Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Michael Augustave and Manoah Gracia v. Charles Cheatham and Allegheny East Conference of Seventh Day Adventists


May 20, 2011


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-1954-07.

Per curiam.


Argued February 1, 2011

Before Judges Messano and Waugh.

Plaintiffs Michael Augustave and Manoah Gracia appeal from an order granting summary judgment to defendants Allegheny East Conference of Seventh Day Adventists and its president, Charles Cheatham. Plaintiffs raise the following issues on appeal:









We have considered the arguments raised in light of the record and applicable legal standards. We affirm.

We discern the following facts from the motion record when viewed in a light most favorable to plaintiffs. R. 4:46-2;

Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

In the early 1990s, plaintiffs, members of the Seventh-Day Adventist Church, organized and founded the Morija Seventh-Day Adventist Church (Morija) in West Orange. As "elder[s]" of the church, plaintiffs were members of Morija's board and "attend[]ed . . . board meeting[s]" with the church's pastor and officers; they also acted as "spiritual leader[s]." Gracia's wife, Dr. Anne Marie Gracia, was a church official and served as Morija's treasurer.

The Seventh-Day Adventist faith is organized in a hierarchical structure as follows: 1) the local church; 2) the "local conference or local field/mission"; 3) the "union conference or union mission," which consists of a "united body of conferences . . . within a larger territory"; and 4) the "General Conference," which "embraces all unions in all parts of the world." Morija belonged to a local conference, defendant Allegheny East Conference (the Conference), which oversaw the activities of 137 churches in the region and owned two-thirds of the individual church buildings. Local churches "agree[d] to follow" various "rules and guidelines" in order to be recognized as a member of the Conference. Morija officers bound themselves to "follow the[se] rules" in order to "become a church."

The "Church Manual" detailed the rights and obligations of all Seventh-Day Adventist churches and delineated the responsibilities of church officers and members. In addition to their professional duties, elders and officers were expected to exhibit both "[m]oral fitness" and "[r]eligious [f]itness" since the "prosperity" of the denomination "depend[ed] largely upon its leadership." The officers were obligated to appropriately administer church finances and funds, including members' "tithe[s]," i.e., the requirement that members provide "one tenth of their . . . personal income" to the church treasury. Tithes could not be "used or disbursed by the local church" but were "remitted" to the local conference, which in turn "remit[ted] one tenth" of the tithes to the union conference. Tithes could only be allotted for "the work of the ministry," such as Bible teachings and outreach services, and could "not . . . be spent on other work, on paying church or institutional debts, or on building programs."

The Church Manual encouraged local church officers to create a budget to "provid[e] for local church expenses" from income sources other than the tithes. If a local church desired to construct a new building, the Church Manual provided:

On Financing Church Buildings -- Churches contemplating either the purchase or erection of church buildings are cautioned against undertaking financial obligations which would be likely to embarrass the membership; . . .

In the purchase or building of church properties, in no case shall commitments be made or building operations be begun until approval has been given by the local conference/mission/field and union conference/mission committees, after these have assured themselves that the financial arrangements are in line with established policies. [(Emphasis added).]

The Church Manual further provided that the "church treasurer" oversee the finances of the local church and "disburse[]" according to the requirements of the Manual. To ensure against misuse of church money, the General Conference used auditors to review "the handling of funds."

The Church Manual discouraged churchgoers from "seeking decrees of civil courts" if disputes arose among members and leaders of the church. Specifically, it provided, in relevant part:

A church member should not instigate litigation against any entity of the church except under circumstances where the church has not provided adequate process of orderly settlement of the grievance within the church, or where the nature of the case is such that it is clearly not within the authority of the church to settle.

Morija's congregation grew, and, by 1993, church members recognized the need for a pastor. Consequently, Pastor Jean M. Fenelon was hired and became a member of the "governing body" of the church. As part of his duties, the pastor would act as the "bridge between the Conference and the local church" and would essentially be "in charge of everything." The pastor "[wa]s [also] chairman of the board" and personally received reports, along with the church elders, on financial matters.

