California-Nevada Annual Conference of United Methodist Church v. St. Luke's United Methodist Church

This case involves the issue of who controls a local church’s property when the local church (here, appellant St. Luke’s United Methodist Church) ends its affiliation with a national or worldwide religious denomination (here, the United Methodist Church). After a nonjury trial, the trial court ruled that the local church held the church property in trust not only for the use and benefit of the local church, but also for the use and benefit of the United Methodist Church. The court also ruled that the local church could not revoke that trust. The trial court’s ruling was based largely on its understanding of the meaning of subdivisions (c) and (d) of Corporations Code section 9142. On this appeal, the local church contends that (1) the court erred in concluding that a trust existed in favor of the United Methodist Church, and (2) even if such a trust existed, the local church could and did revoke that trust. As we shall explain, we agree that the evidence presented at trial supports the trial court’s conclusion that a trust in favor of both churches was created. But we disagree with the trial court’s conclusion that St. Luke’s could not revoke the trust in favor of the…