Bigelow v. Sassafras Grove Baptist Church

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA15-557

Filed: 10 May 2016

Caswell County, No. 13 CVS 288

REV. CARL E. BIGELOW, Plaintiff,

v.

SASSAFRAS GROVE BAPTIST CHURCH, BOARD OF DEACONS OF SASSAFRAS

GROVE BAPTIST CHURCH, WILLIE L. TURNER, JAMES HINTON, LOUIS

HENDERSON, BOBBY R. JONES, ROY JOHNSON, SELMA S. HUNTER, CINDY

HENDERSON, REV. DAVID HOLLOWAY, and JOHN DOES, Defendants.

Appeal by plaintiff from order entered 20 January 2015 by Judge W. Osmond

Smith, III in Caswell County Superior Court. Heard in the Court of Appeals 4

November 2015.

Hicks McDonald Noecker LLP, by David W. McDonald, for plaintiff-appellant.

Law Offices of R. Lee Farmer, PLLC, by R. Lee Farmer, for defendants-

appellees.

GEER, Judge.

Plaintiff, the Reverend Carl E. Bigelow, appeals from an order granting

defendants’ motion to dismiss for failure to state a claim upon which relief can be

granted. Plaintiff, a former pastor of defendant Sassafras Grove Baptist Church (“the

“Church”) who became disabled, has brought claims for both breach of contract and

violation of the North Carolina Wage and Hour Act for failure to pay compensation

and benefits plaintiff alleges is due to him pursuant to a written employment contract

he entered into with defendants. While defendants have argued that two overlapping

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doctrines emanating from the First Amendment, the “ministerial exception” and the

“ecclesiastical abstention doctrine,” preclude the courts from deciding plaintiff’s

claims, we hold, consistent with other jurisdictions addressing this issue, that those

doctrines do not bar courts from resolving contractual disputes not involving

ecclesiastical issues and requiring only application of neutral principles of contract

and statutory law. We, therefore, reverse the trial court’s order.

Facts

On 25 October 2013, plaintiff filed a complaint against defendants -- the

Church and its Board of Deacons, including Willie Turner, James Hinton, Louis

Henderson, Bobby Jones, Roy Johnson, Selma Hunter, Cindy Henderson, and the

Revered David Holloway -- for breach of contract and violation of the North Carolina

Wage and Hour Act. The complaint alleged the following facts.

Plaintiff began serving as a part-time pastor of “the Church,” which is located

in Yanceyville, North Carolina, in 1975. He held this part-time position until 14

February 2001, during which time he also worked for General Electric Co. (“GE”) in

Mebane, North Carolina. In order to be eligible for retirement at GE, plaintiff was

required to continue working there through 13 February 2013. However, on 14

February 2001, plaintiff resigned his position with GE and entered into a contract

with the Church entitled “Agreement of Full Time Pastorship.” This contract

consisted of several provisions that are pertinent to this appeal:

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The Pastor shall serve the church for an indefinite

period since there is no scriptural support of tenure. Where

as, by [sic] Minister CARL BIGELOW is resigning from his

current position of employment and would be eligible for

retirement in the next (12) years, the [sic] accepts the

liability of his employment and livelihood of his family for

the enduring time until retirement.

If the Pastor should become disabled to carry on his

work, he shall be paid his full salary until, the disability

insurance begin to paid [sic] (which is provide [sic] by

church) and relieves church of its responsibility to Pastor.

....

Where as, at any time the church shall become

dissatisfied with the services of Pastor and ask for his

resignation, the congregation at that time, shall take a vote

and be governed by the majority of voting members eligible

(members in good standing with church). At that time the

church shall pay the Pastor the total package in advance

or his services shall continue until such time the church

shall meet this requirement.

After 10 years of serving as head pastor of the Church, plaintiff contracted

kidney disease in September 2011, was hospitalized, and underwent surgery. As a

result, he was no longer able to serve as the pastor of the Church. In addition, because

the long-term disability insurance policy mentioned in the employment agreement

lapsed prior to plaintiff’s disability, plaintiff was without any disability coverage. At

this point in time, it appears, based on the complaint, that the Church had ceased all

payment of plaintiff’s salary and benefits.

