In their latest New York Law Journal Religion Law column, Barry Black and Jonathan Nelson tackle a subject that has led to decades of confusion in the legal system and woven a complex web of decisions to interpret: when can courts decide disputes between local churches and their denominations. Check out the full article as Barry and Jonathan review the law and suggest solutions to mitigate risk across the board.
On June 15, 2019, partner Jonathan Robert Nelson was honored by the Geeta and the Divya Dham temples for the successful representation of the congregation in a dispute over ownership of the temple, the largest Hindi temple in Queens, that dragged on over a decade. The commemoration featured speeches from Swami Satyanandji, head of the denomination, as well as their chief administrator from India. The ceremony culminated in Mr. Nelson receiving a plaque displaying gratitude and thanks from Holy Geeta Temple.
In the Friday, May 31, 2019 issue of the New York Law Journal, NMB partners Barry Black and Jonathan Nelson examine the differences of between hierarchical and congregational governing structures of religious institutions, and the understanding of the roles that trustees and congregations have authority over of hiring and firing affairs. Barry and Jonathan also outline practical considerations for congregations to be mindful of when making decisions about clergy.
Check out a link to the full New York Law Journal article here.
On April 4, after Yale Law School announced that it “will not financially support employment positions unless they are open to all of our student body” and that it “will not fund the work of an employer that refuses to hire students because they are, for instance, Christian,
black, a veteran, or gay,” U.S. Sen. Ted Cruz (R-Texas) notified Yale Law School Dean Heather Gerken of his intention to investigate Yale’s policy.
On April 4, after Yale Law School announced that it “will not financially support employment positions unless they are open to all of our student body” and that it “will not fund the work of an employer that refuses to hire students because they are, for instance, Christian, black, a veteran, or gay,” U.S. Sen. Ted Cruz (R-Texas) notified Yale Law School Dean Heather Gerken of his intention to investigate Yale’s policy.
The U.S. Department of Justice has filed a statement of interest in a case pending in the
U.S. District Court for the District of Vermont in support of parents and parochial high school
students who claim that Vermont has discriminated against them in violation of the Free Exercise
Clause of the First Amendment to the U.S. Constitution.
The plaintiffs in the case, A.M. v. French, assert that their Free Exercise rights have been
violated because the state does not permit them to participate in a state program that pays tuition
for high school students to take up to two college courses.
The U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) has issued its final “conscience rule.”
In a statement, the HHS said that the 440 page final rule “protects individuals and health care entities from discrimination on the basis of their exercise of conscience in HHS-funded programs.” The HHS added that the final rule implements “full and robust enforcement of approximately 25 provisions passed by Congress protecting longstanding conscience rights in healthcare.”
The U.S. Court of Appeals for the Seventh Circuit, reversing a district court’s decision, has ruled that the Internal Revenue Code provision excluding housing allowances from ministers’ taxable income does not violate the First Amendment and is not unconstitutional.
The Parsonage Allowance
After the Sixteenth Amendment to the U.S. Constitution was ratified in 1913, authorizing Congress to levy an income tax, Congress enacted the federal income tax. Thereafter, the Treasury Department adopted the “convenience-of-the-employer” doctrine in connection with the definition of taxable “income.” Under that doctrine, housing provided to employees for the convenience of their employer is exempt from the employees’ taxable income.
Just about one month after the U.S. Supreme Court permitted Domineque Ray, a Muslim prisoner, to be executed without his minister being present, the Court stopped another execution where a prisoner was denied the presence of his spiritual advisor.
In Murphy v. Collier, 587 U. S. ____ (2019), the Court stayed the execution of Patrick Murphy by the state of Texas, declaring that the state “may not carry out Murphy’s execution” unless the state “permits Murphy’s Buddhist spiritual advisor or another Buddhist reverend of the [s]tate’s choosing to accompany Murphy in the execution chamber during the execution.”
In an important victory for a Nelson Madden Black client, the New York State Supreme Court has invalidated a mortgage on church property that did not comply with the requirements of the New York Religious Corporations Law.
This appears to be the first time that a court has struck down a “hard money” mortgage – that is, a mortgage securing a short term loan at high rates, with a balloon payment due at the end of the term – after finding that it was not fair to a church when it was made and that it was not in the church’s best interest to enforce it now.
The court battle over the mortgage began in April 2010, when the lender sought to foreclose on the mortgage. By 2018, when Nelson Madden Black began to represent the church, the lender had been awarded summary judgment and was seeking to foreclose on its mortgage. Nelson Madden Black overcame judgment in favor of the lender and, now, has obtained summary judgment in favor of the church.
Nelson Madden Black demonstrated that the mortgage was invalid from the beginning because it did not comply with the Religious Corporations Law, and persuaded the court not to retroactively approve it.
The decision has been published by the New York Law Journal and is available at: https://www.law.com/newyorklawjournal/almID/1553231389NY1088510/
A recent decision of the Kings County New York Supreme Court invalidated a 12-year old mortgage in foreclosure proceedings. When the Grace Christian Church hired Nelson Madden Black, the court had already granted summary judgment against it, enforcing a second mortgage given to a “hard money” lender. But with hard work and persistence, firm lawyers, led by partner Jonathan Nelson, persuaded the court to vacate the initial ruling, and grant summary judgment to the church invalidating the mortgage. Having initially neglected to obtain judicial approval of the mortgage, as the law required, the lender had asked the court to approve it nunc pro tunc. The court questioned whether the mortgage was fair at the time of its making, noting that the church’s congregation had never approved the borrowing, which had increased at the closing beyond the amount approved by the church trustees, and observing that the loan may have been “doomed to failure” if the church could not repay it when the balloon payment came due. Looking to the present day, the court concluded that it would not be in the best interest of the church to lose its house of worship from the foreclosure of the mortgage, and granted summary judgment dismissing the lender’s complaint. The case sends a cautionary message to lenders not to overreach when lending money to religious institutions, and to make doubly sure that the loan’s terms are fair, reasonable and in the borrower’s long-term best interests.