Morija leased space to conduct its services. From 2003 to 2006, Morija rented space in a church in West Orange. However, this space was in a dilapidated condition with "rainwater . . . dripping on the heads of the people." Augustave testified in deposition that the building was also "very cold," and prevented the congregants from being able to "worship properly."

In early 2005, Fenelon believed the need for Morija's members to have "[their] own building" was urgent, and he organized a financial committee to begin investigating nearby properties. Pursuant to the Church Manual, whenever Morija's officers "f[ound] a building" they liked, they informed the Conference "so [it] c[ould] give . . . permission." Morija's officers ultimately located a property in Elizabeth, originally called the "Eben-Ezer Church." However, their petition to buy the church was denied by the Conference because the property had been used as "a dry-cleaning business and there were chemicals" that could cause an "environmental" hazard. Gracia testified in deposition, however, that Morija's request was denied because the requests of other churches were "ahead of [theirs]."

On November 26, 2005, despite the Conference's rejection, Morija officers moved ahead with plans to purchase the building in Elizabeth. Augustave and Gracia were among seven members of the board who voted to "sen[d] [only] . . . 50 percent" of the tithes to the Conference and retain the balance to purchase the property. The official minutes of the meeting confirm that church officers "voted . . . without the support of the

[C]onference." The minutes do not reflect that Fenelon was present at this meeting, but it is undisputed that he knew of the decision to purchase the building. By December 2005, the church had closed title; Gracia signed the loan documents and $400,000 in withheld tithe monies was paid toward the $500,000 purchase price.

In February 2006, the Conference released an audit report regarding an investigation of Morija's finances. The actual audit had taken place in April 2005, but, because the auditor did not convert his findings into a written report until February 14, 2006, the report's conclusions reflected events in the latter half of 2005. The audit concluded that Morija was "conceal[ing] the full amounts of funds donated monthly" and engaging in "several acts . . . [that] were inappropriate and had been performed for years." Among these "acts" were: "undervalu[ing]" treasurer reports; and "[r]emitting only a portion of Conference funds, such as tithe, and restating the funds withheld as Church funds." The auditor recommended several measures, including removing the church treasurer and implementing a better system for filing financial reports; he also documented a $26,198.44 debt to the Conference reflecting outstanding remittance payments.

Even before the release of the auditor's report, church officers acknowledged they owed several thousand dollars to the Conference. Minutes from a January 21, 2006 meeting reflect that $26,000 was due for the four months between September and December 2005. Instead of paying the debt in its entirety, church officers agreed to only "send $3,000" because "the church [wa]s . . . confronting [some] financial problems." Gracia acknowledged the debt but believed buying a new building was a good excuse for "[not] hav[ing] the money."

On February 18, 2006, four days after the report's release, Cheatham attended an anniversary celebration for the Morija congregation and used his visit to specifically address his concerns regarding the audit. Cheatham testified in deposition that he first discovered Morija's unapproved plans when he read the audit and realized a building had "be[en] bought independently." Thus, although he was called to "preach [at] the occasion," Cheatham ordered a "business meeting with the church congregation at large" and "read the result of the audit," specifically noting "the treasurer [wa]s using the money of the church." Cheatham testified that instead of receiving an explanation of the audit's findings from the officers, he was "lambasted" for accusing them of stealing money. Augustave, who was present at the business meeting, testified that he was both "shock[ed]" and "surprised" at the audit because no one had "[]ever received a copy of [it]."

On March 9, 2006, in an effort to clarify his intentions, Cheatham sent a letter to Morija's officers demanding that they comply with the Church Manual or face removal from the Conference. In the letter, among other things, Cheatham wrote:

[T]he local leadership, including the First Elder, the Treasurer and others were not following the prescribed guideline[s] as set forth by [the Church] in the proper management of funds. The records showed that monies were entrusted to them by the members of the church to be sent to the conference as their faithful tithe to be used . . . for "[t]he work of the ministry." But for years this group decided that they would use a portion of the tithe money for other purposes. We expect records will show when, and how these [tithe] monies were diverted for the operations of the building and rents as well as . . . for the unauthorized purchase of a building that is not in the name of [the Church]. . . . This building is not insured with the Denominational endorsements, is not tax exempt, and in no way associated with the Allegheny . . . Conference . . . .

