            IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Andy Pagac, Carol Osethsky,                      :
Donna Ewedosh, Bernard                           ;
Kurjanowicz, Steven M. Kime, and                 :
Marge Sawicky, Individually and on               :
Behalf of The Roman Catholic                     :
Congregation of St. Agnes,                       :
                        Appellants               :
                                                 :
                  v.                             :   No. 1350 C.D. 2018
                                                 :   ARGUED: May 6, 2019
The Diocese of Pittsburgh, and the               :
Most Reverend David A. Zubik,                    :
Diocesan Bishop                                  :


BEFORE:        MARY HANNAH LEAVITT, President Judge
               HONORABLE RENÉE COHN JUBELIRER, Judge
               HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
SENIOR JUDGE LEADBETTER                                           FILED: January 30, 2020


               This action arises from events surrounding the suppression and merger1
of the Roman Catholic Congregation of Saint Agnes Church (Saint Agnes or Saint
Agnes Parish) in Richeyville, Washington County.2 The Appellants, Parishioners3

    1
      Suppression is a canonical process whereby a Roman Catholic parish is disbanded. In this
case, Saint Agnes and four other local parishes in Washington County were suppressed and merged
to form the Congregation of Saint Katherine Drexel, located in Bentleyville, Washington County.

    2
      An opinion in a similar case, Magone v. Diocese of Pittsburgh (Pa. Cmwlth., No. 1351 C.D.
2018, filed January 30, 2020), is being issued concurrently.

    3
       The Diocese and Bishop Zubik argue that the parish ceased to exist upon suppression and
that the Appellants are no longer parishioners of Saint Agnes Parish. Irrespective of this, we refer
of Saint Agnes, brought this action on behalf of themselves and Saint Agnes Parish
against the Diocese of Pittsburgh, which oversaw Saint Agnes, and the Bishop of the
Diocese, David A. Zubik, who issued the decree suppressing and merging Saint
Agnes. The action, which included four counts seeking monetary damages and one
seeking injunctive relief,4 was dismissed by order of the Court of Common Pleas of
Washington County (trial court) granting the Diocese’s and Bishop Zubik’s
preliminary objections.
              Parishioners’ allegations may be summarized as follows. The Diocese
and Bishop Zubik are averred to have engaged in a plan to merge Saint Agnes and
other parishes to form “mega parishes” and falsely communicated that Saint Agnes
would remain open. Specifically, in February 2015, the Diocese notified
Parishioners that Saint Agnes Parish would close but in March 2015 announced a
rescission of this decision. The complaint alleges that the latter announcement was
a knowingly false and material misrepresentation made with the wrongful intent to
induce Parishioners to continue to make donations to and raise funds for the Church.
Based on their belief that Saint Agnes would remain open, Parishioners continued
to attend Mass and provided tithes, donations, and offerings and, for a period of 21
months, engaged in fundraising efforts for the benefit of the congregation which
raised in excess of $100,000.
              In December 2016, the Diocese announced that Saint Agnes Parish
would be merged with four other parishes to form the Congregation of Saint
Katherine Drexel. Parishioners allege that among the five merged churches, the


to these individuals as “Parishioners” for descriptive purposes, as the Diocese and Bishop David
A. Zubik do at several junctures in their brief.

    4
     Count I—Breach of Fiduciary Duty; Count II—Fraud; Count III—Conversion; Count IV—
Unjust Enrichment; and Count V—Injunctive Relief.



