MorningStar Fellowship Church v. York Cnty. S.C.

MorningStar Fellowship Church, Plaintiff, v. York County South Carolina, James E. Baker,and Houston "Buddy" Motz, Defendants.

Civil Action No.: 0:18-cv-03077-JMC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ROCK HILL DIVISION

June 17, 2019

ORDER AND OPINION

Defendants York County South Carolina ("County"), James E. Baker ("Baker"), and Houston "Buddy" Motz ("Motz") (collectively, "Defendants") move this court for dismissal of Plaintiff MorningStar Fellowship Church's ("MorningStar") Complaint (ECF No. 1). (ECF No. 15.) Subsequent to Defendant's filing of its Motion to Dismiss, MorningStar moved to amend its Complaint. (ECF No. 28.) The court GRANTS IN PART and DENIES IN PART Defendants' Motion to Dismiss and GRANTS MorningStar's Motion to Amend.

I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

MorningStar is "an evangelical church operating primarily in Fort Mill, York County, South Carolina." (ECF No. 1 at 1.) It describes itself as a "large . . . international ministry that reaches virtually every nation," including by publishing books that have been bestsellers and translated into over fifty (50) languages and hosting an internet television network and Christian conferences on its properties in Fort Mill. (Id. at 3 ¶¶ 12-14.) Those properties were once owned and operated by the large evangelical ministry known as PTL, formerly headed by Jim and Tammy Bakker. (Id. at 3 ¶ 15.) MorningStar purchased the properties in 2004. (Id. at 4 ¶ 19.) One of these properties, and the subject of this lawsuit, is the Heritage Tower ("Tower"), a twenty-one story, partially-completed building consisting of five hundred (500) plus residential rooms. (Id. at 6 ¶ 25.) In 1989, Jim Bakker was convicted for overselling memberships to the Tower. (Id. at 6 ¶ 28.) See also United States v. Bakker, 925 F.2d 728 (4th Cir. 1991). Plaintiffs allege the Bakker case "is relevant because [MorningStar] became the subject of anti-religious and anti-Christian comments by County officials, with at least one public official, namely . . . Motz, attempting to falsely suggest that PTL and MorningStar are one in the same." (Id. at 7 ¶ 33.)

Since purchasing the PTL properties in 2004, MorningStar renovated one building at a time, obtaining construction permits as needed. (Id. at 21 ¶ 81.) When MorningStar was ready to begin renovation of the Tower, the County "mandated a 'Development Agreement,'" pursuant to the South Carolina Local Government Development Agreement Act ("SCLGDAA").¹ (Id. at 21 ¶ 82; 22 ¶ 87.) On November 5, 2007, the County passed two ordinances regarding the Development Agreement with MorningStar, and on January 13, 2008, MorningStar and the County entered into a Development Agreement ("Agreement") with a five-year term. (Id. at 22 ¶ 86; 23 ¶ 93.) The Agreement provided for demolition of the Tower if certain conditions were not met by MorningStar:

[w]ithin 180 days of County approval of the commercial site plan for the Property, should [MorningStar] or its contractor be unable to obtain bid, performance and payment bonds from an A+ Best rated insurer or letters of credit from a national bank or substantial equivalent acceptable to County, then this Development Agreement shall be deemed null and void. At such time, the Tower shall be demolished, with all costs for its demolition borne by [MorningStar].

(ECF No. 1-2 at 5.)

On March 5, 2010, the County "notified MorningStar that it was 'in default'" of the Agreement "because MorningStar, supposedly, had not provided the [C]ounty with [the required] performance and payment bonds." (ECF No. 1 at 40 ¶ 168.) MorningStar responded to the notice of default by letter to the County on March 9, 2010. (Id. at 40 ¶ 170.) MorningStar alleges that under the Agreement, the County was required to provide MorningStar with "formal notification in writing . . . of approval of the site development plan, which was the prerequisite that would trigger the bonding process, under a 180-day time frame from the formal notification of approval." (Id. at 42 ¶ 176.) MorningStar alleges the County never delivered any such notification to MorningStar. (Id.) Instead, according to MorningStar, "the [C]ounty answered [MorningStar]'s inquiry about the status of the Site Plan approval [by informing MorningStar] the [C]ounty was about to issue the default notice." (Id. at 41 ¶ 175.) MorningStar attempted to "work out any misunderstandings" with the County according to "provisions . . . in the . . . Agreement for working out such misunderstandings," but the County "continued to maintain [MorningStar] was in default." (Id. at 42 ¶ 177.) MorningStar believes

[the] County did everything in its power to conceal the site plan, to conceal the approval process, to avoid clarification on the approval by refusing to respond to notices and information requests, delivered by certified mail, from MorningStar, all in an attempt to achieve their true intention of invoking an unconstitutional demolition clause to destroy sacred church property central to MorningStar's worship.