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Plaintiff filed suit against the Church on 25 October 2013. On 23 December

2013, defendants filed a motion to dismiss contending that the trial court did not have

jurisdiction to hear this dispute and that plaintiff had failed to state a claim upon

which relief could be granted. Defendants subsequently also filed a motion for

summary judgment supported by the affidavits of defendants Willie L. Turner and

James Hinton on 30 December 2014.

The trial court heard defendant’s motion to dismiss on 6 January 2015.

Because plaintiff did not receive proper notice of defendant’s motion for summary

judgment and the accompanying affidavits, the trial court limited the hearing to the

motion to dismiss and did not consider the affidavits.1 On 20 January 2015, the trial

court entered an order granting defendants’ motion to dismiss. Plaintiff timely

appealed to this Court.

Discussion

“This Court reviews de novo a trial court’s ruling on a motion to dismiss.”

Transp. Servs. of N.C., Inc. v. Wake Cnty. Bd. of Educ., 198 N.C. App. 590, 593, 680

S.E.2d 223, 225 (2009). “[T]he question for the court is whether the allegations of the

complaint, treated as true, are sufficient to state a claim upon which relief may be

granted under some legal theory, whether properly labeled or not.” Blinson v. State,

1Defendants’ motion for summary judgment and the accompanying affidavits were included in

the Record on Appeal. However, because defendants have made no argument on appeal that the trial

court erred in refusing to consider these affidavits, we have not addressed them in this opinion.

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186 N.C. App. 328, 335, 651 S.E.2d 268, 274 (2007). “The court must construe the

complaint liberally and ‘should not dismiss the complaint unless it appears beyond a

doubt that the plaintiff could not prove any set of facts to support his claim which

would entitle him to relief.’ ” Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396,

400, 580 S.E.2d 1, 4 (quoting Block v. Cnty. of Person, 141 N.C. App. 273, 277-78, 540

S.E.2d 415, 419 (2000)), aff’d, 357 N.C. 567, 597 S.E.2d 673 (2003).

I

We first address whether plaintiff adequately stated claims for breach of

contract and violation of the North Carolina Wage and Hour Act. “The elements of a

claim for breach of contract are (1) existence of a valid contract and (2) breach of the

terms of that contract.” Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000).

Here, plaintiff alleged the existence of a written employment contract between

himself and the Church, signed by several representatives of the Church on 14

February 2001.

Specifically, plaintiff alleged that he was guaranteed under the contract

“salary continuation upon his disability” and “salary, housing, utilities, social

security, and medical insurance . . . through February 13, 2013” in consideration for

his forfeiture of his previous job’s benefits. He further alleged that defendants

breached this contractual provision upon their refusal to pay his salary and other

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benefits when he became disabled. These allegations taken as true are sufficient to

state a claim for breach of contract.

In arguing that plaintiff has failed to state a claim for relief, defendants rely

on the principle that, in the absence of an employment contract providing for a

specified term of employment, plaintiff is an employee at will and cannot sue for

breach of contract. This argument is beside the point.

Certainly, it is well established “that absent some form of contractual

agreement between an employer and employee establishing a definite period of

employment, the employment is presumed to be an ‘at-will’ employment,” but in that

event, “the employee states no cause of action for breach of contract by alleging that

he has been discharged without just cause.” Harris v. Duke Power Co., 319 N.C. 627,

629, 356 S.E.2d 357, 359 (1987) (second emphasis added), disapproved of on other

grounds by Kurtzman v. Applied Analytical Indus., Inc., 347 N.C. 329, 493 S.E.2d 420

(1997). Thus, Harris mandates that an “at-will” employee cannot state a claim for

breach of contract based on wrongful discharge.

The “at will” doctrine does not preclude an at-will employee from suing for

breach of contract with respect to benefits or compensation to which the parties

contractually agreed. Thus, in Brooks v. Carolina Tel. & Tel. Co., 56 N.C. App. 801,

804-05, 290 S.E.2d 370, 372 (1982), when the defendant pointed to “at will” cases in

arguing that the plaintiff was not entitled to sue for breach of contract with respect

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to a severance agreement, this Court held: “Those cases dealt with each employee’s

right to continued employment and did not deal with the issue of benefits or

compensation earned during employment.” Those cases are not apposite to the case

now before us. See also Way v. Ramsey, 192 N.C. 549, 551-52, 135 S.E. 454, 455 (1926)

(acknowledging that minister, who served at pleasure of his church organization,

could sue for breach of contract with respect to nonpayment of his salary).