Labeling the purchase as "illegal," and concluding that the officers were "jointly responsible for the scheme," Cheatham recommended their removal and demanded an accounting of Morija's finances for 2004 and 2005 "within the next 30 days." He concluded that if Morija's officers "refus[ed] to submit all records," or destroyed or "conceal[ed]" them, it "w[ould] be considered a fraudulent criminal act." Other threatened consequences for failure to comply included the removal of the pastor and expulsion from the Conference "because of insubordination and misappropriations of funds." The letter was copied to the "Officers of Morija - First Elder - Treasurer -Clerk - [and] Head Deacon."

The thirty-day deadline passed and Cheatham had not received the documents requested. Though the Morija officials asked for an extension, it was refused. Cheatham began the process of "disbanding" Morija and, on June 17, 2006, he returned to the church to officially announce that it was "to remove itself from the [Conference]." Elders and church officials at that meeting told Cheatham that they were "willing to . . . change things" and also claimed that they were not the "first" church to bend the rules.

On March 5, 2007, plaintiffs filed their complaint against defendants alleging two counts of defamation, specifically in the contents of the March 9, 2006 letter and in the comments Cheatham made during the June 17, 2006 meeting. In a third count, plaintiffs alleged a violation of their privacy rights by "casting them in a false light in the community." Defendants filed their answer, generally denying plaintiffs' allegations, and asserting various affirmative defenses, including that the suit was not "cognizable in law or equity," and that "qualified and/or conditional immunity" applied to any statements made about plaintiffs.

In answers to interrogatories, plaintiffs alleged that during the June 2006 meeting:

[Cheatham] explained that the only chance the congregation had to continue as a member of the Conference would be to reorganize under a new name "but make sure that those guys (plaintiffs) are not part of the new church because they are not going to change."

Further, plaintiffs claimed that an associate of Cheatham, Pastor Campbell, was overheard saying "that one guy just came out of jail for stealing the church money." In response to a hypothetical query posed by one of the Morija officers -- "if, for example, a specific amount like $40,000 [were] missing . . . [would] they go[] to jail" -- plaintiffs claimed Cheatham responded, "It is an ongoing investigation." In his deposition, Augustave acknowledged that only one person was present at the June 2006 meeting who was not affiliated with Morija or the Conference; that person was the "son of [another pastor]" and "was not a member of the church."

In his deposition testimony, Augustave reiterated that dire circumstances compelled church leaders to resort to drastic measures. He acknowledged that this included buying a building without approval and "withhold[ing] 50 percent of the tithe" "in the years leading up to 2006." He further admitted that he knew this was in direct violation of the Church Manual. Augustave contended, however, that "[n]obody follows technically the church manual," calling only the "Bible . . . absolute, not the church manual."

Nevertheless, Augustave did not deny that the majority of the statements made by Cheatham were true, and acknowledged that Cheatham's comments "[were]n't about [him] by name" but rather the overall conduct of the church officers. Gracia and Fenelon confirmed the majority of Augustave's testimony in their depositions.

In his deposition, Cheatham claimed that Morija's request to buy the building was denied because the church had not undertaken "certain specifications . . . like [an] environmental inspection" or checked "the constructional soundness of the building" before buying it. He also testified that once the audit alerted him to Morija's misdeeds, he took action because in the past, other denominations "had . . . individuals . . . go[] to jail for embezzlement and misuse of moneys." But he claimed that he never specifically directed his June 2006 comments toward plaintiffs.

Plaintiffs alleged Cheatham's comments sullied their reputations as church leaders. Specifically, Gracia testified that church members began to treat him differently and "the respect they ha[d] for [him] [wa]s so gone." He also was no longer receiving invitations to speak and started taking prescription medication for anxiety because he "fe[lt] so bad." Augustave also contended that his reputation was ruined but did not deny that he has nonetheless remained an elder of the Morija Church.

