Ward and Smith attorney Gavin Parsons assisted Fifth Avenue United Methodist Church of Wilmington (Fifth Avenue) in a dispute over ownership of church property with the North Carolina Conference of the United Methodist Church (UMC).
Fifth Avenue is a historic church established in 1847, located near the Cape Fear River in Wilmington.
In early 2023, Fifth Avenue began the process of disaffiliating from the UMC following procedures laid out in the UMC's Book of Discipline (BOD), the governance document for all United Methodist churches. However, before Fifth Avenue could hold a required congregational vote on disaffiliation, UMC leaders closed the church in March 2023, citing "exigent circumstances," and changed the locks, preventing the congregation from worshipping or using church property.
Fifth Avenue filed suit, making several claims, including breach of contract, fraud, and requests for declaratory judgment regarding property rights. While the trial court initially dismissed all of Fifth Avenue's claims, the North Carolina Court of Appeals reversed most of these dismissals.
On December 31, 2024, the Court of Appeals ruled that the trial court has jurisdiction to hear most of Fifth Avenue's claims, including the breach of contract claim, claims for quiet title, judicial modification of trust, fraud, and declaratory judgment. The Court also ruled that Fifth Avenue is entitled to preliminary injunctive relief to prevent changes to the property during litigation. Only the dismissal of Fifth Avenue's promissory estoppel claim was affirmed.
This ruling represents a significant victory for Fifth Avenue, allowing them to pursue most of their legal claims regarding the property dispute with the UMC. Parsons said, "I'm very pleased for the congregants at Fifth Avenue and look forward to the day we can move this through the trial court as originally intended."
Parsons explained, "This ruling has significant implications for other churches facing similar property disputes. The court's decision re-affirms that while civil courts cannot interfere with matters of religious doctrine, they can apply neutral legal principles to resolve property and contract disputes between local churches and their denominations."
It is not yet known whether this decision will be appealed to the North Carolina Supreme Court or when the case will be returned to a lower court for a decision.
