United States District Court, S.D. New York
March 15, 2004.
JANET BRODERICK KRAFT, Plaintiff, -against- The Rector, Churchwardens and Vestry of GRACE CHURCH in New York; RICHARD F. GREIN; ANNE RICHARDS; and DAVID RIDER, Defendants
The opinion of the court was delivered by: KIMBA WOOD, District Judge
OPINION & ORDER
Plaintiff, a former senior associate priest at defendant Grace Church
in New York ("Grace Church"), was terminated by Grace Church. Plaintiff
does not contest the Church's right to terminate her, and does not seek
reinstatement to her former position. Rather, plaintiff claims damages
for breach of her employment contract and for the allegedly tortious
conduct surrounding her termination. Specifically, plaintiff sues for:
breach of, and tortious interference with, her employment contract;
wrongful discharge; wrongful denial of employment benefits; and
defamation. Each of the defendants moves to dismiss the Complaint, either
in whole or in part.
Plaintiff's claims all arise out of her employment agreement. This
agreement permitted Grace Church to terminate plaintiff with or without
cause, but it entitled her to certain benefits if her termination was
without cause. Plaintiff claims that she was ultimately terminated
without cause, and yet did not receive the benefits to which she was
entitled. Defendants claim that
plaintiff was terminated for cause; namely, that certain expenditures made
by plaintiff from her discretionary fund, and on the church credit card,
were improper and in violation of canon law. Plaintiff's actions in tort
similarly derive from her challenge to the Church's position that she was
terminated for cause.
As discussed below, the Free Exercise Clause of the United States
Constitution (the "Free Exercise Clause") bars courts from adjudicating a
dispute, such as this, regarding the reasons for a church's decision to
terminate one of its ministers.*fn1 Additionally, resolving the precise
dispute posed by plaintiff in this litigation namely, whether the
challenged expenditures furthered her ministry and/or whether they
complied with canon law would likely entangle the Court in a religious
dispute, in violation of the Establishment Clause of the United States
Constitution (the "Establishment Clause").*fn2
Plaintiff is an ordained priest of the Episcopal Church in good
standing. See Complaint, ¶ 10. In 1997, plaintiff resigned as Rector of
All Saints' Church in Briarcliff Manor, New York, to
accept the position of Senior Associate Priest, with the title of
"Vicar," at defendant Grace Church in New York. Id. at ¶¶ 11-12. At that
time, plaintiff entered into a written employment agreement (the
"Agreement") with Grace Church. The Agreement provides that the "Vicar
[i.e., plaintiff] shall serve at the pleasure of the Rector. If Vicar is
terminated for any reason . . . other than for cause, she will be given
not less than one year's prior written notice thereof." Agreement, §
F(1).*fn4 The Agreement also provides for: (1) specified compensation
and benefits, id. Exh. A, § B; (2) "periods of leave at full
compensation," id. at § A(2); and (3) plaintiff's ability to make
disbursements from a clergy discretionary fund and a vicar's
discretionary fund, id. at § D. The vicar's discretionary fund was
established for the purpose of plaintiff to "deposit and, at her sole
discretion, disburse all donations received to support her ministry."
In May 1999, the Reverend John Andrew ("Andrew") became the
"Priest-in-Charge" at Grace Church. See Complaint, ¶ 22. In late
September 2000, Andrew notified plaintiff that she would be terminated
without cause, effective October 1, 2001. Id. at 1 25. Upon receiving
that notice, plaintiff began her search for employment at other
parishes. Id. at ¶ 26. On January 18, 2001, plaintiff began a seven-month
sabbatical leave. Id. at 1 29. In March 2001, Reverend David Rider
("Rider") was appointed the Priest-in-Charge of Grace Church, to be
effective June 1, 2001.
Id. at ¶ 34.
In April 2001, Defendant Bishop Grein ("Grein") directed Andrew to sign
a letter (the "Termination Letter") immediately terminating plaintiff's
employment for cause, based on alleged improprieties in plaintiff's use
of the discretionary funds and of the parish's credit card. Id. at 55
36-38. On May I, 2001, Andrew read the Termination Letter at a meeting
attended by: plaintiff; counsel for plaintiff; counsel for Grace Church; the
Treasurer and Assistant Treasurer of Grace Church; the two Wardens; and
Andrew. Id. at 55 42-46. In response, plaintiff asked for details about
her alleged improprieties. She received a computer printout listing the
allegedly improper transactions. Id. at ¶ 49. Included in the printout
were several payments to the high school that her son attended, as well
as payments to people who had, at some point, allegedly served as
plaintiff's babysitter. See Defendants' Exh. 1. Kraft also used the
discretionary funds to send her son and two friends on a ski trip with
FOCUS, a religious group. Id. Kraft admits to having made the challenged
expenditures, but defends them as having been properly made, at her
discretion, to support her ministry. See Oct. 17, 2002, Tr. 69:14-21.
