“We all have a vested interest in this case” – Clarity on the Oakland Situation from the Rev. Dr. Martin Noland

Yesterday we posted some news and commentary from Reclaim News on the intriguing situation with a congregation out in Oakland, California. The district is fighting to take the property away from the congregation.

It is a story with as many twists and turns as California Coastal Highway 101, not to mention a couple hundred pages of deposition of the synodical president,  and so it is difficult to follow. BJS regular Martin Noland has commented on the post from yesterday and left us with a gift of clarity for the current stage of this story. Here is his comment.

Pastor Rossow, et.al.,

First, thank you Pastor Rossow for giving us the information on this very important case. The full deposition is even more important, so thanks for including that. I did read the whole thing, thanks to your post here. It was much more helpful than the Reclaim News citation, which inserted comments without indicating whose statements were whose. But for those who don’t want to read hundreds of pages of legal transcripts, Cascione’s report is at least an introduction.

Second, in my opinion, attorney Strand did an excellent job representing her client’s interests. On the basis of her work here, I would hire her to represent me, if I ever needed an attorney.

Third, in my opinion, President Kieschnick did a fair job, but not an excellent job, as a witness. He was not a party to the case, so he was not “on trial.” The judges and jury in the case need to know how the administrators who run our church actually think about our ruling documents. The documents alone are not sufficient.

Fourth, it is rare in our history that we have a court case that specifically tests the relationship between the synod and individual congregations. For this reason, I think this is a historic case, and deserves scrutiny by every church-worker and laymen in the synod. Here we will get to see how external courts judge the relationship between the synod and congregations, based on our ruling documents and current administrators. Carl Mundinger argued, in “Government in the Missouri Synod,” that Article VII pertaining to the relationship between synod and congregations was the most important (because unique) of our constitutional provisions. Here in Oakland, California we will have a test case to see how it actually works. We all have a vested interest in this case, and LAYMEN NEED TO WATCH THIS CASE TO SEE TO WHAT EXTENT SYNOD HAS CONTROL OVER THEIR CONGREGATION.

Fifth, in reading the full transcript, it appears that one of the problems of the case is whether a district president can intervene in the internal affairs of a congregation when there is no excommunication involved (LCMS bylaw 1.10.2, 4th case) or no rostered church-worker affected (ibid., 1st case). The President of the Synod apparently, based on the transcript, believes that the district president can do this, although he seems to contradict himself on this point. This does not mean that the district president actually has that power, only that the president of the synod thinks he does, or is confused.

Sixth, we should not automatically blame the president of the synod for his confusion. The bylaws of the synod themselves may be confused, and confusing, and may be contradicting the constitution of synod. With regard to the Dispute Resolutions bylaws, which were adopted in 1992, I opposed their adoption, both at the floor committee meetings and on the convention floor, for several reasons. These reasons are laid out, to the best of my limited ability, in my 1994 essay “Law and Due Process in the Kingdom of the Left and the Kingdom of the Right,” in “God and Caesar Revisited” (1994 Congress on the Lutheran Confessions) and in my 1997 essay “District Presidents and their Council: Biblical and Confessional Limitations” in “Church Polity and Politics” (1997 Congress on the Lutheran Confessions), both available from Logia Books at: www.logia.org.

Seventh, I saw evidence in the transcript of the attorney for the Oakland congregation “piercing the corporate veil.” This is what the business about “synod, incorporated” and “synod in the bylaws” is all about. I sent a very lengthy letter to the LCMS Board of Directors back in the early 1990s about the reincorporation of synod. My concern then was, that if the purpose was to protect the national office assets from lawsuits, the way it was being done could be defeated by “piercing the corporate veil,” and that control over the “liberated” agencies and their assets would be weakened or lost. I got a terse reply ignoring my concerns. The Oakland attorney is now probing as to whether or not responsibility for the events in CNH district could be attributed to the national offices and the president, or to what extent. The synod as a whole, i.e., all members, have a vested interest in this case in order to see to what extent the agencies of synod are controlled or accountable to the main body.

Eighth, it is not possible for me or you to judge, on the basis of this transcript, who should “win” this case. We don’t have all the facts of this case before us to judge it, informally or otherwise. If Our Redeemer is not properly constituted, if it did not conduct its meetings properly, if it has lost or never had its own state incorporation, it could easily lose. If it has done all these type of things properly, and had no excommunications, then it would be very hard for CNH to make a case that it had a right to intervene in the internal affairs of a congregation. But there could also be any other number of things that could sway the case either way. You want a good lawyer when you have a case as complex as this. Both lawyers are very competent, so we are all about to get a great education in synod polity.

Finally, I wonder why the attorney for Oakland did not make more fuss about Constitution Article VII.2 “Membership of a congregation in the Synod gives the Synod no equity in the property of the congregation.” If that constitution articles does not apply to a case like this, when does it apply?

