Cross Point Church v. Andrews (In re Andrews)

560 B.R. 429

In re: Robert Charles Andrews, Debtor.

Cross Point Church, Plaintiff

v.Robert Charles Andrews, Defendant

CASE NO. 15–01253–NPO

ADV. PROC. NO. 15–00045–NPO

United States Bankruptcy Court, S.D. Mississippi.

Signed October 20, 2016

Michael Patrick Everman, Wheeless, Shappley, Bailess, and Rector, Vicksburg, MS, for Plaintiff.

J. Thomas Ash, Jackson, MS, for Defendant.

MEMORANDUM OPINION AND ORDER ON THIRD AMENDED COMPLAINT TO DETERMINE THE DISCHARGEABILITY OF A DEBT PURSUANT TO 11 U.S.C. § 523(a)(4)

Judge Neil P. Olack, United States Bankruptcy Judge

This matter came before the Court for trial (the "Trial") on August 31, 2016, on the Third Amended Complaint to Determine the Dischargeability of a Debt Pursuant to 11 U.S.C. § 523(a)(4) (the "Adversary Complaint") (Adv. Dkt. 23)¹ filed by Cross Point Church and the Amended Response to Third Amended Complaint to Determine the Dischargeability of a Debt Pursuant to 11 U.S.C. § 523(a)(4) (the "Response") (Adv. Dkt. 25) filed by the debtor, Robert Charles Andrews ("Andrews"), in the Adversary. At Trial, Cross Point Church was represented by Kenneth B. Rector, and Andrews was represented by J. Thomas Ash. The Pretrial Order (Adv. Dkt. 36) was entered on August 19, 2016. By stipulation, seventeen (17) exhibits were introduced into evidence at Trial by Cross Point Church, and four (4) exhibits were introduced by Andrews.² Eight (8) witnesses testified at Trial, including Andrews. Cross Point Church asked the Court to declare non-dischargeable a debt arising from a state court judgment against Andrews in the amount of $69,505.31, plus interest, for "converting money belonging to Cross Point Church." (Church Ex. 16). Cross Point Church contended that the debt is nondischargeable under 11 U.S.C. § 523(a)(4).³ Having considered the pleadings, exhibits, and testimony presented at Trial, the Court finds as follows:⁴

Jurisdiction

The Court has jurisdiction over the parties to and the subject matter of this proceeding pursuant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I). Additionally, the parties have consented to the entry of a final judgment by this Court. (Pretrial Order at 1–2). Notice of the Trial was proper under the circumstances.

Facts

Since 1964, Cross Point Church in Vicksburg, Mississippi (formerly First Methodist Protestant Church) has existed under the ecclesiastical jurisdiction of the Mississippi Conference of the Methodist Protestant Church (the "Conference"), headquartered in Collins, Mississippi.⁵ Cross Point Church consists of approximately thirteen (13) acres of land, on which sits a sanctuary, Sunday school, meeting halls, and a daycare center. From 2001 through 2012, a span of approximately eleven (11) years, Andrews served as the pastor of Cross Point Church and a member of its Official Board (the "Board").⁶ The present matter began as an intra-church dispute between the Conference, on the one hand, and Andrews and his followers, on the other hand, regarding Andrews' unsuccessful attempts to withdraw Cross Point Church from the denomination and the Conference's subsequent removal of Andrews as pastor. The church "schism" grew into a legal battle over the possession and control of Cross Point Church, including its pulpit, property, and other assets.

The Methodist Protestant Church, founded in 1828, is governed by the ecclesiastical rules and procedures of the Constitution and Discipline of the Methodist Protestant Church (Rev. 2008) (the "Constitution " or "Discipline ") (Church Ex. 12). The Methodist Protestant Church is divided into geographical districts, including the Mississippi District. (Const. at 18; Discipline at 111). The Constitution requires each district to hold an annual conference (the "Annual Conference"), which is generally responsible for making sure that the local churches within that district operate pursuant to the rules and regulations of the Discipline . (Const. at 20–21). The Annual Conference is attended by "itinerant ministers belonging to the district" and one delegate from each church. (Id. ). The church year begins on the first Wednesday after the third Sunday in June, and the Annual Conference is held on the first day of the new church year in June.⁷

Each year in May, the local churches hold their last monthly meeting, called the "Annual Church Meeting," to discuss and vote on new officers, budget and financial reports, and other church business. (Discipline at 47). Additionally, the Constitution requires that the Methodist Protestant Church hold a general conference (the "General Conference") every four (4) years beginning May 2004. The General Conference consists of delegates from all of the districts (Const. at 22) and, like the Annual Conference, elects a president and other officers.

