McKnight v. Wakefield Missionary Baptist Church, Inc.

McKnight v. Wakefield Missionary Baptist Church, Inc., 2022 NCBC 10.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
WAKE COUNTY 20 CVS 8299

CHARLOTTE MCKNIGHT and
AUDREY FOSTER, in their official
capacities as Trustees for and on
behalf of WAKEFIELD
MISSIONARY BAPTIST CHURCH,
AN UNINCORPORATED
ASSOCIATION,

Plaintiffs,

v.
ORDER AND OPINION ON MOTIONS
WAKEFIELD MISSIONARY FOR SUMMARY JUDGMENT
BAPTIST CHURCH, INC.;
BARBARA WILLIAMS; APRIL
HIGH; ALTON HIGH; EKERE
ETIM; ROSALIND ETIM;
HOUSTON HINSON; NATALIE
HARRIS; and DARRYL HIGH,

Defendants.

WAKEFIELD MISSIONARY
BAPTIST CHURCH, INC.,

Counterclaim
Plaintiff,

v.

CHARLOTTE MCKNIGHT;
AUDREY FOSTER; LEROY
JEFFREYS; and JULIUS
MONTAGUE, in their official
capacities as Trustees and/or Officers
for and on behalf of WAKEFIELD
MISSIONARY BAPTIST CHURCH,
AN UNINCORPORATED
ASSOCIATION,

Counterclaim
Defendants.
1. This case arises out of a dispute between two factions of the congregation of

Wakefield Missionary Baptist Church. Pending are the parties’ cross-motions for

summary judgment.

Michael A. Jones & Associates, P.L.L.C., by Michael A. Jones, for
Plaintiffs/Counterclaim Defendants Charlotte McKnight and Audrey
Foster and for Counterclaim Defendants Leroy Jeffreys and Julius
Montague.

Kitchen & Turrentine, PLLC, by S.C. Kitchen, for
Defendant/Counterclaim Plaintiff Wakefield Missionary Baptist
Church, Inc. and for Defendants Barbara Williams, April High, Alton
High, Ekere Etim, Rosalind Etim, Houston Hinson, Natalie Harris, and
Darryl High.

Conrad, Judge.
I.
BACKGROUND

2. The Court does not make findings of fact when deciding motions for

summary judgment. This background describes the evidence, noting relevant

disputes, to provide context for the Court’s analysis and ruling.

3. Wakefield Missionary Baptist Church (“Wakefield”) was formed as an

unincorporated association over 150 years ago. It is a congregational church,

meaning that it is self-governing and not controlled by any higher ecclesiastical body.

Since 2016, Wakefield has had a written constitution and bylaws 1 with provisions

that vest its members with all governing authority and that direct its board of

trustees to hold church property in trust and to supervise the collection and

1 There are two versions of the constitution and bylaws in the record. (See ECF Nos. 33.1,
67.1.) Although the parties dispute which is the correct version, that dispute is immaterial
because the relevant parts of each are identical.
disbursement of church funds. (See generally Aff. A. High Ex. 1, ECF No. 67.1

[“Bylaws”].)

4. Plaintiffs Charlotte McKnight and Audrey Foster are church members and

claim to be trustees as well. They have sued eight other trustees (“Trustee

Defendants”) for allegedly taking actions that were either without the congregation’s

approval or contrary to its will, thus violating Wakefield’s bylaws.

5. The troubles began in mid-2019 after a controversial membership meeting

to elect signatories for Wakefield’s bank account. Senior pastor Cory Benson

moderated the meeting and named McKnight, Foster, and Leroy Jeffreys as the

winners of the election. (See Aff. A. High Ex. 2, ECF No. 67.2.) The Trustee

Defendants rejected the result, protesting what they viewed as irregularities in how

the meeting and vote were conducted. (See Aff. A. High ¶ 5, ECF No. 67.) Caught in

the middle, the bank froze the church’s account and filed an interpleader suit—a suit

that remains pending in Wake County Superior Court. See generally United Cmty.

Bank v. Wakefield Missionary Baptist Church, 2021-NCCOA-89, 855 S.E.2d 300

(unpublished).