Yours in Christ, Martin R. Noland

About Pastor Tim Rossow

Rev. Dr. Timothy Rossow is the Director of Development for Lutherans in Africa. He served Bethany Lutheran Church in Naperville, IL as the Sr. Pastor for 22 years (1994-2016) and was Sr. Pastor of Emmanuel Lutheran in Dearborn, MI prior to that. He is the founder of Brothers of John the Steadfast but handed off the Sr. Editor position to Rev. Joshua Scheer in 2015. He currently resides in Ocean Shores WA with his wife Phyllis. He regularly teaches in Africa. He also paints watercolors, reads philosophy and golfs. He is currently represented in two art galleries in the Pacific Northwest. His M Div is from Concordia, St. Louis and he has an MA in philosophy from St. Louis University and a D Min from Concordia, Fort Wayne.


“We all have a vested interest in this case” – Clarity on the Oakland Situation from the Rev. Dr. Martin Noland — 36 Comments

  1. Dr. Noland,

    I asked a couple of questions on the other thread, but perhaps it is better to ask them here.

    You wrote:

    “Third, in my opinion, President Kieschnick did a fair job, but not an excellent job, as an expert witness.”

    The Plaintiffs have given notice of President Kieschnick as their expert witness?! What’s that about?

    You wrote:

    “Finally, I wonder why the attorney for Oakland did not make more fuss about Constitution Article VII.2 ‘Membership of a congregation in the Synod gives the Synod no equity in the property of the congregation.'”

    As to Article VII.2, why would Mr. Nelson want to make more of a fuss about it?


    Don Kirchner

  2. Makes you wonder if now the synod will have overtures on Otten’s church since they have been trying to oust the congregation for staying faithful to him. All they need is a contingent in that congregation to say that they haven’t had a rousterd pastor there in 50 years and……………..well the possibilities are endless.

    Test case? No doubt.

  3. Dr. Noland,

    While I’m at it would you be gracious enough to explain something else for me?

    You wrote:

    “Seventh, I saw evidence in the transcript of the attorney for the Oakland congregation ‘piercing the corporate veil.’” You then state: “The Oakland attorney is now probing as to whether or not responsibility for the events in CNH district could be attributed to the national offices and the president, or to what extent.”

    Can you explain how that is piercing the corporate veil? I’ve never heard the term used in that context.

    Thanks again,

    Don Kirchner

  4. I am sure Dr. Noland is already aware of this, but for the benefit of others I will mention that this is not the first time these issues have been tried in court. The story of the congregations and pastors who left the LCMS to form the Orthodox Lutheran Conference in the 1950s involved very similar accusations of “meddling” by district presidents, attempts by the synod to improperly influence or take control of breakaway congregations, and more.

    It’s been ten years since I last looked at any of the documentation, but I found one reference that might be a little more accessible — a portion of the Trinity, Chesterfield, MO case is recorded in “The Doctrinal Position of the Orthodox Lutheran Conference, A Court Statement,” Concordia Historical Institute Quarterly, Vol. XXVII, April 1954.

  5. Why is anyone suing anyone in the first place, anyway?

    Why would it be necessary for the District to sue any church congregation, if that congregation owns it’s own property and has a valid church constitution, albeit, it needs updating or no?

    If all church assets revert back to the District at the dissolution of the congregation, but no dissolution has taken place, but rather a congregation that wants to leave Synod, for what ever reason, it has that right, given that the present members that constitute the membership roll ,as now constituted, are the Congregation, what is the legal standing of District. What standing does the District have?

    It is situations like these that determine alot more than moneyed assets.

  6. Dr. Noland’s exegesis of the current status of the case is, as expected, on target. Several observations:

    1. Interpretation of Art. VII.2. and Art. XII.1 of the synod’s constitution does not require an exegete or a legal scholar. The synod has no equity in the property of a congregation, and districts are but (mostly) geographic divisions of the synod. Thus, by definition, districts also have no equity in or right to the property of a congregation.

    2. An exception to the above can occur, of course. Let’s say that a district purchases property and begins a congregation as a mission. Unless the district turns over the title to the congregation (freely or by purchase), conceivably the district, i.e., the synod, retains title to (owns) the property. If the district owns the property and the congregation raises funds and builds a church on the property, things can become complicated. It needs to be clarified that such exceptional circumstances are or are not the case in Oakland. If not, the constitution is clear.

    3. If a congregation does hold legal title to its property and an internal dispute occurs within the congregation about its property, its polity, its relationship to the synod (or to the synod in that place, i.e., the district), etc., such a dispute must be resolved by the parties within the congregation. The district might provide advice or even assistance in resolving the dispute, but, constitutionally, it has no legal right to the property.

    Anecdote: About 15 years ago I was a member of a congregation that decided to cease its corporate existence. After some consultation with district personnel, the building and property were offered to the district (N.B., OFFERED) as a potential location to begin a mission congregation with a “new face.” The district declined. There were two other congregations with a mile of the property. And so, the church council determined to sell the property. Ca. $300,000 was carefully distributed over a year and half by the church council, who maintained legal custodianship of the funds, to other congregations, mostly in its circuit and with a special focus on those with schools, as well as to several inner city congregations. The relevant point is that the district never once assumed any right to the property, although we could have signed it over for the district to sell.

    Dr. Noland is correct. Laymen have a vested interested in watching this case carefully. One can only hope that the our synodical publications, e.g., Reporter, will soon begin to provide the facts about this increasingly public legal action. Until that occurs, we are forced to rely on whatever sources of information become available.

