Opinion
C.A. No. 10C-04-222 FSS.
Submitted: October 18, 2010.
Decided: February 28, 2011.
Defendants' Motion to Dismiss for Lack of Subject Matter Jurisdiction — DENIED. Defendants' Motion to Dismiss for Failure to State a Claim — DENIED , in part, GRANTED , in part.
MEMORANDUM OPINION AND ORDER
This is a straightforward breach of employment contract case, were it not for the fact Plaintiff worked as an ordained clergyman. Thus, the court has to determine at the threshold where its authority ends and ecclesiastical matters begin. Specifically, does the court have subject matter jurisdiction to hear the pastor's claim that the church wrongfully cut-off his pay before a bargained-for arbitration took place? Plaintiff makes other claims, which Defendants oppose, such as tortious interference and a Wage Act claim, and so on.
Reverend Robert Broesler was suspended from his pastoral duties at St. Barnabas Episcopal Church and the suspension's validity is not a subject this court may consider. The employment agreement, however, promised that Rev. Broesler's "tenure [would] continue until dissolved by mutual consent or by arbitration and decision as provided by the relevant Canons of the Diocese of Delaware and of the General Convention." Before the "arbitration and decision," Defendants voted to end Rev. Broesler's pay unilaterally. Reverend Broesler challenges the unilateral cut-off before the arbitration. He also claims Bishop Wayne Wright told parishioners that Rev. Broesler was an alcoholic and immoral. Reverend Broesler characterizes that as a civil wrong, which the court can redress.
I. A. The Letter of Agreement
The Letter of Agreement between Rev. Broesler and the Church is mostly a typical employment contract. The clause at issue provides that Rev. Broesler's "tenure is to continue until dissolved by mutual consent or by arbitration and decision as provided by the relevant Canons of the Diocese of Delaware and the General Convention." (Again, the dissolution's propriety is a church matter.)
The Letter further says Rev. Broesler was expected to "participate in the life and ministry of the Dioceses of Delaware and be present at diocesan gatherings." It also says Rev. Broesler's "scheduled workweek is five days, usually measured as ten to twelve units of mornings, afternoons or evenings in various combinations reflecting the demands of this ministry." It ends with a promise to conduct an annual review "of the total ministry of the parish . . . in order to . . . assess how well [the parties] are fulfilling their responsibilities to each other and the ministry they share."
B. The Vote to Terminate Compensation
Based on the pleadings, it appears Rev. Broesler was suspended from his pastoral duties following allegations of improper conduct. During the suspension, Bishop Wright tried to remove Rev. Broesler's name from church publications. According to Rev. Broesler, the Bishop also told parishioners Rev. Broesler was an alcoholic and "engaged in an improper and immoral sexual relationship with a parishioner." Although suspended, Rev. Broesler was still paid by Defendants.
In June 2009, however, before the bargained-for arbitration, Defendants voted to cut-off Rev. Broesler's pay. Reverend Broesler was not present for the vote. The Bishop, through his assistants, told Defendants "that there was clear and irrefutable evidence of wrongdoing by Reverend Broesler." They reasoned that "[b]ecause [Plaintiff] is not able to fulfill his tasks as outlined in his Letter of Agreement with St. Barnabas[,] we are not obligated to pay him."
Put another way, Defendants concluded that because they unilaterally refused to let Plaintiff do his duty, they could refuse to pay him because he could no longer do his duty. This raises the question as to where Defendants find their authority to suspend Plaintiff without pay, pending termination.
II. A.
Reverend Broesler's claims that Defendants tortiously interfered with the Letter, defamed him, and invaded his privacy may or may not be justiciable in this court. It is not a given, for example, that the court may not rule on the scope of a bishop's privilege to discuss a clergyman's behavior within his church. They turn on Defendants' privilege and justification, which depend on the arbitration. If Rev. Broesler is cleared, those claims may become justiciable and potentially viable. But, if not, the court assumes without deciding that the claims are beyond the court's jurisdiction. In any event, those claims will not be subject to review here, if ever, until the arbitration is done, and the termination's regularity is conclusively determined by the church. That leaves Rev. Broesler's contract claims and his Delaware Wage Payment and Collection Act claim.