                                               2
former Saint Agnes was the most financially feasible, the most recently built, and
the only parish compliant with the Americans with Disabilities Act of 1990.5 Saint
Agnes was also successful in meeting operating costs and paying down debt which
made the Church “an ideal candidate to market at great profit.” Parishioners hired
an outside engineering firm to assess the church buildings within the parishes of the
proposed merger and the report concluded that Saint Agnes’s projected costs fell
well below any church in the southeastern portion of Washington County over five
and ten years.
                Parishioners assert that the Diocese and Bishop Zubik breached a
fiduciary duty to act in their best interests and within the boundaries of the law; were
unjustly enriched; converted their contributions intended for Saint Agnes to the
merged       parish;    misled       Parishioners   through   intentional   actions   and
misrepresentations to believe that they would be able to save their Church from
closure by raising funds; and only sought those funds to improve the market value
of Saint Agnes’s property to sell it at a higher profit.
                Parishioners filed their complaint in the trial court in January 2017. The
Diocese and Bishop Zubik filed preliminary objections arguing that the controversy
was not ripe; that the trial court lacked subject matter jurisdiction due to the
constitutional “deference rule”; that Parishioners lacked standing; and that each
count was legally insufficient (demurrer). After argument and briefing, the trial
court sustained the preliminary objections with respect to lack of subject matter
jurisdiction and dismissed Parishioners’ complaint with prejudice by order dated
October 19, 2017. (Reproduced Record “R.R.” 153-59a.)




    5
        42 U.S.C. §§ 12101- 12213.



                                               3
              This appeal ensued.6 The trial court issued an opinion under
Pennsylvania Rule of Appellate Procedure 1925(a) upholding dismissal for lack of
subject matter jurisdiction and additionally finding that Parishioners lacked
standing. (R.R. 187-99a.) On appeal, Parishioners raise the following issues:7
                     (1) Whether the trial court erred in determining that
              it lacked subject matter jurisdiction under the deference
              rule; and

                    (2) Whether the trial court erred in concluding that
              Parishioners lacked standing.

For the reasons set forth below, we affirm in part and reverse in part.
              The courts of this Commonwealth have confronted several cases in the
past similar to the one at bar and have routinely relied upon what is commonly
referred to as the Act of 1935,8 10 P.S. § 81, in holding that members of a Roman
Catholic parish lack standing to challenge the suppression or dismemberment of a
parish. See St. Peter’s Roman Catholic Parish v. Urban Redev. Auth. of Pittsburgh,
146 A.2d 724, 726 (Pa. 1958) (St. Peter’s) (settlement for condemnation of church
building); Post v. Dougherty, 191 A. 151, 153 (Pa. 1937) (suppression of a parish);
Canovaro v. Bros. of Order of Hermits of St. Augustine, 191 A. 140, 145 (Pa. 1937)
(dismemberment of a parish); Croatian Roman Catholic Church of the Holy Trinity
Congregation, Ambridge, Beaver Cty., Pa. v. Wuerl, 668 A.2d 1151, 1152-53 (Pa.


    6
      Parishioners’ appeal was filed in the Superior Court in November 2017. After the
submission of briefs and the reproduced record, the matter was transferred to the Commonwealth
Court pursuant to Rule 751 of the Pennsylvania Rules of Appellate Procedure.

    7
      These issues present questions of law over which we exercise plenary review. Phillips v. A–
Best Products Co., 665 A.2d 1167, 1170 (Pa. 1995).

    8
      Section 7 of the Act of April 26, 1855, P.L. 328, as amended, 10 P.S. § 81. The
aforementioned section was substantially amended by the Act of June 20, 1935, P.L. 353, which
has become synonymous with the provision despite its original enactment date.


                                               4
Super. 1995) (Holy Trinity Church) (suppression of parishes). The Act of 1935
provides in salient part:

             Whensoever any property . . . has . . . been . . . conveyed
             to any . . . bishop . . . for the use of any church [or]
             congregation . . . for . . . religious worship . . . , the same
             shall be taken and held subject to the control and
             disposition of such officers and authorities of such church
             . . . , having a controlling power according to the rules . . .
             of such church, . . . which control and disposition shall be
             exercised in accordance with and subject to the rules and
             regulations, usages, canons, discipline[,] and requirements
             of the religious body . . . to which such church . . . shall
             belong.
Based on the Act of 1935 and the binding precedent applying it, we must agree with
the trial court that Parishioners lack standing to interfere with the suppression of
Saint Agnes or its merger into the Saint Katherine Drexel Parish. Therefore, we
affirm the dismissal of Count V seeking an injunction to bar the merger.
             Nor, we believe, can Parishioners recoup their contributions under
theories of breach of fiduciary duty, unjust enrichment, or conversion. Parishioners’
allegations implicitly acknowledge that the moneys given were, as it is put in the Act
of 1935, “[personal] property . . . conveyed to . . . [a] bishop . . . for the use of [a]
church . . . for religious worship.” 10 P.S. § 81. Thus, under the Act of 1935, Bishop
Zubik owned the property given to Saint Agnes in trust for the Parish and alone may
dispose of it in accordance with the Canons of the Roman Catholic Church.
Therefore, “[t]he dispositive rule is that [a] plaintiff, as a parish or congregation, has
no standing to sue.” St. Peter’s, 146 A.2d at 726. We must emphasize here that
Parishioners do not suggest that the money they raised and donated was held or used
for anything other than activities of the Diocese and its various churches. That being
the case, while Parishioners find the use of their donations contrary to their intent as