  7. Mr. Berger,

    You wrote:

    “Thus, by definition, districts also have no equity in or right to the property of a congregation.”

    With all respect, the Synodical Constitution simply does not say that. It says,

    “Membership of a congregation in the Synod gives the Synod no equity in the property of the congregation.” [Article VII.2]

    In other words, Synod does not have any inherent right in a congregation’s property simply by virtue of the congregation being a member of Synod. The congregation is free to offer property to the Synod, as in your anecdote, or to state in its own constitution that, in certain circumstances or certain events transpiring, title to their property shall go to Synod. Either of those situations may take place, but neither is because Synod has any present equity in the property. Note the analogy on the other thread with LCEF or another bank mortgagee. Such an entity has no equity in the mortgagor’s property, but if a default occurs and a legal action- a foreclosure- takes place, the mortgagee certainly will have equity in the property.

    I have not seen anything in the legal action at hand in which the District alleges that it has a present equity in the congregation’s property or that it is entitled to the property by virtue of having a present equity therein. Rather, is it not something similar to the other sorts of situations stated above in which a District might gain ownership?

    So, I do not see how Article VII.2 is some sort of slam-dunk bar to the District’s claim. District is not claiming present equity in the congregational property. In fact, that’s why they are bringing the lawsuit! They’re purportedly trying to gain ownership. As to any right to the property, that appears to be their claim, and Article VII.2 does not state that they have no right despite your assertion.

    Now, if someone can show me otherwise please do. But I must respectfully disagree that Dr. Noland’s views are, without qualification, on target. I’ve already addressed the claim that President Kieschnick is an expert witness. I’ve addressed the claim that Article VII.2 is an absolute bar to Plaintiffs’ claims.

    Dr. Noland asserts that Mr. Nelson was “piercing the corporate veil.” I don’t understand how or even why he would be doing that. The term references a legal means of imposing liability for corporate activity, in disregard of the corporate entity, on a person or entity other than the offending corporation itself, usually stockholders or an officer of the corporation. You “pierce” the corporate cloak of immunity that protects the shareholders and officers from personal liability.

    First of all, I am not aware that Synod is a Defendant in this legal action. So, corporate Synod is not being held liable for anything. In fact, it’s been argued that Synod is the real Plaintiff! Secondly, I have not heard that there’s any attempt to hold Preseident Kieschnick personally liable for anything involving this case.

    Now, if the congregation was deemed a corporate entity and Plaintiff District, represented by Ms. Strand, was seeking to hold individual members personally liable for wrongful actions of the corporate congregation, then I could see a suggestion that Ms. Strand and her client were attempting to pierce the corporate veil. But here, the congregation is a Plaintiff, not a Defendant! I simply do not see Dr. Noland’s basis for claiming that Mr. Nelson, who represents Defendants, is attempting to pierce the corporate veil.

    Again, if Dr. Noland or someone else can show me otherwise, please do.

    Speaking of Ms. Strand, Dr. Noland opines that she did an excellent job representing her client’s interests and that he would hire her to represent him if he ever needed an attorney. Such an opinion is simply that- an opinion, and reasonable minds may differ. I personally think she did okay but far from excellent. She was able to block any inquiry into attorney-client privileged conversations involving President Kieschnick. She was often able to signal to President Kieschnick on how to answer a question. I don’t know that the latter is a sign of doing an excellent job. Often, she’d get into spats with Mr. Nelson, e.g., objecting and claiming that he was trying to mislead the witness (President Kieschnick). Mr. Nelson would patiently respond to her rant, ask that the same question be re-read, and President Kieschnick would simply answer it, not confused in the least. Many of her objections were of a shotgun approach, rattling off 3 or 4 at a time, the sign of an unsure lawyer or someone that simply wished to disrupt the flow of the deposition. Thankfully for her client, this was a deposition, not a trial before a jury. If the latter, her actions very well could be seen by a jury as tiresome, as her client trying to hide something, and as Ms. Strand simply trying to grandstand and hear herself talk. But that’s just my opinion.

    Finally, Dr. Noland states that President Kieschnick did a fair job as a witness. Perhaps, but I’m not sure if he means for the Plaintiffs or the Defendants! That remains to be seen, depending on whether he testifies at trial, whether witnesses at trial will contradict his testimony, whether his testimony will be impeached at trial, and, if his testimony is brought at trial, whether the jury will believe him. When the President of Synod does not know the correct meaning of the Evangelical Lutheran Church in “the Symbolical Books of the Evangelical Lutheran Church” I personally question whether his testimony rises to the status of fair. But I don’t know that such statements will harm the Plaintiff’s case. (He would generally be viewed as the Plaintiffs’ witness.)

    I definitely agree with Dr. Noland in that it is not possible for us to judge, on the basis of a deposition transcript, who should prevail in the legal case. We don’t have all the facts of this case before us to judge it, informally or otherwise. And that’s why I do not think it is helpful to apply Article VII.2 erroneously, to make legal judgments, or to suggest legal concepts that simply do not apply to this case.

    Finally, I agree that pastors and laymen have a vested interest in watching this case carefully.

    So, while I disagree that Dr. Noland’s statement about the case at hand lends clarity but, rather, confuses on some points, the importance of the case as expressed by him and you is quite right.