6. More controversy followed in the wake of the bank’s actions. The Trustee

Defendants terminated Benson’s employment contract, accusing him of meddling in

church finances and other malfeasance. (See Hr’g Tr. 72, ECF No. 66.1. 2) They also

locked the church building and notified members that, “until the church’s funds are

2 This document is a transcript of an evidentiary hearing in a third litigation between these

parties. See Wakefield Missionary Baptist Church, Inc. v. Benson, No. 19-CVS-13269 (Wake
Cnty.).
released, regular services will not be held.” (Notice Dated 10 Aug. 2019, ECF No.

33.3.) This prompted Benson and a dozen or so members—including McKnight and

Foster—to begin holding weekly worship services at an off-site location. (See Foster

Resp. to Interrogs. 4–5, ECF No. 66.4; see also Hr’g Tr. 10.)

7. Over the next few months, the Trustee Defendants took steps to reorganize

Wakefield as a corporation called Wakefield Missionary Baptist Church, Inc.

(“WMBC, Inc.”). Among other things, they approved a plan of conversion, filed

articles of incorporation, adopted new bylaws, and obtained a new employer

identification number for tax purposes. (See Aff. A. High Ex. 3, ECF No. 67.3.) When

the Trustee Defendants reopened the church for worship after the new year, they put

these actions to the congregation for a vote. At a business meeting in February 2020,

all thirty-seven members in attendance voted to ratify the corporate conversion and

to transfer Wakefield’s property to WMBC, Inc. At the same time, the members in

attendance also unanimously ratified the termination of Benson’s contract. (See

Church Resolution, ECF No. 33.8; see also Hr’g Tr. 116, 118.)

8. This litigation began when McKnight and Foster filed suit on behalf of the

unincorporated association to recover damages and to unwind the transfer of its

property to WMBC, Inc. 3 McKnight and Foster dispute the legitimacy of the

February 2020 ratification vote and assert that the Trustee Defendants overstepped

their authority by rejecting the elected slate of bank-account signatories, closing the

3 McKnight and Foster also oppose the termination of Benson’s employment contract as
senior pastor. In an earlier decision, the Court held that they lack standing to pursue relief
related to his dismissal.
church building, and reorganizing Wakefield as a corporation. The amended

complaint includes claims against the Trustee Defendants for breach of fiduciary duty

and constructive fraud and a claim against WMBC, Inc. for unjust enrichment.

9. In response, the Trustee Defendants and WMBC, Inc. assert that the

congregation ratified their actions and, thus, that the unincorporated association no

longer exists. WMBC, Inc. has also brought counterclaims against McKnight, Foster,

and two others, alleging that they have used the name “Wakefield Missionary Baptist

Church” without permission to open a new bank account, advertise their services on

the internet, and make contracts with third parties. These allegations are the basis

for counterclaims for trade name infringement, conversion, and civil conspiracy.

10. Three motions for summary judgment are pending: one by McKnight and

Foster; another by McKnight, Foster, and their fellow counterclaim defendants; and

a third by the Trustee Defendants and WMBC, Inc. (See ECF Nos. 66, 69, 71.)

Together, the three motions cover all pending claims. After full briefing and a hearing

on 28 October 2021, the motions are ripe.

II.
ANALYSIS

11. Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that any party is entitled to a

judgment as a matter of law.” N.C. R. Civ. P. 56(c). In deciding a motion for summary

judgment, the Court views the evidence in the light most favorable to the nonmoving

party and draws all inferences in its favor. See Vizant Techs., LLC v. YRC Worldwide,
Inc., 373 N.C. 549, 556 (2020); N.C. Farm Bureau Mut. Ins. Co. v. Sadler, 365 N.C.

178, 182 (2011).

12. “When the party with the burden of proof moves for summary judgment, a

greater burden must be met.” Almond Grading Co. v. Shaver, 74 N.C. App. 576, 578

(1985). The moving party “must show that there are no genuine issues of fact, that

there are no gaps in his proof, that no inferences inconsistent with his recovery arise

from the evidence, and that there is no standard that must be applied to the facts by

the jury.” Parks Chevrolet, Inc. v. Watkins, 74 N.C. App. 719, 721 (1985); see also

Kidd v. Early, 289 N.C. 343, 370 (1976). For that reason, “rarely is it proper to enter

summary judgment in favor of the party having the burden of proof.” Blackwell v.