Defendants moved for summary judgment. They argued that the complaint should be dismissed because the court lacked subject matter jurisdiction since the case involved "an int[ra]church dispute." They also contended no "specific defamatory statements [were] proven" from either the March 2006 letter or the June 2006 meeting, and, even if the statements were defamatory, a qualified privilege applied.

Plaintiffs countered by arguing that the court had jurisdiction over the dispute. They also contended that defendants' statements were "slander per se" because they "accused [plaintiffs] of stealing money," and "were susceptible to a meaning that . . . was an accusation of theft." Plaintiffs conceded that a "conditional privilege . . . applie[d] to the statements made," but that the privilege was lost because defendants acted with "reckless indifference" to the truth or falsity of Cheatham's statements or had otherwise abused the privilege.

In a short written statement that accompanied the order under review, the judge concluded:

Members of a religious group may [share] a [c]ommon interest for purpose of a qualified privilege. The [c]hurch members had a [c]ommon interest in seeking to determine how their [t]ithes were being spent and whether [t]he elders were abiding by the rules set forth in the Church Manual. This privilege was not abused through over [p]ublication or malice, as only [c]hurch members were present, and the statements made by [d]efendants were not malicious. The statement that these people "will never change" or answering a hypothetical question on what happens when other people [t]ake monies cannot be deemed malicious, or for that matter, defamatory.

He granted defendants' summary judgment motion, and this appeal followed.

When reviewing a grant of summary judgment, we employ the same standards used by the motion judge. Atl. Mut. Ins. Co. v. Hillside Bottling Co., Inc., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006). We first determine whether the moving party has demonstrated there were no genuine disputes as to material facts. Ibid.

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. [Brill, supra, 142 N.J. at 540.]

We then decide "whether the motion judge's application of the law was correct." Atl. Mut. Ins. Co., supra, 387 N.J. Super. at 231. We owe no deference to the motion judge's conclusions on issues of law. Ibid. (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

We have said that "if the summary judgment turns on a question of law, or if further factual development is unnecessary in light of the issues presented, then summary judgment need not be delayed." United Sav. Bank v. N.J. Dep't of Envtl. Prot., 360 N.J. Super. 520, 525 (App. Div.), certif. denied, 177 N.J. 574 (2003). Moreover, "[p]ublic policy considerations favor the use of summary judgment motions to eliminate baseless defamation claims." Feggans v. Billington, 291 N.J. Super. 382, 395 (App. Div. 1996); see also Costello v. Ocean Cnty. Observer, 136 N.J. 594, 605 (1994) (calling summary judgment an "important tool for disposing of non-meritorious [defamation] lawsuits").

We focus on the first point plaintiffs raise on appeal, i.e., whether the motion judge correctly concluded that defendants' statements were, as a matter of law, privileged, and whether defendants had demonstrated, as a matter of law, that they had not abused the privilege. We review some basic principles in this regard.

In New Jersey, it has been long-recognized that "in particular situations, . . . private people [should] be able freely to express private concerns to a limited and correlatively concerned audience." Bainhauer v. Manoukian, 215 N.J. Super. 9, 36 (App. Div. 1987). Thus, otherwise defamatory comments are accorded a privilege "where the publisher is . . . protecting . . . an interest common to [him] and the recipient." Ibid. Whether an otherwise defamatory statement may be immunized by a qualified privilege turns on consideration of three factors: first, the "appropriateness of the occasion on which the defamatory information is published"; second, "the legitimacy of the interest thereby sought to be protected or promoted"; and third, "the pertinence of the receipt of that information by the recipient." Id. at 37 (noting that the defendant bears the burden of proving the privilege). "[T]he judge rather than the jury" will determine the privilege's applicability. Id. at 40. "[R]eligious . . . associations" are often shielded by a privilege "for communications among themselves concerning the qualifications of the officers and members." Restatement (Second) of Torts § 596 comment e (1977); see also Gallo v. Princeton Univ., 281 N.J. Super. 134, 144-45 (App. Div.) ("recogniz[ing] that charitable institutions. . . have a qualified privilege to communicate with contributors . . . and other persons involved in their activities regarding alleged employee wrongdoing"), certif. denied, 142 N.J. 453 (1995).

