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Ascension Consortium, Inc. v. Hines

March 12, 2009


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-915-06.

Per curiam.


Submitted February 3, 2009

Before Judges Winkelstein, Gilroy and Chambers.

Following a jury trial, defendants Reverend Garrison Hines and Grace Temple of the Church of God and Christ (the Church) appeal from a January 8, 2008 final judgment in favor of plaintiff, Ascension Consortium, Inc., in the amount of $484,845.*fn1 We affirm.

In 2003, plaintiff's representative, Don Wilson, approached Reverend Hines, the Church's pastor and president, to discuss the potential development of low income housing on vacant property the Church owned in Jersey City. In furtherance of that development, because the land was subject to tax liens, plaintiff facilitated a loan between Meridian Mortgage and the Church to pay off the liens. Thus, on September 17, 2003, the Church mortgaged the property for $270,000, which it agreed to pay in full by March 17, 2004. Reverend Hines signed the mortgage documents on behalf of the Church. He testified that he had full power and authority to do so, even though the Church did not pass a formal resolution authorizing him to do so.

On March 2, 2004, plaintiff and the Church entered into a partnership agreement to form the Randolph Avenue LLC Venture (the LLC) to develop the property. The project was to include seven buildings consisting of forty-eight housing units. Reverend Hines signed the agreement on behalf of the Church.

The agreement provided that, "The [Church] will provide to the LLC upon creation[,] the above-mentioned [Church property]." The agreement also provided that, "The [Church] will have 51% of the voting power with the remaining 49% belonging to [plaintiff]." Plaintiff would secure financing for the project, obtain all governmental approvals, ensure that title to the property was clear, and manage the overall development process. The LLC would pay all outstanding taxes and notes on the property.

Plaintiff's understanding of the agreement was that the Church would convey the property to the partnership for development. In exchange, the Church would be entitled to fifty-one percent of the proceeds from the sale of the lots. Reverend Hines admitted that the property was "supposed to have been" conveyed to the LLC, and that "if the project was completed," the assets would be divided in accordance with the percentages identified in the agreement. The Church did not convey the property to the LLC.

On February 7, 2005, a final judgment in foreclosure was entered against the Church and Reverend Hines for failure to satisfy the Meridian mortgage. To save the property from foreclosure, plaintiff, at the request of Reverend Hines, sought a buyer for the property. Plaintiff secured three offers to purchase the property; Reverend Hines accepted one of the offers, which was for $1.2 million. Because the Church had not conveyed title to the property to plaintiff as called for in the agreement, the Church directly conveyed the property to the buyer. Reverend Hines and the Church refused to divide the proceeds of the sale with plaintiff.

Plaintiff sued, and the jury determined that Reverend Hines and the Church breached their agreement with plaintiff by not paying plaintiff the percentage of the sale proceeds as set forth in the partnership agreement, and found that plaintiff sustained damages of $484,845 as a result. On appeal, the Church and Reverend Hines argue that no contract existed between the parties; and in the absence of a resolution of the Church's board of trustees authorizing the partnership agreement, the Church could not be bound by the agreement signed by Reverend Hines.

Initially, we view these arguments as a claim that the jury's verdict was against the weight of the evidence. In that context, the appeal is procedurally barred as defendants failed to move before the trial court for a new trial. See R. 2:10-1 (appellate court will not address appeal claiming verdict was against the weight of the evidence unless motion for a new trial on that ground is made in the trial court); see also Pressler, Current N.J. Court Rules, comment 2 on R. 2:10-1 (2009); Fiore v. Riverview Med. Ctr., 311 N.J. Super. 361, 362-63 (App. Div. 1998). Nevertheless, we will address defendants' appeal on its merits.

The trustees of a religious society are empowered to convey church property after authorization by the society's membership. Hopewell Baptist Church v. Gary, 111 N.J. Super. 1, 6, aff'd, 57 N.J. 166 (1970); see also N.J.S.A. 16:1-6 (trustees of church or religious society are authorized and empowered to sell and convey church property if sale is authorized by majority of members present at any meeting called by trustees and held at its usual place of worship). The president of the religious corporation may execute all contracts. N.J.S.A. 16:1-14.

The manner in which a religious society may appropriately exercise its power of directing its trustees in the acquisition or sale of church property depends on the established rules and regulations of the particular society. Page v. Asbury Methodist Episcopal Church, 78 N.J. Eq. 114, 116 (Ch. 1910). "[W]hether the power to give such direction resides in the whole congregation, or in particular members, or in special officials, depends, in each instance, on the established usages or express ...

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