Reverend Broesler claims the vote to terminate compensation before the bargained-for arbitration breached the Letter. He also contends the vote was "arbitrary and unreasonable" in breach of the implied covenant of good faith and fair dealing. Alternatively, he claims Defendants "are estopped from denying [] his employment until exhaustion of the ecclesiastical procedures available to him." Finally, he claims Defendants violated the Wage Act, which entitles him to unpaid wages, liquidated damages, and attorneys' fees.
III. A.
As a preliminary matter, Defendants' arguments to dismiss the Vestry and the Bishop are without merit. Only in a footnote to their Statement of the Case, do Defendants suggest that Rev. Broesler failed to properly plead the Vestry, but, if named, "dismissal still is appropriate due to the grant of immunity provided by 10 Del. C. § 8133." After Rev. Broesler overlooked it, did Defendants promote the footnote to the front page of their reply brief, where they trumpeted that Rev. Broesler "does not dispute that the Vestry is not a separate legal entity subject to suit." To the extent that sandbagging-style argument has merit, which it does not, Rev. Broesler may amend the complaint, nunc pro tunc. Further, 10 Del. C. § 8133, does not immunize Defendants.
10 Del. C. § 8133(b) immunizes against negligence.
As for Bishop Wright, Defendants contend he should be dismissed because Rev. Broesler "does not allege that the Bishop was a party to the Unsigned Agreement or that he was employed by the Bishop." Defendants did not move to dismiss for failure to join an indispensable party, and there is enough in the complaint to put the Bishop on notice. If not, again, Rev. Broesler may amend the complaint, nunc pro tunc. The court will not act on technicalities. But, that does not mean Rev. Broesler's claims are flawless, as discussed below.
Super. Ct. R. 12(b)(7).
B. Subject Matter Jurisdiction
The first half of Defendants' motion labels the dispute a "quintessentially ecclesiastical matter." Defendants contend the court cannot review the Letter because it incorporates "the relevant Canons of the Diocese of Delaware and the General Convention." According to Defendants, that means Rev. Broesler's breach of contract claims "cannot be separated from the Canons or, more generally, from the ecclesiastical doctrine and polity of the Church." Likewise, "the doctrine of church-autonomy precludes a promissory-estoppel claim relating to a clergy's employment." Thus, they conclude, the promissory estoppel claim "would inevitably require the Court to consider matters of church polity as governed by the Canons."
Defendants, however, present a qualitatively different issue than the one presented by the complaint, at least in part. The narrow issue is whether the bargained-for arbitration took place before Rev. Broesler's pay was cut-off — not whether the arbitration followed "the relevant Canons of the Diocese of Delaware and of the General Convention." Although the Letter stipulates that arbitration would proceed under church law, that does not mean the court must look into church doctrine or polity to determine if the arbitration took place. The same is true for Rev. Broesler's promissory estoppel claim. By the same token, while the Letter clearly invokes ecclesiastical matters in connection with the dissolution, it does not seem to color the question of interim pay in the same hue.
Nothing has established that the court cannot decide whether the Letter allows an interim suspension without pay, as a matter of secular employment law. The Supreme Court of the United States endorsed the view that courts can avoid offending the First Amendment by applying neutral principles of law to church disputes. Several courts have since applied that reasoning to employment disputes between churches and pastors. For example, one court found "[a] church is always free to burden its activities voluntarily through contracts, and such contracts are fully enforceable in civil court." That court reversed the trial court's decision it lacked jurisdiction to hear a pastor's claim he was promised a suitable congregation. Another court turned down a church's appeal that a pastor's breach of employment contract claim was an ecclesiastical matter, concluding that "[s]imply because a church is involved in the litigation does not make the matter ecclesiastical."
Jones v. Wolf, 443 U.S. 595 (1979).
See e.g., Jenkins v. Trinity Evangelical Lutheran Church, 825 N.E.2d 1206, 1212 (Ill. App. 3d 2005) ( holding that a church's "agreement for wages and benefits is governed by principles of civil contracts law and can be enforced by [the] courts").
Minker v. Baltimore Annual Conference of United Methodist Church, 894 F.2d 1354, 1359 (D.C. Cir. 1990) citing Watson v. Jones, 80 U.S. 679, 714 (1871).
