Attorney at Law and Born Again Believer
Texas Bar Number 00787466
Copyright © September 6, 2022
This essay speaks to another false ad by StartCHURCH meant to strike fear into churches and believers so as to induce them to use their expensive and continuing services of “helping” churches organize and operate contrary to Bible and legal principles. StartCHURCH and like organizations rely on fantasy—not knowledge, understanding and wisdom—to sell their anti-God services.
To fully understand the dishonesty of the ad requires a knowledge of Bible church doctrine, corporation law, federal tax exemption law, the First Amendment to the United States Constitution and corresponding state constitutional provisions as well as a careful analysis of the ad itself and the case cited therein, Hutchins v. Grace Tabernacle 804 S.W.2d 598 (Tex. App. 1991) (https://casetext.com/case/hutchins-v-grace-tabernacle).
The first heading in the ad is the title to the ad: “All Members of One Church Get Sued at the Same Time.” The title states a lie. Yes, as the ad states, the plaintiff filed a class action against all members of the church. However, the interlocutory order of the 333rd District Court of Harris County, Texas denied plaintiff’s request to certify a class action. The 1st Court of Appeals, First District, Houston Texas, affirmed the District Court ruling. In other words, the plaintiff’s attempt to continue the suit as a class action failed.
One very important thing to understand about the StartCHURCH dishonesty here is that a legal entity (person(s), corporation(s), etc.) can file a false suit. If that happens, the defendant must respond correctly, as did the defendant in this case. A plaintiff could also improperly file such a suit against all members of a corporate church. Then, I am sure that StartCHURCH would be glad to help the members of the corporate church who were sued in dealing with the court case; for a good fee, of course. The StartCHURCH ad is intended to persuade churches that – because plaintiff filed the action against all members of a church which had not employed StartCHURCH in organizating as a corporation, was not incorporated, and could not be sued – the first thing every church should do is to incorporate.
If a plaintiff files a suit against a church which is not a legal entity and therefore cannot be sued, a Church under Christ alone, someone in the church should file a motion contesting jurisdiction. StartCHURCH presents us with a case in which plaintiff’s class action against all the members failed, but StartCHURCH still, for it’s insidious and profit making motives, claimed that all the members were sued at the same time.
Sadly, in the case cited and relied upon by the StartCHURCH ad, the church could not be sued since it was not an entity (as recognized by the plaintiff and the Court), but argued that it was an entity which could be sued and also that the members could not be sued. As the Appeals Court opinion states, “In brief, the Church wants both the advantage of an unincorporated entity (no liability for the entity), and at the same time wants the advantage of a corporate entity (no liability for its members.” – But see the remaninder of this essay on this latter statement by the court.)
The paragraph under the title, the first heading, to the StartCHURCH ad states: “‘Members of an unincorporated association are individually liable for tortious acts of agents or employees of the association if the tort is committed within the scope of their authority’ (Hutchins v. Grace Tabernacle 804 S.W.2d 598 (Tex. App. 1991)).” Of course, the ad does not explain that the members of a corporation (including members of a church non-profit corporation) are individually liable for the tortious acts of agents or employees of the association if the tort is committed within the scope of their authority.”
No matter the way a church is organized, a member who is directly involved or interested in any act, tort, affair, contract, transaction or legal proceeding is a “party.” For example, a person who has been given and accepts the responsibility to keep the entry way to a church meetinghouse safe, regardless of the legal status of the church (incorporated legal entity or not) may be sued should a non-member (and maybe a member, depending upon the law of the state), slip and injure himself upon ice left unattended by the person(s) responsible for removing the ice and any other members who saw the danger and said or did nothing about it.
The members of the incorporated church own and fund the corporation. Should someone file a suit against the church corporation (and anyone who is a party to the tort) and prevail, who pays the judgment against the corporation? The corporation. Who funds the corporation? The members. The court will hold the corporation responsible for paying the judgment. Ultimately, the members will furnish the funds to pay the judgment, unless the corporation has insurance, in which case the members paid for the insurance. It goes without saying that, in general, it is wise for every owner of real estate to purchase liability insurance. Additionally, the Lord makes clear that one is to love others and himself. Is trying to avoid helping another who was injured due to one’s individual or church knowling, intentional, negligent, or reckless act loving one’s neighbor? Again, obtaining insurance is a wise way to love one’s neighbor.
The second heading in the StartCHURCH ad is “Unincorporated churches with voting members are most at risk.” Wrong again. First, the analysis above addresses some aspects of this false argument.
Second, unincorporated churches which have not forfeited their non-legal entity status (their First Amendment status) are not at risk of being sued; they cannot be sued as the case cited by StartCHURCH makes clear. Members of all churches, whether the church can be sued or not, should not, if they love others as commanded, try to escape responsibility for harming others, dishonoring contracts, mortgage of lease agreements, etc.
