Filed 4/5/16




                          CERTIFIED FOR PUBLICATION


               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FIFTH APPELLATE DISTRICT

DIOCESE OF SAN JOAQUIN et al.,
                                                                  F070264
        Plaintiffs and Respondents,
                                                      (Super. Ct. No. 08CECG01425)
                 v.
                                                                OPINION
KEVIN GUNNER, as Administrator, etc. et al.,

        Defendants and Appellants.



        APPEAL from a judgment of the Superior Court of Fresno County. Donald S.
Black, Judge.
        Wild, Carter & Tipton, Russell G. VanRozenboom; Haley & Bilheimer and
Allan S. Haley for Defendants and Appellants.
        Ragghianti Freitas, Michael O. Glass, Sarah N. Léger; Goodwin Procter, David
Booth Beers; Overstreet & Associates and David M. Overstreet for Plaintiffs and
Respondents.
                                         -ooOoo-
        Due to theological disagreements, a majority of the members of the Diocese of
San Joaquin (Diocese) voted to disaffiliate from the Protestant Episcopal Church in the
United States of America (Episcopal Church). This case concerns who now owns the
property that belonged to the Diocese before the disaffiliation.
       The trial court ruled in favor of plaintiffs and respondents, the Protestant
Episcopal Bishop of San Joaquin, the Diocese, and the Episcopal Church. Defendants
and appellants, Kevin Gunner, as administrator of the estate of John-David Schofield, the
former Protestant Episcopal Bishop of San Joaquin, and the Anglican Diocese Holding
Corporation, argue the trial court erred by misconstruing an earlier decision by this court
and failing to apply neutral principles of law.
       Appellants are correct that the trial court made certain errors. Nevertheless,
applying neutral principles of law, the property belongs to respondents. Therefore, the
judgment will be affirmed.
                                     BACKGROUND
1.     The structure of the Episcopal Church.
       The Episcopal Church is “„a constituent member of the Anglican Communion.‟
The Anglican Communion is a worldwide organization of dioceses, provinces, and
regional churches under the ecclesiastical leadership of the Archbishop of Canterbury,
who is Primate of the Church of England.” (Schofield v. Superior Court (2010) 190
Cal.App.4th 154, 157 (Schofield).) However, the various regional Anglican churches,
such as the Episcopal Church, have significant latitude in adopting forms and modes of
worship deemed appropriate for local conditions. (Ibid.)
       The Episcopal Church is hierarchical with a three-tiered organizational structure.
(New v. Kroeger (2008) 167 Cal.App.4th 800, 808 (New).) At the highest level it is an
unincorporated association operating on a national level. (Ibid.) The Episcopal Church
is governed by a general convention, composed of bishops and deputies, and a presiding
bishop. (Episcopal Church Cases (2009) 45 Cal.4th 467, 474; Huber v. Jackson (2009)
175 Cal.App.4th 663, 668 (Huber).) The general convention adopted, and from time to


                                             2.
time amends, a constitution and other rules called canons that are binding on all
subordinate entities in the church. (Huber, supra, at pp. 667-668.)
       The second level of the Episcopal Church consists of 111 geographically divided
dioceses. (Episcopal Church Cases, supra, 45 Cal.4th at p. 474; New, supra, 167
Cal.App.4th at p. 808.) As a condition of being admitted into union with the Episcopal
Church, each diocese must accede to the Episcopal Church‟s constitution and canons and
recognize the authority of the Episcopal Church‟s general convention. (New, supra, 167
Cal.App.4th at p. 809.) A diocese then convenes its own annual convention to adopt a
diocesan constitution and canons consistent with those of the Episcopal Church. The
bishop of a diocese, the “„ecclesiastical authority,‟” is elected to that position by the
diocese convention. (Id. at p. 808.) Ordination and consecration of the diocesan bishop-
elect requires consent of the governing committees and the bishops of the Episcopal
Church. (Schofield, supra, 190 Cal.App.4th at p. 158.)
       Each diocese is divided into missions and parishes, the third level of the Episcopal
Church. These are the individual churches where members meet to worship. (Episcopal
Church Cases, supra, 45 Cal.4th at p. 474; New, supra, 167 Cal.App.4th at p. 808.) A
parish is governed by a vestry, consisting of a rector, who is an ordained priest, and a
group of elected laypersons. (Episcopal Church Cases, supra, at p. 474; New, supra, at
pp. 808-809.) A parish is subject to the constitutions and canons of both the Episcopal
Church and the parish‟s diocese.
2.     The Diocese of San Joaquin.
       Beginning in 1910, the individual Episcopal churches in the Central Valley were
part of the Missionary District of San Joaquin. Unlike a diocese, a missionary district is
not self-governing. Rather, the missionary district is under the direction of, and
supported by, the national church.




