FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION INTERNATIONAL v. HYUN JIN MOON

District of Columbia

Court of Appeals

No. 14-CV-0094 DEC 24 2015

FAMILY FEDERATION FOR WORLD PEACE AND

UNIFICATION INTERNATIONAL, et al.

Appellants and Cross-Appellees,

v. CAB-3721-11

HYUN JIN MOON, et al.,

Appellees and Cross-Appellants.

On Appeal from the Superior Court of the District of Columbia

Civil Division

BEFORE: Glickman and Blackburne-Rigsby, Associate Judges; and Steadman,

Senior Judge..

JUDGMENT

This case came to be heard on the transcript of record, 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 order of the trial court, denying

defendants’ motion to dismiss, is affirmed; the order of the trial court, granting

defendants’ motion for judgment on the pleadings, is reversed; and the case is remanded

for further proceedings consistent with this opinion.

For the Court:

Dated: December 24, 2015.

Opinion by Senior Judge John Steadman.

Notice: This opinion is subject to formal revision before publication in the

Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the

Court of any formal errors so that corrections may be made before the bound

volumes go to press.

DISTRICT OF COLUMBIA COURT OF APPEALS

No. 14-CV-94

FAMILY FEDERATION FOR WORLD PEACE AND UNIFICATION INTERNATIONAL, ET AL.,

APPELLANTS AND CROSS-APPELLEES,

v.

HYUN JIN MOON, ET AL., APPELLEES AND CROSS-APPELLANTS.

Appeals from the Superior Court

of the District of Columbia

(CAB-3721-11)

(Hon. Natalie M. Combs Greene, Motions Judge)

(Hon. Anita Josey-Herring, Trial Judge)

(Argued March 10, 2015 Decided December 24, 2015)

Alan I. Horowitz, with whom James A. Bensfield, Emmett B. Lewis, Brian A.

Hill, John C. Eustice, Benjamin P. De Sena, Thomas C. Green, Frank R. Volpe,

George W. Jones Jr., W. Gary Kohlman, Jeffrey R. Freund, Ramya Ravindran, and

Philip C. Andonian, were on the brief, for appellants/cross-appellees.

David A. Reiser, with whom Steven M. Salky, Blair G. Brown, Caroline E.

Reynolds, Amit P. Mehta, Adam B. Abelson, Keisha N. Stanford, Peter J.

Romatowski, Adrian Wager-Zito, Shay Dvoretzky, Yaakov Roth, and Francis D.

Carter, were on the brief, for appellees/cross-appellants.

Before GLICKMAN and BLACKBURNE-RIGSBY, Associate Judges, and

STEADMAN, Senior Judge.

2

STEADMAN, Senior Judge: Before us is a dispute over legal control of a

District of Columbia nonprofit corporation, originally named the Unification

Church International (“UCI”),1 established in 1977 under the auspices of the

Reverend Sun Myung Moon, founder of the Unification Church. UCI has received

very substantial contributions in the past from entities under the greater Unification

Church umbrella and manages millions of dollars in assets. Succinctly put,

plaintiffs’ complaint involves allegations that defendants undertook a series of

coordinated and calculated illegal actions to usurp UCI and its corporate assets and

wrest control of UCI from the Unification Church.2

On direct appeal, plaintiffs appeal the trial court’s grant of the defendants’

motion for a judgment on the pleadings for lack of subject-matter jurisdiction.3

The judgment was based on the trial court’s view that the dispute could not be

1

In 2010, the corporation’s Articles of Incorporation were amended to

change the name from “Unification Church International” to “UCI.” The

motivation behind the corporation’s decision to amend its Articles is in dispute.

For simplicity, we refer to the entity as UCI throughout this opinion.

2

The plaintiffs in this action are two ousted former directors of UCI and

three entities with close interests in the operation of UCI, all as explained in more

detail in part I (B) infra. The defendants are UCI itself and its five current

directors.

3

As part of its order, the trial court dismissed the complaint with prejudice,

subject to the completion of certain collateral matters.

3

decided without the court’s venturing into religious questions forbidden by the

First Amendment. On cross-appeal by the defendants is an earlier order by the trial

court refusing to dismiss the complaint on the asserted grounds of lack of personal

jurisdiction, lack of standing, and failure to state a cause of action.

On the direct appeal, we conclude that the grant of judgment on the

pleadings prematurely resolved the constitutional issue. On the cross-appeal, we

affirm the order of the trial court.

I. UCI and Plaintiffs’ Allegations4

A. The Founding of UCI

In a broad sense, the current dispute stems from the founding by Reverend

Moon of the Holy Spirit Association for the Unification of World Christianity (the

“Unification Church”), in Seoul, South Korea, in 1954. In 1971, Reverend Moon

moved from South Korea to the United States to expand the Unification Church’s

4

We here set forth the facts as alleged in the complaint. The defendants

filed a counterclaim with a markedly different view of events. This counterclaim

was eventually dismissed, creating finality for the instant appeals.

4

activities around the globe. Two years later, in 1975, Reverend Moon directed his

close associate, Dr. Bo Hi Pak, to “open a bank account with Diplomat National

Bank in the District of Columbia in the name of Unification Church International.”

The first sum deposited in the account came from an account in Reverend Moon’s

name, and additional funds were contributed by various other Unification Church

entities. Reverend Moon “directed Dr. Pak to hold the funds in the [UCI] bank

account in trust solely for the benefit and support of the Unification Church and its

related activities.” As a key assertion, plaintiffs argue that Reverend Moon’s

statements and actions demonstrate the intent to create an oral, charitable trust with

Dr. Pak serving as the trust’s first trustee (“UCI Trust”).

By 1977, approximately $7,000,000 had been donated and was held in the

UCI bank account. Reverend Moon then directed Dr. Pak to establish a District of

Columbia nonprofit corporation to implement the UCI Trust and carry out its

purpose. Thus, UCI came into being in that year. Dr. Pak changed the UCI

Trust’s bank account to reflect that the donated funds would be held by UCI, as

opposed to the trust itself. Reverend Moon intended for this corporation to

“implement the purposes of the trust and for the Directors of the Corporation to

serve as trustees and ensure that the Corporation and its assets would be

administered for the benefit of the Unification Church.”

5

The original February 1977 Articles of Incorporation are alleged to “reflect[]

the purposes” of the corporation and “evidence” Reverend Moon’s intent.

