Opinion
NO. 2012-CA-000228-MR
07-05-2013
TRUE GOSPEL CHURCH OF GOD IN CHRIST, HOPKINSVILLE, KENTUCKY APPELLANT v. CHURCH OF GOD IN CHRIST, KENTUCKY FIRST JURISDICTION, INC.; AND BISHOP DWIGHT L. HAYGOOD, SR. APPELLEES
BRIEFS AND ORAL ARGUMENT FOR APPELLANT: Kenneth W. Humphries Hopkinsville, Kentucky BRIEF FOR APPELLEES: Byron E. Leet Dwight L. Haygood, Jr. Anne R. MacLean Louisville, Kentucky ORAL ARGUMENT FOR APPELLEES: Byron E. Leet Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM CHRISTIAN CIRCUIT COURT
HONORABLE JOHN L. ATKINS, JUDGE
ACTION NO. 11-CI-01211
OPINION
REVERSING AND REMANDING
BEFORE: ACREE, CHIEF JUDGE; TAYLOR AND VANMETER, JUDGES. TAYLOR, JUDGE: True Gospel Church of God in Christ, Hopkinsville, Kentucky, (referred to as True Gospel Church) brings this appeal from an October 12, 2011, order of the Christian Circuit Court dismissing its complaint upon the basis of res judicata against Church Of God in Christ, Kentucky First Jurisdiction, Inc., and Bishop Dwight L. Haygood, Sr., (collectively referred to as First Jurisdiction). We reverse and remand.
True Gospel Church is a local community church based in Hopkinsville, Kentucky; it is an unincorporated association of individual members. First Jurisdiction is one of many incorporated entities of the National Church of God in Christ, Inc. (National Church). First Jurisdiction is responsible for governing individual member churches located within the geographical unit comprising the state of Kentucky.
In early 2009, a dispute arose between members of True Gospel Church and First Jurisdiction concerning the appointment of a new pastor for True Gospel Church. The former pastor had passed away in November 2008, and the members were not supportive of the successor designated by First Jurisdiction. In February 2009, members of True Gospel Church formed a new corporation named True Gospel Church Ministries, Inc. (True Ministries Church), and in June 2009, transferred the real property of True Gospel Church by recorded deed to True Ministries Church.
In January 2010, First Jurisdiction filed a complaint in the Christian Circuit Court against True Ministries Church and three of its members (Action No. 10-CI-00127). First Jurisdiction asserted that True Gospel Church was a member of the National Church and subject to its jurisdiction. First Jurisdiction alleged the transfer of real property from True Gospel Church to True Ministries Church was void as violative of the National Church's constitution and bylaws. Eventually, a default judgment was rendered in favor of First Jurisdiction in April 2011. Relevant herein, the circuit court held that the deed transferring the real property from True Gospel Church to True Ministries Church in June 2009 was void. The court further adjudged True Gospel Church "the rightful owner of the [p]roperty" and ordered the master commissioner to "issue a Commissioner's Deed conveying the [p]roperty to True Gospel Church."
The three members were David Henderson, Carthel Henderson, and Shirley Cook. Also, of note, True Gospel Church of God in Christ, Hopkinsville, Kentucky (True Gospel Church), was not a party to Christian Circuit Court Action No. 10-CI-00127.
An appeal of the default judgment was filed by True Gospel Church Ministries, Inc., with this Court in May 2011. The default judgment was affirmed in Appeal No. 2011-CA-000796-MR by Opinion rendered July 6, 2012. The Kentucky Supreme Court denied discretionary review on March 13, 2013.
While True Ministries Church's appeal was pending, True Gospel Church, by and through its members, filed the action which is the subject matter of this appeal - a complaint and request for injunctive relief in the Christian Circuit Court against First Jurisdiction (Action No. 11-CI-01211). In the complaint, True Gospel Church claimed that it was not affiliated with First Jurisdiction or the National Church and that neither held any interest in its real property. First Jurisdiction filed a motion to dismiss under Kentucky Rules of Civil Procedure (CR) 12.02 and argued that the present action was barred by res judicata by virtue of the default judgment entered in favor of First Jurisdiction in the earlier action. By order of dismissal entered October 12, 2011, the circuit court concluded that the present action against First Jurisdiction was barred by "res judicata." In particular, the circuit court reasoned:
This action is barred by the doctrine of res judicata and this Court's ruling in the Prior Action. In the Prior Action, True Gospel Church Ministries, Inc., David Henderson, Shirley Cook, and Carthel Henderson alleged on several instances, . . . that all members of the True Gospel Church of God in Christ in Hopkinsville voted unanimously to disassociate or sever ties with the National Church and Kentucky First Jurisdiction and to form a new church - True Gospel Church Ministries, Inc.This appeal follows.