                                              3.
       In 1961, the Missionary District of San Joaquin petitioned the general convention
to give its consent to the formation of a diocese out of the whole of the Missionary
District of San Joaquin. The general convention accepted the petition and approved the
proposed diocesan constitution and canons. Thus, the Diocese was formed.
       As required by the general convention, the Diocese‟s constitution provided: “The
Church in the Diocese of San Joaquin accedes to the Constitution of that branch of the
Holy Catholic Church known as the Protestant Episcopal Church in the United States of
America and recognizes the authority of the General Convention of the same.”
       Under the diocesan canons, the bishop of the Diocese is required to be a
corporation sole by the title of “„The Protestant Episcopal Bishop of San Joaquin, a
Corporation Sole.‟”1 The title to trust funds and real estate acquired by gift or purchase
for the use of the Diocese is “vested in The Protestant Episcopal Bishop of San Joaquin, a
Corporation Sole, in trust for such purposes as are specified in the deed or are otherwise
made a matter of record .…” Over the years, as new bishops were elected, the
corporation sole‟s articles of incorporation were amended to reflect the change of
incumbent. Such amendments required the consent of the Diocese‟s annual convention.
The diocesan bishop does not have authority to amend the corporation sole‟s articles of
incorporation without such approval.
       In 1988 John-David Schofield was elected bishop of the Diocese by the diocesan
convention. He was ordained and executed the declaration of conformity, vowing to
“Conform to the Doctrine, Discipline, and Worship of the Episcopal Church.” By virtue
of his office, Schofield became the incumbent bishop of the corporation sole.




1     A corporation sole is a perpetual entity through which a religious organization can
administer and manage property dedicated to the benefit of that organization. (Corp.
Code, § 10000 et seq.)


                                             4.
3.     The dispute.
       Because of theological disagreements, Schofield began advocating for the Diocese
to disaffiliate from the Episcopal Church. In his address to the Diocese‟s 2007
convention, Schofield summarized these disagreements as follows:

       “For twenty years and more we have watched The Episcopal Church lose
       its way: straying, at first, from Scripture … to the point of dismissing the
       Word of God, in some instances, as mere historical documents – of value,
       perhaps in bygone eras – but no longer applicable to us, to appropriating
       powers to itself through the General Convention it had never had and,
       finally, on to unilateral decisions about theology, sexuality, and ordination
       potentially cutting itself off from the Anglican Communion.”
       In 2004, the Diocese began the process of amending its governing documents
through resolutions passed at the annual conventions. In 2005, the Diocese amended
article II of its constitution, the accession clause, to provide:

       “The Diocese of San Joaquin accedes to and/or incorporates the terms and
       provisions of the Constitution of the Episcopal Church in the United States
       of America to the terms and provisions of the Constitution of the Diocese
       of San Joaquin to the extent that such terms and provisions, and any
       amendments thereto, adopted by the authority of the General Convention,
       are not inconsistent with the terms and provisions of the Constitution and
       Canons of the Diocese of San Joaquin, as amended from time to time, and
       ratified by any Diocesan Convention duly called and held.”
       In an attempt to protect its property, the Diocese amended Canon XXV in 2004 to
add section 25.06 which provides:

       “No ownership or proprietary interest in any real or personal property in
       which title and/or ownership is held by the Diocese of San Joaquin, its
       churches, congregations, or institutions, shall be imputed to any party other
       than the Bishop as a Corporation Sole (including a trust, express or
       implied) without the express written consent of the Bishop and the Standing
       Committee of the Diocese.”
       The articles of incorporation for the corporation sole were also amended to
redefine how a bishop vacancy was to be filled. The amendment omitted the



                                               5.
requirements that the local choice of bishop be approved by the national church and that
the bishop be ordained and consecrated by at least three Episcopal bishops. “Instead, if
the bishop-elect was „already consecrated a Bishop in the Apostolic Succession,‟ the
bishop-elect would become bishop upon the bishop-elect‟s acceptance of election.”
(Schofield, supra, 190 Cal.App.4th at p. 158.)
       In 2006, at Schofield‟s recommendation, the annual convention voted to further
amend the diocesan constitution to remove the Diocese from the Episcopal Church. The
Episcopal Church‟s executive council responded in June 2007 by issuing a resolution.
The council concluded that any amendments purporting to limit or lessen the unqualified
accession to the constitution and canons of the Episcopal Church were “null and void”
and therefore must be “considered as completely ineffective.”
       In early December 2007, before the diocesan annual convention, the Episcopal
Church‟s presiding bishop wrote a letter to Schofield urging him to reconsider his
position. The presiding bishop further advised Schofield that “[i]f you continue along
this path, I believe it will be necessary to ascertain whether you have in fact abandoned
the communion of this Church, and violated your vows to uphold the doctrine, discipline,
and worship of this Church.”
       Schofield continued to support amending the constitution at the annual
convention. On December 8, 2007, those amendments passed thereby deleting the
accession and authority provisions and substituting “The Diocese of San Joaquin is
constituted by the Faith, Order, and Practice of the One, Holy, Catholic, and Apostolic
Church as received by the Anglican Communion. The Diocese shall be a constituent
member of the Anglican Communion and in full communion with the See of
Canterbury.” The following canon was also added: “The Diocese of San Joaquin is a
full member of the Anglican Province of the Southern Cone of South America.” Thus,