(Id. at 42 ¶ 178.)

For the next eighteen (18) months after the County issued the default notice, the parties attempted to mediate. (Id. at 42 ¶ 179.) MorningStar maintained it had not received notice of site approval, as required by the Agreement, while the County maintained "it had given notice when it supposedly communicated with private engineers in Charlotte, North Carolina[,] who [had] been working on the project on behalf of MorningStar." (Id. at 43 ¶¶ 180-83.) MorningStar allegesthis was in "direct violation of how official notices were to be given personally to MorningStar President and Pastor Rick Joyner Joyner by Certified Mail."² (Id. at 12 ¶ 58; 17 ¶ 68; 43 ¶ 184.) MorningStar asserts that by issuing the default, "the [C]ounty effectively prohibited MorningStar from being able to secure any bonding or financing of the Tower project." (Id. at 44 ¶ 186.) This in turn left MorningStar unable to remedy the default because "no prudent financial institution would issue a bond on a project already in 'default' by a municipality." (Id. at 44 ¶ 187.) The default caused MorningStar "to suffer serious financial losses from the County's arbitrary 'default' declaration, including losses of engineering funds and other reconstruction expenses, as well as make all of its other financial needs nearly impossible." (Id. at 44 ¶ 188.) Still, MorningStar and two County Commissioners (representing the County) were able to reach an agreement during mediation. (Id. at 45 ¶ 189.) However, the York County Council ("Council") unanimously rejected the settlement, including the two Commissioners who had negotiated the settlement. (Id. at 45 ¶ 190.)

On January 24, 2013, MorningStar sued the County in the York County Court of Common Pleas, seeking declaratory judgment regarding "the County's apparently arbitrary actions under the . . . Agreement, by its use of a so-called 'default' mechanism to actively prevent MorningStar from getting bonding that was needed to complete [its] obligations under the [A]greement." (Id. at 47 ¶¶ 198-99.) The County counterclaimed, seeking destruction of the Tower pursuant to the Agreement's demolition clause. (Id. at 48 ¶¶ 200-01.) The County filed its counterclaim on March 25, 2013, "more than five years after execution of the . . . Agreement[] and after any authority that the County may have had under the . . . Agreement[] to bring about destruction of the Tower, hadalready expired." (Id. at 50 ¶ 210.) During discovery, "MorningStar found shocking evidence, which showed the County's true intentions with regard to the church, revealing the County's unconstitutional discriminatory attitude against [MorningStar] in its exercise of religious activities." (Id. at 51 ¶ 213.) Specifically, MorningStar discovered two emails it describes as "slanderous" and "defamatory." (Id. at 51 ¶¶ 214-15.) The first, sent by Defendant Motz, Chairman of the Council, on January 22, 2010, states,

Thanks Jim. I see them as being in the same mode as the old PTL, and just as scheming. They are only out to fleece the investors of the units and bilk them for every dime they can get. The [C]ounty has delayed this for too long and I see no reason for us to allow them to continue further. It would not be accepted for other businesses and it should not be allowed for them.

(Id. at 51 ¶ 215.) (See also ECF No. 1-3 at 1.) Motz sent the email to ten other County officials including County Commissioners, Assistant County Managers, the Clerk to the Council, the County Attorney, a Council member, Executive Assistants to the County Manager, and the Director of the York County Planning and Development Services Department. (Id. at 55 ¶¶ 229, 231-39.) MorningStar asserts that Defendant Motz's "email sets out a clear example of anti-Christian discrimination, and unleashes a shocking tirade of petty vindictiveness and an all-out assault on religious freedom that the First Amendment sets out to protect Americans against, especially from government officials." (Id. at 54 ¶ 225.)

The second email, sent about twenty (20) minutes before the email from Motz, was sent by Defendant Baker. (Id. at 57 ¶ 241.) (See also ECF No. 1-3 at 1-2.) Baker wrote that he "believe[d] the [C]ouncil should take a strong stance and give notice of default to MorningStar if they cannot provide the financial assurances that were promised in the . . . Agreement that they signed on April 28, 2008." (Id. at 57 ¶ 243.) Baker's email was sent to three Council members, including the ViceChairman, and several of the same recipients of Motz's email. (Id. at 63 ¶¶ 270-75; 64 ¶ 276.) MorningStar alleges that

[t]he vindictive emails, and the policy that followed those emails, and the tone that was set by the wording of those emails, were designed to orchestrate, and carry out a [C]ounty policy against [MorningStar] and to prevent and obstruct the church and its members from carrying out their freedom of worship as they see

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