                                            5
well as unwise and unfair, our statutory and case law does not allow them to
challenge the Bishop’s discretion in this regard.
               Moreover, Parishioners’ standing is further diminished as a result of the
suppression. Our Supreme Court has held that any rights in a church’s property that
its parishioners may have arise only out of their membership and are extinguished
in the suppression or dismemberment. “The effect of the suppression of [a] parish
[is] to cause the lay members to lose their membership therein . . . . Having lost their
membership in the parish, they have no standing to maintain a bill in equity to
enforce any property rights which they may have had in their former capacity . . . .”
Post, 191 A. at 153. While these authorities are admittedly old and, in some
circumstances may seem inequitable, they have not been overturned and we are
bound by them. As the Superior Court has stated, Parishioners’ devotion to their
Parish “can neither confer upon the civil courts jurisdiction over an ecclesiastical
matter nor cloak appellants in these cases with standing where none exists.” Holy
Trinity Church, 668 A.2d at 1152. Accordingly, we must affirm the trial court’s
dismissal of Counts I (breach of fiduciary duty), III (Conversion) and IV (unjust
enrichment).
               However, we conclude that Count II (fraud) may go forward beyond
this preliminary stage. Parishioners have alleged that Bishop Zubik made knowingly
fraudulent misrepresentations which caused them to part with their money. At this
point we must assume these allegations to be true. Such conduct, if proven, certainly
can be said to “contravene the law of the land,” Saint Peter’s, 146 A.2d at 726.9 The



    9
       This stands in sharp contrast to St. Peter's, a case in which the then-Bishop of the Diocese
of Pittsburgh agreed to a settlement in the condemnation and demolition of a parish. Our Supreme
Court concluded its discussion of the standing of the plaintiffs as follows:




                                                6
fraud claim stated here is not subject to the “deference rule,” by which the trial court
found that it lacked subject matter jurisdiction. According to the deference rule,
“civil courts decline to exercise jurisdiction over cases that would require them to
decide ecclesiastical questions.” See Connor v. Archdiocese of Philadelphia, 975
A.2d 1084, 1088 (Pa. 2009) (explaining in depth the origins and application of the
deference rule under Pennsylvania and federal jurisprudence). Parishioners argue
that the trial court has jurisdiction over the allegedly non-ecclesiastical, tortious acts
which led up to the suppression. Parishioners suggest application of the “neutral
principles of law approach,” which applies civil law principles to suits that are “not
predicated on any religious doctrine.” See id. at 1096-97 [quoting Presbytery of
Beaver-Butler of United Presbyterian Church U.S.A. v. Middlesex Presbyterian
Church, 489 A.2d 1317, 1322 (Pa. 1985) (Beaver-Butler)].
               Connor surveyed at length the history and competing rationales of the
deference rule and the neutral principles of law approach, but summarized the
current state of the law as follows: “the most thorough and persuasive analyses are
yielded by a claim-by-claim, element-by-element approach to the question of
whether to apply the deference rule.” 975 A.2d at 1102. The Court concluded as
follows:



               The members of the plaintiff parish are bound by the Act of 1935
               and by [Post and Canovaro]. They have not alleged that the action
               of the defendant Bishop contravenes the canons of the Church or the
               law of the land. The power to dispose of this Church property is
               therefore exclusively in him. Nor has plaintiff in any way impugned
               the action of the Bishop as being against the prescribed process of
               the Church or as being in bad faith, but rather in its answer to the
               preliminary objections has expressly excepted him from any
               imputation of fraud.