                                            6.
the Diocese „“seceded and disassociated from The Episcopal Church.‟” (Schofield,
supra, 190 Cal.App.4th at p. 158.)
       The Episcopal Church responded in January 2008 by disciplining Schofield for
abandoning the communion of the Episcopal Church by “„an open renunciation of the
Doctrine, Discipline or Worship of this Church.‟” (Schofield, supra, 190 Cal.App.4th at
p. 159.) The presiding bishop inhibited Schofield and ordered that after January 11,
2008, “he cease from exercising the gifts of ordination in the ordained ministry of this
Church” and “cease all „episcopal, ministerial, and canonical acts, except as relate to the
administration of the temporal affairs of the Diocese of San Joaquin.‟”
       On January 22, 2008, Schofield filed a document with the California Secretary of
State titled “Amendment to Articles of Incorporation Changing Name of The Protestant
Episcopal Bishop of San Joaquin (A Corporation Sole) to The Anglican Bishop of San
Joaquin (A Corporation Sole).” Schofield stated in the document that, as the Bishop of
the Diocese of San Joaquin, he was the chief officer of the corporation sole and that the
amendment had been duly authorized by the Diocese. However, the annual convention
did not consider or authorize any such amendments as is required to amend the articles of
incorporation of the corporation sole.
       Effective March 12, 2008, the presiding bishop, with the consent of a majority of
the House of Bishops, deposed Schofield as bishop of the Diocese. Schofield was
thereby “deprived of the right to exercise the gifts and spiritual authority of God‟s word
and sacraments conferred at ordination in this Church” and “all ecclesiastical and related
secular offices held by Bishop Schofield” were “terminated and vacated.”
       At a March 29, 2008 special meeting of the diocesan convention, the Diocese, i.e.,
the minority of parishes and members that had not seceded in 2007, elected Jerry A.
Lamb as provisional bishop. (Schofield, supra, 190 Cal.App.4th at p. 159.) The
convention adopted resolutions undoing the amendments to the diocesan constitution and


                                             7.
canons and undoing the January 22, 2008 amendment to the articles of incorporation
changing the name of the corporation sole.
       On April 8, 2008, in accordance with the diocesan convention‟s authorization,
Lamb filed an amendment to the articles of incorporation stating that Bishop Lamb is the
incumbent of the corporation sole and that the corporation sole‟s name is The Protestant
Episcopal Bishop of San Joaquin, a Corporation Sole.
       On March 27, 2008, Schofield began retitling the 27 parcels of real property in
dispute by granting them to The Anglican Bishop of San Joaquin, a Corporation Sole.
Thereafter, Schofield executed and recorded grant deeds transferring the real property
from The Anglican Bishop of San Joaquin, a Corporation Sole, to the Anglican Diocese
Holding Corporation (Holding Corporation).
       Schofield formed the Holding Corporation to serve as a parallel legal structure to
perform the same function as the corporation sole and to protect the property from
“someone like Jerry Lamb claiming it.” The Holding Corporation‟s articles of
incorporation state that its purpose is to “hold, invest and manage property, both real and
personal, of the Diocese of San Joaquin, a Anglican diocese of the Province of the
Southern Cone, created on December 8, 2007.”
       In April 2008, Lamb asked Schofield to return all the real and personal property to
him on behalf of the Diocese. However, Schofield refused to do so.
4.     The underlying lawsuit.
       The Episcopal Church and the Diocese filed the underlying action to reclaim
possession of the real and personal property and for declaratory relief. In December
2008, they moved for summary adjudication of the cause of action seeking a declaration
as to the identity of the incumbent officeholder of the Diocese of San Joaquin‟s
corporation sole. The trial court granted the motion concluding that the actions of the
Diocese in attempting to withdraw from the Episcopal Church were ultra vires and that


                                             8.
Lamb was the current incumbent of the corporation sole.
          The defendants filed a petition for writ of mandate with this court. We granted the
petition and ordered the trial court to vacate the summary adjudication order. (Schofield,
supra, 190 Cal.App.4th at p. 164.) We concluded that the dispute regarding the identity
of the incumbent “Episcopal Bishop of the Diocese of San Joaquin” was “quintessentially
ecclesiastical” and therefore a civil adjudication of the issue was forbidden by the First
Amendment. (Schofield, supra, at pp. 161-162.) Accordingly, we held the trial court,
upon proper motion, must dismiss that cause of action. (Id. at p. 162.)
          In so ruling, we found that three facts were established by the record and were, in
any event, “„ecclesiastical facts‟ that the courts have no jurisdiction to adjudicate.”
(Schofield, supra, 190 Cal.App.4th at p. 162.) These facts are: (1) “before and through
January 11, 2008, Schofield was the Episcopal Bishop of the Diocese of San Joaquin; on
that day, his powers as Episcopal Bishop were suspended by the national church”;
(2) “after March 29, 2008, Lamb was the Episcopal Bishop of the Diocese of San
Joaquin, duly recognized by the national church”; and (3) “at some point Schofield
became the Anglican Bishop presiding over an Anglican Diocese of San Joaquin,
affiliated with the Anglican Province of the Southern Cone of South America.” (Ibid.)
We further observed “[t]he continuity of the diocese as an entity within the Episcopal
Church is likewise a matter of ecclesiastical law, finally resolved, for civil law purposes,
by the Episcopal Church‟s recognition of Lamb as the bishop of that continuing entity.”
(Ibid.)
          We then instructed the trial court that, on remand, it should apply neutral
principles of law to resolve property disputes presented by the remaining causes of
action. However, we emphasized that in resolving these disputes, the trial court must rely
on applicable documents and civil law, not religious doctrine. (Schofield, supra, 190
Cal.App.4th at p. 163.)