    Thank you for your input, Mr. Berger.

    Don Kirchner

  8. I read the whole case, all 200 pages. To me, the crux or the argument is who is the real congregation? The district has a strong argument and mandate to investigate irregularities in procedure for the protection of the wronged. It appears there were a lot of irregularities including those of the district president and his officers.

    Nelson seems to be following the path that those who are in the congregation must determine who the congregation is, errors or not, specifically that synod has no right to excommunicate or disfellowship those in the local churches by decreeying who are or are not members. Synod’s power is limited to saying to the congregation, “You are no longer in fellowship with us.” At the heart and core then, is a really significant matter; how
    incorperation/legal rights play out against the freedom of religious association. Can the law decide who the church is?

    Ironic, that for all the synod’s posturing, the typical district president takes Nelson’s position when congregations attempt “illegal” votes against pastors. “Congregations have the right to err”. The pastors have the right to appeal. The erring opinion stands until such opinion is overturned by a reconciliation process.

  9. Michael,

    Your analysis is excellent. I have not read all of this but a fair amount of it – not enough to get the grasp you have. But what I have read squares with your conclusions. I think your irony is right on – DP’s never want to take on congregations and seldom pastors, but here in this case, seemingly with the smell of money, they all of the sudden want to get involved. Hmmm…..


  10. Rev. Rossow,

    I would even expand on your statement regarding DPs and their interaction with congregations, etc. They seem to never want to take on congregations and, if it is congregation versus pastor, in the end the norm is to side with the congregation (even though the pushing for a severance package, called the intellectually dishonest “sabbatical”, in order to get the pastor to quietly leave is claimed to be supporting the pastor) that wants to get rid of their pastor for whatever reason. I do not think it unfair to conclude that a major consideration if not the main factor is from whom does the district gain income- congregation or pastor?

    Since they are so willing to nearly always back the congregation when it’s member versus member (congregation versus pastor) it should not surprise us of the position they will take when it’s member (congregation) versus individual laity. Add in the issue of property purportedly worth millions…

    Indeed, it’s usually about the smell of money.

  11. Tim,

    As far as the “money” angle. I really don’t think that’s the issue with any DP. Give them some credit. Its more like the conversation I had with my DP; “Pastors come and go but congregations are here to stay”.This is ground zero. It is quite logical yet results in a purely functionalistic view of the ministry. Hence a bigger problem.

    I loved this mornings OT reading from Jeremiah. Nothings changed.

    Now as far as this court case is concerned doctrine must decide, not power

    They need to read Eph 2 and commit it to memory

  12. 1) michael: We ought to appreciate your effort to stick up for the DPs in trying to put the best construction on everything. And yet at the same time, there are those who personally know and have interacted with DPs — DPs who are facing crucial budget cuts due to the lack of “revenue” from congregational offerings — who might know some details but are not at liberty to reveal them. Perhaps it is unfair for them to intimate anything at all, but still it isn’t necessarily a bad thing to “trust but verify”.

    I wonder if any of us are aware of how many districts have received the assets of congregations in the past 10 years. Some have had to close their doors because the district did not consider them “viable” and did nothing to keep the congregations from closing, but then the district benefited from the sale of the congregation’s assets. So, is it possible to try to put the best construction on everything and yet at the same time not be naive to think that no DP has ever or would ever seek to get a congregation’s assets?

    We ought not keep the Eighth Commandment at the exclusion of the Ninth. I don’t think we can impute any motives to the DP in this case unless there is any particular evidence to do so, but I would still keep a close eye on what’s going on so that we not only try to keep a DP’s good name intact, but also so that we help congregations to keep, improve and protect that property which has been set aside for the proclamation of the Word and administration of the Sacraments.

    2) I would like to hear more discussion about whether it is EVER appropriate for a DP to take disciplinary action against a congregation — and if so, what that entails: legal (state) and/or constitutional (church).

    Isn’t it interesting that the DP and the SP are willing to go to such great lengths in the “discipline” by suing four Lutheran church ladies, but they won’t discipline congregations for open communion, unionistic worship, etc. ???

    And furthermore, if it is a discipline issue, why not just remove a congregation from membership in the synod? Why does one have to seize their property? Why not just let them go?

    It might be because some members are faithful to the Scriptures and the Confessions but in that case, the district ought to stand up for them to help those people KEEP THEIR PROPERTY and it would not be necessary for the district to TAKE THEIR PROPERTY.

    3) I’m sure that there are numerous documents like those which Rev. Noland has prepared — including official responses from the Board of Directors and from the CCM. I wonder if any pastors or Lutheran lawyers (we had a couple of really good ones on the BoD not that long ago) on this list who have such OFFICIAL synodical communications shouldn’t send them to the lawyer defending the congregation. (I’m not talking about personal interpretations or observations — I’m just talking about official correspondence on such questions). Perhaps the lawyer is not aware of some of these things — and how could he unless he were a Justus Jonas or George Spalatin?

    4) Has it been documented that the District used that congregation’s property as collateral for a loan? (http://www.christianforums.com/t7400662/)

  13. P.S. – I encourage everyone to watch the YouTube video wherein Pastor Jack Cascione interviews the four ladies named in the lawsuit.


