+Bruno Caught Between a Rock and a Hard Place

 

+Bruno Caught Between a Rock and a Hard Place

Author: 

A.S. Haley

The Rt. Rev. J. Jon Bruno, Bishop of the Episcopal Diocese of Los Angeles, has landed himself in a difficult spot. As detailed in this earlier post, he entered into a contract in 2015 to sell the property of St. James the Great in Newport Beach to a developer for a price of $15 million, without bothering to inform its parishioners beforehand. When the congregation and its vicar protested, he changed the locks and kicked them out.

This being Bishop Bruno, litigation soon ensued -- between the parish and its Bishop, and between the original donor of the church's property (who sought to enforce a restriction on the use of the property for anything besides church purposes). The parishioners also brought charges of fraud, misrepresentation and "conduct unbecoming a member of the clergy" against +Bruno before the national body's Disciplinary Board for Bishops, as detailed in this earlier post.

The litigation grew nastier, as narrated in this post. Matters even began to sour between Bishop Bruno and his own Diocese's convention. Eventually, the original purchaser pulled out of the contract (because of the litigation, no doubt), +Bruno rejected all attempts at mediation / conciliation with the parishioners, and the Disciplinary Board's review panel ordered the matter (over +Bruno's hypocritical objections) to a full-blown, public hearing, which took place over three days at the end of March of this year. (You can read the day-by-day accounts of the proceedings at this site, if you choose. With my departure from ECUSA, I have pretty much stopped chronicling all the desultory conduct that goes on in the name of that body.)

In the civil courts, meanwhile, +Bruno achieved mixed results. The parishioners' lawsuit to stop him from selling the property was dismissed, but his suit against the original donor has not fared well. On February 24, the Court of Appeal reversed a decision by the trial court which had denied the donor's motion to strike +Bruno's "slander of title" claim against it. The decision ordered the trial court to strike the claim from the lawsuit and award the donor its attorneys' fees and costs incurred as a result of its filing. The fees and costs will have to be paid out of the Bishop's own corporation sole, since it was the plaintiff against the donor. In another ruling, the trial court found the original donor had failed to record a renewal of its deed restriction as required by law to keep it enforceable. That freed +Bruno to sell the property, but by then (as we now learn -- see below) the original buyer had backed out.

After the disciplinary hearing concluded on March 30, the hearing panel took the matter under submission for briefing before issuing its decision. The Bishop's attorneys asked the panel to dismiss all charges against him, while the attorney prosecuting the charges asked the panel to find him guilty and suspend him from active ministry for up to a year while fashioning a remedy that would foster reconciliation -- for which +Bruno to date has shown no interest whatsoever.

On June 14, before the panel had issued any decision, one of the complainants submitted colorable evidence that +Bruno had entered into a new contract to sell St. James while the disciplinary proceedings were going on. The panel asked +Bruno's attorneys to disclose to it whether he was under contract with a buyer or not, and when they gave evasive replies, the panel issued a sanctions order on June 17 directing +Bruno not to sell or contract to sell the property until "further order of the Hearing Panel."

Now comes word from Anglican news sources that on June 22, +Bruno's attorney sent an email to the panel in which she disclosed that Bishop Bruno had signed a contract to sell the property to another developer -- just three weeks after the disciplinary hearing (the purchaser signed the contract a month later). She explained that neither +Bruno nor his attorneys could respond substantively to the panel's inquiry earlier because he had been bound by a "confidentiality clause" in the purchase contract, which the parties had just agreed to modify so that he could disclose the fact of the sale. (You may read the details here and here.)

Other sources are now reporting that not only is +Bruno selling the St. James church property, but also its rectory and a huge commercial property which his corporation sole owns in Anaheim. The total sales which he reportedly has currently in escrow come to approximately Forty Million Dollars ($40,000,000).

In his desire to recoup the money he has squandered on over twelve years of litigation -- against parishes, their clergy, and (as shown above) generous donors to his Diocese -- Bishop Bruno has now landed himself between a rock and a hard place. He is under a direct disciplinary command not to complete the sale of St. James. But his contract with the purchaser provides that he will be in default -- and liable for damages and costs -- if he does not sign the deed in escrow.

Can the Hearing Panel actually block the sale? No, it cannot, since it has ecclesiastical jurisdiction only, and that is over Bishop Bruno, not the purchaser. But it can certainly discipline him for flouting its order. Such discipline could include suspension from his ministry (he will reach mandatory retirement age in late 2018), or even deposition (a drastic step he has not hesitated to take in the past against dissident clergy).

Will the Dennis Canon's trust provisions affect the marketable title to St. James property? Again, no: the Canon applies only to property in the name of a parish, and not to property held by a corporation sole or by a Diocese. (That was the ruling of the Fifth District Court of Appeal in the San Joaquin case last year.)

However, it appears from the latest stories linked above that the new purchaser runs the risk of displeasing the City Council of Newport Beach, if it tears down the church to put up some industrial or commercial complex -- for which it will need a zoning change. So the developer may find it convenient to let +Bruno out of his contract, after all.

There is no doubt that +Bruno's underhanded conduct has thrown a monkey wrench into the deliberations of the Hearing Panel. By selling the property while the disciplinary panel was considering his case, +Bruno in effect attempted to bypass its authority to maintain the status quo until it reached its final decision. No court likes to be told that a defendant has acted on his own, and surreptitiously to boot, to alter the status quo while the court has the matter still under submission.

Do not expect, therefore, that Bishop Bruno might wiggle out from this dilemma unscathed. It may cost his corporation sole still more money, and it may cost him his bishopric. I will update this post when the Panel renders its decision.