Because plaintiff in this case is not challenging the basis for his dismissal, but

only seeks to recover money and benefits owed under the employment contract he

alleges he entered into with defendants, the “at will” doctrine is inapplicable.

Plaintiff has, therefore, properly alleged a claim for breach of his employment

contract’s provisions for compensation and benefits.

Plaintiff also alleged a claim under the North Carolina Wage and Hour Act.

Defendants do not address the sufficiency of those allegations. The Wage and Hour

Act provides: “Every employer shall pay every employee all wages and tips accruing

to the employee on the regular payday. Pay periods may be daily, weekly, bi-weekly,

semi-monthly, or monthly.” N.C. Gen. Stat. § 95-25.6 (2015). Further, “[a]ny

employer who violates the provisions of . . . G.S. 95-25.6 . . . shall be liable to the

employee . . . in the amount of their unpaid . . . compensation, or their unpaid amounts

due under G.S. 95-25.6 . . . .” N.C. Gen. Stat. § 95-25.22(a) (2015). See Meehan v.

Am. Media Int’l, LLC, 214 N.C. App. 245, 262, 712 S.E.2d 904, 914 (2011) (remanding

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to trial court for determination of salary due pursuant to a claim brought under the

Wage and Hour Act).

Plaintiff’s allegations that the contractually promised “salary” constituted

wages as defined in N.C. Gen. Stat. § 95-25.1 et seq. (2015), along with his allegation

that defendant wrongfully failed to pay that salary, sufficiently alleges a claim under

the North Carolina Wage and Hour Act. See Hamilton v. Memorex Telex Corp., 118

N.C. App. 1, 10, 454 S.E.2d 278, 282 (1995) (“[O]nce the employee has earned the

wages and benefits under this statutory scheme the employer may not rescind

them[.]”).

II

Defendants primarily based their motion to dismiss on their claim that

plaintiff’s causes of action are barred by the “ministerial exception” or the

“ecclesiastical abstention” doctrine.2 In making their argument on appeal, however,

defendants address almost exclusively the doctrine’s applicability to wrongful

discharge claims. Although defendants appear to assume that plaintiff is challenging

the termination of his employment, his complaint only asserts claims based on the

non-payment of contractually agreed upon compensation and benefits. Neither

doctrine, therefore, applies to plaintiff’s claims.

2Defendants merge the two doctrines, but since they are analytically distinct, we treat them

separately.

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We first note that although both legal doctrines bar certain claims against

religious institutions for reasons arising out of the Free Exercise and Establishment

Clauses of the First Amendment of the United States Constitution, our appellate

courts have not specifically addressed the ministerial exception and have only

discussed the jurisdictional limits set in place by the ecclesiastical abstention

doctrine. Because plaintiff argues both legal principles are inapplicable to his alleged

claims, we address each in turn.

The ministerial exception is best articulated in the United States Supreme

Court decision of Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C.,

___ U.S. ___, 181 L. Ed. 2d 650, 132 S. Ct. 694 (2012). We note that although North

Carolina appellate courts have not previously addressed the ministerial exception,

we are, of course, under the Supremacy Clause of the United States Constitution,

bound by Hosanna-Tabor’s application and construction of the First Amendment. See

State v. Elliott, 360 N.C. 400, 421, 628 S.E.2d 735, 749 (2006) (“The Supreme Court

of the United States is the final authority on federal constitutional questions.”).

We first note that the parties mistakenly assume that the ministerial exception

is a question of subject matter jurisdiction. Hosanna-Tabor clarifies, however, that

“the exception operates as an affirmative defense to an otherwise cognizable claim,

not a jurisdictional bar. That is because the issue presented by the exception is

‘whether the allegations the plaintiff makes entitle him to relief,’ not whether the

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court has ‘power to hear [the] case.’ ” ___ U.S. at ___ n.4, 181 L. Ed. 2d at 667 n.4,

132 S. Ct. at 709 n.4 (quoting Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247,

254, 177 L. Ed. 2d 535, 546, 130 S. Ct. 2869, 2877 (2010)).