Plaintiffs contend the privilege does not apply because 1) "church members already knew" about the diversion of the tithe monies and the purchase of the building without consent of the Conference; and 2) "publication by defendants was volunteered." We find these arguments to be unpersuasive.

The February and June 2006 meetings and the March 2006 letter were "appropriate[] . . . occasion[s]" for Cheatham to disclose his concerns about Morija's management of its funds.

Bainhauer, supra, 215 N.J. Super. at 37. Cheatham specifically testified that he had not learned of the tithe withholdings or the building's purchase until he read the auditor's report, which was released only a few days prior to his visit. We recognize that plaintiffs contend Cheatham already knew about the purchase because Fenton was aware. But resolution of this factual dispute is irrelevant because whether Cheatham knew of the circumstances before the February 2006 meeting, or whether the congregants knew, is irrelevant.

As representative of the Conference, Cheatham took the opportunity to affirm the organization's disapproval of the purchase of the building and diversion of funds for that purpose. His letter of March 2006 reiterated his concerns. His remarks in June 2006 addressed the continued inability of the Morija officials to respond to the Conference's requests for information. Plaintiffs cannot seriously dispute the appropriateness of the occasions.

Moreover, the "legitimacy" of Cheatham's concerns, Bainhauer, supra, 215 N.J. Super. at 37, cannot be questioned by plaintiffs, particularly since they admit purchasing the building with foreknowledge of violating the Church Manual. Although they contend that other local churches had similarly purchased buildings without approval, that in no way diminishes the legitimate issues disclosed by the February 2006 audit report, which, parenthetically, raised additional concerns of financial management.

Lastly, the information Cheatham provided to the congregation was "pertinen[t]" to those who received it. Bainhauer, supra, 215 N.J. Super. at 37. Plaintiff contends that the information was volunteered by Cheatham, not sought by the church members. However, the gravamen of Cheatham's remarks included a clear statement regarding the consequences of Morija's prior decisions. The fact that the building was purchased in the local church's name and without appropriate insurance coverage, in violation of the Church Manual, exposed the congregation to consequences that, arguably, went beyond their expectations. Moreover, there is sufficient evidence in the record to demonstrate that some of Cheatham's comments made at the June 2006 meeting were made in direct response to specific questions. See Restatement, supra, § 595 comment j (noting "publi[cations] in response to a request by [a] person whose interest is concerned" supports the existence of a conditional privilege).

In short, the motion judge correctly determined that the privilege applied.

Alternatively, plaintiffs contend that even if a qualified privilege applied, it was "abused" because defendants acted "malicious[ly]" and "over[-]publi[shed]" their comments. We disagree.

Even when a qualified privilege applies, "[a] plaintiff may [still prevail] by proving that the immunized defendant abused [the] privilege." Govito v. W. Jersey Health Sys., Inc., 332 N.J. Super. 293, 312 (App. Div. 2000). Abuse of the privilege occurs:

[I]f "(1) the publisher knows the statement is false or the publisher acts in reckless disregard of its truth or falsity; (2) the publication serves a purpose contrary to the interests of the qualified privilege; or (3) the statement is excessively published." [Ibid. (quoting Williams v. Bell Tel. Labs. Inc., 132 N.J. 109, 121 (1993)).]

"The privilege will also be abused if the publisher does not reasonably believe the matter to be necessary to accomplish the purpose for which the privilege is given." Ibid. (quotations omitted). Plaintiff bears the burden of proving "[a]buse of a qualified privilege . . . by clear and convincing evidence." Ibid. And, we have recognized that in general, "[t]he jury determines whether the defendant abused a special-interest privilege." Ibid. (citing Bainhauer, supra, 215 N.J. Super. at 40-41; Restatement, supra, § 619(2)).

