March 23, 2017

July 1, 2015

Poetic Justice for the Bishop of Los Angeles

Bishop J. Jon Bruno of Los Angeles, he of the forkèd tongue, has finally met with a degree of poetic justice worthy of his nefarious aims. I have previously reported in these pages the long and tortuous saga of the parish of St. James, Newport Beach, which had no stomach for the revisionist tendencies of either Bishop Bruno or his Episcopal Church (USA), and which voted in 2004 to leave the Diocese of Los Angeles.

The usual lawsuit by the Diocese ensued, joined later in a separate suit by the “new sheriff in town,” the Most Rev. Katharine Jeffers Schori. Both maintained that the infamous Dennis Canon operated, under California law, to prevent the congregation from departing ECUSA with its property as its own.

The case found its way to the California Supreme Court, which triumphantly applied the Dennis Canon to conclude on demurrer—i.e., before St. James had even answered the complaint—that the trust imposed by the Dennis Canon overrode every other claim to the property. Since the parish was no longer a part of the Episcopal Church, it no longer had any ownership interest in the property (despite the deeds being all in its name), which the Supreme Court concluded now belonged to the Diocese.

The case had to undergo a further appeal to the California Supreme Court before it clarified its ruling to say that if the facts alleged in the complaints by the Diocese and ECUSA were proved true, then the parish would no longer own its property. Along the way, the U.S. Supreme Court declined to take cognizance of the case, no doubt because it had not yet even gone to trial.

The parish of St. James rested a huge part of its defense on the strength of a letter its donors had requested and received from the Diocese of Los Angeles, which stated (under the signature of the Bishop’s right-hand aide, his Canon to the Ordinary) that the Diocese “waived” any Dennis Canon interest in the property being purchased by wealthy donors to St. James, so that it could expand its premises without worrying about any future reversionary interest.

Finally, in 2013, Orange County Superior Court Judge Kim Dunning ruled on the Diocese’s and ECUSA’s motions for summary judgment that the parish could not retain the property under the Dennis Canon even though the Diocese had waived the Canon’s application (to at least one of the parish’s parcels). She did so on the ground that because the Dennis Canon was a creation of the national Church, only the national Church could “waive” the interest it created in parish property.

Consequently, she held, the letter written by the Diocese was “ineffective” to cancel out the national Church’s Dennis Canon interest. And given that conclusion, the Dennis Canon triumphed again, so that the Diocese was entitled to the real property.

After some preliminary maneuvers, the parish of St. James, in a very painful decision reached in September 2013, resolved to vacate the property, and not to take any further appeals. This left the church free for the congregation that wished to remain in the Episcopal Church (USA).

By all accounts, that congregation took over the management of the property and began, under a dedicated vicar, to grow its numbers. However, after they had been using the property for about a year, Bishop Bruno (he of the forkèd tongue, remember) announced he had sold the property to an oceanfront developer, for a rumored price of $15 million (more than twice its appraised value), who planned to raze the beautiful church buildings and put up a mixed use apartment and commercial complex on the oceanfront property.

The remnant congregation was shocked and angered by this sudden decision. Their vicar bravely filed a lawsuit in Orange County Superior Court in an attempt to block the proposed sale. It emerged from the legal documents that although the Diocese of Los Angeles had taken over title to the property after the Anglican congregation vacated the buildings, Bishop Bruno had surreptitiously arranged for the transfer of its title into his corporation sole. By definition, such a corporation has only one officer—the sitting bishop—and thus he can make decisions about property it holds without having to obtain approval from any other people or bodies in the Diocese.

Despite the lawsuit and protests by the congregation and others in the diocese, Bishop Bruno and his diocese went ahead with plans for the sale. The vicar said good-bye to her parish after holding her last service there just a week ago. And it looked as though the sale would proceed, even though the buyer would (in my view) have been foolish to ignore the Superior Court’s ruling that only the national Church could release its Dennis Canon trust interest in the property.

