Scorecard. Think of this article as your legal scorecard to the impending clash.

Episcopal Sects Preparing for Property Fight With Church

By Anna Palmer
Legal Times
January 15, 2007

Tensions between the Episcopal Diocese of Virginia and nine breakaway congregations reached a boiling point last week after the diocese signaled it would not renew a 30-day no-lawsuit pledge — meaning the groups will likely be heading to court over property.

“Everybody’s assumption for a long time was this was likely to be resolved without result of litigation, through negotiations, and ultimately a settlement,” says Gene Schaerr, a partner at Winston & Strawn who is counsel to the breakaway congregations, including the Falls Church and Truro Church. “If they remain unwilling to negotiate about it, as our congregations would very much like to do, we will have to resort to litigation.”

The move followed an initial negotiation meeting between diocese lawyers Bradfute Davenport Jr. and M. Kevin McCusty, both partners at Troutman Sanders, and David Charlton, president of church schools for the diocese, and representatives from the breakaway churches, including A. Hugo Blankingship Jr., partner at Blankingship & Keith who is legal counsel to the Falls Church, Steffen Johnson, partner at Winston & Strawn, and Robert Dilling, partner at Reed Smith who is legal counsel to Truro Church.

The nine congregations voted to secede from the Episcopal Church last month over interpretations of Scripture on hot-button issues such as homosexuality. Of those congregations, the Falls Church and Truro Church are two of the wealthiest and most historic.

The coalition of churches have retained Winston & Strawn partners Schaerr, Gordon Coffee, and Johnson, a former Department of Justice lawyer in the Office of Legal Counsel who worked on President George W. Bush’s faith-based initiative and is a member of the Falls Church. Troutman partners Davenport, Russell Pallmore (who is also chancellor of the Virginia diocese), and George Somerville are representing the diocese.

After voting in mid-December, the congregations individually filed reports in Virginia county courts, notifying the courts of their intent to leave the Episcopal Church. If the courts certify the vote, the congregations would gain control of the properties.

Davenport says the diocese will intervene in those circuit court proceedings.

“The issue is who owns and controls the property of the breakaway congregations, which includes real estate and personal property, things on the premises, money, and endowment funds,” says Davenport. “These properties are Episcopal properties that are owned by and have been owned by and used for past, present, and future generations of Episcopalians as Episcopal churches and they do not belong legally, ethically, or in any other way to those who choose to leave the Episcopal Church.”

But the breakaway congregations disagree.

“The congregation built and maintained these churches with their own denominations, not the [diocese],” says Johnson of the congregation’s rights to the property. “The diocese and the national church abandoned negotiations before getting them off the ground. We’re prepared to defend the rights of the congregations in court . . . but if they want to return to the table, we welcome that.”

Davenport says he expects the Virginia Diocese executive board to meet within a week of Jan. 17, when the 30-day no litigation period ends, to determine the diocese’s next steps.

“It’s fair to assume the bishop executive board will move to retain property at all of the separated churches,” says Patrick Getlein, spokesman for the diocese [and former Washington Post reporter]. “How it happens remains to be seen. That will be decided after the expiration of the standstill.”