. . . .
The claims advanced in this action either were or could have been asserted in the Prior Action, which was dismissed by an Order entered on April 5, 2011. The Court finds the claims asserted in this action must also be dismissed as a matter of law.
True Gospel Church, by and through its members, contends that the circuit court erred by dismissing the complaint against First Jurisdiction upon the basis of res judicata. For the reasons hereinafter stated, we conclude the circuit court erred by dismissing the action.
To begin, res judicata is "an umbrella doctrine" that envelops two subparts: (1) claim preclusion, and (2) issue preclusion. Miller v. Adm. Office of the Courts, 361 S.W.3d 867, 871 (Ky. 2011). In this case, we are only concerned with claim preclusion.
It is well-settled that "claim preclusion bars a party from relitigating a previously adjudicated cause of action and entirely bars a new lawsuit on the same cause of action." Yeoman v. Commonwealth, 983 S.W.2d 459, 465 (Ky. 1998). To invoke claim preclusion, the following three elements must be demonstrated:
(1) there must be an identity of parties between the two actions; (2) there must be an identity of the two causes of action; and (3) the prior action must have been decided on the merits.Miller, 361 S.W.3d at 872.
For purposes of this appeal, we only need to address the first element concerning identity of the parties. The parties to the former action in Christian Circuit Court (Action No. 10-CI-00127) were First Jurisdiction, True Ministries Church (a nonprofit corporation), and three members of True Ministries Church; whereas, the parties to the present action (Action No. 11-CI-01211) are First Jurisdiction and True Gospel Church, by and through its members. Thus, True Gospel Church, by and through its members, is a named party in the present action but was not a named party in the former action. Also, True Ministries Church was a named party in the former action and is not a named party in the present action. Consequently, the record in appeal clearly reflects that identical parties are not involved in the former action (Action No. 10-CI-00127) and the present action (Action No. 11-CI-01211).
Attachment A to the complaint in the present appeal references approximately fifteen members' signatures who purportedly constitute a majority of True Gospel Church's members.
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Although identical parties are not named in the former and present actions, the element of identity of the parties may, nevertheless, be satisfied for the purpose of claim preclusion if the named parties to the former action are in the privity with the parties to the present action. In this context, privity of parties is found to exist if any of the following are demonstrated:
(1) where the nonparty is the successor in interest to a party's interest in property; (2) where the nonparty controlled the prior litigation; and (3) where the nonparty's interests were adequately represented by a party to the original suit.50 C.J.S. Judgments § 936 (2012).
First Jurisdiction argues that True Gospel Church was in privity with both First Jurisdiction and True Ministries Church, who were named parties in the former action. Specifically, First Jurisdiction asserts that the "individuals prosecuting this [present] action" are in reality the same individuals who prosecuted the former action and further, that First Jurisdiction adequately represented the interests of True Gospel Church in the former action. Essentially, First Jurisdiction is arguing that: (1) True Gospel Church is in privity with True Ministries Church because members of True Gospel Church were members of True Ministries Church and controlled the litigation in the former action, and/or (2) True Gospel Church is in privity with First Jurisdiction because First Jurisdiction adequately represented its interest in the former action. We address each seriatim.
In the former action, True Ministries Church was named as a nonprofit corporation and three members of its board of directors were also named as defendants. Conversely, in the present action, True Gospel Church is the plaintiff and is an unincorporated association. No members of True Gospel Church are specifically named as parties in the present action, albeit a majority of its members have executed an attachment to the complaint.