And now—enter God’s poetic justice. It seems that Bishop Bruno, who is as quick as any Episcopal Church diocesan to recognize a Dennis Canon interest in property when he comes across one, forgot about an earlier reversionary interest in the St. James parish property. It turns out that the original developer of the area, Griffith Company, donated in 1945 the land on which the beautiful St. James building was erected, to the Protestant Episcopal Bishop of the Diocese of Los Angeles, upon “the condition, covenant and restriction” that

The property conveyed shall be used for church purposes exclusively and no building other than a church and appurtenances shall be erected, placed or maintained thereon. The foregoing restriction shall be binding upon the [Bishop], his successors and assigns. Upon the breach of the foregoing condition, the title to said property ... shall become at once divested from the [Bishop], his successors and assigns, and shall revert and revest in the grantor [Griffith Company], its successors or assigns.

Thus if Bishop Bruno carries out his plans to sell the property to the current developer, the only thing that developer could do with the property is maintain the existing church building on it (or build a brand-new one). And thus there is no way a developer would pay $15 million for land that is so encumbered.

Has Bishop Bruno taken the news like a man, and canceled the sale?

Bishop Bruno? Are you kidding? He has filed a “slander of title” lawsuit against the Griffith Company, in which he maintains that the donor released its reversionary interest in the property in 1984, when it agreed to allow three of the four original St. James parcels to be used for the construction of a church parking lot (an “ancillary” use). He claims that this act freed the property of its restriction, so that to revive the claim in 2015 amounts to denigrating the Diocese’s free and clear title to the property (“slander of title”).

Well, two can play at that game. One of the interesting features about a claim for slander of title under California law is that the party who prevails in the lawsuit may ask to be awarded its attorneys’ fees.

So the Diocese of Los Angeles, already out of pocket some $4 to $5 million in its battle to recover the St. James property, and hoping to turn it into a neat $10 million net profit, may face still more legal costs and attorneys’ fees, only to find out that the property has to remain a church after all. (Or, more likely, Bishop Bruno’s lawsuit is just an opening gambit in a game that will end in a settlement to divide the loot from the property with the Griffith Company and leave the congregation out in the cold.)

Stay tuned as we follow the future developments of this most circuitous church property case in the entire history of ECUSA.

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That made my day.  I don’t know anything about the Griffith Company, but a truly sweet resolution would be the company giving the property back to the departed congregation.  Regardless, clearly the diocese should have spent some money on a lawyer to do the real and necessary research of restrictions on the property before launching its wave of lawsuits.  That said, the California courts have hardly shown themselves to be objective arbiters of property rights.

[1] Posted by rwkachur on 7-1-2015 at 10:02 AM · [top]

Bruno, Petard.
Petard, Bruno.
Hoist away!!!

Perchance those California courts will read the law written.

[2] Posted by dwstroudmd+ on 7-1-2015 at 10:03 AM · [top]

Well, if it’s this “Griffith Company”, the Bishop is in for a fight.  If the Griffith Company is the one listed below, they’ll know a golden egg when it’s dropped on their doorstep.

From their mission statement,“Together, we continue to uphold our company’s guiding principles, collectively known as the Griffith Way: Honesty, integrity and a commitment to deliver on our promises. This is what allows us to consistently meet our obligations to owners, agencies, employees, subcontractors, suppliers and shareholders alike — without compromising fairness or quality that have become synonymous with the Griffith name.” 

There are a lot of words in there the good bishop may be unfamiliar with.  I let you guess which ones.

[3] Posted by rwkachur on 7-1-2015 at 10:06 AM · [top]

Ditto’s #1 rwkachur

[4] Posted by Undergroundpewster on 7-1-2015 at 12:53 PM · [top]

Maybe a developer could build a high rise appurtenance or two around and over the church and get around the restrictive covenant.

I know that restrictive covenants have been challenged in the courts and struck down before and I expect Bruno’s team to challenge this one.

[5] Posted by Undergroundpewster on 7-1-2015 at 12:57 PM · [top]

Couldn’t happen to a nicer group.  “Honesty, integrity, and a commitment to deliver on our promises.”  The Diocese of LA should take notes.

[6] Posted by Katherine on 7-1-2015 at 01:55 PM · [top]

It would be icing on the cake if it turned out the Griffith Company was owned by Christians.

Actually the language in the reverter clause here is pretty strong.