                                                9.
       On remand, the Episcopal Church and the Diocese amended their complaint to
eliminate the declaratory relief cause of action that this court ordered dismissed. The
Episcopal Church and the Diocese then filed a summary judgment motion. The trial
court denied the motion finding that the plaintiffs had not met their burden of proof. The
court noted that the plaintiffs presented no facts regarding either the Episcopal Church‟s
constitution or canons or the Diocese‟s constitution or governing documents. Therefore,
the plaintiffs failed to present the applicable documents for the trial court to review under
neutral principles of law.
       Thereafter, the case was tried by the court. The parties produced all of the
applicable documents. Because Schofield died before the trial commenced, his personal
representative, Kevin Gunner, was substituted into the case in Schofield‟s place.
       The parties stipulated to certain evidence, including the dates of Schofield‟s
transfer of the property at issue. All such transfers occurred after Schofield had been
removed as bishop of the Diocese.
       The trial court determined that the Schofield opinion set out “a roadmap for [its]
determination of the property issues presented by this case” and that, in light of the
ecclesiastical facts, the trial court was limited to addressing whether Schofield made
property transfers while he was the duly constituted bishop of the Diocese of San
Joaquin. Because the evidence stipulated to by the parties showed that no property
transfers were made before Schofield was deposed as a bishop by the Episcopal Church,
the trial court concluded those property transfers were void.
       The trial court also provided three alternate holdings. First, the trial court
concluded it was bound by the Schofield opinion‟s statement that, as a matter of
ecclesiastical law, the Diocese of San Joaquin continued as a constituent part of the
Episcopal Church. Moreover, the trial court opined that, in any event, it would find that
the Diocese did not leave the Episcopal Church because the Episcopal Church determined


                                             10.
that the 2006 and 2007 amendments to the diocesan constitution were null and void and
civil courts must defer to the Episcopal Church as to matters of “polity, or structure, and
governance of the Church.”
       Second, the trial court stated that, even if it were not bound by deference
principles, the Episcopal Church and the Diocese submitted substantial evidence at trial
that a diocese may not “„disassociate‟ from the Church once it has acceded.” The trial
court noted that a diocese is a geographical construct of the church and therefore “it
makes no sense that a diocese can „leave‟ the Church.”
       Finally, the trial court found that the transfers were void because either the
property was held in trust for the Episcopal Church or Schofield lacked authority to make
the transfers. The court noted that the corporation sole was created to protect and manage
the Diocese‟s property and that, by transferring property away from the Diocese,
Schofield was acting contrary to that purpose.
       Accordingly, judgment was entered in favor of the Episcopal Church and the
Diocese.
                                       DISCUSSION
       Appellants contend the Episcopal Church is collaterally estopped from arguing
that the trial court correctly decided the case because the Illinois Court of Appeal came to
a contrary conclusion in Diocese of Quincy v. Episcopal Church (Ill.Ct.App. 2014) 14
N.E.3d 1245 (Diocese of Quincy). Appellants further assert that the trial court
misinterpreted and misapplied Schofield and consequently failed to apply neutral
principles of law. Finally, appellants argue that the trial court erred in deferring to the
Episcopal Church‟s experts to resolve the property dispute.
1.     The Episcopal Church is not collaterally estopped by the Illinois court’s opinion.
       “Collateral estoppel precludes relitigation of issues argued and decided in prior
proceedings.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, fn. omitted