Massey, 69 N.C. App. 240, 243 (1984).

A. Claims by McKnight and Foster

13. The Court begins with the claims asserted by McKnight and Foster (breach

of fiduciary duty, constructive fraud, and unjust enrichment). Each side has moved

for summary judgment.

14. All three claims raise a common question: who is the rightful owner of

Wakefield’s property? The unincorporated association is, according to McKnight and

Foster. In their view, the Trustee Defendants usurped the authority of the

congregation by claiming control of Wakefield’s grounds and bank account, taking

steps to reorganize the church as a corporation, and then transferring its property to

WMBC, Inc. The Trustee Defendants and WMBC, Inc. respond that the congregation

ratified the corporate conversion and authorized the property transfer. These votes,
they contend, not only confirm WMBC, Inc.’s title to church property but also

extinguish all claims by McKnight and Foster.

15. This inquiry implicates the First Amendment, which “severely

circumscribes the role that civil courts may play in resolving church property

disputes.” Harris v. Matthews, 361 N.C. 265, 271 (2007) (quoting Presbyterian

Church in the U.S. v. Mary Elizabeth Blue Hull Mem’l Presbyterian Church, 393 U.S.

440, 449 (1969)). Under no circumstances may a civil court “resolve ecclesiastical

questions” or decide “controversies over religious doctrine and practice.” Id. (quoting

Presbyterian Church in the U.S., 393 U.S. at 449). Rather, “court review should be

limited to questions that can be resolved on the basis of neutral principles of law such

as (1) who constitutes the governing body of this particular church, and (2) who has

that governing body determined to be entitled to use the properties.” Id. at 272

(cleaned up).

16. On these narrow questions, the evidence is undisputed and favors the

Trustee Defendants and WMBC, Inc. Wakefield’s governing body is its congregation.

(See Bylaws Art. III, § 1.) In February 2020, members of the congregation met to

decide whether to ratify the actions of the Trustee Defendants—specifically including

the incorporation of the church—and to authorize the transfer of church property to

WMBC, Inc. Attending members unanimously voted yes. (See Church Resolution.)

17. McKnight and Foster offer no contrary evidence and no constitutionally

permissible reason to upset the congregation’s decisions. They assert, without

citation, that the ratification meeting lacked proper notice and that they were
prevented from attending and voting. But the evidence shows that the meeting was

properly called and conducted. (See Hr’g Tr. 116; Church Resolution; see also Bylaws

Art. X § 2 (“Notice of [a business] meeting and the purpose for which it is called shall

be given on the Sunday preceding the date of the meeting.”).) McKnight and Foster

also assert that all thirty-seven individuals who voted for ratification had ceased to

be church members. Again, the undisputed evidence contradicts that assertion and

shows no change in Wakefield’s membership. 4 (See Hr’g Tr. 160 (“The Court: How

have they lost membership? Have people resigned their membership? The Witness:

No, they are just not attending.”).)

18. Throughout their briefs, McKnight and Foster urge the Court to look past

the congregation’s ratification of the Trustee Defendants’ actions and instead

consider whether those actions were valid at the time they were made. To do so would

be error. Wakefield’s “congregation has the right to control the church,” including

the right to forgive or to endorse actions previously taken by church leaders. Graham

v. Lockhart, 42 N.C. App. 377, 379 (1979) (observing that congregation had the power

to change customs and to approve or overturn earlier decisions). Put simply, the

congregation, as the governing body, has had its referendum on these disputes and

has “declared the matter closed.” Harris, 361 N.C. at 273–74 (deferring to decision of

internal governing body in dispute about use of church funds).

4 Perhaps McKnight and Foster believe that those who voted for ratification forfeited their

membership by supporting the Trustee Defendants. If so, entertaining that argument would
undoubtedly run afoul of the First Amendment. The Court has no business rendering a
decision that would, in effect, excommunicate church members for siding with one faction
over another in matters of church governance.
19. Moreover, peeking behind the ratification vote would lead to a dead end.