However, it is equally clear that where "there [i]s not sufficient evidence of an abuse of the . . . privilege," "submission of that issue to the jury" is unnecessary. Jorgensen v. Penn. R.R. Co., 25 N.J. 541, 569 (1958); see also Murphy v. Johns-Manville Prod. Corp., 45 N.J. Super. 478, 495 (App. Div.) (the issue should not be submitted to the jury when there is "not more than a scintilla of evidence, of malice"), certif. denied, 25 N.J. 55 (1957). In Govito, supra, 332 N.J. Super. at 320, for example, we affirmed the trial court's involuntary dismissal of the plaintiff's case before submission to the jury. See also Gulrajaney v. Petricha, 381 N.J. Super. 241, 259 (App. Div. 2005) (affirming grant of summary judgment on grounds of qualified privilege).

In this case, plaintiffs cannot assert that Cheatham's oral statements and those in his letter were made with knowledge of their falsity or in reckless disregard of their truth or falsity. Plaintiffs conceded that the statements regarding the diversion of tithe monies and the purchase of the building without consent were true.

Similarly, plaintiffs failed to demonstrate that the statements were made with "a purpose contrary to the interests of the qualified privilege." Govito, supra, 332 N.J. Super. at 312 (quotations omitted). As already noted, Cheatham's interest in making the statements was to notify Morija of the significant consequences of the violations and to urge the congregation to correct them. There is no evidence of any contrary motive.

Lastly, plaintiffs contend that there was evidence of over-publication because "others received the March letter and learned of the statements." In order for the privilege to apply, publication of the defamatory statement must be limited to a "correlatively concerned audience." Bainhauer, supra, 215 N.J. Super. at 36. "Excessive publication occurs where defendants could have no reasonable belief that the publication was an appropriate means of communicating the [statement] to another to whom the publication is privileged." Feggans, supra, 291 N.J. Super. at 399. The privilege is not defeated by excessive publication simply because the comment was received by someone who did not need to know its contents. Govito, supra, 332 N.J. Super. at 318-19. As we explained:

Ordinarily, a privilege is abused by speaking defamatory words in the presence of persons whose knowledge of them is unnecessary to the protection of the interest in question. However, this is not true when the publication to those persons is reasonably incidental to the communication of the defamatory matter to the person whose knowledge is reasonably believed to be necessary or useful for the protection of the interest. [Id. at 319 (quoting Restatement, supra, § 604).]

The March 2006 letter was only copied to individuals who had an interest in the issues Cheatham raised. Neither Augustave nor Gracia could confirm whether any of those people read the documents; Gracia testified that he had only shown the letter to his wife, who at the time was acting as the church treasurer. Thus, even if "others" had viewed the March letter, there is no evidence to suggest that Cheatham published the comments without a "reasonable belief" that it was an appropriate way to convey his concerns. Feggans, supra, 291 N.J. Super. at 399.

In their third point, plaintiffs argue that the judge dismissed their false light invasion of privacy claim without explanation and that they presented sufficient evidence to defeat defendants' summary judgment motion in this regard. We agree that the judge did not sufficiently explain his rationale in granting summary judgment on this count of plaintiffs' complaint, but there is no reason to remand the matter. We conclude that summary judgment was properly granted.

"Liability for this form of privacy invasion is found when '[o]ne . . . gives publicity to a matter concerning another that places the other before the public in a false light [and]. . .

(a) the false light in which the other was placed would be highly offensive to a reasonable person, and

(b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.'" [Romaine v. Kallinger, 109 N.J. 282, 294 (1988) (alterations in original) (quoting Restatement (Second), supra, § 652E).]

"'[A] fundamental requirement of the false light tort is that the disputed publicity be in fact false, or else at least have the capacity to give rise to a false public impression as to the plaintiff.'" G.D. v. Kenny, 205 N.J. 275, 308 (2011) (quoting Romaine, supra, 109 N.J. at 294).

In this case, plaintiffs admitted that Cheatham's comments regarding the diversion of tithe monies and the unauthorized purchase of the building were true. They contend that other comments, however, implied they had engaged in criminal conduct. Even if this "impression" were false, plaintiffs have failed to prove that Cheatham acted with the requisite "reckless disregard." The March 2006 letter does not allege that plaintiffs acted criminally, and plaintiffs' versions of Cheatham's February and June 2006 oral comments likewise do not raise a jury question in this regard.

In light of our holding, we need not consider the other points raised on appeal.



© 1992-2011 VersusLaw Inc.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.