                                             11.
(Lucido).) The doctrine is applied only if certain threshold requirements are fulfilled.
These requirements are: the issue sought to be precluded must be identical to that
decided in a former proceeding; the issue must have been actually litigated in the former
proceeding; the issue must have been necessarily decided in the former proceeding; the
decision in the former proceeding must be final and on the merits; and the party against
whom preclusion is sought must be the same as, or in privity with, the party to the former
proceeding. (Ibid.)
       Appellants argue the Episcopal Church is bound by Diocese of Quincy, supra, 14
N.E.3d 1245 and therefore is collaterally estopped from arguing that the trial court
judgment is correct under either the law or the Episcopal Church‟s governing documents.
       The background facts in Diocese of Quincy are similar to the facts here. There, as
here, the diocese voted to end its association with the Episcopal Church and realigned
itself with the Anglican Church of the Southern Cone. Thereafter, the Episcopal Church
declared the diocese‟s decision to disaffiliate void, denounced the amendment of the
diocesan constitution to eliminate the diocese‟s accession to the Episcopal Church‟s rules
and governance, and elected a new bishop of the diocese. A dispute arose between the
Diocese of Quincy and the Episcopal Church over the ownership of the diocese‟s
property and litigation ensued. (Diocese of Quincy, supra, 14 N.E.3d at pp. 1250-1251.)
       Following trial, judgment was entered in favor of the Diocese of Quincy. The trial
court concluded the Episcopal Church‟s authority over the Diocese of Quincy could not
be constitutionally determined. Nevertheless, applying neutral principles of law, the trial
court determined that the Diocese of Quincy held title to the property in dispute. The
Illinois appellate court affirmed.
       However, there are significant differences between the structure of the Diocese of
Quincy and the Diocese and how title to the property was held by each. The Diocese of
Quincy was incorporated as a not-for-profit corporation under Illinois law. Its property


                                            12.
was held, managed and distributed by another not-for-profit corporation called “„The
Trustees of Funds and Property of the Diocese of Quincy‟ (Trustees).” Members of the
Diocese of Quincy were the directors of the Trustees. (Diocese of Quincy, supra, 14
N.E.3d at p. 1250.) In contrast here, the Diocese was a corporation sole and the property
was held in the name of the corporation sole with the incumbent bishop as the one
officeholder.
       As noted above, preclusion requires that the issues be identical. “The „identical
issue‟ requirement addresses whether „identical factual allegations‟ are at stake in the two
proceedings, not whether the ultimate issues or dispositions are the same.” (Lucido,
supra, 51 Cal.3d at p. 342.)
       In answering the question of „“who owns the disputed property,”‟ the Diocese of
Quincy court concluded that it was not necessary to determine whether the Diocese of
Quincy could leave the Episcopal Church or to identify the leaders of the continuing
diocese. (Diocese of Quincy, supra, 14 N.E.3d at p. 1257.) Rather, applying neutral
principles of law, the court focused on how title to that property was held. A comparison
of the Diocese of Quincy with the Diocese reveals significant factual differences
regarding this issue.
       In Diocese of Quincy, the property was held by the Trustees. Since the diocese
was organized under the Illinois Not-For-Profit Corporation Act rather than under the
Illinois Religious Corporation Act, the Episcopal Church had no authority to remove and
replace the Diocese of Quincy‟s directors. Unlike the Religious Corporation Act, the
Not-For-Profit Corporation Act does not impose requirements for officeholders that are
tied to the religious organization. For example, a trustee of a religious corporation can be
removed from office for, inter alia, abandonment of the denomination. (Diocese of
Quincy, supra, 14 N.E.3d at p. 1257.)




                                            13.
       In contrast here, the bishop of the Diocese holds title to the Diocese‟s property as a
corporation sole. A corporation sole, as well as any amendments to its articles of
incorporation, must be duly authorized by the religious organization. (Corp. Code,
§§ 10002, 10010.) Thus, the Episcopal Church had more influence and control over the
corporation sole in California than it did over the not-for-profit corporation in Illinois.
Accordingly, the first prerequisite for collateral estoppel, i.e., the issue in both
proceedings is identical, has not been met.
       Moreover, the Diocese of Quincy court was applying Illinois corporate and trust
law, not California law. Further, when a novel issue, such as is presented here, is being
litigated, collateral estoppel based on a foreign court‟s opinion cannot be used to preclude
a party from litigating that issue in California. (American Continental Ins. Co. v.
American Casualty Co. (2001) 86 Cal.App.4th 929, 945.)2
2.     Applying neutral principles of law, the disputed property belongs to respondents.
       As discussed below, the trial court made several errors in its analysis of this case.
First, it did not apply neutral principles of law to the property dispute as directed by
Schofield. Further, in discussing alternative reasons for its ruling, the trial court ventured
into questions of religious doctrine. Nevertheless, based on the title documents and the
structures of the various entities, neutral principles of law require us to find in favor of
respondents.
       a. The trial court misapplied Schofield.
       When called upon, secular courts must resolve internal church disputes over
ownership of church property. (Episcopal Church Cases, supra, 45 Cal.4th at p. 478.) In

2      Because we find the Episcopal Church is not collaterally estopped by foreign court
opinions, appellants‟ requests that we take judicial notice of the records in Diocese of
Quincy, supra, 14 N.E.3d 1245 and the records of the District Court of the 141st Judicial
District, State of Texas, Tarrant County, in the matter of The Episcopal Church, et al. v.
Franklin Salazar, et al., case No. 141-252083-11, are denied.


