The state Supreme Court has ruled in The Episcopal Church split

The state Supreme Court has partially reversed a lower court ruling in the Episcopal Church split that involves potentially hundreds of millions of dollars in church property, much of it historic. File

In a highly anticipated ruling, the state Supreme Court decided Wednesday that 29 parishes whose congregations left The Episcopal Church in 2012 can't take their valuable properties with them, a decision that could set the stage for a massive exchange of historic church capital in the region.

However, seven parishes and a land trust that left can hold on to their properties because they never agreed in writing to let the national church hold them in trust, unlike the others, a majority of justices ruled. 

St. Christopher Camp and Conference Center on Seabrook Island is among the properties that are set to return to The Episcopal Church.

Also on the list are Charleston parishes, including St. Michael's Church, the oldest surviving religious building in the city, and St. Philip's Church, the oldest congregation in the state according to several sources and notes included in court document.

The ruling presents a dilemma for The Episcopal Church, which though largely victorious Wednesday now must decide what to do with so many reclaimed church properties that might have few congregants filling the pews. Two years ago, The Episcopal Church and Bishop Skip Adams' diocese offered a settlement that would have allowed 35 breakaway parishes to keep roughly $500 million in church properties. In return, the national church would have kept the diocesan name and identifying marks, along with St. Christopher Camp and other assets. 

Bishop Mark Lawrence and his Diocese of South Carolina, which left the national church, rejected the deal. 

A spokesman for the Diocese of South Carolina said attorneys are still reviewing the complicated series of opinions. They are certain they will seek a rehearing by the high court.

"It's fair to say we were disappointed in the ruling as it has come down," said the Rev. Jim Lewis, Canon to the Ordinary. "But it's something we are still studying because it's complicated."

If the court doesn't grant a rehearing, the Diocese can petition the U.S. Supreme Court.

The justices issued their 77-page divided opinion almost two years after hearing arguments in the case. Now-retired Chief Justice Costa Pleicones wrote in the lead opinion that he would reverse the entire trial court order, which allowed parishes that left the national church to take with them their parish properties, the diocesan name and its identifying marks. Justice Kaye Hearn fully concurred.

The protracted legal journey began when about two-thirds of parishes in the Diocese of South Carolina, along with Bishop Mark Lawrence, left the national church in 2012 after years of bitter arguments over everything from scriptural interpretations to governance powers to gay rights. Lawrence's diocese has since affiliated with the Anglican Church in North America, a group that formed in 2009 as an alternative to The Episcopal Church.

After leaving, the Diocese of South Carolina and 18 parishes sued the national church to retain control of more than $500 million in properties, the 314-acre St. Christopher Camp and the diocese’s name, marks and other identifiers. The number of parishes involved later rose to about three dozen. 

At issue in the case is whether South Carolina civil law trumps a hierarchical national church's own canons, backed by the First Amendment's religious protections.

After a three-week, non-jury trial in summer 2014, Circuit Judge Diane Goodstein ruled that the breakaway parishes had the right to leave and take the Diocese of South Carolina name and church properties with them. She found that in South Carolina so-called “neutral principles” override the church’s constitution and canons.

Neutral principles apply civil corporate, contract and trust laws to this type of dispute rather than deferring to a hierarchical church’s internal rules. It marked an important distinction in Goodstein's ruling. The key issues at stake in the case included whether the national church held parish properties in trust and whether the breakaway group took proper actions under state nonprofit law to separate from the national body.

However, Pleicones wrote that Goodstein improperly based her ruling solely on neutral principles and that she wrongly said she was required "to ignore the ecclesiastical setting in which these disputes arose." Pleicones added that "this error of law led, in turn, to a distorted view of the issues in this case."

Hearn agreed.

"Of what importance is it that a religious body be hierarchical in nature, if any individual church can choose to disassociate from the higher body and take all property with it?" she wrote.

The justices, however, split 2-2 on intellectual property issues at stake, thereby leaving in place the trial judge's ruling that the breakaway diocese could keep the Diocese of South Carolina name, marks and seals. Chief Justice Donald Beatty expressed no ruling on the issue, agreeing with colleagues who found it should be resolved in a separate, ongoing federal lawsuit.

Each justice wrote an individual opinion, and several included unusually pointed words at colleagues.

Justice John Kittredge voted to affirm the Goodstein's ruling.

"The message is clear for churches in South Carolina that are affiliated in any manner with a national organization and have never lifted a finger to transfer control or ownership of their property — if you think your property ownership is secure, think again,” Kittredge wrote.

In fall 2015, the Supreme Court agreed to bypass the state appellate court to hear arguments in the dispute, which by then had spanned three years of court wrangling, millions of dollars in legal fees, a three-week trial, 1,300 exhibits and the unrequited settlement offer. Two of the justices who heard arguments have since retired but still ruled in Wednesday's opinion. 

The Diocese of South Carolina spans the entire eastern half of the state, so the ruling will have profound implications on thousands of clergy and congregants, including those whose families have worshiped at several colonial churches for generations and now could face a decision over whether to stay or leave. 

"We all appreciate the anxiety everyone has at this point," Lewis said. "The implications are not clear."

Bishop Adams of The Episcopal Church in South Carolina, the diocese that remains with the national church, said in an email to parishioners that he was grateful for the decision but cautioned patience. 

"It is important to note that the legal system allows for periods of judicial review and possible appeal, so it will be some time before we can say with certainty what the journey ahead will look like," Adams wrote. He added that the church's ultimate goal is "reconciliation and unity."

Now-retired Chief Justice Jean Toal voted to uphold the trial court order but acknowledged the difficulty of the case and "five different, strongly-held opinions" among justices. Those conflicting opinions extend to the clergy and congregants who now must sift through the complex decision and decide their next moves.

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Contact Jennifer Hawes at (843) 937-5563 or follow her on Twitter @jenberryhawes.

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