Specifically, Article 3, Section 2 of the Articles of Incorporation stated that the

UCI will “serve as an international organization assisting, advising, coordinating,

and guiding the activities of Unification Churches organized and operated

throughout the world.” Furthermore, Section 3 stated that the UCI will “promote

the worship of God, and to study, understand and teach the Divine Principle, the

new revelation of God, and, through the practical application of the Divine

Principle . . . achieve the interdenominational, interreligious, and international

unification of world Christianity and all other religions.” Additionally, Article 9

also stated that the Directors of UCI “recognize and acknowledge that the

Reverend Sun Myung Moon has provided the inspiration and spiritual leadership

for the founding of the Corporation and is the spiritual leader of the international

Unification Church movement.” Plaintiffs assert that the Divine Principle is the

theological textbook of the Church and contains the essential teachings of

Reverend Moon.

6

From 1977 to 2006, UCI operated without controversy.5 From 1977 through

1992, Dr. Pak, as the president of the corporation, managed the corporation’s

assets, to which various entities, notably one in Japan that is a plaintiff in this

action, donated “hundreds of millions of dollars” allegedly to be “held in trust” and

used for the Church’s endeavors. Both Dr. Pak and plaintiff Dr. Douglas D.M.

Joo, who served as President of UCI from 1992 to 2005, understood that the

corporation held its assets to fund the Church’s activities.

Things changed radically beginning in 2006, when Preston Moon,6 one of

Reverend Moon’s sons, became the new president of the UCI as well as one of the

five directors. Two years later, Reverend Moon appointed another son, Sean

Moon, as the next leader of the Church’s worldwide religious organization. This

appointment allegedly disappointed Preston Moon, who “resolved not to take

direction from his younger brother Sean Moon in matters relating to UCI,” and led

Preston Moon to take a series of actions to divest the Church of control over UCI

and divert the corporation from its alleged mission and intended purpose.

5

In 1980, UCI gave up its original tax-free status.

6

The named defendant is “Hyun Jin Moon (a/k/a Preston Moon).” The

complaint consistently refers to him as Preston Moon, and we follow that practice

here because the complaint is the focus of attention.

7

Plaintiffs’ challenge to those actions by Preston Moon and the other directors is the

subject of this law suit.

B. Plaintiffs’ Claims

Five plaintiffs are linked in this case. Three of them are entities related to

Reverend Moon’s original Unification Church. The first entity is the lead plaintiff,

Family Federation for World Peace and Unification International (“Family

Federation”) that is located in South Korea and is the current name for the religious

entity that directs the church’s activities worldwide and is now headed by Sean

Moon.7 The second entity is the Holy Spirit Association for the Unification of

World Christianity (Japan) (the “Japanese Church”), which is the “corporate

embodiment” of the Universal Church in Japan and was the primary donor of funds

to UCI for several decades. The third entity is the Universal Peace Federation, a

District of Columbia nonprofit corporation, which was a long-time major recipient

of funding from UCI prior to the takeover by Preston Moon. The other two

plaintiffs, Dr. Douglas D.M. Joo and Peter H. Kim, are individuals who were

7

As the trial court noted, when and how this succession occurred is not

clear from the record. When naming his son Sean Moon as the next leader of the

Church, Reverend Moon also named Sean Moon as the international president of

Family Federation. Reverend Moon himself died at the age of 92 on September 3,

2012.

8

directors of UCI until ousted by Preston Moon. Plaintiffs challenge virtually all of

the actions taken by Preston Moon and UCI since he gained control, summarized

as follows.8

Plaintiffs first challenge the actions taken to secure control of the

corporation’s Board of Directors. Under its by-laws, the corporation (which had

no members or stockholders) functioned under the supervision of a five-person

self-perpetuating Board of Directors. Plaintiffs assert that although the written by-

laws provide that the Board of Directors shall elect successor directors, Reverend

Moon, as the co-settlor of the trust and spiritual leader of the Church, had

designated all individuals to serve on the Board of Directors of UCI. Plaintiffs

further assert that the directors have “understood and accepted” this “long and

continuous usage of this uniform practice” that constitutes a “binding convention”

as to how the directors are to be nominated.

In January 2009, Preston Moon held a UCI board meeting during which he

arranged for the resignation of two of the five original directors and the election of

defendants Michael Sommer and Richard Perea to the Board of Directors. Preston

8

Plaintiffs’ complaint runs to forty pages plus a number of attachments.

We summarize the major assertions of wrongdoing.

9

Moon and his hand-picked directors allegedly stymied an effort by directors Joo

and Kim to elect directors designated by Reverend Moon, which contravened the

longstanding, uniform custom and practice of Reverend Moon nominating the

individuals to be directors of the corporation. Preston Moon completed his

takeover of the UCI Board of Directors in August 2009, when he convened a

special board meeting where he, Sommer, and Perea voted to remove directors Joo

and Kim from the Board of Directors.9 Defying instructions from the Family

Foundation to reinstate the removed directors, Preston Moon, Sommer, and Perea

instead added two of Preston Moon’s brothers-in-law to the Board of Directors.

Plaintiffs contend that these steps constituted “unauthorized, illegal and improper

actions” that vitiated the validity of subsequent UCI corporate acts.

Next, plaintiffs challenge the diversion of corporate expenditures from the

purposes set forth in the trust imposed on the corporation and in the original

articles. In late 2009 and early 2010, Preston Moon was stripped of his positions

on several Church entities. In response to this, Preston Moon announced that he

would act through an entity known as the Global Peace Festival Foundation

(“GPFF”), which he had created in 2009. Preston Moon further indicated that

9

The by-laws of the corporation permitted a majority of the Board to

remove any director with or without cause.

10

GPFF would have no formal or legal association with the Family Federation,

Universal Peace Foundation, or the Unification Church. This resulted in the

Universal Peace Foundation no longer receiving funding from UCI as it had for

decades. Preston Moon then began holding “Global Peace Festivals” through

GPFF and used UCI corporation assets to fund the activities, in defiance of the

wishes of Reverend Moon and the Family Foundation. In furtherance of his plan,

on April 14, 2010, Preston Moon and the UCI Board of Directors, which he now

controlled, amended the UCI Articles of Incorporation to disassociate the

corporation from the Church, specifically by changing the name from “Unification

Church International” to “UCI” and removing all references to the original purpose

of advancing the Divine Principle and supporting Unification Churches worldwide.

As amended, the Articles of Incorporation provided more generally only for

promotion and support of the Unification Movement.