                                              14.
doing so, secular courts must not entangle themselves in disputes over church doctrine or
infringe on the right to free exercise of religion. (Ibid.) However, this rule does not
prevent civil courts from using neutral principles of law to resolve a church property
dispute that does not turn on questions of church doctrine. (Id. at p. 484.) Accordingly,
to the extent a court can resolve a property dispute without reference to church doctrine,
it should apply neutral principles of law. The “court should consider sources such as the
deeds to the property in dispute, the local church‟s articles of incorporation, the general
church‟s constitution, canons, and rules, and relevant statutes, including statutes
specifically concerning religious property .…” (Id. at p. 485.)
       In Schofield, we held that the trial court erred in determining who the incumbent
bishop of the Diocese was because that issue was “quintessentially ecclesiastical.” We
observed that, despite the existence of ecclesiastical issues, “civil jurisdiction is properly
invoked to resolve issues concerning property transfers assertedly made by Schofield
while he was the duly constituted Bishop of the Diocese of San Joaquin.” (Schofield,
supra, 190 Cal.App.4th at p. 162.) We then directed the trial court on remand to apply
“neutral principles of law to resolve property disputes presented by the remaining causes
of action.” (Id. at p. 163.)
       The trial court interpreted Schofield as setting out a specific roadmap for trial.
Based on the above observation regarding the property transfers “assertedly made by
Schofield while he was the duly constituted Bishop of the Diocese of San Joaquin,” the
trial court believed it was limited to applying neutral principles of law only if the
transfers were made before Schofield was deposed.
       The trial court‟s belief, while incorrect, is understandable. Although the above
phrase seems to dictate a result, it is not the law of the case.
       The law of the case doctrine deals with the effect of the first appellate decision on
the subsequent retrial. When an appellate court states a rule of law that is necessary to


                                              15.
the decision of the case, that rule is conclusively established and is determinative of the
rights of the same parties in any subsequent retrial or appeal in the same case.
(Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491.) Further, the doctrine only
applies to an appellate decision on a question of law and not to a question of fact.
(People v. Barragan (2004) 32 Cal.4th 236, 246.)
       In Schofield, we concluded that the trial court erred in summarily adjudicating a
cause of action seeking declaratory relief because it required ruling on an ecclesiastical
fact that courts have no jurisdiction to adjudicate. That determination was necessary to
the decision and therefore is law of the case. Further, the conclusion that neutral
principles of law must be applied to resolve church property disputes was also necessary
and therefore binding. However, our comment regarding the timing of the transfers was
not a rule of law that was necessary to the decision. At that point, the facts regarding
how title was held, i.e., who could validly transfer the property, and whether any trusts
had been imposed on the property had not been developed. Therefore, the trial court
erred when it relied on the timing of the transfers rather than the relevant neutral
principles of law.
       b. Deference to the Episcopal Church does not resolve the dispute.
       Secular courts must accept and defer to any church adjudication regarding
“„questions of discipline, or of faith, or ecclesiastical rule, custom, or law.…‟” In other
words, secular courts “may not decide questions involving church doctrine or faith.”
(Episcopal Church Cases, supra, 45 Cal.4th at p. 484.)
       Here, the trial court concluded that, based on this deference principle, it was
required to find that the Episcopal Church is hierarchical and that a diocese may not
unilaterally leave the Episcopal Church. The trial court further stated that, even if it were
not bound by the deference principle, it would find that the Diocese could not and did not
leave the Episcopal Church.


                                             16.
       As discussed above, courts in California have repeatedly described the Episcopal
Church as hierarchical. (Episcopal Church Cases, supra, 45 Cal.4th at p. 480; Huber,
supra, 175 Cal.App.4th at p. 667; New, supra, 167 Cal.App.4th at p. 808.) However,
recognizing the Episcopal Church as hierarchical does not resolve a property dispute such
as the one here. Rather, the hierarchical label merely explains the structure of the church
and recognizes that questions involving church doctrine or faith are to be decided by the
church, not a secular court. A secular court is still required to apply neutral principles of
law where it can do so without reference to church doctrine. (Episcopal Church Cases,
supra, 45 Cal.4th at p. 485.)
       Similarly, deciding whether a diocese can leave the Episcopal Church does not
resolve the property dispute. Although we are not bound by the Illinois court‟s opinion in
Diocese of Quincy, that court‟s framing of this issue is instructive. The court noted that
the central issue underlying the parties‟ dispute was “„who owns the disputed property.‟”
(Diocese of Quincy, supra, 14 N.E.3d at p. 1257.) The Diocese of Quincy court then
explained that “[d]etermining whether the Diocese could leave the Church or identifying
the leaders of the continuing diocese is unnecessary for purposes of answering that
question.” Further, “such determinations would necessarily involve an extensive inquiry
into church polity.” (Ibid.) Rather, the court may apply neutral principles of law by
considering sources such as deeds, bylaws, articles of incorporation and relevant statutes.
(Cf. Episcopal Church Cases, supra, 45 Cal.4th at p. 485.) It should also be noted that,
because an inquiry into church polity is required, the trial court did not have jurisdiction
to make an independent finding on the question of whether a diocese can unilaterally
leave the Episcopal Church.
       c. The property was not held in trust for the Episcopal Church.
       The trial court concluded that the Diocese held the disputed property in trust for
the Episcopal Church. This finding was based on Canon I.7.4, which was adopted by the


