Schuller v. Naylor (In Re Crystal Cathedral Ministries)

MEMORANDUM *

Dr. Robert H. Schuller (“Schuller”) and the corporation Robert Harold, Inc. (“RHI”) appeal from a district court order affirming the judgment of a bankruptcy court. We have jurisdiction pursuant to 28 U.S.C. § 158 (d)(1), and we affirm.

1. The bankruptcy court did not err in subjecting Schuller’s claim to the one-year cap in 11 U.S.C. § 502 (b)(7).

Section 502(b)(7) limits “the claim of an employee for damages resulting from the termination of an employment contract” to “the compensation provided by such contract, without acceleration, for one year.... ” The bankruptcy court determined that Schuller was an “employee” of Crystal Cathedral Ministries,, and that his *308 contract with Crystal Cathedral Ministries (the “Transition Agreement”) was an “employment contract.”

We find no error in the determination that Schuller was an “employee.” Where, as here, a statute does not otherwise define the term “employee,” “the term ‘employee’ should be understood in light of the general common law of agency.” Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 741 , 109 S.Ct. 2166 , 104 L.Ed.2d 811 (1989). On balance, the Reid test leads us to conclude that Schuller was an…

dissenting:

This case presents a difficult question regarding how best to characterize an unusual retirement agreement between a church and its founding pastor. My disagreement with the panel majority stems from the fact that I find the relevant question to be whether Dr. Robert H. Schuller is a retiree or an employee, whereas the panel majority applies the test for whether a person is an employee or an independent contractor. See Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 752 , 109 S.Ct. 2166 , 104 L.Ed.2d 811 (1989).

11 U.S.C. § 502 (b)(7) is inapplicable to claims for retirement benefits by retirees. See, e.g., In re Irvine-Pac. Commercial Ins. Brokers, Inc., 228 B.R. 245, 247 (9th Cir. BAP 1998); In re Prospect Hill Res., Inc., 837 F.2d 453 , 455 (11th Cir.1988). Although the question is a close one, the Transition Agreement in the instant case is best characterized as a retirement agreement, rather than an employment agreement. The principal purpose of the agreement was to provide for Schuller’s retirement from his position as Senior Pastor while defining the kind of relationship he would have with Crystal Cathedral Ministries in the future should he wish to…

FILED

NOT FOR PUBLICATION AUG 04 2014

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In the Matter of: CRYSTAL No. 13-56039

CATHEDRAL MINISTRIES,

D.C. No. 2:12-cv-10879-RGK Debtor,

MEMORANDUM*

ROBERT H. SCHULLER; ROBERT

HAROLD, INC.,

Appellants,

v.

KAREN SUE NAYLOR, Plan Agent;

CRYSTAL CATHEDRAL MINISTRIES,

Reorganized Debtor,

Appellees.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Argued and Submitted May 12, 2014 Pasadena, California

Before: PREGERSON, REINHARDT, and NGUYEN, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Dr. Robert H. Schuller (“Schuller”) and the corporation Robert Harold, Inc.

(“RHI”) appeal from a district court order affirming the judgment of a bankruptcy

court. We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1), and we affirm.

1. The bankruptcy court did not err in subjecting Schuller’s claim to the

one-year cap in 11 U.S.C. §…