    Therein, one of the women says that Pres. Newton explicitly stated that it is all right for a woman to preach and administer the sacraments. If that is a false statement, the woman should be disciplined. If it is a true statement then Dr. Newton should be given the opportunity to explain and recant publicly or himself be disciplined and removed from office.

  14. This error by Newton is greivious, even scandelous. He not only gave approval but received communion from her. The bar must be higher for one in his position. It is understandable that four untrained lay women would trust his word. To accuse them of false doctrine is a terrible hypocrisy. Whatever happened to the rule that you could not be held accountable for decisions made by your ecclesiastical supervisor? 🙂

  15. Yeah it happened. Was it in the first trial testimony? Both him and his 1st VP took it. But then to charge the women with violating LCMS doctrine? Outrageous! By the way, the women publically acknowledged their error and repented of their sin and no longer use her services. They are being attended to by some of their own laymen.

  16. Michael,

    It is about the money. The district is trying to get the congregation to disband they are not tyring to keep it active! You’re theory is not consistent with the facts. Mine, sadly, is.


  17. “Was it in the first trial testimony?”

    What is the “first trial,” and when did that take place?


  18. Don- A while back a link was posted on this website to the Alameda court system. Maybe it was a preliminary hearing. You’ll find what you want there.

    Tim- If the district wanted this congregation to survive, they would certainly have given it a pastor. Why they did not do this is anyone’s guess. Maybe the church leadership so ticked off the DP that he wrote them off as uncooperative and hopeless. Notice I’m trying to avoid the money explanation because its too easy and there is no proof. Now if Newton would be served a deposition, and I don’t see why that is not coming, this might shed more light as to why he wouldn’t give them a pastor. Unfortunately the women didn’t know the congregation has the right to call its own pastor. The district wouldn’t recognize that call anyway because the district is saying that the people in that building are not the legitimate congregation and hence owners of the building, but the ex chairman represents those who are.

    The district can determine doctrinal issues, not property issues. That’s where the court comes in. The district will have to prove that the procedures outlined in the churches constitution were not followed properly. The ladies will have to prove there was a compelling reason to violate them if they did so. This would be very hard.

    But then again, because of recent LCMS opinions that DPs can set aside constitutions, the ladies could argue the same for their side.

    If the ex-chairman wins, will he sell off the building? I would think being a member there some 40 years, his motivation is to regain the property to be a church again. If that is true, there is no monetary advantage to the district.

    The issue is that of control, not money.

  19. Michael,

    Good point about the former chairman. I think I am simply following Cascione’s suggestion when I assume that the property will be sold. As I think about your point, I am still convinced it is about money. I do not see anything that suggests the former chair wants to reinvigorate the congregation. Besides, I do not think there is anyone there who will follow him.

    Thanks for the food for thought.


  20. Pr. Kirchner,
    I believe the complicity of the district (and of the former congregational president, now in the district’s camp) in bringing in an Episcopalian woman to preach was discussed in one of the earliest communications from Pr. Cascione.

    I suppose it would be breaking the *th to say that I wonder if these ladies were “set up”?

  21. Dear BJS Bloggers,

    I promised I would respond to questions on this subject. I will only respond to questions directed to me, or which were apparently headed my direction.

    [[Full disclosure here: I am a native of the San Francisco Bay Area, and know many of the LCMS congregations in that region, and their pastors, teachers, and laymen. My parents, siblings, and their kids still live there. However, I do not know anyone who is or was a member of Our Redeemer, Oakland. In the current Lutheran Annual, under CNH listing (California-Nevada-Hawaii District), I have met DP Newton and DP emeritus Tietjen once or twice, I know DP emeritus Oswald (he knows my mom from Walther League days; he was my ordinator), and I know Karl Wyneken, archivist, from my years at CHI. Otherwise I don’t know the other CNH officers or staff. The CNH board members are not listed, so I don’t know if I know them]].

    As background to this subject, I recommend that folks read Richard B. Couser, “Ministry and the American Legal System” (Minneapolis: Fortress Press, 1993). That book is the best that I have found for legal and risk management issues as they pertain to congregations, and to a limited extent, also to church bodies. I read that book through completely when it was first published, and have referred to it extensively since that time. My copy is currently in storage, so I am sorry I cannot give direct citations.

    FOR THE POST “FYI – Reclaim News Analysis . . .”, dated Feb. 25, 2010, from Rev. Rossow. COMMENTS FROM:

    Don Kirchner, #29 – Don, you are right. The synod president was a mere witness, not an “expert witness.” I have made corrections on both posts.

    Don Kirchner, #29 – Don wants to know why I believe the attorney for the defendants should make a fuss over LCMS Constitution VII.2? The attorney may not have needed to talk about it in the deposition, since its meaning is so clear. That is why I am interested to see if he brings it up in the trial itself. VII.2 defines the relationship of the synod (and synodical agencies, like Districts) to congregations with regard to their property.
    Don, you are correct in one of your comments, that “membership,” by itself, by a congregation in synod, gives synod no equity in the property of the congregation. VII.2 does not pertain to other relationships, such as mortgager and mortgagee. I think that the term “equity” in VII.2 means “ownership equity, but I could be wrong. This has been my understanding since VII.2 was put into the constitution (early 1990s I think). “Ownership equity” is the residual claim after all liabilities have been paid in the dissolution of a corporation. Since districts often start congregations, it might seem to some folks that the district had an “ownership equity,” even after the mortgage was burned and title transferred to the local congregation. VII.2 makes clear that membership in the synod, or district, does not by itself give those entities such equity.