In June, the Annual Conference elects, among other officers and committees, a president and a stationing committee consisting of two (2) ministers and two (2) lay delegates whose general role is to assign pastors to the local churches within the district. The stationing committee is chaired by the president of the Conference. In 2012, during the relevant time period, Billy Frazure ("Frazure") was president of the Conference for the Mississippi District, and Robert E. Quimby, Sr. ("Quimby") was its treasurer.⁸

According to Frazure's testimony at Trial, pastors work for the Conference but are paid by the local churches, which lack the authority to employ pastors on their own.⁹ With respect to Andrews' employment, Frazure testified that the Conference initially assigned Andrews as the pastor of Cross Point Church on September 8, 2002, and renewed his assignment in June of each year thereafter until early 2012.¹⁰ At Trial, Andrews agreed with Frazure about his initial assignment to Cross Point Church but disagreed that the Conference held ultimate responsibility for stationing pastors at the local churches.¹¹ Several former Board members, all followers of Andrews, also disagreed with Frazure, testifying that congregations vote on their own pastors, and the Conference approves their choice in June.¹² Frazure acknowledged that local churches vote on their pastors, but as Quimby explained, their vote was not binding on the Conference.¹³

At a meeting on September 20, 2011, the Board voted unanimously to begin the process of withdrawing Cross Point Church from the denomination and the Conference. (Andrews Ex. 1 at 1–2). "[D]ue to a series of unfortunate events, the leadership feels it is necessary to part ways with the Methodist Protestant denomination." (Id. ). The procedure for a local church to withdraw from the denomination is set forth in the Discipline and requires, among other things, a three-fourths majority vote of all members voting. (Discipline at 49–50). Frazure was informed of the vote by the Board, and, thereafter, met with Andrews and other members of the Board to seek a conciliation, but Andrews and the Board remained steadfast in their decision to withdraw Cross Point Church.¹⁴ Consequently, Frazure decided to terminate Andrews' assignment as pastor and met with the Conference's stationing committee to discuss his removal. The stationing committee then voted to replace Andrews with Marc Williams ("Williams").

In a one-page letter dated February 17, 2012, Frazure, acting as president of the Conference, informed Andrews that he was no longer assigned as pastor to Cross Point Church because of his alleged failure "to execute the Discipline and faithfully discharge all the duties belonging to the ministerial office." (the "First Removal Letter") (Church Ex. 1). The First Removal Letter cited as the basis for Andrews' termination Chapter 2, Article 4, Section Two, paragraph 1 of the Discipline . Frazure discovered that the First Removal Letter cited the wrong chapter of the Discipline , so he wrote Andrews a second one-page letter dated February 27, 2012 (the "Second Removal Letter") (Church Ex. 2), correcting the citation to Chapter 3, Article 4, Section Two, paragraph 1 and confirming the decision of the Conference to terminate his assignment effective February 17, 2012.

After consulting with an attorney, Andrews asked the Conference to reconsider its decision and, in the meantime, refused to vacate the premises of Cross Point Church or allow Williams to take over the pulpit.¹⁵ He made only one concession; he abstained from voting at Board meetings. Interestingly, it was in late February, 2012, after he received the Second Removal Letter, that Andrews first moved into the church parsonage, which until then had been occupied by another church officer.¹⁶

In response to Andrews' request to reconsider his removal, Frazure and Ladon Dawson ("Dawson"), then president of the General Conference, wrote a third letter dated April 4, 2012 (the "Third Removal Letter") (Church Ex. 3), addressed to both Andrews and the Board. In the Third Removal Letter, which was considerably more detailed than the others, Frazure and Dawson cited thirteen (13) non-exclusive reasons for Andrews' removal, the first of which was his "[a]ttempts to lead [Cross Point Church] to other denominations and/or attempting to create an independent sovereignty and failing to provide pastoral services faithful to the Methodist Protestant Church." (Id. at 1). They warned the Board that the Conference would view any action taken by Andrews after February 17, 2012, as " and void and without any Church authority" and that any income or fees paid to Andrews after February 17, 2012, would have to be returned to Cross Point Church. (Id. ). Frazure and Dawson also demanded a "complete accounting" of the proceeds from the sale of certain real property owned by Cross Point Church and ordered the Board to provide them with all business records of Cross Point Church, including its membership lists and all minutes from Board meetings for the years 2007–2011. (Id. at 2).

With respect to the withdrawal of Cross Point Church from the denomination, Frazure and Dawson...