Third, plaintiffs charge that Preston Moon used his powers as President and

Chairman of UCI to engage in self-dealing transactions and to divert corporation

assets for his own interests, in violation of his fiduciary duties and of the District of

Columbia Nonprofit Corporation Act. Among other allegations, plaintiffs assert

that Preston Moon caused a UCI subsidiary to engage in a property transaction

with an entity wholly owned by Preston Moon at less than fair market value, and

11

that the transaction served no legitimate business purpose. Plaintiffs also allege

that Preston Moon caused UCI to lend $2,000,000 to that entity owned by him and

to enter into a consulting agreement with it to pay $120,000 a month when the

consulting agreement served no legitimate business purpose.

The plaintiffs’ complaint primarily relies on four legal theories, each set

forth in a separate count of the complaint, in challenging these allegedly wrongful

actions taken by Preston Moon and UCI. The first two counts, raised by all

plaintiffs, are breach of the trust established by Reverend Moon with Dr. Pak, and

breach of corporate fiduciary duties and ultra vires acts. The third count, raised

only by Family Federation, is breach of fiduciary duty by Preston Moon as an

agent of Family Federation, the principal.10 The fourth count, raised only by the

Japanese Church, is breach of contract relating to its provision of funds to UCI. 11

With this background of events, we turn now to the appeals before us. As

disposition of the cross-appeal could potentially be outcome-determinative apart

10

The other four directors are charged with aiding and abetting Preston

Moon.

11

The Japanese Church also raises quasi-contractual claims of promissory

estoppel and unjust enrichment as related bases for recovery. We see no need to

separately address these counts.

12

from the merits, we first address the challenges raised in the cross-appeal asserting

lack of personal jurisdiction, lack of standing, and failure to state a claim.

II. Personal Jurisdiction, Standing, and Failure to State a Claim

A. Personal Jurisdiction

Each of the five individual defendants was a director of UCI during part or

all of the time of the alleged wrongdoings and, according to the heading of the

complaint, was a resident of the United States. However, none was a resident of

the District. Accordingly, the trial court’s exercise of jurisdiction rests on the

District’s Long Arm Statute—“more particularly, the provision that the District’s

courts ‘may exercise personal jurisdiction over a person, who acts directly or by an

agent, as to a claim for relief arising from the person’s transacting any business in

the District of Columbia.’” Daley v. Alpha Kappa Alpha Sorority, Inc., 26 A.3d

723, 727 (D.C. 2011) (quoting D.C. Code § 13-423 (a) (2001 ed.)). “We have

repeatedly reaffirmed” that the “transacting business provision [of the District’s

Long Arm Statute] is coextensive with the due process clause of the Fifth

Amendment.” Id. (internal quotation marks removed); that is, jurisdiction extends

as far as the due process clause permits. Flocco v. State Farm Mut. Auto. Ins. Co.,

13

752 A.2d 147, 162 (D.C. 2000). “[A] nonresident defendant need not have been

physically present in the District” for our courts to exercise personal jurisdiction.

Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C. 1981). Rather, the critical issue is

whether the individual’s “conduct and connection with the forum state are such

that he should reasonably anticipate being haled into court there.” Daley, supra,

26 A.3d at 727 (quoting Gonzalez v. Internacional de Elevadores, S.A., 891 A.2d

227, 234 (D.C. 2006)). In other words, the inquiry is whether maintenance of the

suit against defendants “offend[s] ‘traditional notions of fair play and substantial

justice.’” Shoppers Food Warehouse v. Moreno, 746 A.2d 320, 330 (D.C. 2000)

(en banc) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316

(1945)).

The defendants rely on the Supreme Court case of Shaffer v. Heitner, 433

U.S. 186 (1977) for the proposition that asserting jurisdiction over nonresident

directors of a forum-state corporation is inconsistent with due process.12 But, as

12

In Shaffer, Delaware law conferring jurisdiction via sequestration of the

defendant’s property in that state “to compel the personal appearance of a

nonresident defendant” was used by a plaintiff who owned one share of stock in a

Delaware company and attempted to bring a derivative suit against the company

and various officers and directors. The Court held that the principles of fairness

and substantial justice from International Shoe also apply to an in rem proceeding,

which under Delaware law and the facts of the case was insufficient to confer

jurisdiction.

14

the Fourth Circuit rightly observed in Pittsburgh Terminal Corp. v. Mid Allegheny

Corp., 831 F.2d 522 (4th Cir. 1987), the Shaffer case was based on Delaware’s

assertion of jurisdiction based on property owned by the directors in that state, not

on an assertion of jurisdiction based on a long-arm statute. Nor can these

defendants benefit from the so-called corporate fiduciary shield, whereby “[a]

court does not have jurisdiction over individual officers and employees of a

corporation just because the court has jurisdiction over the corporation.” Flocco,

supra, 752 A.2d at 162. However the doctrine may operate in normal

circumstances, we have declined to adopt an “absolute fiduciary doctrine” that

would amount to “a per se rule that an employee’s acts in his official capacity may

never give rise to personal jurisdiction over him.” Id. at 163 n.20. Accordingly,

our analysis is not a “mechanical test”; instead, we weigh the facts of each case.

Holder v. Haarmann & Reimer Corp., 779 A.2d 264, 270-71 (D.C. 2001) (citation

omitted).

The case before us is somewhat akin to our decision in Daley. In that case,

we upheld jurisdiction over the nonresident individual officers of a District of

Columbia nonprofit corporation who were alleged to have enriched themselves

without proper authority. Daley, supra, 26 A.3d at 728. While it is true that in

certain respects, the individual officers in Daley had been present in the District,

15

the association itself consisted of a wide membership, unlike the structure of UCI.

In the case before us, each defendant voluntarily undertook to serve as a director of

a nonprofit District corporation without members or stockholders, and where the

directors were self-perpetuating and in total control of the corporation, answerable

only to themselves. The plaintiffs’ allegations are that these directors participated

in wrongful activities going to the very essence of that corporation’s existence.

Furthermore, apart from the fact that all the alleged wrongdoing affected a District

of Columbia corporation, at least one of those acts and a significant one, the

allegedly wrongful amendment of the Articles of Incorporation, indubitably

occurred within the District by filing here.13 On the alleged facts of this case, we

have little difficulty in concluding these directors clearly could anticipate being

hauled into [a District of Columbia] court to account for their activities and that

doing so does not violate notions of fair play and substantial justice.

13

“Once, however, the claim is related to acts in the District, § 13-423 does

not require that the scope of the claim be limited to acts within the District.”