[UPDATE 06/24/2017: Bishop Bruno has filed with the Disciplinary Board for Bishops an appeal of the Hearing Panel's sanctions order. The attachments to the appeal dispel some of the mysteries surrounding his dealings with the Newport Beach property. We learn:

1. The original purchaser pulled out of the sales contract in early November, 2016.

2. At that time, Bishop Bruno was contacted by other "potential purchasers." Though there was no express canonical jurisdiction of the Diocesan Standing Committee over the Bishop's corporation sole, Bishop Bruno sought and received on November 16 the consent of the Standing Committee to a future (unspecified) sale of the property, in order to obviate one of the disciplinary charges against him (that he had entered into a contract to sell the property without obtaining the consent of the Standing Committee as required by the national canons in the case of sales of property by a Diocese).

3. The discussions with purchasers crystallized into the present buyer, which signed a "Due Diligence and Confidentiality Agreement" with the Bishop on April 19, 2017, and then entered into a formal purchase and sale agreement on May 25, with escrow to close on July 3.

4. The "colorable evidence of a pending sale" furnished to the Hearing Panel by one of the complainants consisted of a screen capture of an online property reporting service that indicated a title insurance policy had been ordered from Fidelity Title for the property on June 6, 2017 -- a sure sign that an escrow had been opened. (I assume there are similar title policies ordered for the other sales which the "Save St. James" group has reported as pending, making up the $40 million total mentioned in the post.)

5. Bishop Bruno turned down a request earlier this year from a long-time parishioner at St. James to allow her mother's ashes to be interred there in accordance with her dying wishes. The parishioner appealed to Presiding Bishop Michael Curry, but was told it was a decision which Bishop Bruno alone could make, as the Presiding Bishop had no authority over him.

6. Bishop Bruno is utterly non-repentant about keeping his dealings with the property out of the purview of the disciplinary proceedings. Once the initial sale complained of fell through, he believed there was no restraint of any kind on his ability to enter into a new sales contract for it.

7. He has asked the full Disciplinary Board to set aside the sanctions order of June 17, so that he will not go into default under his current sales contract.

Some further observations on these disclosures:

A. The "consent" by the Standing Committee (both the one in 2015 and the one in November 2016) was a meaningless gesture. In neither instance was the Standing Committee given any particulars about the sale, so its "consent" was uninformed, and for outward form's sake only.

B. We still do not know the amount +Bruno has contracted to accept for the church property, or for any of the other properties he is selling: $40 million is just an educated guess, based upon tax roll values. Nothing could demonstrate more clearly +Bruno's determination to keep all particulars of his dealings as a corporation sole from both his Standing Committee and his Diocese as a whole.

C. The Standing Committee is itself complicit in these matters, and acts as a willing rubber stamp for anything +Bruno decides to do. It has requested that he amend the articles of his corporation sole to provide for oversight and consent of its property dealings, but that is only a request -- as was the request the Convention made to +Bruno to disclose the finances of his corporation sole. He has thus far ignored both of them.

D. By virtue of his office, Bishop Bruno stands in a fiduciary relationship to his Diocese and to its governing bodies. A fiduciary under law has a duty to act in utmost good faith toward those who have put their trust in him. +Bruno's secretive conduct is the polar opposite of how a fiduciary is supposed to act toward those in his charge. For him, it's all about the money: business comes first, and to hell with fiduciary duties that get in the way.

E. Thus far, the complainants are the sole members of the Diocese who are trying to compel Bishop Bruno to observe fiduciary standards of conduct, and they are a decided minority. The Hearing Panel is their last resort. The Diocese of Los Angeles is receiving exactly the kind of fiduciary care that it asks for -- especially after its Board voted in May 2014 to transfer the Newport Beach property to the corporation sole, where it could be sold without +Bruno having to account to anyone.

F. Bishop Bruno's claim that the Panel "lacks jurisdiction" to direct him not to sell the property, while accurate in a church constitutional sense, ignores his fiduciary duties to the church of which he is an episkopos -- the Greek word for "overseer" or "guardian", used since the earliest days to describe the role and functions of a bishop. The Panel most certainly can sanction him for breach of his fiduciary duties toward his Diocese and its governing bodies, because such breach is the essence of "conduct unbecoming a member of the clergy." If you can't put your trust in a man ordained to serve God, whom can you trust?

G. The whole charade of this matter puts ECUSA's Title IV procedures to the ultimate test. It brings into sharp relief the actual autonomy of dioceses and their bishops in relation to the national body itself, which is surprisingly weak in light of how recent Presiding Bishops and their Chancellors have sought to portray its supreme authority in civil litigation over church property. Oh, yes -- the Presiding Bishop and hired attorneys will swoop down upon any hapless rector and parish (or bishop and diocese) who dares to try to leave ECUSA, and drag them into never-ending and ruinously costly litigation, regardless of the harm done to its reputation. But let one of their own have his sovereign authority to act in his own diocese be challenged, and just watch how effete ECUSA will be in response. It has taken over a year to bring Bishop Bruno to this point, and he still defies the authority of the disciplinary bodies to hold him accountable for his conduct unbecoming. (It is ironic that the ENS is currently carrying a lead story on how bishops learn to be bishops.)

The proof will be forthcoming shortly. First the Board will act on the appeal (it has been asked to do so by next week, when Bishop Bruno is obligated to sign escrow papers to close the sale), and then the Hearing Panel will have to agree upon a final decision. Well, not really "final", because then there will be a motion for reconsideration, followed perhaps by a further appeal. You get the picture.

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