turning on church policy
and administration or on religious doctrine and practice. Serbian Eastern
Orthodox Diocese v. Milivojevich, 426 U.S. 696, 708-09 (1976); Presbyterian
Church v. Mary Elizabeth Hull Memorial Presbyterian Church, 393 U.S. 440,
446-47 (1969); Kedroff v. St. Nicholas Cathedral, 344 U.S. at 116; Gonzalez
v. Roman Catholic Archbishop, 280 U.S. 1, 16 (1929).
2
The First Amendment’s free exercise guarantee and its prohibition against laws respecting the establishment
of religion have been made wholly applicable to the states by the Fourteenth Amendment. School District of Abington
Township v. Schempp, 374 U.S. 203, 215-216 (1963); Cantwell v. Connecticut, 310 U.S. 296, 303 (1940). Courts have
at times varied in their identification of the source of the ecclesiastical abstention doctrine as the Free Exercise Clause
or the Establishment Clause, or both. See Rosati v. Toledo Catholic Diocese, 233 F. Supp 2d 917, 920 (N.D. Ohio
2002)(stating that the majority hold that the doctrine is founded in the Free Exercise Clause)..
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“A consequence of this Nation’s fundamental belief in the separation of church
and state is that, under most circumstances, the First and Fourteenth
Amendments preclude civil courts from adjudicating church fights that require
extensive inquiry into matters of ‘ecclesiastical cognizance.’” Burgess v. Rock
Creek Baptist Church, 734 F.Supp. 30, 31 (D.D.C. 1990), citing Serbian
Eastern Orthodox Diocese v. Milivojevich, 426 U.S. at 709-10. The
underlying premise is that our system of government, through the First
Amendment, “has secured religious liberty from the invasion of the civil
authority.” Watson v. Jones, 80 U.S. 679, 730 (13 Wall.)(1872).
Anderson v. Watchtower Bible and Tract Society of New York, Inc., No. M2004-01066-COA-
R9-CV, 2007 WL 161035, at *4-5 (Tenn. Ct. App. Jan. 19, 2007).3
It is clear that the unconditional right to access under subsection (a) does not in this
case run afoul of the ecclesiastical abstention doctrine since it does not require the court to
become entangled in any way with church doctrine or disputes in order to decide the question
of access. Consequently, the trial court correctly ordered the Church Members to produce
the records described in subsection (a) of Tenn. Code Ann. § 48-66-102.
With regard to the second class of documents under subsection (b) and (c), the Church
Officers argue that constitutional principles protect these documents from access by
Members and, alternatively, that the trial court erred in finding the statute required access
since the conditions of subsection (c) were not met. We need not examine whether access
to the membership lists violates the Church Officers’ alleged associational right to privacy
under the First Amendment, because application of the statute to the facts herein does not
require production.
For the records under subsection (b), the Members relied upon their “property rights
in the church building and its funds” as the proper purpose. The purpose presented by the
Members and accepted by the trial court was to determine their property rights. However,
as has been previously held, unless there is an agreement to the contrary in some bylaw or
associational agreement, any decision about control of church property is to be decided by
a majority vote of the church. See Avondale Church of Christ v. Merrill Lynch, E2007-
3
The Tennessee Supreme Court similarly held long ago that courts of this State are without jurisdiction to
inquire into or supervise the decisions of religious organizations. Nance v. Busby, 18 S.W . at 881, citing Watson, 80 U.S.
at 727. Tennessee courts have continued to refuse to hear disputes that are perceived to be purely ecclesiastical in nature.
Travers v. Abbey, 58 S.W . 247, 247-48 (Tenn. 1900) (holding that dispute over removal of pastor did not involve
property or personal rights, related to governance of and discipline by church, and courts would not review the decisions
of ecclesiastical judicatures); Martin v. Lewis, 688 S.W .2d 72, 73 (Tenn. Ct. App. 1985).
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02335-COA-R3-CV, 2008 WL 4853085, at *5-7 (Tenn. Ct. App. Nov. 10, 2008). It has
likewise been found that church members have no property rights in their contributions to
a church. Foster v. Collins, W2004-01959-COA-R3-CV, 2005 WL 3527656, at *7 (Tenn.
Ct. App. Dec. 27, 2005). Consequently, the Members have no property rights in the church
building or its assets. This is in accord with the generally accepted law on the subject.
Generally, a non-profit corporation, and not its members, owns the property of the non-profit.
12A F LETCHER C YC. C ORP., 5707. Absent a departure by the majority from doctrine
accepted by the articles of incorporation, the minority has no right to claim church property
from a majority at the church membership. Id. See Cumberland Presbyterian Church v.
North Red Bank Cumberland Presbyterian Church, 430 S.W.2d 879 (Tenn. Ct. App. 1968).
In effect, the purpose specified by the Members for obtaining the records in subsection
(b) has no legal existence. We are cognizant that the Church Officers had the burden of
proof that the Members’ purpose was not proper and that a purpose is generally deemed
proper if related to legitimate interests of the shareholder and is not harmful to the
corporation. See City of Franklin v. Middle Tennessee Electric Membership Corporation,
M2007-1060-COA-R3-CV, 2009 WL 2365572, at *6-8 (Tenn. Ct. App. 2009). However,
as discussed above, the Members did not have a property interest in the church assets, which
was the reason relied upon before the trial court. Subsection (c)(2) requires the Member to
describe the purpose “with particularity.” Whether access would have been required had
another purpose been proffered by the Members is speculative at best.
Consequently, as it does not appear the Church Members enunciated a proper purpose
for the documents as required by Tenn. Code Ann. § 48-66-102(b) and (c), the trial court
erred when it required the Church Officers to produce those records.
The trial court is affirmed in part and reversed in part. Costs of this appeal are to be
apportioned fifty percent to the appellants and fifty percent to the appellees.
____________________________________
PATRICIA J. COTTRELL, P.J., M.S.
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