                                             17.
Episcopal Church in 1979. (Episcopal Church Cases, supra, 45 Cal.4th at p. 486.)
Canon I.7.4 provides:

       “Sec. 4. All real and personal property held by or for the benefit of any
       Parish, Mission or Congregation is held in trust for this Church and the
       Diocese thereof in which such Parish, Mission or Congregation is located.
       The existence of this trust, however, shall in no way limit the power and
       authority of the Parish, Mission or Congregation otherwise existing over
       such property so long as the particular Parish, Mission or Congregation
       remains a part of, and subject to, this Church and its constitution and
       Canons.”
       By its terms, Canon I.7.4 imposes an express trust in favor of the Episcopal
Church on property held by a parish. Thus, “a local parish owns local church property in
trust for the greater church and may use that property only so long as the local church
remains part of the greater church.” (Episcopal Church Cases, supra, 45 Cal.4th at
p. 489.) However, there is no corresponding language with respect to property owned by
a diocese. The Episcopal Church‟s canons do not state that diocesan property is held in
trust for the Episcopal Church. Thus, an express trust did not exist.
       Further, courts will not imply a trust on church property. Implying a trust almost
inevitably puts the civil courts squarely in the midst of ecclesiastical controversies, in that
every dispute over church doctrine that produces strongly held majority and minority
views forces the court to determine the true implied beneficiaries of the church entities
involved. The court would be required to determine which faction continued to adhere to
the “true” faith. This is something a civil court is not permitted to do. “If the civil courts
cannot properly determine which competing group is the bearer of the true faith, they
cannot determine for whose benefit title to church property is impliedly held in trust.”
(Protestant Episcopal Church v. Barker (1981) 115 Cal.App.3d 599, 618.)
       d. Applying neutral principles of law, Schofield’s property transfers were
invalid.
       To answer the question of who owns the property, we must look to how title to the


                                             18.
property was held and the structure of the corporation sole at the time Schofield
attempted to make the transfers. Contrary to appellants‟ position, the validity of the 2007
amendments to the diocesan constitution and canons is not determinative. The
corporation sole, not the Diocese, was the title holder.
       The facts necessary to decide this issue were either stipulated to or are undisputed.
Accordingly, we apply the neutral principles of law de novo. (Iglesia Evangelica Latina,
Inc. v. Southern Pacific Latin American Dist. of the Assemblies of God (2009) 173
Cal.App.4th 420, 432-433.)
       One purpose of the corporation sole is to ensure the continuation of ownership of
property dedicated to the benefit of a religious organization that may be held in the name
of its titular head. “Title will not then be divested or passed to that person‟s heirs upon
his death but will be retained for the benefit of the religious group and passed to the
successors to his office.” (County of San Luis Obispo v. Ashurst (1983) 146 Cal.App.3d
380, 383 (Ashurst).)
       Title and ownership as between the unincorporated religious organization and the
individual officeholder as the corporation sole are severable. There is a clear distinction
between the corporation sole and the individual who happens to be the current
officeholder. (Berry v. Society of Saint Pius X (1999) 69 Cal.App.4th 354, 368 (Berry),
quoting Ashurst, supra, 146 Cal.App.3d at p. 384.) A corporation sole may deal with the
assets and contract in the same manner as a natural person. However, the individual does
so only for the purposes of the trust, i.e., to administer and manage the affairs, property,
and temporalities of the religious organization. (Corp. Code, §§ 10002, 10007,
subd. (b).)
       As discussed above, the presiding bishop inhibited Schofield and ordered him to
“cease all „episcopal, ministerial, and canonical acts‟” after January 11, 2008. However,
Schofield was to continue administering the temporal affairs of the Diocese. Thus, until


                                             19.
Schofield was deposed on March 12, 2008, he remained the chief officer of the
corporation sole.
       Under Corporations Code section 10010, the chief officer of a corporation sole
may amend the articles of incorporation of the corporation changing its name. In doing
so, the chief officer of the corporation must “sign and verify a statement setting forth the
provisions of the amendment and stating that it has been duly authorized by the religious
organization governed by the corporation.” (Corp. Code, § 10010.) Thus, the “religious
organization governed by the corporation,” here the Diocese, must authorize an
amendment for it to be effective. (Berry, supra, 69 Cal.App.4th at p. 372.)
       At the time Schofield was inhibited, title to the property in dispute was held by
“The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole.” On January 22,
2008, Schofield filed an amendment to the articles of incorporation of the corporation
sole with the California Secretary of State. This amendment purported to change the
name of the corporation sole from “The Protestant Episcopal Bishop of San Joaquin (a
Corporation Sole)” to “The Anglican Bishop of San Joaquin (a Corporation Sole).” As
noted above, Schofield stated that the amendment had been duly authorized by the
Diocese.
       However, this amendment was not authorized at the 2007 diocesan convention.
Further, this amendment conflicted with Canon 25.01 which provided “The Bishop of the
Diocese shall be a Corporation Sole under the laws of the State of California, by the title
of „The Protestant Episcopal Bishop of San Joaquin, a Corporation Sole.‟” The minutes
for the 2007 convention reflect that the Diocese voted to amend certain articles of the
constitution and canons but no amendments to either Canon 25.01 or the articles of
incorporation of the corporation sole were authorized.
       The minutes of the 2008 annual diocesan convention reflect that in October 2008
the convention ratified “Diocesan Council‟s action taken January 2008, to amend Canon


