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Jackson v. George

Court of Appeals of Columbia District

September 22, 2016

CLARENCE JACKSON, et al., Appellants,
ROBERT GEORGE, et al., Appellees.

          Argued May 3, 2016

         Appeal from the Superior Court of the District of Columbia Civil Division (CAB-7115-13) (Hon. Stuart Nash, Trial Judge)

          Anthony P. Ashton, with whom Dennis Whitley, III, and Isaac H. Marks, Sr., were on the brief, for appellant.

          Joseph M. Creed, of the state of Maryland, pro hac vice, by special leave of court, with whom Timothy F. Maloney, Ronald M. Cherry, D'Ana E. Johnson, and Nadia A. Patel, were on the brief, for appellees.

          BEFORE: Fisher and Thompson, Associate Judges; and Farrell, Senior Judge.


         This case came to be heard on the transcript of record and the briefs filed, and was argued by counsel. On consideration whereof, and as set forth in the opinion filed this date, it is now hereby

         ORDERED and ADJUDGED that the judgment on of the trial court is affirmed.


          Phyllis D. Thompson Associate Judge.

         This matter arose when plaintiffs/appellees, individuals who had been longtime congregants of Jericho Baptist Church Ministries, Inc. (also known as Jericho City of Praise) during its existence as a District of Columbia non-profit corporation ("Jericho D.C."), sued a number of individuals (the "individual appellants") who (1) incorporated under Maryland law a church bearing the same name ("Jericho Maryland"); (2) claiming to be members of the Jericho D.C. Board of Trustees, merged Jericho D.C. into Jericho Maryland and transferred Jericho D.C.'s assets to the new entity; and (3) thereafter dismissed appellees from membership. The lawsuit also named Jericho Maryland as a defendant. The trial court (the Honorable Stuart Nash) dismissed some of plaintiffs' claims in ruling on motions to dismiss and a motion for summary judgment. The remaining claims proceeded to trial, after which Judge Nash ruled that the putative Jericho D.C. trustees who had merged Jericho D.C. into Jericho Maryland had acted without authority. He granted plaintiffs'/appellees' prayer for declaratory and injunctive relief, inter alia, declaring that the individual appellants' purported approval of the merger of Jericho D.C. into Jericho Maryland was invalid and ordering defendants to "refrain from exercising ownership or control over any corporate assets of Jericho Maryland formerly belonging to, or derived from, the corporate assets of Jericho DC."

         In this appeal, defendants/appellants renew the jurisdictional, standing, First Amendment, and mootness arguments they made in their pre-trial dispositive motions and contend that Judge Nash erred in declining to dismiss the case before trial. They also argue that the evidence at trial did not support judgment in favor of appellees, that Judge Nash improperly asserted himself into ecclesiastical matters, that the declaratory judgment he issued is an invalid advisory opinion, and that he improperly relied on evidence submitted after trial. For the reasons discussed, we affirm.

         I. Factual and Procedural Background

         The pertinent factual background is set out in Judge Nash's Findings of Fact and Conclusions of Law, which in brief summary are as follows: Jericho D.C. was incorporated in the District of Columbia in 1962 and, from its inception, was "operated and controlled by a Board of Trustees" (the "Board" or the "Jericho D.C. Board"). In 1996, the Board elected to make Jericho D.C. subject to the then-newly enacted District of Columbia Non-Profit Corporation Act ("NPCA"). See D.C. Code § 29-301.01 (2001). At the time of that election, Jericho D.C.'s Trustees were Betty Peebles, James Peebles, Jr., William Meadows, Lucy Lane, Anne Wesley, and Dorothy Williams. James Peebles, Jr., and Lucy Lane died some time prior to March 2009, but the other trustees continued to serve on the Board until at least March 2009. One of the disputes at trial was whether Joel R. Peebles (a son of the founder of Jericho D.C.) had been validly installed on the Board at some point prior to March 15, 2009.

         The March 15, 2009, date is relevant because, on that date, a document entitled "Resolution 1-09 of Board of Trustees" (hereinafter "the Resolution" or "Resolution 1-09") was signed by Board members Betty Peebles, William Meadows, Anne Wesley, and Dorothy Williams. The Resolution purported to install a new Board comprised of longtime members Betty Peebles and Dorothy Williams and seven new members, including appellants Clarence Jackson, Gloria McClam-Magruder, and Denise Killen. "By implication, " Judge Nash found, Resolution 1-09 relieved Meadows and Wesley "as well as Joel R. Peebles, if he was, in fact, a member of the Board prior to March 2009[, ]" of their duties as Trustees. Judge Nash found that Meadows signed the resolution at the direction of Betty Peebles (who was then the "leader of Jericho DC"), "believing it to be a routine piece of business related to the administration of the church[, ]" and that Meadows "had no understanding that by signing the document he had effectively resigned as a trustee and elected a new slate of members of the Board." Judge Nash further found that Joel Peebles "received no notice of Resolution 1-09 prior to its passage[, ]" not learning of it until September 2010.