St. Peter's, 146 A.2d at 726.



                                                7
             [I]n determining whether to apply the deference rule, the
             fact-finding court must: (1) examine the elements of each
             of the plaintiff’s claims; (2) identify any defenses
             forwarded by the defendant; and (3) determine whether it
             is reasonably likely that, at trial, the fact-finder would
             ultimately be able to consider whether the parties carried
             their respective burdens as to every element of each of the
             plaintiff’s claims without “intruding into the sacred
             precincts.”

Id. at 1103 (quoting Beaver-Butler, 489 A.2d at 1321). The elements of fraud are as
follows:
             (1) a representation; (2) which is material to the
             transaction at hand; (3) made falsely, with knowledge of
             its falsity or recklessness as to whether it is true or false;
             (4) with the intent of misleading another into relying on it;
             (5) justifiable reliance on the misrepresentation; and (6)
             the resulting injury was proximately caused by the
             reliance.

Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994).
             Obviously, at this early stage of the litigation Bishop Zubik and the
Diocese have not filed an answer wherein affirmative defenses would be raised, but
to the extent a defense has been stated, it is that the relief requested by Parishioners
would require the court to examine and analyze Canon Law with respect to the
underlying decision to suppress Saint Agnes.
             We are cognizant that examining the underlying decision to suppress
Saint Agnes would require the sort of inquiry that the Diocese and Bishop Zubik
caution against, and on that ground have affirmed the dismissal of four of the five
counts of Parishioners’ complaint. However, while the Bishop and the Diocese may
have had the right under the law to do as they saw fit with regard to merging the
parishes and dealing with church property, they did not have the right to take the
Parishioners’ money under false pretenses, and the latter claim can be litigated



                                           8
without intruding into the former actions to which deference is owed. In other words,
accepting the allegations of the complaint, as we must, we do not see the deference
rule as an impediment to the inquiry as to whether Parishioners were defrauded.
Therefore, at this preliminary stage we must allow this litigation to go forward.10
               Accordingly, we will reverse the dismissal of Count II and remand for
further proceedings on the claim of fraud.11


                                             _____________________________________
                                             BONNIE BRIGANCE LEADBETTER,
                                             Senior Judge



Judge McCullough did not participate in the decision for this case.




    10
       What remedy Parishioners may be able to obtain is not at issue here. As noted above, they
cannot recoup their contributions given to the Church, but if they can prove their claim that the
Diocese and Bishop Zubik knowingly perpetrated a fraud, they may be able to obtain punitive or
other damages.

    11
      The Diocese argues that the case is not ripe because of ongoing proceedings under Canon
Law administered by authorities of the Roman Catholic Church. The Diocese does not cite and
our own research does not disclose any authority preventing the civil claim for fraud in this case
from proceeding.


                                                9
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Andy Pagac, Carol Osethsky,                 :
Donna Ewedosh, Bernard                      ;
Kurjanowicz, Steven M. Kime, and            :
Marge Sawicky, Individually and on          :
Behalf of The Roman Catholic                :
Congregation of St. Agnes,                  :
                        Appellants          :
                                            :
               v.                           :   No. 1350 C.D. 2018
                                            :
The Diocese of Pittsburgh, and the          :
Most Reverend David A. Zubik,               :
Diocesan Bishop                             :


                                     ORDER


            AND NOW, this 30th day of January, 2020, the order of the Court of
Common Pleas of Washington County is AFFIRMED in part and REVERSED in
part and the matter is REMANDED in accordance with the foregoing opinion.
            Jurisdiction is relinquished.
            The Diocese of Pittsburgh’s and Bishop David A. Zubik’s Application
for Leave to File Post-Argument Memoranda is DISMISSED AS MOOT.




                                       _____________________________________
                                       BONNIE BRIGANCE LEADBETTER,
                                       Senior Judge