                                             20.
25.01 to change the name of Corp Sole from „The Protestant Episcopal Bishop of San
Joaquin‟ to „The Anglican Bishop of San Joaquin‟; and authorizing Bishop to amend the
Articles of Incorporation of Corp Sole to reflect said name change to „The Anglican
Bishop of San Joaquin, a Corporation Sole.‟” However, while the diocesan council has
authority to act for the convention between meetings “in all matters not expressly
reserved to the Convention,” this authority does not extend to amending canons. Rather,
Canon 35.01 requires that proposed amendments to the canons be submitted no later than
60 days before the annual convention. Thereafter, a summary of the proposals must be
sent to each parish and mission at least 30 days before the annual convention. These
requirements can be dispensed with but only by a three-fourths vote of the members
present at the annual convention. Accordingly, amendments to the canons must be
approved at annual conventions. Therefore, the diocesan council‟s January 2008 attempt
to amend Canon 25.01 was ineffective. Since Canon 25.01 dictates the name of the
corporation sole, the diocesan council could not validly authorize amending the articles
of incorporation to state a contrary name.
       Schofield did not have the approval of the 2007 diocesan convention to amend the
articles of incorporation changing the name of the corporation sole. Further, the diocesan
council‟s attempt to amend Canon 25.01 to authorize changing the name of the
corporation sole in January 2008 was ineffective. Therefore, the January 22, 2008,
amendment to the articles of incorporation was invalid and of no effect.
       Beginning on March 27, 2008, and ending in August 2008, Schofield executed and
recorded grant deeds for the disputed property. These deeds stated “„The Anglican
Bishop of San Joaquin, a Corporation Sole, which acquired title under the name The
Protestant Episcopal Bishop of San Joaquin, a Corporation Sole [California Corporation
No. C0066488] hereby GRANT(S) to The Anglican Bishop of San Joaquin, a




                                             21.
Corporation Sole [California Corporation No. C0066488]‟ followed by the relevant
property description.”
       Thus, Schofield was attempting to change the title holder of the property in dispute
from the corporation sole known as The Protestant Episcopal Bishop of San Joaquin to
the corporation sole known as The Anglican Bishop of San Joaquin. However, because
the amendment changing the name of the corporation sole to The Anglican Bishop of San
Joaquin was invalid, no corporation sole known as The Anglican Bishop of San Joaquin
existed when these deeds were executed and recorded. Out-of-state cases have held that
an attempted conveyance of real property to a nonexistent entity is void. (See, e.g., Stone
v. Jetmar Properties, LLC (Minn.App. 2007) 733 N.W.2d 480, 486; Julian v. Petersen
(Utah App. 1998) 966 P.2d 878, 881.) This is a logical conclusion and should be adopted
here. Title cannot be held by an entity that does not exist. Therefore, these deeds were a
nullity. Accordingly, title to the disputed property remained with The Protestant
Episcopal Bishop of San Joaquin.
       Between April 8, 2008 and August 2008, Schofield executed and recorded a
second set of grant deeds. These deeds purported to transfer the disputed property from
“„The Anglican Bishop of San Joaquin, a Corporation Sole‟ to „The Anglican Diocese
Holding Corporation.‟” However, because Schofield‟s attempts to transfer title from The
Protestant Episcopal Bishop of San Joaquin to The Anglican Bishop of San Joaquin were
ineffective, these deeds were also a nullity. Title was not legally in the name of the
Anglican Bishop of San Joaquin. The Protestant Episcopal Bishop of San Joaquin held
title to the property at the time of the transfers. Therefore, the Anglican Bishop of San
Joaquin could not transfer title and title remained with The Protestant Episcopal Bishop
of San Joaquin.
       Beginning on March 29, 2008, Lamb was the Protestant Episcopal Bishop of San
Joaquin and the articles of incorporation for the corporation sole were validly amended


                                            22.
on April 8, 2008, to reflect the change of the incumbent of the corporation sole. As the
incumbent of the corporation sole, Lamb had control over the property held by the
Protestant Episcopal Bishop of San Joaquin, i.e., the property in dispute. Therefore,
Schofield did not have the power to make these purported transfers.
      In sum, Schofield‟s attempts to transfer title from The Protestant Episcopal Bishop
of San Joaquin to The Anglican Bishop of San Joaquin and then to the Holding
Corporation were invalid. Accordingly, the judgment returning the property to the
Episcopal Church and the Diocese is affirmed.
                                     DISPOSITION
      The judgment is affirmed. Costs on appeal are awarded to respondents.



                                                                _____________________
                                                                      LEVY, Acting P.J.
WE CONCUR:


 _____________________
FRANSON, J.


 _____________________
PEÑA, J.




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