Third, StartCHURCH contends that members in an unincorporated church who vote on “issues such as salaries, purchase contracts, and other important things like real estate transactions and lease agreements” … “take upon themselves potential personal liability because they become a direct personal party to the contract or transaction. This could bring disastrous results [notice the hyperbole].” One who votes on such matters in an incorporated church can also be held to be a liable party. If one votes to approve a contract, salary, real estate transaction, etc., that person has given their authority for the act and any wrong committed in violation of the agreement involved. The matter of “piercing the corporate veil” may come into issue in some cases. Remember, should the corporation be found liable, the members fund the corporation.
If a person is ruled by fear, no matter how the church is organized, the wisest course of action for him is to abstain from becoming a party by not participating in any church affair. Such a person should not become a member of a church. Surely, if he wants to be religious, he will be able to find a church which will allow him to show up, sing, worship, hear the weekly lecture(s), give (especially if he gives to the corporation if the church is incorporated), etc. without requiring him to be a member.
The third heading of the StartCHURCH ad is “One of the first acts of a church.” The ad then states:
- “Incorporating ought to be one of the first acts of any church. In 2010, approximately 1,000 churches per month were sued. That number is likely to keep rising because today, many churches are starting in homes, hotel conference rooms, and schools, which means they have to sign more contracts and enter into unusual contracts. It is important to ensure that your church forms a legal structure to protect its members, board, and trustees. As mentioned before, incorporating should be done before conducting your first service.”
Of course, perhaps StartCHURCH is correct should one leave out of consideration his God-given goal (the glory of God; see, e.g., Revelation 4:11: “Thou art worthy, O Lord, to receive glory and honour and power: for thou hast created all things, and for thy pleasure they are and were created.”); God’s principles concerning churches built by Christ as expressed in the New Testament and especially God’s epistles written by the hand or dictation of the Apostle Paul; the First Amendment to the United States Constitution and corresponding state constitutional provisions; and his conscious (knowledge of good an evil).
- Ephesians 1:22: “And hath put all things under his feet, and gave him to be the head over all things to the church.”
- Colossians 1:18: “And he is the head of the body, the church: who is the beginning, the firstborn from the dead; that in all things he might have the preeminence.”
- Acts 20:28: “Take heed therefore unto yourselves, and to all the flock, over the which the Holy Ghost hath made you overseers, to feed the church of God, which he hath purchased with his own blood.”
- Ephesians 5:25-27: “Husbands, love your wives, even as Christ also loved the church, and gave himself for it; That he might sanctify and cleanse it with the washing of water by the word, That he might present it to himself a glorious church, not having spot, or wrinkle, or any such thing; but that it should be holy and without blemish.”
It is interesting to note that StartCHURCH gives no authority for their positions from the God’s Word.
Most importantly, a church who chooses to submit herself to any authority other than the Lord Jesus Christ has grieved our Lord by committing spiritual fornication. For short answers to any questions this may raise, please see Short Answers to Some Important Questions, Basic Course, Bible Studies: The Doctrine of the Church. No church who wishes to please God should ever combine with civil government through incorporatipon, Internal Revenue Code § 501(c)(3) or § 508 (c)(1)(A) tax exempt status; contract, purchase or lease real estate, purchase insurance, or do anything else which sets the church up as an entity which can be sued.
Should a church choose, by her actions and declarations, to remain totally separate from and outside the authority of civil government the church will have all her First Amendment protections and cannot be sued. The First Amendment is the highest law of the land concerning churches, church establishment, religious freedom; freedom of speech, freedom of association, and freedom of press.
Civil government has no jurisdiction over a church which is not a legal entity such as a corporation; such a church cannot sue or be sued or act legally in some other way. As pointed out above, if someone tries to sue a church which is not a legal entity, lack of jurisidiction should be presented to the court. Remember, as well, that no matter how a church is organized, those responsible for tortious or wrongdoing where one has a duty to act or not can be taken to court. Insurande is wise where appropriate.
Again, believers should not try to avoid restitution to those who are damaged by their actions; we are to love others as we love ourselves – to do unto others as we would have them do unto us. The Churches under Christ Ministry, at no charge, shows churches and believers how do deal with all these matters so as to honor both God and man.
The fourth heading of the StartCHURCH ad is: “What happens when you incorporate your church?” Under this heading, StartCHURCH states:
- “The legal concept of an artificial person exists where state law has created laws recognizing a corporation. The laws of all fifty states allow churches to create a corporation that exists separate from that of its members, officers, and board. The church uses the corporation to conduct its business and manage its assets.”