Shoppers Warehouse, supra, 746 A.2d at 326 (quoting Cohane v. Arpeja-

California, Inc., 385 A.2d 153, 158-59 (D.C. 1978)).

16

B. Standing and Failure to State a Claim

Although challenges based on lack of standing and failure to state a cause of

action pursuant to Super. Ct. Civ. R. 12 (b)(6) are conceptually distinct, the

interrelationship of the two in the case before us makes it useful to discuss both

challenges together.14 We first address the first two counts brought by all five

plaintiffs, resting on legal principles relating to trusts and to corporate fiduciary

duties and ultra vires acts. Next, we address the count of breach of fiduciary duty

as agent brought by Family Federation. Finally, we examine the contractual count

brought by the Japanese Church.

1. Claims of Breach of Trust and Corporate Fiduciary Duties

In contesting plaintiffs’ standing on the first two counts, the defendants

primarily invoke the traditional rule that, generally, with respect to charitable trusts

and charitable corporations “only a public officer, usually the state Attorney

General, has standing to bring an action to enforce the terms of the trust.” Hooker

14

The defendants’ brief addresses the standing issues under the heading of

failure to state a claim.

17

v. Edes Home, 579 A.2d 608, 612 (D.C. 1990).15 As we explained, this restriction

primarily flows from the “impossibility of establishing a distinct justiciable interest

on the part of a member of a large and constantly shifting benefited class, and the

recurring burdens on the trust res and trustee of vexatious litigation that would

result from recognition of a cause of action by any and all of a large number of

individuals who might benefit incidentally from the trust.” Id.

However, an important exception to the general rule exists “in situations

where an individual seeking enforcement of the trust has a ‘special interest’ in

continued performance of the trust distinguishable from that of the public at large.”

Id. While “special interest” is a term of uncertain scope, the key consideration,

discussed at length in Hooker, is whether finding a justiciable interest in a given

plaintiff would contravene the considerations underlying the traditional rule. Id. at

612. The exponential expansion of charitable institutions justifies a reasonable

relaxation of any rule limiting enforcement to a busy Attorney General.

15

That case involved a charitable corporation, but we have recognized the

applicability of the rules relating to charitable trusts to such corporations. See

Owen v. Board of Dirs. of the Washington City Orphan Asylum, 888 A.2d 255, 260

(D.C. 2005) [hereinafter WCOA II](“[W]e held that rules governing charitable

trusts could be applied to charitable corporations, thus giving the Directors

standing to sue.”).

18

We are quite satisfied that, in the circumstances here, each of the plaintiffs

has the requisite “special interest” to provide it with standing to contest the

complained-of actions by the defendants under both the trust and corporate wrong-

doing theories.

Two of the plaintiffs are the ousted directors. They occupy a status both as

the alleged successor trustees to the Moon trust and as directors of a charitable

corporation akin to a charitable trust.16 See Board. of Dirs. of the Washington City

Orphan Asylum v. Board of Trs. of the Washington City Orphan Asylum, 798 A.2d

1068 (D.C. 2002) (explaining special interest exception for former directors

challenging their ouster); WCOA II, supra note 13, 888 A.2d at 260. Family

Federation asserts an interest in several capacities: as successor in interest to

Reverend Moon and his role as settlor of the trust,17 in nominations of directors,

16

In addition to finding that the ousted directors have special interest

standing, we also conclude that they fall within the definition of “among others” in

D.C. Code § 19-1304.05 (2012 Repl.) for enforcement of charitable trusts, and may

“maintain a proceeding to enforce the trust.” The District of Columbia is one of

many jurisdictions that has adopted the Uniform Trust Code (“UTC”). D.C. Code

§ 19-1307.03 (g) (2012 Repl.), which establishes that when co-trustees are

appointed to act as stewards of a trust, “[e]ach trustee shall exercise reasonable

care to . . . [p]revent a co[-]trustee from committing a serious breach of trust; and .

. . [c]ompel a co[-]trustee to redress a serious breach of trust.”

17

See D.C. Code § 19-1304.05 (c) (2012 Repl.) (“The settlor of a charitable

trust, among others, may maintain a proceeding to enforce the trust.”).

19

and as an overarching superior and benefiting entity in UCI’s proper role to further

the mission of Family Federation and the Unification Church. The Universal

Peace Foundation was a major beneficiary from UCI for three decades,

comfortably falling within the Hooker requirement that a beneficiary be in a class

limited in number and that the nature of the challenge be to an extraordinary

measure.18 Furthermore, in Hooker, the plaintiffs granted standing were not even

current beneficiaries of the charitable corporation, only prospective ones, quite

contrary to the Universal Peace Foundation’s long--term status here. And the

contributions by the Japanese Church go far beyond the asserted rule that donors

ordinarily cannot sue charities unless they restrict their gifts, as we discuss in

subpart 3 infra.19

The defendants argue, however, that even if the plaintiffs have standing, “the

complaint does not allege facts permitting plausible inferences that UCI is

governed by a secret trust, by-law, and agency agreement that are each inconsistent

with its formal and legally-binding Articles of Incorporation and By-laws.” This

18

All plaintiffs are challenging an extraordinary measure—fundamentally

changing the purpose of UCI and taking steps to divest itself from the Unification

Church.

19

In addition, the Japanese Church alleges that it was a co-settlor of the

trust.

20

argument essentially mirrors the fallacy in limiting considerations to formal

documents discussed in the abstention context in part III (B)(1) infra. We see no

inherent reason why any of the allegations in the complaint should be dismissed at

this point as utterly implausible, given the legal doctrines governing the counts set

forth.

To survive a 12 (b)(6) motion to dismiss, a complaint “must contain

sufficient factual matter, accepted as true, to state a claim to relief that is plausible

on its face.” Grimes v. District of Columbia, 89 A.3d 107, 111-12 (D.C. 2014)

(quoting Potomac Dev. Corp. v. District of Columbia, 28 A.3d 531, 544 (D.C.

2011) (internal quotations omitted)). The facts pleaded must amount to more than

simple legal conclusions, id. at 112, i.e., “more than an unadorned, the-defendant-

unlawfully-harmed-me accusation[s],” Potomac Dev. Corp., supra, 28 A.3d at 544,

and when well-pleaded, we “assume their veracity and then determine whether

they plausibly give rise to an entitlement to relief.” Grimes, supra, 89 A.3d at 112

(citation omitted).

