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In the Court of Common Pleas of Allegheny County, Pennsylvania

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In the Court of Common Pleas of Allegheny County, Pennsylvania • • IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA CALVARY EPISCOPAL CHURCH, CIVIL DIVISION PITTSBURGH, PENNSYLVANIA, a Pennsylvania Non-Profit Corporation, et ai. No. GD-03-020941 Plaintiffs, AMENDED MOTION TO RESTORE AND PRESERVE STATUS QUO AND v. MOTION TO ESTABLISH PROCEDURE FOR ADJUDICATION OF THE RIGHT REVEREND ROBERT CHALLENGES WILLIAM DUNCAN, Bishop ofThe Episcopal Diocese ofPittsburgh, et al. Defendants. FILED ON BEHALF OF: The Right Reverend Robert William Duncan, Bishop ofThe Episcopal Diocese of Pittsburgh, The Episcopal Diocese of Pittsburgh, et aI., Defendants Counsel for these Parties: JOHN H. LEWIS, JR. (I.D. No. 04490) DAVID D. LANGFITT (I.D. No. 66588) Jo A. ROSENBERGER (I.D. No. 200121) MONTGOMERY, MCCRACKEN, WALKER & RHOADS,LLP 123 South Broad Street Avenue ofthe Arts Philadelphia, PA 19109 Telephone: (215) 772-1500 Facsimile: (215) 772-7620 ANDREW FLETCHER (I.D. No. 75544) CHRISTOPHER A. CAFARDI (I.D. No. 90904) RICHARD M. WEIBLEY (I.D. No. 90958) PEPPER HAMILTON, LLP Firm ID # 143 50th Floor 500 Grant Street Pittsburgh, PA 15219-2502 Tel: (412) 454-5000 Fax: (412) 281-0717 • • IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA CALVARY EPISCOPAL CHURCH, ) PITTSBURGH, PENNSYLVANIA, a Pennsylvania ) Non-Profit Corporation; et aI., ) No. GD-03-020941 ) Plaintiffs, ) ) v. ) ) THE RIGHT REVEREND ROBERT WILLIAM ) DUNCAN, Bishop ofThe Episcopal Diocese of ) Pittsburgh, The Episcopal Diocese ofPittsburgh, ) et al. ) ) Defendants. ) AMENDED MOTION TO RESTORE AND PRESERVE STATUS QUO AND MOTION TO ESTABLISH PROCEDURE FOR ADJUDICATION OF CHALLENGES On January 20, 2009, Defendants filed a Motion to Restore and Preserve Status Quo (the "Motion for Status Quo,,)l to stop Plaintiffs and a newly-created diocese aligned with The Episcopal Church (the "New Diocese") from interfering with the Diocese's ability to hold and administer Diocesan property. Plaintiffs and the New Diocese have asserted that the Diocese's withdrawal from The Episcopal Church ("TEC") is invalid. Rather than seeking a judicial determination of this issue, Plaintiffs and the New Diocese have proceeded as though it has already been resolved in their favor and thus demanded that the New Diocese be given immediate access to all Diocesan property. This conduct has caused the Diocese's investment accounts at Morgan Stanley (the "Morgan Stanley Accounts") to be frozen, despite the Court's prior determination that Diocesan property should not be encumbered, but administered as it 1 The Motion for Status Quo, which is incorporated by reference herein, contains a detailed summary of both the procedural and factual background ofthis dispute. • • always had, pending the resolution of the major issues in this litigation. Since Defendants filed the Motion for Status Quo, it has become apparent that absent immediate relief from this Court, Defendants will be unable to defend themselves in this litigation, and the Diocese's continued operation will be threatened. In addition to this relief, Defendants request that the Court establish a procedure to resolve the procedural issues raised by the recent filings of the New Diocese and TEC and bring this litigation to an efficient and orderly conclusion. The Court must put an end to the New Diocese's attempts to circumvent the adjudication of this matter by claiming to be the Diocese that is a party to this litigation. Defendants request that the Court schedule a hearing on Defendants' Motion to Strike Praecipe for Entry of Appearance, strike Mr. Roman's entry of appearance, and set a deadline for the New Diocese to become a proper party to this case. Moreover, Defendants request that the Court schedule a hearing on the Petition to Intervene of the Right Reverend John C. Buchanan, as trustee ad litem for TEC. Once these issues have been addressed, Defendants request that the Court hold a hearing to establish a procedure for addressing the substantive issues in this litigation, including (I) whether the Diocese's withdrawal from TEC is valid; and (2) if it is valid, the impact of that withdrawal under the October 14,2005 Stipulation and Order. I. Defendants Need Immediate Relief from the Court to Restore and Preserve the Status Quo I. Defendants need immediate relief from this Court to restore and preserve the status quo, including an order unfreezing the Diocese's Morgan Stanley accounts. 2. Since Defendants filed the original Motion for Status Quo, additional facts have come to light demonstrating urgent need for the requested relief. -2- • • 3. As outlined in the Motion for Status Quo, Plaintiffs and the New Diocese have caused the Diocese's Morgan Stanley Accounts to be frozen. 