         After March 2010, Betty Peebles was in declining health. She died on October 12, 2010. On November 1, 2010, Jackson, McClam-Magruder, Killen, Williams, and two other individuals incorporated Jericho Maryland. The same day, Articles of Merger were filed in the District of Columbia indicating that, pursuant to a vote of Jericho D.C.'s Board taken on October 30, 2010, Jericho D.C. was merged into Jericho Maryland. On April 18, 2012, appellees Robert George, Anaya Jamison, and Paulette Shelton received letters from McClam-Magruder, "in her capacity as President of the Board of Trustees of Jericho Maryland, terminating their memberships in the church."

         On October 15, 2013, appellees George, Jamison, Shelton, and one other individual (Patricia Gray, who was subsequently dismissed from the suit) filed a ten-count complaint against Jackson, McClam-Magruder, Killen, Williams, Clifford Boswell, and Jericho Maryland. The Complaint alleged that the individual appellants "unlawfully seized control of the Church" and "its considerable assets, " "purported to dissolve" Jericho D.C., terminated Joel Peebles (who had served as Pastor since the death of Betty Peebles, his mother), and terminated appellees as members and forcibly prevented them from accessing Church services and property. Appellees sought a declaratory judgment that the individual appellants "are not the valid Board of Trustees of the Church, " that they are "without lawful authority" to operate or control the Church, that their attempt to merge Jericho D.C. into Jericho Maryland and to dissolve Jericho D.C. was legally invalid and of no force and effect, and that the purported terminations were invalid. Appellees also sought injunctive relief "to remedy [appellants'] unlawful activities, " including dissipating assets of the Church. In addition, they sought an accounting, a constructive trust, and damages for breach of fiduciary duty, unjust enrichment, fraudulent concealment, and constructive fraud, and relief from violations of the NPCA and the Maryland Corporations and Associations Code.

         On December 3, 2013, the individual appellants filed a motion to dismiss all counts of the Complaint, asserting that Resolution 1-09 was legally valid and arguing that appellees had failed to comply with the statutory prerequisites for bringing a derivative suit. Jericho Maryland filed a separate motion to dismiss, arguing that the trial court lacked personal jurisdiction over it. On April 23, 2014, Judge Nash issued orders dismissing the counts of the Complaint that alleged fraudulent concealment and a violation of the Maryland Code, but otherwise denied appellants' motions. Judge Nash also denied a subsequent motion to dismiss filed by appellants on May 5, 2015.

         In September 2014, appellants filed a motion for summary judgment, which Judge Nash granted in part and denied in part on February 26, 2015. He dismissed plaintiff Gray (who he found had "voluntarily left the church") from the suit for lack of standing and granted judgment in favor of the appellants on several of the counts, but allowed the matter to proceed to trial on appellees' claims for declaratory and injunctive relief.

         Judge Nash presided over a three-day bench trial from June 8-10, 2015. On July 7, 2015, Judge Nash issued his Findings of Fact and Conclusions of Law. He concluded that plaintiffs/appellees "met their burden of showing a violation of the [NPCA] that warrants application of [the court's] equitable power to issue declaratory and injunctive relief." He declared "that Resolution 1-09 of the Jericho DC Board of Trustees, which purported to change the membership of the Board of Trustees, is invalid"; "that the current Board of Trustees for Jericho DC shall consist of the surviving members of the Board of Trustees that existed prior to the invalidated Resolution 1-09, those members being: William A. Meadows; Dorothy L. Williams, and Joel R. Peebles"; and "that actions taken by defendants after March 15, 2009, acting as the purported Board of Trustees of Jericho DC, under the color of [R]esolution 1-09, including the purported approval of the merger of Jericho DC into Jericho MD, are invalid[.]" As injunctive relief, Judge Nash ordered that defendants/appellants "refrain from exercising ownership or control over any corporate assets of Jericho Maryland formerly belonging to, or derived from the corporate assets of Jericho DC" and that plaintiffs/appellees "are reinstated as members of the church, pending a review of their membership status by the validly-constituted Board of Trustees of Jericho DC, as declared above."[1]This appeal followed.

         II. Analysis of the Arguments on Appeal


         We begin our analysis with Jericho Maryland's argument that Judge Nash erred in not granting its motion to dismiss for lack of personal jurisdiction. Jericho Maryland emphasizes that it is a Maryland corporation that conducts its church services in Maryland and that the injury appellants allege - termination of their church membership - was a termination from Jericho Maryland, not from Jericho D.C., and occurred "more than a year after the District of Columbia corporation ceased operation[.]" Jericho Maryland asserts that Judge Nash was therefore mistaken in reasoning ...

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