In particular, defendants contend that plaintiffs’ claim must fail because they

failed to plead sufficient facts to plausibly establish that Reverend Moon intended

to create an oral trust in 1975, and that the trust was extinguished when UCI came

21

into existence as a corporation. However the evidence may eventually turn out to

be, we are not persuaded that any decision on this issue can be based on an

inadequacy in the complaint. A writing is not required to create a valid trust.

Intent may be established by “written or spoken language or by conduct, in light of

all surrounding circumstances.” Cabaniss v. Cabaniss, 464 A.2d 87, 91 (D.C.

1983). And it is not implausible that the establishment of UCI was intended to

continue the trust in corporate form. The trustee of a trust has the “[p]ower to form

a corporation or other entity . . . for the purpose of carrying on business or

investment activities of the trust” and the trustee’s various fiduciary duties apply

“to operation of the entity.” Restatement (Third) of Trusts § 86 cmt. e (2007).

Moreover, unlike the situation in Save Immaculate/Dunblane, Inc. v. Immaculata

Preparatory Sch. Inc., 514 A.2d 1152, 1157 (D.C. 1986), relied on by defendants,

here the alleged trust can be viewed as not in conflict with the Articles of

Incorporation of UCI, but rather a direction for their exercise.

2. Breach of Fiduciary Duty as Agent

“Whether an agency relationship exists in a given situation depends on the

particular facts of each case.” Judah v. Reiner, 744 A.2d 1037, 1040 (D.C. 2000)

(citing District of Columbia v. Hampton, 666 A.2d 30, 38 (D.C. 1995)). As

22

already indicated, the complaint identifies Family Federation as the entity that

directs Unification Churches worldwide. It asserts that the Church designates

certain organizations as “providential organizations,” which are organizations that

were founded by Reverend Moon as part of his wider ministry. It further asserts

that heads of these providential organizations are appointed by, and subject to

removal by, Family Federation. UCI is said to be one of these providential

organizations.

In the third count, Family Federation makes the following assertion:

As President and Chairman of the Board of Directors of

UCI, Preston Moon is the head of a providential

organization of the Unification Church and an agent of

the Family Federation. In accepting this position,

Preston Moon agreed to act on behalf of the Family

Federation and Subject to the Family Federation’s control

and direction.

Family Federation also alleges that the other four directors wrongfully aided and

abetted Preston Moon in his breaches of his duties as agent of Family Federation.

Specifically in regards to count three, breach of principal-agent relationship, but in

a sense in all claims, Family Federation asserts that it is the principal and UCI is

the agent. Taking these assertions as true, Family Federation as principal clearly

has standing to assert breaches of the fiduciary relationship created by Moon’s

23

position as agent. Nor is such a relationship inherently implausible, given the other

allegations in the complaint.

3. Breach of Contract and Quasi-Contract Claims

The Japanese Church’s participation in this litigation is based primarily on

its prominent role in funding the operations of UCI with hundreds of millions of

dollars over a period of years. The Japanese Church alleges a contractual breach:

“A condition of the Japanese Church’s contributions to UCI was the understanding

that those funds would be used in a manner consistent with the purposes for which

the [UCI] was established.”

It is true that the general rule at common law was that “a donor who has

made a completed charitable contribution . . . as an absolute gift . . . had no

standing to bring an action to enforce the terms of his or her gift or trust . . . .”

Carl J. Herzog Found., Inc. v. University of Bridgeport, 699 A.2d 995, 997 (Conn.

1997); accord Irish J. Goodwin, Donor Standing to Enforce Charitable Gifts:

Civil Society vs. Donor Empowerment, 58 Vand. L. Rev. 1093, 1145 (2005). But

24

the Japanese Church denies that the funding it provided was “an absolute gift.”20

Each claim strongly characterizes the contributions as a restricted gift made to a

charitable corporation; funds that were contributed pursuant to a “condition” or

“promise” or “understanding.” Like any other transaction, there is no inherent

reason why funds could not be provided to a corporation, charitable or otherwise,

with a contractual understanding as to how the funds were to be used and thus

standing is established with respect to enforcing the restriction on the donations.

Turning to whether the Japanese Church has pleaded sufficient facts, we

agree with the trial judge that “[b]ased on the facts provided in the [c]omplaint, the

[c]ourt can reasonably infer that UCI had an obligation to use [the Japanese

Church’s] funds for an express purpose, and it breached that obligation by

20

The Restatement recognizes that when a contribution or disposition is

made to an “institution for a specific purpose . . . such as to support medical

research . . . or to establish a scholarship fund in a certain field of study,”

Restatement (Third) of Trusts § 28, cmt. a (Am. Law Inst. 2003), then such a

specifically targeted gift or contribution “creates a charitable trust of which the

institution is the trustee . . . .” Id. The Restatement goes on to note that when a

“nonprofit organization receives a restricted gift or devise that applicable law treats

as a charitable trust . . . special-interest standing entitles the settlor to maintain a

suit against the trustee-organization,” although “only to enforce the restriction.”

Restatement (Third) of Trusts § 94, cmt. g (3) (Am. Law Inst. 2012). While a

restricted gift is not “a trust in the technical sense” and is “not bound by all the

limitations and rules which apply to a technical trustee,” the nonprofit organization

“may not . . . receive a gift made for one purpose and use it for another . . . .” St.

Joseph’s Hosp. v. Bennett, 22 N.E.2d 305, 308 (N.Y. 1939).

25

allegedly diverting funds away from the specified purposes for which they were

contributed,” and thus pleaded sufficient facts for its contract claim. At the

pleading stage, such a contractual or quasi-contractual relationship is not

implausible and the Japanese Church has standing to assert the claims.

In summation, all plaintiffs have alleged their respective injuries, traceable

to the defendants’ actions, and the trial court can provide redress if the plaintiffs

meet their respective burdens. See Padou v. District of Columbia, 77 A.3d 383,

389 (D.C. 2013). All parties have the requisite standing. Moreover, each claim

has been pleaded with sufficient facts to withstand a Rule 12 (b)(6) challenge. The

trial judge’s denial of the defendants’ motion taken on cross-appeal is therefore

affirmed.

III. Religious Abstention

We now turn to the direct appeal from the trial court’s dismissal of

plaintiffs’ complaint. The trial court concluded that, under the doctrine of religious

abstention mandated by the First Amendment, it lacked subject matter jurisdiction

26

pursuant to Super. Ct. Civ. R. 12 (h)(3).21 The application vel non of religious

abstention has been treated as one of subject matter jurisdiction, Heard v. Johnson,

810 A.2d 871, 877 (D.C. 2002) (citation omitted), and the issue of subject matter

jurisdiction is a question of law that this court reviews de novo, Second Episcopal

Dist. African Methodist Episcopal Church v. Prioleau, 49 A.3d 812, 815 (D.C.