4. The Morgan Stanley Accounts contain numerous endowments on which the Diocese depends in funding its budget.2 5. Without access to these endowments, the Diocese will be unable to meet its budgeted expenses, including paying its operating expenses and legal fees in this matter.3 6. Absent relief from this Court, Defendants will be unable to defend themselves in this litigation, and the Diocese's continued operation will be threatened. 7. The conduct of Plaintiffs and the New Diocese in causing the Morgan Stanley Accounts to be frozen is both improper and unwarranted. 8. Since its withdrawal from TEC, the Diocese has continued to hold and administer the property covered by the Stipulation and Order for the beneficial use of all the parishes and institutions of the Diocese. It has never questioned, let alone failed to satisfy, this obligation. 9. The Diocese's actions with regard to the property have been transparent and fully documented. 2 The Morgan Stanley Accounts also contain funds held for individual parishes. These funds belong to the parishes and are distributed to parishes and used at their discretion. 3 The conduct ofPlaintiffs and the New Diocese has also prevented the Diocese from making scheduled payments to individual parishes and institutions ofthe Diocese. Indeed, parishes on both sides ofthe current dispute have not received payments which are used to fund these parishes' operating budgets and pay other expenses. The freeze also threatens the Diocese's continued funding ofscholarships, mission work and community service that it has always funded. -3- • • 10. Without cause or justification, Plaintiffs and the New Diocese have usurped this Court's authority and resorted to self help regarding the property covered by the Stipulation and Order. 11. While Plaintiffs asked this Court to freeze the Diocese's assets in the Summer of 2007, see, e.g., Supplement, ~ 22, Plaintiffs chose not to follow through on this request and instead agreed to the appointment ofa Special Master to inventory the property. 12. The conduct of Plaintiffs and the New Diocese in causing the Morgan Stanley Accounts to be frozen was improper, and Plaintiffs and the New Diocese should not be permitted to freeze Diocesan assets without litigating the issue or seeking a ruling from this Court. 13. The freeze of the Morgan Stanley Accounts also undermines the Court's decision to appoint the Master. 14. The Master was appointed to inventory the Diocese's property so that the issues surrounding the ownership and/or distribution of that property under the Stipulation and Order could be resolved without upsetting the day-to-day operations ofthe Diocese, the parishes and church institutions. See September 8, 2008 Transcript, pp. 74 (the Court stating "... I think the master needs to come in, create the inventory and define the issues, task master as he or she finds them, and then we can go forward."); see also id. pp. 59-60. ("We don't want gridlock where there are injunctions and bank accounts frozen."). 15. By causing the Morgan Stanley Accounts to be frozen, Plaintiffs and the New Diocese have upset this process and caused the exact result this Court sought to avoid. -4- • • 16. Accordingly, the Court should enter an order restoring and preserving the status quo, including unfreezing the Morgan Stanley Accounts, until the Court can resolve the major issues in this litigation. II. The New Diocese Must Become a Proper Party to this Litigation 17. The New Diocese must become a proper party to this litigation. 18. On January 5, 2009, Andrew Roman, the chancellor of the New Diocese, filed a praecipe to enter his appearance in this case on behalf of an entity called "The Episcopal Diocese ofPittsburgh ofthe Episcopal Church ofthe United States ofAmerica." 19. On January 20, 2009, Defendants moved to strike Mr. Roman's praecipe for entry of appearance (the "Motion to Strike") on the basis that: (1) Mr. Roman purports to enter his appearance for an entity that is not a party to this litigation; (2) the diocese that is a Defendant in this litigation and governed by Stipulation and Order is represented by Montgomery McCracken and Pepper Hamilton; and (3) the entity for which Mr. Roman claims to appear is not even the name ofhis client - the New Diocese, but the description ofthe Diocese contained in the Stipulation and Order.4 20. Neither Mr. Roman nor the New Diocese has responded to the Motion to Strike. 21. Defendants recognize that the New Diocese contends that the Diocese's withdrawal from TEC was invalid; that officers of the Diocese lost their offices because they 4 The New Diocese calls itself "Episcopal Diocese of Pittsburgh ofThe Episcopal Church in the United States." Mr. Roman purported to enter his appearance on behalfof"The Episcopal Diocese ofPittsburgh ofthe Episcopal Church ofthe United States ofAmerica." -5- • • supported the withdrawal; and that the New Diocese is the diocese covered by the Stipulation and Order. 22. Defendants further recognize that these are issues to be addressed by this Court. Indeed, Defendants submit that the validity of the Diocese's withdrawal from TEC should be the first substantive issue addressed by this Court.
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