Payne & Fears LLP Wins Appeal in Corporate Governance Case


In September, 2007, the congregation of a historic Angleno Heights church retained Payne & Fears LLP as appellate counsel after suffering a complete defeat in the Los Angeles Superior Court.  The church, which is a California nonprofit corporation, had been affiliated for many years with a "cooperative fellowship" of Pentecostal churches.  The officers of this larger association used the affiliation as a pretext to seize control of the corporation, occupy its property (valued at over $14 million), and literally lock the congregation out of its own church.  After a three day bench trial, the lower court entered judgment against the church in a written decision holding that religious corporations lose all rights when they affiliate with a large association.  Payne & Fears LLP substituted in as counsel and appealed, arguing that California law expressly protects the rights of religious corporations notwithstanding spiritual affiliations.  The California Court of Appeal, Second Appellate District, agreed with Payne & Fears LLP on all points, reversed the judgment in full, ordered a trial on two claims, and directed the Superior Court to enter judgment for the client on all remaining claims.  The published decision is entitled Iglesia Evangelica Latina, Inc. v. Southern Pacific Latin American Dist. of the Assemblies of God, 173 Cal. App. 4th 420, 93 Cal. Rptr. 3d 75 (2009).  Eric C. Sohlgren and Daniel F. Lula handled the appeal.

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