Id.
Fellowship Tabernacle, Inc. v. Baker, 869 P.2d 578 (Idaho App. 1994).
Id. at 583.
In short, the court is not considering "arbitration and decision" under church law. And, the claim here is not about the parishioner's allegations to Defendants, or the Bishop's power under church law to suspend Rev. Broesler. Those matters are sacrosanct. But, the limited question of interim pay falls within the court's jurisdiction over contract claims. Having decided the court has subject matter jurisdiction over the interim pay issue, the court will address it substantively.
See e.g., Pearson v. Church of God, 458 S.E.2d 68 (S.C. App. 1995) (holding the court lacked jurisdiction to define "license" and "ministry" under church law).
See e.g., Belin v. West, 864 S.W.2d 838 (Ark. 1993) (holding the court lacked jurisdiction to inquire into Bishop's power to appointment pastors).
C. Motion to Dismiss for Failure to State a Claim
The second half of Defendants' motion contends the complaint fails to state a claim. A motion to dismiss for failure to state a claim tests a complaint's sufficiency. "The test for sufficiency is a broad one, that is, whether a Plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint." All well-pleaded allegations are accepted as true and construed in plaintiff's favor. To survive, Plaintiffs' allegations need to put Defendants on notice of the claims and set out facts from which Plaintiffs could recover. Finally, in some circumstances, the court can consider documents that are pleaded in the complaint, without converting the motion to dismiss into one for summary judgment.1. Breach of Contract
In Defendants' words, Rev. Broesler's "breach-of-contract claim should be dismissed because he fails to allege the existence of a valid and binding contract." According to Defendants, "[b]ecause Plaintiff has failed to identify any contract to which Defendants are parties as demonstrated by an express manifestation of intent by their signatures, Plaintiff's claim seeking to enforce the Unsigned Agreement should be dismissed." But, if "the Unsigned Agreement constitutes a binding contract, its terms are too indefinite to be enforced[,]" meaning the employment was at-will. Finally, Defendants argue Rev. Broesler committed the first material breach because he was suspended.To survive dismissal, Rev. Broesler "must demonstrate: first, the existence of the contract; second the breach of an obligation imposed by that contract; and third, the resultant damages to [him]." Further, the Letter is the sort of document the court can consider without converting the motion to dismiss into one for summary judgment.
VLIW Technology, LLC v. Hewlett-Packard, Co., 840 A.2d 606 (Del. 2003).
Although the copy of the Letter Rev. Broesler attached is unsigned, the complaint alleges that it reflects a binding contract. No rule says a breach of contract is subject to dismissal merely because the plaintiff fails to attach a signed copy. For now, an unsigned copy accompanied by specific allegations will do.
Reverend Broesler alleges he had an "Employment Contract dated August 1, 2001," to minister at St. Barnabas. He attached a copy of the contract, and although not signed, it includes a space for his signature, the Bishop's signature, and two Wardens' signatures. Next, he alleges the "right to receive his contractual compensation and benefits" until his tenure is dissolved. "That right has been breached by the Defendants[']" vote to terminate compensation early. Finally, he alleges the loss of compensation since the vote. Again, that is enough at this stage.
Defendants' alternate contention that the "terms are too indefinite to be enforced" because the Letter "does not identify Plaintiff's duties as Rector or the duration of his employment" is flatly contradicted by the Letter. As discussed above, the Letter sufficiently detailed what Defendants expected from Rev. Broesler, down to how he should spend his workweek. If the agreement lacks a critical detail, that can be fleshed out in litigation.
Finally, as mentioned, Defendants contend in circular fashion, as presented above, Rev. Broesler committed the first material breach because he failed to perform his pastoral duties while suspended. The only reason that can be said is because Defendants suspended him.
2. Breach of the Covenant of Good Faith and Fair Dealing
The only difference between the good faith and fair dealing claim, and the breach of contract claim, is Rev. Broesler's characterization of the alleged breach, i.e., the vote, as "arbitrary and unreasonable." In Delaware, an implied covenant of good faith and fair dealing is organic to every contract. It is a rare measure intended to remedy arbitrary or unreasonable conduct that prevents the other party from receiving the fruits of the bargain. The covenant does not create a "free-floating duty," and a party cannot recover when "the subject at issue is expressly covered."