Yes, “A church may choose to apply for corporate status under state law.” However, If the state approves the church application for incorporation, the church becomes a creature of the state, a temporal, earthly, legal entity as opposed to an eternal, heavenly, spiritual entity. Incorporation combines church and state (the unholy is combined with the holy so as to profane the holy) in violation of Romans 13, 1 Peter 2, the Old Testament doctrine of civil government, and New Testament church doctrine. The corporation is a creation of state law and is governed by the law of incorporation. The procedures, officers, members, and board of a corporation are all required and controlled by the non-profit corporation law of the state of incorporation. The church and the corporation are intertwined. Members of incorporated churches can sue the pastor, other church members, the church, etc. as to many church disagreements and matters matters since the state is sovereign of and authority over many corporate matters. The head of and authority over the incorporated church for many matters is the state not the Lord Jesus Christ. The following resources explain incorporation in much more detail:
- What does church inc. mean? and the resources linked to in that essay
- CHURCH AND STATE: GOD’S CHURCHES – SPIRITUAL OR LEGAL ENTITIES?
- Basic Course Covering The Bible doctrines of government, church, the relationship of church and state
- Corporation: A human being without a soul
The fifth heading of the StartCHURCH ad is: “What is indemnification?” It states under that heading:
“When a church forms a corporation, it receives special power to indemnify its pastors, board members, and employees from liability for the action they take in behalf of the church. This allows one to serve on the board with the confidence of knowing that the acts he/she performs in behalf of the church will not come back to haunt him/her.”
One cannot protect a person, even a pastor, board member, or employee for torts or crimes for the action they take on behalf of the church. Indemnification does give some protection from suit by members of the church, but not from suit by outside parties suing the individual for his alleged wrongdoing which harmed a plaintiff.
1 Corinthians 6 makes clear that churches are to judge internal church infractions. God directs that such matters are not to be submitted to outside authorities.
The sixth heading of the StartCHURCH ad is: “Where is your church?” Under that heading, it states”
“Right now, there are many churches operating on a deficient legal foundation. Most pastors I have met state that from the first day they started their church, they had always intended on doing things the right way, but then ministry, preaching, and life got in the way. That does not have to be you. Today is the best day to start getting right.”
StartCHURCH recommends spiritually prostituting your church and calls it “getting right.” See, SEPARATION OF CHURCH AND STATE: CHRISTIANS WHO CALL EVIL GOOD AND GOOD EVIL “Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter” (Is. 5.20)!
Click here to go to The False and Misleading Teachings and Advertisements of StartChurch, Another Spiritual and Legal Deceiver (091212)
[i] The following is a copy and paste of a StartCHURCH ad at: https://www.startchurch.com/blog/view/name/all-members-of-one-church-get-sued-at-the-same-time
All Members of One Church Get Sued at the Same Time
Several years ago a church in Texas ran into some trouble when a man wanted to sue the church. The problem, however, was that the church was not incorporated, and so it could not be sued. Instead, he filed a class action lawsuit against every member of the church. Could he sue every member? Does the law allow members to be sued personally? The court that heard the case stated, “An unincorporated association is a voluntary group of persons, without a charter, formed by mutual consent for the purposes of promoting a common enterprise.” The court also stated, “Members of an unincorporated association are individually liable for tortious acts of agents or employees of the association if the tort is committed within the scope of their authority” (Hutchins v. Grace Tabernacle United Pentecostal Church).
Unincorporated churches with voting members are most at risk
This court case brings up something that ought to make its members think twice about their legal status as a church. There are many churches that have voting members who vote on many issues such as salaries, purchase contracts, and other important things like real estate transactions and lease agreements. In essence, when members of the unincorporated church vote on a particular item, they are taking upon themselves potential personal liability because they become a direct personal party to the contract or transaction. This could bring disastrous results.
In the case of the church in Texas, the court stated that the ” . . . members of an unincorporated association are individually liable for tortituous acts of agents or employees of the association if the tort is committed within the scope of their authority.” However, the appeals court remanded the case back to the trail court because the plaintiff committed a procedural error in filing her paperwork and claim with the court seeking class action; one that could be easily fixed. The point we must not miss is that, the court made it very clear that the members of an unincorporated church could be sued personally for the tortiuous acts of its ” . . . agents or employees of the association if the tort is committed within the scope of their authority.”
One of the first acts of a church
Incorporating ought to be one of the first acts of any church. In 2010, approximately 1,000 churches per month were sued. That number is likely to keep rising because today, many churches are starting in homes, hotel conference rooms, and schools, which means they have to sign more contracts and enter into unusual contracts. It is important to ensure that your church forms a legal structure to protect its members, board, and trustees. As mentioned before, incorporating should be done before conducting your first service.
What happens when you incorporate your church?
The legal concept of an artificial person exists where state law has created laws recognizing a corporation. The laws of all fifty states allow churches to create a corporation that exists separate from that of its members, officers, and board. The church uses the corporation to conduct its business and manage its assets.
What is indemnification?
When a church forms a corporation, it receives special power to indemnify its pastors, board members, and employees from liability for the action they take in behalf of the church. This allows one to serve on the board with the confidence of knowing that the acts he/she performs in behalf of the church will not come back to haunt him/her.
Where is your church?
Right now, there are many churches operating on a deficient legal foundation. Most pastors I have met state that from the first day they started their church, they had always intended on doing things the right way, but then ministry, preaching, and life got in the way. That does not have to be you. Today is the best day to start getting right.