In explaining the ministerial exception, Chief Justice Roberts wrote for the

Court: “Since the passage of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §

2000e et seq., and other employment discrimination laws, the Courts of Appeals have

uniformly recognized the existence of a ‘ministerial exception,’ grounded in the First

Amendment, that precludes application of such legislation to claims concerning the

employment relationship between a religious institution and its ministers.” Id. at

___, 181 L. Ed. 2d at 663, 132 S. Ct. at 705. “By imposing an unwanted minister, the

state infringes the Free Exercise Clause, which protects a religious group’s right to

shape its own faith and mission through its appointments. According the state the

power to determine which individuals will minister to the faithful also violates the

Establishment Clause, which prohibits government involvement in such

ecclesiastical decisions.” Id. at ___, 181 L. Ed. 2d at 663, 132 S. Ct. at 706.

At the conclusion of Chief Justice Roberts’ opinion, he limited the opinion’s

holding to the narrow circumstance of “employment discrimination suit[s] brought on

behalf of a minister, challenging her church’s decision to fire her” and specifically

“express[ed] no view on whether the exception bars . . . actions by employees alleging

breach of contract . . . .” Id. at ___, 181 L. Ed. 2d at 668, 132 S. Ct. at 710.

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Defendants, in relying on the ministerial exception set out in Hosanna-Tabor,

vigorously argue only that “it is the decision of a church to hire or fire its pastor that

is protected from judicial scrutiny[.]” Defendants cite no authority and provide no

argument why the ministerial exception, as articulated in Hosanna-Tabor, should

apply to claims based on nonpayment of compensation and benefits.

Although North Carolina courts have not expressly addressed the ministerial

exception, other jurisdictions have and, in accordance with Hosanna-Tabor, have

limited its application to the context of wrongful discharge suits not alleging a breach

of contract. The Supreme Court of Kentucky has held that “[secular] courts do have

jurisdiction to hear and resolve employment disputes, contract claims, tort claims, or

similar. And that authority is not lost as a result of the ministerial exception.” Kirby

v. Lexington Theological Seminary, 426 S.W.3d 597, 608 (Ky. 2014). Applying

Hosanna-Tabor, the Kirby court held that the ministerial exception barred the

plaintiff minister’s claim that her discharge by a defendant Seminary was racially

discriminatory. 426 S.W.3d at 614-15.

However, the court concluded that plaintiff’s breach of contract claim based on

the defendant Seminary’s violation of its tenure policy was not barred by the

ministerial exception:

When deciding whether a claim is barred by the

ministerial exception, it is important to remain mindful of

the ministerial exception’s underlying purpose: to allow

religious institutions, free from government interference,

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to exercise freely their right to select who will present their

faith tenets. Although state contract law does involve the

governmental enforcement of restrictions on a religious

institution’s right or ability to select its ministers, those

restrictions are not governmental restrictions. Simply put,

the restrictions do not arise out of government involvement

but, rather, from the parties to the contract, namely, the

religious institution and its employee.

Contractual transactions, and the resulting

obligations, are assumed voluntarily. Underneath

everything, churches are organizations. And, like any

other organization, a church is always free to burden its

activities voluntarily through contracts, and such contracts

are fully enforceable in civil court. Surely, a church can

contract with its own pastors just as it can with outside

parties. Enforcement of a promise, willingly made and

supported by consideration, in no way constitutes a state-

imposed limit upon a church’s free exercise rights.

We are not presented with a situation where the

government is inappropriately meddling in the selection of

who will minister to the congregation. Limits on a religious

institution’s ability to choose -- or the criteria for choosing

-- who will minister to its faithful are not being foisted on

the religious institution. The government had no role in

setting the limits on how the Seminary’s tenured

professors may be terminated. Instead, this is a situation

in which a religious institution has voluntarily

circumscribed its own conduct, arguably in the form of a

contractual agreement, and now that agreement, if found

to exist, may be enforced according to its own terms. That

cannot breach church autonomy. Arguably, instead, this

exemplifies religious autonomy because religious

institutions are free to set forth policies that align with

their respective mission.