See Dunlap v. State Farm Fire and Cas. Co., 878 A.2d 434 (Del. 2005).
Id.
Id.
The Chancery Court, under similar circumstances, reasoned that "[a]bsent a contractual provision dictating a standard of conduct, there is no legal difference between breaches of contract made in bad faith and breaches of contract not made in bad faith. Both are simply breaches of the express terms of the contract." Because the express terms governed, that left "no interstitial space in which the doctrine of the implied covenant might operate." Like that case, the subject at issue — whether dissolution happened as bargained-for — is governed by the contract's express terms. Therefore, the breach of the implied covenant of good faith and fair dealing allegations fail to state a separate claim upon which relief can be granted.
ASQR India Private, Ltd. v. Bureau Veritas Holding, Inc., 2009 WL 1707910 at *12 (Del. Ch. 2009) (STRINE, V.C.).
Id.
3. Promissory Estoppel
Reverend Broesler claims "Defendants promised [him] that he would have procedures and due process available before his employment could be terminated or his compensation could be ended and Plaintiff relied upon those promises and protections in entering into the position as Rector of St. Barnabas." Thus, he concludes, "Defendants are estopped from denying [him] his employment until exhaustion of the ecclesiastical procedures available to him."Normally, "a promissory estoppel analysis is not applicable to cases in which the alleged promise is supported by consideration." Some courts, however, have allowed plaintiffs to plead promissory estoppel as an alternative to breach of contract. In either case, a plaintiff must allege, among other things, that the "promise is binding because injustice can be avoided only by enforcement of the promise."
Genencor Int'l, Inc. v. Novo Nordisk A/S, 766 A2d 8, 12 (Del. 2000) citing Lord v. Souder, 748 A.2d 393, 398 (Del. 2000).
Chrysler Corp. v. Chaplake Holdings, Ltd., 822 A.2d 1024, 1034 (Del. 2003) ( "The prevention of injustice is the `fundamental idea' underlying the doctrine of promissory estoppel").
Lord v. Souder, 748 A.2d 393, 399 (Del. 2000).
As Defendants point out, Rev. Broesler does not "allege that injustice can be avoided only by the enforcement of the promises made." In fact, the only "injustice" was the breach, which is addressed through the breach of contract claim. To be clear, the court is not holding that Rev. Broesler cannot plead promissory estoppel as an alternative to the breach of contract claim. Rather, the claim is dismissed because Rev. Broesler failed to allege a necessary element of promissory estoppel: enforcement is necessary to prevent injustice.
See Super. Ct. Civ. R. 8(a).
4. Delaware Wage Payment and Collection Act
Reverend Broesler claims he has not been paid since the vote. That does not assert a claim within the Wage Act. The Wage Act imposes substantial penalties plus costs and attorneys' fees on employers who do not pay wages. Under the Act, "`wages' means compensation for labor or services rendered by an employee. . . ." "Whenever an employee . . . is . . . suspended . . . the wages earned by the employee shall become due and payable by the employer on the next regularly scheduled payday. . . ." That refers to wages earned before the suspension, which should have been paid. Nothing in the Act requires an employer to continue paying wages to a suspended employee.
19 Del. C. § 1102, 12-3.
D. Motion to Stay
The court will not stay the remaining breach of contract claim. That claim does not depend on the ecclesiastical process. In fact, Rev. Broesler points out the ecclesiastical trial is not even addressing the breach of contract claim. The tortious interference, defamation, and invasion of privacy claims, which do depend on the arbitration and decision, have been dismissed as non-justiciable. Therefore, there is no reason to stay the narrow breach of contract claim concerning interim pay.IV.
For the foregoing reasons, Defendants' motion to dismiss for lack of subject matter jurisdiction in the entirety is DENIED. Defendants' motion to dismiss for failure to state a claim is DENIED as to the breach of contract claim for interim salary. It is GRANTED on the promissory estoppel claim, the breach of the covenant of good faith and fair dealing claim, and the Delaware Wage Act claim. Defendants' motion to stay pending the conclusion of the ecclesiastical process is DENIED, as to the limited, surviving claim concerning interim pay.
IT IS SO ORDERED.