    Miles Whitener #35 – You are right, Miles. Congregational leaders should investigate whether or not their congregation is incorporated with the state under the respective state’s Not For Profit (NFP) laws. Incorporation is especially advisable today because of the phenomenal increase in lawsuits against congregations. Incorporation protects the officers and members from PERSONAL liability in cases of lawsuits against the congregation. It still does not protect from malfeasance. It also does not protect the congregation’s bank account from court expenses, so church insurance for various liabilities and for directors and officers (D&O) is also highly advisable.
    State not-for-profit statutes are usually available online, by going to the state’s Secretary of State website or state record’s office. NFP law does not replace church laws (congregational constitution, bylaws, and formally adopted policies), but it adds a layer of protection to the congregation by giving it corporation status, and may have some affect on cases of dissolution. NFP is different from 501 (c) 3, which is registration with the IRS to be qualified for charitable contributions. All congregations of synod have 501 (c) 3 automatically, as seen on a back page in the Lutheran Annual.

    Miles Whitener #35. You say “Court action is the only ultimate remedy for NFP corporations failing to follow their own articles and bylaws.” Yes, but there is an added twist for religious corporations. NFP corporations that are bona fide religious congregations of believers, or groups of such congregations (such as a denomination), have the complication of the First Amendment of the US Constitution, which surpasses and overrides all other civil laws, commonly known as the “separation of church and state.”
    Judges will not and cannot interpret church law, because that would be in violation of the First Amendment. Cases of religious dispute that come before the civil courts generally end with the judge saying “Follow your own constitution and bylaws.” If that can’t be done, the judge will generally rule in favor of the will of the simple majority of registered members. In extreme cases, the court itself may also order a dissolution of the corporation and property, while keeping the assets under “charitable use.” Couser’s book, mentioned above, cites cases of this sort of thing.
    Saint Paul was correct, though, that carrying a case before the civil courts is a great embarassment to the church. The complications involved in NFP and religious organizational law mean that you need a specialist in this work, if you end up going to trial. I am not sure that there is anyone in the SF Bay Area that is LCMS and a lawyer competent to work this field. That is probably why they brought Mrs. Sherri Strand from Saint Louis, who is competent in this specific field. My parents personally knew the highly respected Judge Jay Pfotenhauer of San Francisco, who used to be involved in the CNH district and synod, but he is deceased, and I am not aware of anyone who has come forward with the equivalent of his qualifications.

    Don Kirchner #36 – Don, you are right. A district MAY have equity in a congregation’s property if the congregation purchased property from the district and there is a mortgage involved. In the same way, the national LCEF or district LCEF may have equity in the same way. CNH has a district LCEF. I don’t know if they are involved in this case, or not. But MEMBERSHIP BY ITSELF grants no equity to the synod or district, per VII.2

    FOR THE CURRENT POST “We all have a vested interest in this,” dated February 26, 2010, by Rev. Rossow. COMMENTS FROM:

    Don Kirchner #1 – “Expert witness,” see above. “Article VII.2”, see above.

    Don Kirchner #3 – “Piercing the corporate veil.” Don, I had never heard that term at all, since I am not a lawyer or businessman, until I read Couser’s book, listed above. He used it to refer to churches and non-profit organizations, so I assume it is a valid use. Perhaps I have forgotten the proper use of the term, and as I said at the begining, I cannot find my copy of Couser right now. So maybe my use of the term is invalid – in which case I retract it.
    My understanding of the term is that it has to do with corporate structure, officers, and boards of directors. When corporations are composed of several corporate entities, part of the idea of separate incorporations may be to insulate significant assets from “attack.” Corporations of this sort are like compartments in the hull of a ship, or like fire walls and doors in a building, that prevent damage from destroying the whole thing. So there is some good sense behind such corporate structures, but it may not make good sense for every corporation.
    I believe it was Couser, in the book noted above, who observed that unless the separate corporations really operate as separate corporations, this sort of strategy can be defeated by a lawyer “piercing the corporate veil.” What appeared to me, from reading the deposition, was the the lawyer for the defense was trying to determine to what extent the LCMS national entities (president, board of directors, etc.) were responsible for the actions of the regional entity (CNH) by “piercing the corporate veil” between the two.
    If the synodical president and board of directors were aware of this case in Oakland before it came to court, and if they gave counsel or advice to CNH, it could significantly complicate matters. Those are two big IFs, and its the defense lawyer’s job to find out whether those IFs are substantial.

