Decision Number 631

Request From the Central Illinois Conference For a Ruling on the Binding Nature of an Agreement Among Three Conferences in Illinois Concerning Distribution of Assets of the Former Illinois Conference of the Evangelical United Brethren Church.

Digest

The agreement among the three Conferences of Illinois and the former Illinois Conference of the Evangelical United Brethren Church is binding in every respect and can be amended only by consent of all the parties. The distribution of the purchase price should be in accord with the formula of 52 per cent to Northern Illinois Conference, 35 per cent to the Central Illinois Conference and 13 per cent to the Southern Illinois Conference.

Statement of Facts

In 1969, the four Conferences of the former Evangelical United Brethren Church in the geographic bounds of the State of Illinois entered into a merger agreement with the former Methodist Church concerning the property and assets of the former EUB Conferences. This agreement is attached as Exhibit A.*

The property in question in this case concerned Camp Seager which was given in the agreement to the Northern Illinois Conference.

The agreement stated, in part,

In the event of a sale of Camp Seager for commercial purposes, any realized gain over the allocation figure shall be subject to distribution to the three Conferences on the distribution formula.

As indicated in Exhibit A, the percentages specified at that time were 52 per cent to the Northern Illinois Conference, 35 per cent to the Central Illinois Conference and 13 per cent to the Southern Illinois Conference.

The Northern Illinois Conference had jurisdiction and care for the property in question for the subsequent twenty years.

On August 25, 1988, the Northern Illinois Conference entered into both an Option to Purchase and Lease with the Naperville Park District. This document is attached as Exhibit B.

To quote from the background, the memorandum provided by the Northern Illinois Conference: After Northern entered into these agreements it so informed the Central and Southern Illinois Conferences pursuant to the terms of its resolution (Appendix, Exhibit B). Subsequently, representatives of the three conferences, including both Bishops, met to discuss the interpretation of the merger document as it applies to the agreements in order to arrive at a mutual understanding as to the issues involved. During the course of those settlement negotiations, an accounting was prepared as to the capital and operational expenses of Northern for the operation of the facility for the 20 or so years that it has owned the property. (Appendix, Exhibit E).

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At the conclusion of the joint meeting all three parties indicated it would be most appropriate for the lawyers representing the three conferences to work further toward a compromise settlement. The undersigned, together with the chancellors of the Central and Southern Conferences did just that and all recommended the settlement agreement to the three annual conferences. (Appendix, Exhibit F) The Southern and Northern Conferences approved the settlement. (Appendix, Exhibits G & H) Central Conference passed the resolution which was submitted to this Council. (Appendix, Exhibit I)

Subsequent to that time, the matter was appealed to the Judicial Council with request for an immediate ruling which was impossible in the middle of the summer.

A stay order was entered into which is attached as Exhibit C.

Later, by agreement of all parties the stay order was lifted to a limited extent.

The Rev. Wayne C. Hess, the Rev. Donald L. Lowe and the Rev. Eugene J. Moore, representing the Central Illinois Conference and David R. Ackermann and the Rev. Thomas R. Perry, representing the Northern Illinois Conference appeared at an oral hearing on October 26, 1989 at Williamsburg, Virginia.

Jurisdiction

The Judicial Council has jurisdiction under 2615 of the 1988 Discipline.

Analysis and Rationale

The only questions before the Council are whether or not the agreement reached in 1969 is binding and whether or not it can be altered.

The action taken in dividing the properties and assets of the former Illinois Conference of the Evangelical United Brethren Church into the three conferences constituted in the geographic bounds of the State of Illinois was an action following the union between the former Evangelical United Brethren denomination and the Methodist Church, which became The United Methodist Church.

Guidance for the Judicial Council is in the various decisions of the Interim Judicial Council, primarily Interim Judicial Council Decisions One and Two, and to some extent, Decisions 242, 246, and 340 concerning the Enabling Legislation.

These cases are concerned with the matter of racial inclusiveness.

Decision Number 340 is of some help and states:

Paragraph 9 of the Enabling Legislation of the Plan of Union (Paragraph 1901) reads in part-

The objective toward which the new Church moves is an inclusive Church with no overlapping Annual Conference boundaries. The Plan of Union contemplates that unification of church structure shall take place in steps as follows:
Step One

(a) Upon the Plan of Union becoming effective, all Annual Conferences of both united churches will automatically become part of a Jurisdiction of a Central Conference or a Provisional Central Conference of the united church in each case as shown in the attached schedule.

Step Two

(b) Wherever in a Jurisdiction or in a Central Conference or in a Provisional Central Conference, Annual Conference boundaries overlap, the Annual Conferences involved shall designate committees or agencies to study the possibility of, and bring about as soon as practicable and mutually agreeable, the uniting or rearranging of Annual Conferences and Annual Conference boundaries to the end that there shall be no overlapping of Annual Conference boundaries...

(c) Annual Conferences shall not, for a period of twelve years following union, have their names or boundaries changed without their consent (Par 41). This shall not prevent voluntary action by Annual Conferences, and it is anticipated that most, and perhaps all, such Annual Conferences will have taken steps necessary to eliminate overlapping with other Annual Conferences substantially prior to the expiration of the specified time. At the end of the twelve years, if any such Annual Conferences still remain, authority to eliminate overlapping by the redefining of Annual Conference boundaries will vest in the Jurisdiction (Paragraph 26.4) or in the Central Conference (Paragraph 30.4) as the case may be; but nothing herein contained shall be construed as preventing the elimination of Annual Conferences based on race.

While this decision dealt with racial inclusiveness, it also considered the Enabling Legislation that the Annual Conferences would have to follow.

The agreement of the various Illinois Conferences located in the geographic bounds of the State of Illinois would be similar to that of the Georgia Conferences in which this Council said: (2) That the merger agreement reached by the North Georgia Annual Conference and the Georgia Annual Conference is constitutional in conformance with merger requirements, and valid.

In that case, the Council ruled that the agreement between the Conferences was constitutional, valid and binding. In the same fashion the agreement between former Illinois Conferences of the Methodist Church and former Illinois Conference of the Evangelical United Brethren Church cannot be amended or diluted in hindsight except by the consent of all the parties.

The report of the Distributing Committee on Capital Assets adopted pursuant to the Document on Union in 1969 is binding unless or until it is amended by consent of all the parties.

Decision

The Agreement among the three Conferences of Illinois and the former Illinois Conference of the Evangelical United Brethren Church is binding in every respect and can be amended only by consent of all the parties. The distribution of the purchase price should be in accord with the formula of 52 per cent to Northern Illinois Conference, 35 per cent to the Central Illinois Conference and 13 per cent to the Southern Illinois Conference.