2012).

The trial court found that defendants had advanced a ‘factual attack’ on the

complaint, “challeng[ing] the existence of subject matter jurisdiction irrespective

of the pleadings.” Heard, supra, 810 A.2d at 878. However, at the time, discovery

was in its infancy and in fact, as we read the record, the trial court in its ruling

generally treated the allegations of plaintiffs as true and did not rely to any

significant extent on other evidence on the issue.

21

That subsection provides: “Whenever it appears by suggestion of the parties

or otherwise that the court lacks jurisdiction of the subject matter, the court shall

dismiss the claim.” Defendants raised the issue by a motion for judgment on the

pleadings, citing Super. Ct. Civ. R. 12 (c). Challenges to subject-matter

jurisdiction may also be raised by a motion under Super. Ct. Civ. R. 12 (b)(1).

When a party challenges the trial court’s subject matter jurisdiction over the case

pursuant to Rule 12 (c), trial court should treat the motion for judgment on the

pleadings as if it had been brought under Rule 12 (b)(1) (lack of subject matter

jurisdiction). See Kirkham v. Societe Air France, 429 F.3d 288, 291 (D.C. Cir.

2005); 5C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure

§ 1367, at 221 (3d ed. 2004).

27

A. The Religious Abstention Doctrine

As we recently reviewed at some length, “The First Amendment provides, in

pertinent part, that ‘Congress shall make no law respecting an establishment of

religion, or prohibiting the free exercise thereof.’” Samuel v. Lakew, 116 A.3d

1252, 1256 (D.C. 2015) (quoting U.S. Const. amend. I.). Together, the Free

Exercise and Establishment Clauses operate to “severely circumscribe the role that

civil courts may play in the resolution of disputes involving religious

organizations.” Id. at 1256-57 (quoting Meshel v. Ohev Sholom Talmud Torah,

869 A.2d 343, 353 (D.C. 2005)). The First Amendment seeks to preserve the

autonomy of religious entities “to decide for themselves, free from state

interference, matters of church government as well as those of faith and doctrine.”

Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 132 S. Ct. 694,

704 (2012) (citation omitted).

Nonetheless, the Free Exercise Clause “does not mean . . . that churches are

above the law or that there can never be a civil court review of a church action,”

Heard, supra, 810 A.2d at 879. As we have recognized repeatedly, “[n]ot every

civil court decision . . . jeopardizes values protected by the First Amendment.” Id.

(citation omitted); see also Bible Way Church of Our Lord Jesus Christ of

28

Apostolic Faith of Wash., D.C. v. Beards, 680 A.2d 419, 427 (D.C. 1996)

(recognizing that “occasions can arise when civil courts are permitted to address

church activity without running afoul of the First Amendment”). “Religious

organizations come before [the courts] in the same attitude as other voluntary

associations for benevolent or charitable purposes, and their rights of property, or

of contract, are equally under the protection of the law . . . .” Watson v. Jones, 80

U.S. 679, 714 (1871). Especially when a dispute over property arises, “[t]here can

be little doubt about the general authority of civil courts to resolve [the issue],” as

“[t]he State has an obvious and legitimate interest in the peaceful resolution of

property disputes, and in providing a civil forum where the ownership of church

property can be determined conclusively.” Jones v. Wolf, 443 U.S. 595, 602

(1979). Generally, “[c]ivil courts do not inhibit free exercise of religion merely by

opening their doors to disputes involving church property.” Presbyterian Church

in the U.S. v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U.S.

440, 449 (1969).

In sum, the mere fact that the issue before the court involves a church or

religious entity does not thereby bar access to our courts. On the contrary, the

courts as the ultimate arbiter of disputes short of anarchy and self-help have a

29

constitutional duty to carry out their basic function to the maximum permissible

extent.

In determining the line where the First Amendment bars judicial resolution

of disputes, this jurisdiction has consistently relied on the application of “neutral

principles of law” to the parties’ contentions. “The touchstone for determining

whether civil courts have jurisdiction is whether the courts may employ ‘neutral

principles of law’ and ensure that their decisions are not premised on the

‘consideration of doctrinal matters, whether the ritual and liturgy of worship or the

tenets of faith.’” Prioleau, supra, 49 A.3d at 816 (citing Meshel, supra, 869 A.2d

at 354 (citation omitted)).

B. Premature Decision on Application of Doctrine

As already described, plaintiffs’ complaint in this case is based upon four

distinct causes of action based upon four familiar fields of law. In its allegation of

the establishment of a trust and its breach, plaintiffs invoke an ancient and well-

developed legal area with deep roots in Anglo-American law. On the count of

corporate duties and irregularities, the plaintiffs implicate another much-litigated

area. In its count on breach of contract and quasi-contract, plaintiffs raise issues

30

encountered by first-year law students. Finally, in its count on principal and agent,

plaintiffs rely upon doctrines basic to our legal system. Thus, on its face, it would

appear that this dispute is susceptible to resolution by “neutral principles of law”

not requiring any forbidden inquiry into matters barred by the First Amendment.

In our view, in the present posture of this particular case, a contrary conclusion

should be based on a fuller exposition of the facts underlying each cause of action

and not be decided on the pleadings prior to discovery and further evidentiary

presentation by plaintiffs.

To be sure, a court must “look not at the label placed on the action but at the

actual issues the court has been asked to decide.” Samuel, supra, 116 A.3d at 1259

(citations omitted). And we are not unmindful of the principle that in a First

Amendment case, a plaintiff must present facts that take the case outside the

constitutional constraint and bears the ultimate burden to establish jurisdiction.22

As indicated in this opinion, however, we are satisfied that the plaintiffs’ pleadings

are sufficient to survive dismissal on these grounds at this point in the precise

circumstances here. This is not a suit directly against a church, synagogue, or

22

In this regard, we note, as we did in Samuels, that “The Supreme Court in

Hosanna-Tabor [Evangelical Lutheran Church & Sch. V. EEOC] held that a

defense rooted in the religious clause of the First Amendment was an affirmative

defense, rather than a jurisdictional bar.” 116 A.3d at 1261 n.16 (citing Hosanna-

Tabor, 132 S. Ct. at 710 n.4). No party has raised this issue before us.