    Jeff Samelson #4 – You noted that there was an “accusation of meddling by District Presidents” in a previous case, involving the Orthodox Lutheran synod. According to LCMS polity, its presidents, district president, and circuit counselors have the right and responsibility to give counsel and advice, at all times, to congregations. That is the flip side of the Advisory Nature of synod, LCMS Constitution Article VII. They have a right to attend any meeting of a congregation, i.e., a voter’s assembly to give advice and counsel. But they cannot command that congregation what to do.
    What is interesting about the CNH versus Oakland case is that the CNH District has entered a lawsuit on one side of a congregational dispute, at least that is what it looks like from the transcript. That means that, apparently, the District is meddling internally in the affairs of a congregation. The district can be involved if that means protecting a church-worker rostered in the synod, and it may need to be in such cases. The synodical congregations are also not obligated to recognize excommunications of laymen, but I don’t see how they can reverse an excommunication WITHIN the congregation itself.
    There are no church-workers involved in the Oakland case, and I have seen no evidence of an excommunication, so CNH has to have some other reason to be involved in this case. I am not assuming that CNH does, or does not have, valid cause to be involved in the internal affairs of this congregation. That should become evident, however, in the trial at some time.

    One important lesson to be learned immediately. Church disputes in the civil courts can be very expensive. Both parties to the dispute can bankrupt their assets, and may become personally liable if not protected. It is much better to sit down with your opponent outside of court, through arbitration, or through LCMS dispute resolution, than to take this course of action. “Fools rush in where angels fear to tread.”

    Final note. I am not a lawyer. My answer to questions here do not constitute legal advice. If you have a legal problem, you need to consult an attorney properly certified with the bar and registered in your state. Couser’s book is most helpful for risk management, and for learning the issues involved in a general way, but it doesn’t replace a lawyer. If you have a problem, you need to have a professional diagnose your case and advise on the best course of action. Every case is different, so it you end up in court, you need individual attention from an attorney to diagnose, prescribe, and if necessary, serve as your advocate in trial.

    Yours in Christ, Martin R. Noland

  22. Ex-chairman sell the building?

    On the website which I noted above, it intimated that the district had used the property for COLLATERAL on the CNH office building — and I asked if this could be verified.

    If this were true, then there are a NUMBER of CRITICAL questions which must be answered — all of which have to do with all of us.

    In any case, if it was listed [prematurely] as collateral, one doesn’t sell it. One leaves it as collateral, right? The lawsuit against the congregation keeps the congregation from being able to sell their property. But watch and see what happens if the four ladies try to use the property as collateral for a loan to pay for the lawsuit. That would be a trainwreck. It seems to me that that could be an entirely different lawsuit — if the members didn’t know that their property was being used in that way. If the District has used the property as collateral, then even the congregation can’t sell the property.

    And if other congregational properties were also listed as collateral for that loan (or other loans), whose properties might THOSE be? Are there OTHER congregations living a meager existence whose property the District has named as collateral? The ladies thought that there were three others according to their interview.

    If CNH is following this practice of listing congregations as collateral, who’s to say that OTHER districts aren’t doing the same? DPs give each other ideas. Why don’t each of us write our district boards of directors and ask if they are using the property of any congregations in the district as collateral for district operations. What do you think we will find?

    Furthermore, if banks accept congregational property as being collateral for a DISTRICT loan, then the District must have made some kind of legal argument which satisfied the bank that congregational property actually is property of the district — AND THIS IS JUST AS CRITICAL AS THE LAWSUIT ITSELF.

    But the outcry in such matters is little different from the Benke affair. Thousands complain about it, but who will do anything about it? I’ll bet you can’t get 1000 pastors to take action, (milquetoast as the Bylaws have now made that process). Not 500, not 250, not 100, not 50. Kieschnick knows that. He might suffer a little bad publicity in small pockets on websites, and four ladies might try to defend themselves (though the synod can outspend them), but there is nothing practically speaking which can hold Kieschnick’s or Newton’s feet to the fire. (Sure, the convention can do that, but Kieschnick has so stacked the floor committees and the CCM that it is virtually impossible unless he is voted out of office.)

  23. Thanks, Helen. I knew I’d seen it somewhere, so I was not questioning whether it had happened. I simply was curious about “first trial” which presupposes a second trial and my understanding that there have not been any trials. It seems that there’s simply a lot of misuse of legal terms and misinformation being thrown around that confuses things, such as:

    “Now if Newton would be served a deposition, and I don’t see why that is not coming, this might shed more light as to why he wouldn’t give them a pastor.”

    DP Newton has been deposed, as discussed here:

  24. @Rev. Joel A. Brondos #24
    In any case, if it was listed [prematurely] as collateral, one doesn’t sell it.
    One leaves it as collateral, right?

    You leave something as collateral, if you intend to keep it.
    But if you can sell it and apply the proceeds on the debt,
    wouldn’t the bank holding your note be just as happy with the cash?

    (I am assuming that the entity holding the note would get first dibs on the proceeds of a sale.)

  25. @Helen #26

    If you can keep the collateral until you pay off the loan, then you can also sell the property for a profit.

    IF a district used property which was not their own as collateral, I think they’d sue to make sure that the current owners couldn’t sell it which would put the district in a bind.

    I suppose (theoretically) they could sell it and just hand over the proceeds directly to the bank which has a lien on it, but maybe the district (theoretically) would keep it and sell it at a later time (if they are able to remain current on their present loan payments).