While members of True Gospel Church and members of True Ministries Church may include the same individuals, it is generally recognized that a party appearing in a representative capacity in a former action is not barred by claim preclusion in a subsequent action if that party is proceeding individually or in a different representative capacity. See Restatement (Second) of Judgments § 36(2) (1982). Thus, while members of True Ministries Church may have controlled the litigation in the former action (10-CI-00127), they did so in their representative capacity on behalf of the corporation, True Ministries Church; whereas, in the present action (11-CI-01211), the members' individual interests are being represented by the association, True Gospel Church. See Restatement (Second) of Judgments § 59 (1982); 50 C.J.S. Judgments § 1143 (2012). Accordingly, we conclude that no privity exists for claim preclusion purposes between the members of True Gospel Church and True Ministries Church.
As to privity between True Gospel Church and First Jurisdiction, First Jurisdiction sought to set aside a conveyance of church property by deed from True Gospel Church to True Ministries Church in the former action (10-CI-00127). Essentially, First Jurisdiction was claiming that True Gospel Church acted improperly by conveying its property to True Ministries Church. To establish privity of parties based upon adequate representation of interests in a former action, it requires:
[A] substantial identity between the issues in controversy and showing the parties in the two actions are really and substantially in interest the same. In other words, privity requires a person so identified in interest with another that the person represents the same legal rights. If there is no identity of interest, and certainly if the interests of the two parties are in conflict in the main action, privity does not exist.50 C.J.S. Judgments § 1099 (2009) (citations omitted).
In the case sub judice, it is clear that First Jurisdiction's interests in the former litigation (10-CI-00127) were not completely aligned or congruent with the interests of True Gospel Church. In fact, their interests were directly conflicting as to the alleged validity of the deed of conveyance from True Gospel Church to True Ministries Church. See 47 Am. Jur. 2d Judgments § 598 (2012). Consequently, we conclude that privity does not exist between True Gospel Church and First Jurisdiction.
As no privity of parties exists between True Gospel Church and either True Ministries Church or First Jurisdiction, it is clear that the element of identity of parties was not satisfied for application of claim preclusion as concerns the present action now on appeal to this Court. Accordingly, we hold that the circuit court erred in the dismissal of the present action upon the basis of res judicata, as a result of the default judgment rendered in the former action (Action No. 10-CI-00127).
We further note that the circuit court has previously ruled that True Gospel Church is the "rightful owner" of the real property which is the subject matter of this action. Notwithstanding, the circuit court has further recognized that First Jurisdiction also has an interest in the aforesaid property. Upon remand, the competing claims of the parties and the actual ownership to the aforesaid real property should be adjudicated on the merits by the circuit court as well as all other claims asserted in the complaint.
For the foregoing reasons, the order of the Christian Circuit Court is reversed and this case is remanded for proceedings on the merits of the complaint and request for injunctive relief.
ACREE, CHIEF JUDGE, CONCURS.
VANMETER, JUDGE, DISSENTS AND FILES SEPARATE OPINION.
VANMETER, JUDGE, DISSENTING: I respectfully dissent. The well-established case law in this Commonwealth is that an unincorporated association is not a legal entity. Future Federal Savings & Loan Ass'n v. Daunhauer, 687 S.W.2d 871, 873 (Ky. 1985); Business Realty, Inc. v. Noah's Dove Lodge #20, 375 S.W.2d 389, 390 (Ky. 1963). As such it has no capacity to sue or be sued. Noah's Dove Lodge, 375 S.W.2d at 390. (I recognize that lack of capacity must be plead under CR 9.01). No doubt this infirmity was the reason True Gospel Church was not a party to the original action—it could not be sued. First Jurisdiction therefore sued those persons acting as trustees of True Gospel Church: David Henderson, Carthel Henderson and Shirley Cook. First Jurisdiction's complaint identified them both as directors of the new church corporation, and also as trustees of True Gospel Church. In my view, their representative capacity was sufficiently raised and plead, such that anyone claiming under the unincorporated association, True Gospel Church, is now bound, by privity, under the prior judgment. I would affirm the Christian Circuit Court's judgment. BRIEFS AND ORAL ARGUMENT FOR APPELLANT: Kenneth W. Humphries
Hopkinsville, Kentucky
BRIEF FOR APPELLEES: Byron E. Leet
Dwight L. Haygood, Jr.
Anne R. MacLean
Louisville, Kentucky
ORAL ARGUMENT FOR APPELLEES: Byron E. Leet
Louisville, Kentucky