31

mosque or their immediate leadership. On the contrary, the defendant entity at

issue here is a taxable, albeit nonprofit, corporation. Nor does it appear that the

individual defendants have a direct religious role within the church as such, but

rather are basically operating in a secular capacity. Any claim for early immunity

from suit is far less compelling than may be the case in more typical disputes

evoking First Amendment considerations. And, as we show, the actual issues

determinative of the outcome of this case may well be resolvable without

infringement into areas precluded from court consideration by the First

Amendment.

1. Elements of Proof

In its order of dismissal, the trial court appeared to be particularly concerned

with one aspect of this case. In its view, based on “[t]he available corporate

documents in this case,” the trial court could not adjudicate any of the claims under

neutral principles of law. We agree with plaintiffs’ argument that this pure

documentary approach to deciding the abstention issue may have erroneously

permeated the entire analysis.

32

The trial court read several decisions of this court23 to stand for the

proposition that when a civil court is able to resolve a dispute implicating questions

of church doctrine or polity, “it was able to do so because the corporate documents

clearly established that [the legal theories at issue] were firmly established as

distinct and separate from matters of church doctrine or polity.” Based on that

reading, the trial court concluded that “[t]he available corporate documents in this

case . . . are insufficient to permit the court to exercise neutral principles of law

which could provide a sole basis for the resolution of this dispute.” It repeated this

conclusion when it specifically found that the claims of breach of trust and breach

of fiduciary duty could not be adjudicated because “there are no neutral principles

of law apparent from the documents which have been presented to the Court” that

would enable it to do so without “implicating the Unification movement’s polity.”

We do not take issue with the trial court’s attachment of importance to

UCI’s governing documents. But it does not follow that the application of neutral

principles of law must depend on documentary evidence alone. This court has

interpreted Jones v. Wolf, supra, and Maryland & Virginia Eldership of the

23

E.g., Prioleau, supra, 49 A.3d at 817; United Methodist Church, Balt.

Annual Conference v. White, 571 A.2d 790, 793 (D.C. 1990); Save

Immaculata/Dunblane, Inc., supra, 514 A.2d at 1153-57.

33

Churches of God24 to permit civil courts to “look to familiar corporate and trust

principles of law for relief,” so long as courts do “not decide[] questions of church

doctrine, polity, or administration.” Save Immaculata/Dunblane, Inc., supra, 514

A.2d at 1156-57. Jones itself permitted civil courts to adjudicate a property

dispute under neutral principles of law, provided that the intent of the parties was

“in some legally cognizable form.” 443 U.S. at 606. Legal rules underlying proof

in trust, corporate, contract, and agency disputes are replete with circumstances

under which non-documentary evidence may be relevant and permitted. See

Bishop & Diocese of Colo. v. Mote, 716 P.2d 85, 100 (Colo. 1986) (discussing

Jones, supra, 443 U.S. at 610-21) (noting that the Constitution does not mandate

such a “narrow inquiry”). Neutral principles of law analysis may include “other

principles from the common and statutory law of property, contracts, corporations

or voluntary associations . . . .” Id. at 100-01; accord Hope Presbyterian Church

of Rogue River v. Presbyterian Church (U.S.A.), 291 P.3d 711, 722-23 (Or. 2012)

(noting that under the neutral principles approach, a civil court would be permitted

to determine whether a trust existed under the Uniform Trust Code, which does not

require documentary evidence to create a trust). Such an approach permits the

parties to marshal as much evidence in support of their claim as possible, and

24

Maryland & Virginia Eldership of the Churches of God v. Church of God

at Sharpsburg, Inc., 396 U.S. 367 (1970).

34

permits the trial court to make a reasoned, thoughtful determination on the issue of

subject matter jurisdiction based on a more robust record, and helps to ensure that

the doors to the civil courthouse are not closed prematurely.

2. The Individual Counts

On the breach of trust and corporate misconduct counts, the trial court was

understandably concerned about its ability to locate the alleged authority of

Reverend Moon to name the directors and how such exercise of authority was

consistent with director fiduciary duty to UCI. Such concern, however, seems to

postulate the binding authority of the corporate documents. Proof of the existence

and terms of the alleged trust and of the circumstances surrounding the creation

and operations of the corporation could impose an overriding fiduciary duty not

necessarily inconsistent with the corporate documents.

In certain circumstances, a long-standing pattern or practice of corporate

behavior may give rise to a by-law. See, e.g., National Confederation of Am.

Ethnic Grps. v. Genys, 457 A.2d 395, 399 (D.C. 1983) (noting that the “long and

continuous usage of proxy voting has the force and effect of a by[-]law” (internal

quotations omitted)) and citing, inter alia, Walker v. Johnson, 17 App. D.C. 144

35

(D.C. Cir. 1900); see also Lewis v. Don King Prods., Inc., 94 F. Supp. 2d 430, 444

(S.D.N.Y. 2000); Lamm v. Board of Comm’rs for Vermilion Hosp. Serv. Dist. No

1, 378 So. 2d 919, 922 (La. 1979); Dousman v. Kobus, No. 19258-NC, 2002 WL

1335621, at *13, 15 (Del. Ch. June 6, 2002) (quoting and citing In re Osteopathic

Hosp. Ass’n of Del., 195 A.2d 759, 762 (Del. 1963)). The trial court dismissed

plaintiffs’ argument, concluding that such an implied by-law relating to

appointment of directors could not exist, because it would breach the directors’

fiduciary duty to act in the best interest of the corporation.

We believe that the trial court’s conclusion was premature. It is of course a

“basic principle” of corporate law “that directors are subject to the fundamental

fiduciary duties of loyalty and disinterestedness.” Andarko Petroleum Corp. v.

Panhandle E. Corp., 545 A.2d 1171, 1174 (Del. 1988). But the ultimate question

here may be, under all the circumstances, where exactly that fiduciary duty lay.

For example “in a parent and wholly-owned subsidiary context, the directors of the

subsidiary are obligated only to manage the affairs of the subsidiary in the best

interests of the parent and its shareholders.” Id. Here, plaintiffs have alleged in

effect that although UCI was established as a nonprofit corporation, it was and is in

fact a subsidiary entity, both to Reverend Moon’s oral trust in 1977, and to Family

Federation. The original Articles acknowledge Reverend Moon to be the leader of

36

the Unification Church movement. For three decades, plaintiffs assert, Reverend

Moon and his church entities guided the corporation in its activities and named

every member to the Board of Directors. Moreover, and importantly, as already

noted, these practices were not necessarily inconsistent with the corporate

documents and might be viewed as supplemental thereto. It is in this context, if

fully fleshed out and proven, that the precise fiduciary duties can be adjudged.