Essentially, the Seminary willingly made a decision

to offer tenure -- a wholly secular concept -- in exchange for

professorial services. Providing substance to the offer of

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tenure, the Seminary explicitly stated in writing that it

would only terminate a tenured professor on three grounds

. . . . Of course, under the First Amendment, and the

ministerial exception for that matter, the Seminary enjoys

the right to excuse ministers as it sees fit. But here, the

Seminary circumscribed its right to excuse faculty,

ministers or not. The Seminary agreed to only express its

First Amendment right under limited conditions.

Id. at 615-16 (internal quotation marks and footnotes omitted).

Based on this analysis, the court concluded: “Accordingly, the Seminary’s

decision to fire a tenured professor, whether a minister or not, is completely free of

any government involvement or restriction. In the absence of government

interference, the ministerial exception cannot act as a bar to an otherwise legitimate

suit.” Id. at 617.

Other jurisdictions have similarly concluded that the ministerial exception

does not bar contractual claims. See Second Episcopal Dist. African Methodist

Episcopal Church v. Prioleau, 49 A.3d 812, 817 (D.C. 2012) (declining to extend

ministerial exception “to categorically bar any claim whatsoever by a ministerial

employee[,]” particularly where employee seeks salary owed under contract); Galetti

v. Reeve, 331 P.3d 997, 1001 (2014) (“As pled, it appears that Plaintiff can succeed on

her breach of contract claim without any religious intrusion. The district court does

not need to determine whether the Conference had cause to terminate Plaintiff’s

employment, but only whether the Conference complied with its contractual

obligation . . . .”).

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We find these decisions persuasive. Accordingly, because plaintiff’s complaint

does not challenge the Church’s decision to terminate his employment, but instead

seeks to enforce a contractual obligation regarding his compensation and benefits, we

hold that the ministerial exception does not apply and is not a basis for dismissal of

plaintiff’s claims.

We next address the ecclesiastical abstention doctrine, which North Carolina

courts hold is a jurisdictional bar to courts adjudicating “ecclesiastical matters of a

church.” Tubiolo v. Abundant Life Church, Inc., 167 N.C. App. 324, 327, 605 S.E.2d

161, 163 (2004) (“ ‘The courts of the State have no jurisdiction over and no concern

with purely ecclesiastical questions and controversies . . . .’ ” (quoting Braswell v.

Purser, 282 N.C. 388, 393, 193 S.E.2d 90, 93 (1972))); Smith v. Privette, 128 N.C. App.

490, 494, 495 S.E.2d 395, 397 (1998) (“The United States Supreme Court has

interpreted [the Establishment Clause] to mean that the civil courts cannot decide

disputes involving religious organizations where the religious organizations would be

deprived of interpreting and determining their own laws and doctrine.”).

“Our Supreme Court has held that a trial court’s exercise of jurisdiction is

improper only where ‘purely ecclesiastical questions and controversies’ are involved.”

Emory v. Jackson Chapel First Missionary Baptist Church, 165 N.C. App. 489, 492,

598 S.E.2d 667, 670 (2004) (quoting W. Conference of Original Free Will Baptists of

N.C. v. Creech, 256 N.C. 128, 140, 123 S.E.2d 619, 627 (1962)). An ecclesiastical

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matter is defined by our courts as “ ‘one which concerns doctrine, creed, or form of

worship of the church, or the adoption and enforcement within a religious association

of needful laws and regulations for the government of membership . . . .’ ” Tubiolo,

167 N.C. App. at 327, 605 S.E.2d at 163-64 (quoting E. Conference of Original Free

Will Baptists of N.C. v. Piner, 267 N.C. 74, 77, 147 S.E.2d 581, 583 (1966), overruled

in part on other grounds by Atkins v. Walker, 284 N.C. 306, 200 S.E.2d 641 (1973)).

Thus, “[t]he dispositive question is whether resolution of the legal claim requires the

court to interpret or weigh church doctrine.” Smith, 128 N.C. App. at 494, 495 S.E.2d

at 398.