[7] Posted by Jim the Puritan on 7-1-2015 at 01:56 PM · [top]

UGP - it’s not really a restrictive covenant so much as a reservation of an reversionary interest, and these have usually been enforced by the courts—unless the reversion has been released, which is what Bruno is now contending. 

In Real Property I, in my first year of law school, in one of the opening classes, the prof told a story about a local county courthouse in a major city in the state.  The county commissioners wanted to sell the old downtown courthouse, and build a bigger courthouse in a more accessible location.  But when they checked title, they discovered the property had been given to the county circa 1800 for use as a courthouse, and if it ever ceased to be used as a courthouse, the property would revert to the grantors or their heirs.  The county tore down the old courthouse and re-built on the same lot.  The prof’s point was to always check title. 

I agree with your closing remarks—that this will likely all be settled and the diocese and the grantor will sell and split the proceeds.

[8] Posted by Dick Mitchell on 7-1-2015 at 02:02 PM · [top]

#8—Yes, the language here is that of a “fee simple determinable,” the strongest type of reversion, since once the condition is broken the property automatically reverts to the grantor.  There is no way the diocese will be able to close the sale with that reversionary interest there.  I was not impressed by the demand letter of the Griffith Company’s attorney, however.  I would have made it a lot stronger if it were me. So I suspect the Griffith Company is simply angling for some sort of payoff in return for releasing the restriction.

A wrinkle on this could be if the Griffith Company were the developer of the surrounding area.  Then it is possible that others with a property interest in lots developed by the Griffith Company could sue to enjoin the sale, on the grounds that they are the intended beneficiaries of the restriction, as part of a unified development plan.  Those suits are often not successful, but may be worth considering given the history of development in the area. It has been used successfully to stop sale, for example, of community centers, day care centers, etc.  This is because oftentimes developers are required to create these kinds of “community benefits” in order to receive their development permits.

[9] Posted by Jim the Puritan on 7-1-2015 at 02:12 PM · [top]

I was still trying to figure out how it was that Bruno was trying to sell the property without a vote by GC to authorize the sale, after arguing in court that his predecessor could not transfer the property to the original parish without the consent of GC.  There MUST be a law about that on the books, even in California.

For that matter, how exactly did he transfer the property from the diocese that the court awarded it to, to his own corporation sole without transferring an amount equal to the value of the property from the corporation sole to the diocese?

But, yup, you gotta read the deed before you sell real estate.

Strikes me that whoever he sold it to for $15 million might not be so happy with him, either.

[10] Posted by tjmcmahon on 7-1-2015 at 09:05 PM · [top]

TJ, What Mr. Haley mentions is due to a local court ruling with effect only in part of CA (Orange CountyIIRC). So not a law per se but a court ruling that made it so that only GC could approve of and release for sale a property under the Dennis Canon (which is recognized by CA courts). Bishop Bruno better move quickly as General Convention will be over in a day or two.

Yep, that is why with even the simplest sale of a modest house there is a title search- to find out any problems (clouds) on the title. Who forgot to do this basic search?? Did they simply take Bishop Bruno at his word? Good for the Griffith Company to send a letter stating that their restriction in the deed is still in effect and that the property should be returned to the company. It would be indeed sweet poetic justice if the Anglican congregation was offered the property to use once again.

[11] Posted by SC blu cat lady on 7-2-2015 at 08:20 AM · [top]

The Griffith Company is 100% employee owned. Their site mentions projects they have done that run into the 100’s of millions of dollar,s, so they can finance the lawsuits at least as well as the LA Diocese can. especially if they get their legal costs re-reimbursed.

From what I’ve read on this, the Griffith Company was the developers of Lido Beach and specifically wanted a church there. St James is the only church in the area.  So, assuming the employee owners
still do business by the founder’s values, as their website states, then they will enforce the letter of the deed of gift, and see to it that a church remains on the property.  I can’t help wondering if Bruno in locking out the TEC congregation, thus ending its use as a church, has not already violated the terms of the deed.
It really would be poetic justice for the company to regain control of the property and make another deed of gift to the conservative congregation, seeing them as the successors to the original congregation.

[12] Posted by Marie Blocher on 7-14-2015 at 12:45 PM · [top]

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