The District Court of Guam has issued a decision in a motion in the Catholic Church bankruptcy case, ruling that Catholic schools and parishes are not separate entities but are part of the Archdiocese of Hagatna.
The Committee for Unsecured Creditors (those seeking damages in the clergy sexual abuse cases) has pushed for the inclusion of the assets of Catholic schools and parishes in the Archdiocese of Hagatna’s bankruptcy case in order to help pay for clergy sex abuse claimants.
The committee had asked the court to grant partial summary judgment on the question of whether the parishes and schools are separate entities, as the Archdiocese has claimed.
In issuing the decision that the parishes and schools are part of the Archdiocese, the court cited that canon law is “the internal legal system of the Roman Catholic Church” and that the parishes and schools do not have their own separate internal legal system.
Moreover, a parish has a “juridic personality” and a “juridic person” owns the goods it acquires and canon law states that what constitutes a diocese are the parishes and that the diocesan bishop, in this case, Guam Archbishop Michael Byrnes, represents his diocese in all its juridic affairs.
In addition, the district court cited that an overwhelming section of canon law provides that the diocese has control and authority over parishes and although the parish’s care is entrusted to a pastor, the diocesan bishop has authority over that pastor.
“The Parishes and Schools are not separately incorporated. There is no evidence in this case that the Parishes and Schools are separately incorporated under Guam law. The undisputed fact is that no parish or school is independently incorporated with the Guam Department of Revenue and Taxation,” the decision penned by District Court Chief Judge Frances Tydingco-Gatewood stated.
In addition, the court cited that there is no Guam law that allows for unincorporated divisions to sue or be sued and the Parishes and Schools lack property ownership.
The court cited “overwhelming” evidence of the varying degrees of control that the Archdiocese of Agana exerts over the Catholic parishes and schools.
According to the court, the Catholic parishes and schools are under the umbrella of the Archdiocese of Agana, which is responsible for and has authority over all civil property within the Archdiocese, providing “oversight and support to parishes [and] schools.”
“The Debtor plays a major role in the finances of the Parishes and Schools. Although Debtor is not involved in the daily expenditures of the Parishes and Schools, Debtor’s approval is required for all financial transactions exceeding a certain amount,” the decision stated.
Judge Tydingco-Gatewood stressed that the court’s ruling is limited to the question before it: of whether the parishes and schools are separate legal entities; and that the court’s ruling on this should not be construed as foreclosing the resulting trust argument.
“Debtor and Intervenor, address a completely different issue that is not currently before the court and that is, whether a resulting trust exists between Debtor and the Parishes and Schools. The court finds it necessary to tangentially address Debtor’s and Intervenor’s resulting trust argument to clarify the exact boundaries of today’s decision,” the court stated.
The committee of unsecured creditors had asserted that a finding that Debtor and Intervenor are the same “legal entity” automatically precludes a possibility of a resulting trust.
But the court pointed out that whether a “resulting trust” exists is a separate and distinct issue from whether Debtor and Intervenor are the same entity, not only as a matter of procedure given the limited scope of the partial motion at bar, but also as a legal matter.
“Stated more simply, the court is declining to rule on the resulting trust argument solely because of the limited nature of the Committee’s motion, and not because of a deficiency in the Debtor and Intervenor’s legal argument,” the decision stated.
In view of the foregoing, Chief Judge Tydingco-Gatewood ordered that the unsecured creditors’ partial motion for summary judgment is hereby granted and the court finds that the parishes and schools are part of the Debtor and are unincorporated divisions of the Archdiocese of Agaña.