Representatives of Grace Church asked plaintiff to approve a draft
announcement of her termination and to sign a draft agreement of
termination. Complaint, 55 51-54. The draft announcement stated that
there was cause for plaintiff's discharge; the draft agreement claimed to
supercede all prior agreements. Id. at 15 51-52 & 54.
Plaintiff refused to sign either. Id. at ¶¶ 52 & 56.
In a May 3, 2001, telephone conversation, and in a May 16, 2001,
letter, Grein threatened and attempted to intimidate plaintiff to compel
her to sign the draft termination agreement. Id. at II 59 & 61. In the
letter, Grein advised plaintiff that, if she continued to refuse to sign
the draft termination agreement, she could be charged in a formal
canonical complaint with "conduct unbecoming of a member of clergy." Id.
at Exh. D. Sometime thereafter, Grace Church terminated plaintiff's
salary and all of her benefits. Id. at 163.
Throughout April, May and June 2001, Grein and Rider made false
statements about plaintiff's alleged misuse of her discretionary funds
and about plaintiff's other, unspecified, alleged "wrongdoing." Id. at
¶ 64. Grein and Rider made those statements to (among others) members of
the congregation of Grace Church and plaintiff's prospective employers.
Id. In an effort to discredit the allegations of impropriety, plaintiff
documented each challenged financial transaction and requested an
opportunity to present her documentation to the vestry of Grace Church.
Id. at 1 65. When Rider denied her that opportunity, she distributed, on
her own accord and for consideration at the next-scheduled meeting,
written explanatory materials to all members of the vestry. Id. at ¶
66. Rider directed the vestry to return the materials unread. Id. at ¶
On June 6, 2001, at a meeting between Grein and plaintiff, Grein
acknowledged that plaintiff had not used improperly any of
Grace Church's money. Id. at ¶ 75. Nonetheless, Grein continued to
threaten plaintiff with ecclesiastical charges and attempted to
intimidate her into not filing a lawsuit. Id. at ¶¶ 75-76. On June 26, at
a special vestry meeting, Rider announced that he intended to appoint
Richards to the position previously held by plaintiff. Id. at ¶ 79.
Rider subsequently appointed Richards to the position. Id. at ¶ 81.
Plaintiff now charges Grace Church with breach of the Agreement,
wrongful discharge and wrongfully denying her employment benefits.
Plaintiff charges Grein, Richards and Rider with tortious interference
with the Agreement. She charges all defendants with improperly damaging
her professional reputation.*fn5 Defendants move to dismiss, in part and
Defendants move to dismiss this action, under Fed.R.Civ.P. 12(b)(1),
for lack of subject matter jurisdiction or, alternatively, under
Fed.R.Civ.Pro. 12(b)(6), for failure to state a claim upon which relief
can be granted. On a motion to dismiss under Rule 12(b)(1) and (6), the
Court must accept all factual allegations in the Complaint as true and
must draw all reasonable inferences in favor of plaintiff. See Jaghory
York State Pep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997). When
deciding a Rule 12(b)(6) motion, the Court may not consider any material
outside of the pleadings. See Fonte v. Bd. Managers of Cont'l Towers
Condominium, 848 F.2d 24, 25 (2d Cir. 1988). However, when deciding a
Rule 12(b)(1) motion, the Court may refer to evidence outside of the
pleadings to resolve any disputed jurisdictional facts. See Zappia Middle
East Constr. Co., Ltd, v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d
Cir. 2000) (citation omitted).
A. Rule 12(b)(1) Motion
On a Rule 12(b)(1) motion for lack of subject matter jurisdiction, the
plaintiff bears the burden of proving jurisdiction. See Robinson v.
Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). The
nature of the plaintiff's burden depends on the procedural posture of the
litigation. See Ball v. Metallurgie Hoboken-Overpelt, 902 F.2d 194, 197
(2d Cir. 1990). Where, as here, a court holds an evidentiary hearing to
determine whether it can exercise jurisdiction, the plaintiff must
demonstrate jurisdiction by a preponderance of the evidence.*fn6 See
Met. Life Ins. Co. v. Robertson-Ceco, 84 F.3d 560 (2d Cir. 1996);
Robinson, 21 F.3d at 507 n.3.