Moreover, plaintiffs here in a separate count have alleged that a concrete

principal-agent relationship existed between Family Federation and Preston Moon

with respect to the operation of UCI. The trial court was concerned about this

count as obligating it to impermissibly inquire into the governing hierarchy of the

Church. But we fail to see why this necessarily must prove to be the case. The

relationship between Preston Moon and Family Federation does not necessarily

turn on facts involving religious doctrine and practices or the internal policies of

the Unification Church. Plaintiffs assert that the “right to control and direct”

Preston Moon can be established “through documents[,] [] testimony,” and the

actual course of dealings between the parties, and not through application of “the

Divine Principle or through any interpretation of Unification Church doctrine.”

Neutral principles of law can govern the establishment of an agency relationship,

and it may be that an examination of the structure and long-standing practices of

37

the Church will provide an answer to the actual existence of such a relationship.

See Heard, supra, 810 A.2d at 880 (applying neutral principles of law to

employment disputes); EEOC v. Miss. Coll., 626 F.2d 477 (5th Cir. 1980). At this

stage, we believe that it is premature to preclude plaintiffs from proffering

evidence in support of their claim that would permit an adjudication of this claim

without impermissible intrusion into “religious doctrine and practice.”

Apart from the appointment of directors, the trial court expressed concern

about its ability to determine whether, in their actions reorganizing the corporation

and changing its expenditure recipients, the defendants had deviated from the

original purpose of the corporation or had acted ultra vires. In particular, it failed

to see how it could determine whether those actions were or were not in accord

with the “Divine Principle” expressed in the Articles of Incorporation.

This is also an understandable concern but one, we think, that does not

absolutely preclude consideration of plaintiffs’ claims at this point. Determining

who the intended beneficiaries of a trust were and whether corporate assets were

used in accordance with corporate laws are normally governed by neutral

principles of law. See Hooker, supra, 579 A.2d at 612. While it may be difficult

at times to draw clear lines, a deviation by a charitable corporation from its original

38

purpose may be so great as to preclude any argument that correction was not called

for.

It can be a breach of duty to “change substantially the objects and purposes

of the corporation.” 7A Fletcher Cyclopedia of the Law of Corps. § 3718 (2006);

see Queen of Angels Hosp. v. Younger, 136 Cal. Rptr. 36, 41 (Cal. Ct. App. 1977)

(“The question is whether [the corporation] can cease to perform the primary

purposes for which it was organized. That, we believe, it cannot do.”); Hollinger

Int’l, Inc. v. Black, 844 A.2d 1022 (Del. Ch. 2004), aff’d, 872 A.2d 559 (Del.

2005) (distinguishing legal powers of directors from equitable duty); Matter of

Manhattan Eye, Ear & Throat Hosp. v. Spitzer, 715 N.Y.S. 2d 575, 595 (N.Y. Sup.

Ct. 1999) (breach of fiduciary duty to depart “from the charity’s central and well-

understood mission”).

From plaintiffs’ allegations, it appears that a profound alteration in the

corporation, perhaps recognized by the directors themselves in changing the name

and amending the article of incorporation, occurred under Preston Moon. An

organization plainly established to promote the preservation of African wildlife

and acquiring vast funds on that basis might well be barred from switching its

purpose to expenditures on domestic cats and dogs regardless of how technically

39

such a switch might be read into the text of its articles of incorporation. On the

present record, we cannot say with confidence that a somewhat analogous

transformation cannot be shown to have occurred here. And, in any event, the

allegation that corporate funds were used here to benefit one of the directors

personally would appear readily subject to court review. 25

To be sure, the trial court should not be called on to make a lengthy and

painstaking interpretation of UCI’s “Divine Principle,” as “the court must be

cautious not to entangle itself in the decision-making process of the Church with

regard to its religious obligations.” Costello Publ’g Co. v. Rotelle, 670 F.2d 1035,

1050 n.31 (D.C. Cir. 1981). However, these concerns “should not block the court,

from at least considering,” id., “the circumstances of the alleged activity to

determine whether a religious concern existed and whether a nonintrusive remedy

could be fashioned.” Minker v. Baltimore Annual Conference of United Methodist

Church, 894 F.2d 1354, 1360 (D.C. Cir. 1990) (discussing Costello Publ’g Co.,

supra, 670 F.2d at 1050 n.31). At least some factual inquiry by the trial court into

25

The same considerations apply to the Japanese Church’s claims of

contract and quasi-contractual breaches, which are based upon the same assertion

of misuse of funds donated by it, and it may be that the contract terms limited the

permissible use of corporate funds more sharply than the articles themselves. “A

church is always free to burden its activities voluntarily through contracts, and

such contracts are fully enforceable in civil court.” Minker, supra, 894 F.2d at

1359 (citing Watson, supra, 80 U.S. at 714).

40

the nature of UCI’s use of assets by the trial court would not appear to violate the

First Amendment.

In sum, we agree with plaintiffs that the record at this early stage of a

difficult and complicated dispute with many ramifications does not support a

conclusion that the trial court must engage in inquiry banned by the First

Amendment in order to resolve any of plaintiffs’ claims. See Prioleau, supra, 49

A.3d at 817 (concluding that at the motion to dismiss stage, “the record as

developed” did not suggest that resolving plaintiff’s contract claim would “require

the court to entangle itself in church doctrine”). Were we to hold that, based on

the current record, the First Amendment precludes our civil courts from

adjudicating plaintiffs’ claims, then it would approach granting immunity to “every

nonprofit corporation with a religious purpose from breach of fiduciary suits . . .

and prevent any scrutiny of questionable transactions.” Askew v. Trustees of the

Gen. Assembly of the Church of the Lord Jesus Christ of the Apostolic Faith, Inc.,

644 F. Supp. 2d 584, 597 (E.D. Pa. 2009).26

26

We take special note, however, as we did in Prioleau, that “going

forward, if it becomes apparent to the trial court that this dispute does in fact turn

on matters of doctrinal interpretation or church governance, the trial court may

grant summary judgment to avoid excessive entanglement with religion.” 49 A.2d

at 818 (internal quotation and citation omitted).

41

IV. Conclusion

Accordingly, we affirm the order of the trial court denying defendants’

motion to dismiss, we reverse the order of the trial court granting defendants’

motion for judgment on the pleadings, and we remand the case for further

proceedings consistent with this opinion.

So ordered.