    But I’m probably just demonstrating my ignorance of banking and should quit while I’m behind . . . 🙂

  26. Pastor Brondos,
    Because this case, as entered the state legal system, the District, Congregation, the ladies, have effectively have now forfit, what laws govern within Synod. This court case, will now give verdict to our dispute process, goverance, Constitution, etc. The State of California & it’s laws are now what govern & decide, Synod is now, in this court case, out of that process. Prime example, we avoid suing each other or taking each other to court.

    As such, now the property or asset laws of the State of California, now apply. By that I mean, assets held by or funds owed by, a 501 not for profit entity. What happens to the property in question, now will follow the State of California Not for Profit law. Unless, someone who is familar, an attorney, or in assest based lending for not for profit, there really is no way to tell, at this point.

    The question is now, as these issues are now in State court, the decision has long lasting effects on those not only in California, but in the court of public opinion. That is not willingly, any denomination, should ever esteem to be in.

  27. Dutch,


    Another thing I’d like clarification on, since this case seems to try to make a distinction between Synod and its Districts — and between the “state-incorporated LCMS” and the “church constitution” LCMS, is this:

    When the California court rules, does it only affect the CNH district? Or does it truly affect us all?

    If the LCMS is incorporated in the state of Missouri, would there be any Missouri state incorporation rules which could be impacted by the California court decision?

  28. Pastor Brondos,
    The item that frightens me the most is the 501 status, at this point. The 501 status, of many, has/is under investigation at this point (in other denoms & not for profit churches or ministries) All it would take is one ruling, in that favor, to begin an inquiry. That is a serious & denom wide threat. That should be paramount, in my mind at this point.

    As far as, crossing state law, that is really up to the ruling, in the case. The ruling is for California, however, depending on the legal precedence set by the decision, it in theory, that could cross state lines.

    At this point, there is really no way to say, what or what could occur or what that ruling could effect. The definitions of membership, district, congregation, governance, our definitions & constitution, etc., are at essence, also at trial here. California, is not known, for it’s sponsership of churches, nor Christianity, as of late. There are so many variables, within that state, not with standing, all else, one cannot really make a call on this.
    Whether it effects us all, in ruling by the court, or what is brings upon the district or the denom, mostly depends on your perspective on what, “on all of us” is.
    Truthfully, I believe it already has effected LCMS, and us, by proxy. Ultimately, the court of public opinion, as the case is now public, will be the judge. That is again the reason we, as siblings, avoid the public court. As you go to court, you make it public.

  29. Dear Pastor Brondos,

    Excellent question at #29!

    First, the difference between the “MO state incorporated LCMS” and the “church constitution LCMS” is found in the LCMS handbook itself. The Articles of Incorporation are in the back of the handbook, and they define how our church relates to the US government through the state of Missouri. We relate to the US government through state government, because that is how the US constitution mandates that this is to be done. There are not two corporations, but one organization which relates to government through Articles of Incorporation, and is related to its various entities through the Constitution and bylaws. If you understand orthodox Christology, with one person having two natures, you might understand this distinction.

    Second, when the California court rules on this case, it is only ruling on this case, it is not making a law. So in that sense, it only affects Our Redeemer, Oakland and CNH district. But what it does is help us all, in the LCMS, see how our LCMS rules actually play out next to the rules of the civil courts. Through this case, congregations may find that they actually have less control of their property than they always thought they had, or the opposite, i.e., they may have more control than they think.

    Third, there are some variations in not-for-profit laws, but most states follow a common standard. Christian Preus, who knows a lot about not-for-profit laws, once explained to me what that standard was and when it was established. Because of the standardization and the nature of this case, it is unlikely that the Missouri laws would have an effect on, or be affected by, the California decision.

    Fourth, it is highly unlikely that Missouri NFP laws would be involved at all, since this case is an argument about property ownership between two parties which are both California entities, i.e., Our Redeemer-Oakland and CNH District of the LCMS. But LCMS Constitution and Bylaws are most definitely involved, since that is what defines the relationship between Our Redeemer and CNH. I think that is why Mrs. Strand made that distinction between the MO state incorporation, which has to do with property ownership by the national office in MO, and constitution and bylaws, which has to do with relationships between church entities.

    I hope that clarifies matters a bit.

    Yours in Christ, Martin R. Noland

  30. Thanks, Dr. Noland. It is instructive and very interesting to see how the Kingdom of the Left Hand affects the Kingdom of the Right hand. We ought never to lose sight of that. Members of Boards of Regents, Boards of Directors, and other such Synod and District legal entities, take note! Read, mark, learn, and be instructed, and forewarned.


  31. Dr. Noland @ #31

    Is it heretical to maintain a Kenotic or Nestorian doctrine of “synod” — or is there a hypostatic union between the left and right kingdoms incarnate at 1333 S. Kirkwood Road?

  32. I was just watching the real Nixon/Frost interview on our PBS station, noting in particular a common phrase during the course of Watergate: Ehrlichman’s “modified limited hangout” (http://en.wikipedia.org/wiki/Limited_hangout)

    I think M.Z. Hemingway should interview the Rev. Dr. Presidents Gerald Kieschnick to discuss his modified limited hangouts sometime after he is ousted from office this summer.

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of followup comments via e-mail. You can also subscribe without commenting.