Defendants challenge the Court's jurisdiction under both the Free
Exercise Clause and the Establishment Clause of the First Amendment.
Plaintiff must demonstrate by a preponderance of the
evidence that neither of these clauses protects defendants from a Court
exercising jurisdiction. The key difference between a Free Exercise
Clause analysis and an Establishment Clause analysis, is that the former
focuses on the nature of the parties involved in the dispute, whereas the
latter focuses on the issues that would have to be addressed in order to
resolve the suit. See Hartwig v. Albertus Magnus College,
93 F. Supp.2d 200, 211 n. 13 & 212 n. 15 (D. Conn. 2000).
1. The Free Exercise Clause
If a suit involves an employment decision by a church with respect to
one of its ministers, courts lack jurisdiction because the Free Exercise
Clause bars court involvement in the employment relationship between a
minister and a church. This absolute bar has developed under a line of
Supreme Court cases interpreting the Free Exercise Clause as prohibiting
courts from encroaching on a church's ability to manage its internal
affairs,*fn7 particularly with respect to decisions regarding the
selection and retention of clergy. See, e.g., Gonzalez v. Roman Catholic
Archbishop of Manila, 280 U.S. 1, 16, 50 S.Ct. 5, 74 L.Ed. 131 (1929)
("it is the function of the church authorities to determine what the
essential qualifications of a chaplain are and whether the candidate
possesses them"); Serbian Eastern Orthodox Diocese v. Milivojevich,
426 U.S. 696, 717, 96 S.Ct. 2372, 49 L.Ed.2d 151 (1976) ("questions
of church discipline and the composition of the church hierarchy are at
the core of ecclesiastical concern").
Numerous Courts of Appeal have considered whether the Free Exercise
Clause precludes ministers from suing church employers for purported
violations of federal anti-discrimination statutes. Those courts have
held, unanimously, that the Free Exercise Clause bars the application of
these statutes to churches' employment decisions concerning ministers.*fn8
Courts have referred to this bar as being a "ministerial exception" to,
or a "ministerial exemption" from, federal anti-discrimination statutes.
Although the instant suit asserts common law claims, rather than
federal statutory claims, the same constitutional principle applies to
both, and bars court review of church decisions regarding the employment
The Second Circuit has never been called upon to decide whether the
Free Exercise Clause prohibits courts from adjudicating employment
disputes between members of the clergy and religious institutions. It
made indirect reference to the "ministerial exception," without adopting
it, in a case in which it held that
the ADEA applied to a parochial school teacher because his duties were
unlike a minister's duties. See DeMarco. v. Holy Cross High School,
4 F.3d 166, 171-72 (2d Cir. 1993).*fn11 See also Whitney v. Greater New
York Corp. of Seventh-Day Adventists, 401 F. Supp. 1363, 1368 (S.D.N.Y.
1973: (denying motion to dismiss typist-receptionist's race-based Title
VII claim, because her duties were nor similar to those of a minister,
and thus the Free Exercise Clause did not bar adjudication of her
In this case, plaintiff acknowledges that she was a minister at a
church (her employment agreement states that her duties as Vicar
included, inter alia, liturgical participation, preaching, pastoral
care, supervision of children's ministries, and Women's Bible Study).
See Agreement, Position Description. Plaintiff asks this Court to
determine whether she was terminated for cause, which necessarily would
require the Court to scrutinize the reasons for the church's decision to
terminate one of its ministers. For the reasons explained above, the Free
Exercise Clause bars the Court from resolving this dispute.*fn12
It is important to note that the Court does not hold that the Free
Exercise Clause bars a court from adjudicating every dispute that might
arise in the context of an employment contract between a minister and her
church. The Court's holding is limited to a church's decisions concerning
employment of ministers.*fn13
Plaintiff argues that this case would not require court involvement in
a church's decision regarding who is fit to be a minister, because the
Court is not being asked to order the church to do anything other than
pay damages for breaching the Agreement, and for its tortious conduct
surrounding that breach.
The Court rejects plaintiff's argument. Under a Free Exercise Clause
analysis, plaintiff's distinction between a claim for damages and a claim
for reinstatement is irrelevant. Regardless of the relief requested, a
court may not exercise jurisdiction over a case disputing the reasons why
a church decided to terminate a minister. The fact that courts do not
accept plaintiff's proposed distinction is reflected in decisions
declining to exercise any jurisdiction over cases brought by ministers
pursuant to federal anti-discrimination laws. If these courts had found
to exercise jurisdiction over disputes to the extent that the disputes
are over damages, they would have done so.