“While the Courts can under no circumstance referee ecclesiastical disputes,”

Tubiolo, 167 N.C. App. at 329, 605 S.E.2d at 164, they “do have jurisdiction, as to

civil, contract and property rights which are involved in, or arise from, a church

controversy.” Reid v. Johnston, 241 N.C. 201, 204, 85 S.E.2d 114, 117 (1954)

(emphasis added), validity questioned on other grounds by Atkins, 284 N.C. at 317,

200 S.E.2d at 649. See also Way, 192 N.C. at 551, 135 S.E. at 455 (“[T]he question of

liability for the salary of a minister or pastor is governed by the principles which

prevail in the law of contracts, and it is generally held that a valid contract for the

payment of such a salary will be enforced.”). However, the controversy must be

resolved “pursuant to ‘neutral principles of law[.]’ ” Atkins, 284 N.C. at 319, 200

S.E.2d at 650 (quoting Presbyterian Church in U.S. v. Mary Elizabeth Blue Hull

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Mem’l Presbyterian Church, 393 U.S. 440, 449, 21 L. Ed. 2d 658, 665, 89 S. Ct. 601,

606 (1969)).

Defendants seem to argue, without citing any pertinent authority, that the

First Amendment of the United States Constitution immunizes, without exception, a

religious institution from liability arising out of a contract between the religious

institution and its ministerial employees. This unsupported assertion cannot be

reconciled with Smith. This Court in Smith concluded that a holding “ ‘that a

religious body must be held free from any responsibility for wholly predictable and

foreseeable injurious consequences of personnel decisions, although such decisions

incorporate no theological or dogmatic tenets -- would go beyond First Amendment

protection and cloak such bodies with an exclusive immunity greater than that

required for the preservation of the principles constitutionally safeguarded.’ ” 128

N.C. App. at 495, 495 S.E.2d at 398 (quoting Jones v. Trane, 153 Misc. 2d 822, 830,

591 N.Y.S.2d 927, 932 (1992)).

Although defendants cite numerous decisions holding that civil courts cannot

interject themselves into ecclesiastical disputes, they again focus their argument on

the bar against courts determining the propriety of a church’s decision to dismiss a

plaintiff from his position as pastor -- an issue not present in this case. The only

authority that defendants cite as barring a claim regarding compensation is Tarasi

v. Jugis, 203 N.C. App. 150, 692 S.E.2d 194, 2010 WL 916050 at *2, 2010 N.C. App.

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LEXIS 493 at *3-5 (2010) (unpublished), in which this Court applied the ecclesiastical

abstention doctrine when holding that the trial court lacked jurisdiction over a Wage

and Hour Act claim.

In Tarasi, the plaintiff priest filed a Wage and Hour Act claim against the

Roman Catholic Diocese of Charlotte and its bishop, alleging that, after being

instructed by the Vatican to provide the plaintiff “ ‘with an adequate means of

livelihood and the appropriate necessities as envisioned in canons 281 § 1 and 384 of

the Code of Canon Law,’ ” the defendants failed to do so. Id., 2010 WL 916050 at *1,

2010 N.C. App. LEXIS 493 at *2. In affirming the trial court’s dismissal of the

plaintiff’s Wage and Hour Act claim, this Court held that “[t]o determine his claim,

the court would be required to determine, under ecclesiastical law, the compensation

to which plaintiff is entitled” and that “[s]uch a determination is beyond the subject

matter jurisdiction of the North Carolina courts . . . .” Id., 2010 WL 916050 at *2,

2010 N.C. App. LEXIS 493 at *5.

Thus, in Tarasi, the plaintiff was asking the court to decide whether the

Catholic diocese had complied with the Vatican’s directive -- a request that the court

inject itself in the middle of a church dispute and decide what canonical law required.

Here, plaintiff’s claims, rather than asking the court to address ecclesiastical doctrine

or church law, require the court only to make a secular decision regarding the terms

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of the parties’ contract and to apply the neutral principles of the Wage and Hour Act.

Defendants acknowledge that they are not exempt from the Wage and Hour Act.

Accordingly, because a court can decide plaintiff’s contract-based claims

applying “neutral principles of law,” without entangling the Court in an ecclesiastical

dispute or interpretation, we hold that the ecclesiastical abstention doctrine does not

require dismissal of plaintiff’s complaint. We, therefore, hold plaintiff has sufficiently

stated claims for relief and, therefore, reverse the trial court’s order dismissing

plaintiff’s complaint.

REVERSED.

Judges HUNTER, JR. and DILLON concur.

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