The Court is aware that two courts have suggested that the distinction
between damages and reinstatement might make a difference. See Bollard,
196 F.3d at 950 (suggesting that the scope of the ministerial exception
may depend upon the remedy sought); Minker, 894 F.2d at 1360 (reversing
dismissal of plaintiff's claim for breach of oral contract, stating "as
the remedy would be limited to the award of money damages, we see no
potential for distortion of church appointment decisions").
The prohibition on a court resolving employment disputes between a
church and its minister is founded on the principle that courts may not
second-guess a church's determination of who is fit to perform religious
duties. It is irrelevant whether the end result of such a court
determination would be damages or reinstatement.
The Court recognizes that this decision allows a church to contract to
terminate a minister only "for cause," with the minister's only recourse
for breach being an appeal to the church itself. See National Network of
Episcopal Clergy Associates, amicus curiae letter-brief, dated February
5, 2002. This result is required, however, by the Free Exercise Clause.
2. Establishment Clause
Because the Court holds that plaintiff's suit is barred by the Free
Exercise Clause, the Court need not decide whether it is also barred by
the Establishment Clause. However, the Court notes that
on the facts presented in this case, it is likely that plaintiff's
suit would also be barred by the Establishment Clause.
The Establishment Clause bars courts from exercising jurisdiction in
cases where resolution of the dispute would result in the "entanglement"
of government with religion. See Gargano v. Diocese of Rockville Centre,
80 F.3d 87, 90 (2d Cir. 1996). Entanglement occurs when a court is called
upon to resolve disputed issues of "religious doctrine and practice."
Martinelli v. Bridgeport Roman Catholic Diocesan Corp., 196 F.3d 409, 431
(2d Cir. 1999) (quoting Presbyterian Church v. Hull Church, 393 U.S. 440,
449, 89 S.Ct. 601, 21 L.Ed.2d 658 (1969)).
The Termination Letter states that certain improprieties were
discovered "concerning [plaintiff's] discretionary account funds, and
[her] use of the church credit card," and that in accordance with canon
law she was terminated. Complaint, Exh. C. Plaintiff contends that canon
law is not implicated by her termination, because her use of the Vicar's
discretionary fund is governed solely by the terms of her employment
contract, which permits her "at her sole discretion" to make
disbursements "to further her ministry." Agreement § D. Plaintiff argues
that even if her employment contract is to be read in accordance with
canon law, canon law is silent with respect to expenditures from church
credit cards and vicar's discretionary funds.
The Establishment Clause would bar consideration of this suit for two
reasons. First, in order to decide whether canon law applies in this
suit, the Court would have to resolve the parties'
dispute about the meaning and reach of canon law. The Court entanglement
with religion that this decision would require is underscored by the
parties' submissions of Affidavits from experts disputing the scope and
meaning of canon law. A court is barred by the Free Exercise Clause from
resolving such disputes. See Martinelli, 196 F.3d at 431 ("First
Amendment values are plainly jeopardized when . . . litigation is made to
turn on the resolution by civil courts of controversies over religious
doctrine and practice") (quoting Presbyterian Church, 393 U.S. at 449).
Second, regardless of whether the challenged expenditures are governed
by canon law or by the terms of plaintiff's employment agreement, the
exercise of jurisdiction would require the Court to make determinations
that are inherently religious. That is, if canon law applies to
plaintiff's expenditures, resolution of this suit would require the Court
to determine whether the challenged expenditures were used for "pious and
charitable purposes," see Title III, Canon 14, Section 2(f) of the Canons
of the General Convention, Notice of Motion, Exh. B. On the other hand,
if plaintiff's expenditures are to be judged on the terms of her
employment agreement, the Court would have to determine whether the funds
were used in furtherance of plaintiff's ministry, see Agreement § D. In
either case, the Court would be required to pass on whether the church's
invocation of church doctrine and religious principles constituted
sufficient cause for plaintiff's termination.
The Court concludes that the Free Exercise Clause bars this Court from
adjudicating plaintiff's employment dispute with Grace Church, because
resolution of the dispute would encroach upon the constitutionally
protected relationship between a church and its ministers. Because
plaintiff's claims of tortious interference with employment contract and
defamation are essentially tied to whether the employment contract was
breached, and whether plaintiff's use of her discretionary fund and the
parish credit card were improper, the Court dismisses those claims as
The Court finds that it has no jurisdiction over this matter, and
dismisses plaintiff's Complaint in its entirety. The Clerk of the Court
is directed to close this case. Any pending motions are moot.