The parties dispute, for example, the validity of the voting procedures used during

the mid-2019 meeting to elect bank-account signatories. But even McKnight and

Foster see that as an ecclesiastical question that the Court cannot answer. 5 The

parties also dispute whether the Trustee Defendants’ reasons for closing the church

building and suspending worship services were pretextual. That, too, is off limits

because it cannot be resolved based on neutral principles: the bylaws supply no ready

answer, and the Court would therefore have “to interpose its judgment as to both the

proper role of these church officials and whether” closure of the church building “was

proper in light of [Wakefield’s] religious doctrine and practice.” Harris, 361 N.C. at

273 (declining to address claim that church officials “breached their fiduciary duties

by improperly using church funds”); see also Davis v. New Zion Baptist Church, 258

N.C. App. 223, 227 (2018) (declining to address matters not specified in church

bylaws); Davis v. Williams, 242 N.C. App. 262, 266 (2015) (same).

20. In sum, the Court must limit its review to issues that can be resolved based

on neutral principles. Here, the undisputed evidence shows that Wakefield’s

congregation ratified the corporate conversion and approved the transfer of property

to the newly incorporated WMBC, Inc. Neither the Court nor a jury can overrule the

congregation’s edict. The Court therefore enters summary judgment in favor of the

Trustee Defendants and WMBC, Inc. as to the claims for breach of fiduciary duty,

5 (See ECF No. 78 at 12 (stating “that inquiries into how the disputing Church factions
interpret and apply Roberts Rules of Order [at] their meetings runs the risk of ecclesiastical
entanglement concerning Church governance and customary practices”).)
constructive fraud, and unjust enrichment. See, e.g., Atkins v. Walker, 284 N.C. 306,

321 (1973) (concluding that vote “taken at a meeting of the congregation duly called,

convened and conducted according to the properly established procedures of the

church then in effect” was controlling); Graham, 42 N.C. App. at 379 (affirming

summary judgment based on decision of congregation when undisputed evidence

showed “that the meetings were properly called and properly conducted”).

B. Counterclaims by WMBC, Inc.

52. WMBC, Inc. has asserted three counterclaims (conversion, conspiracy, and

trade name infringement). Again, each side has moved for summary judgment.

53. Conversion and Conspiracy. The claims for conversion and conspiracy

relate to donations that McKnight, Foster, and others have collected from worshipers

online and at off-site religious services. WMBC, Inc. contends that it is entitled to

these amounts because they were collected by a dissident faction in the name of the

church but without permission.

54. Conversion is the “unauthorized assumption and exercise of the right of

ownership over goods or personal chattels belonging to another, to the alteration of

their condition or the exclusion of an owner’s rights.” Peed v. Burleson’s, Inc., 244

N.C. 437, 439 (1956) (citation and quotation marks omitted). “[T]he general rule is

that money may be the subject of an action for conversion only when it is capable of

being identified and described.” Variety Wholesalers, Inc. v. Salem Logistics Traffic

Servs., LLC, 365 N.C. 520, 528 (2012) (citation and quotation marks omitted). Thus,
to maintain a claim of conversion, WMBC, Inc. must identify and describe the funds

at issue and also “establish that it retained ownership” of them. Id. at 523.

55. WMBC, Inc. has not presented enough evidence to create a genuine issue of

material fact. Its “conversion claim is not one for a specific amount” given by one or

more individuals but instead “for a category of monies” (all donations collected by the

opposing faction). Wake Cnty. v. Hotels.com, L.P., 235 N.C. App. 633, 653 (2014). The

donations came from unknown sources, at unknown times, and in unknown amounts.

At no point did WMBC, Inc. have possession of all or part of the donations. Nor has

WMBC, Inc. offered any evidence to show that donors intended their money to go to

it rather than to the faction led by McKnight and Foster. In addition, WMBC, Inc.

did not then and does not now control the bank account in which the donations were

deposited; McKnight and Foster created that account after the church split. (See

Foster Resp. to Interrogs. 2.) From this evidence, no reasonable jury could conclude

that the funds in question are capable of being identified and described with

specificity or that they were owned by WMBC, Inc. See Hotels.com 235 N.C. App. at

653 (affirming entry of summary judgment and dismissal of conversion claim on

similar grounds); see also Variety Wholesalers, 365 N.C. at 529 (holding that claim for

conversion of money requires “evidence of the specific source, specific amount, and

specific destination of the funds in question”).

56. The Court therefore grants summary judgment in favor of McKnight,

Foster, and the other counterclaim defendants as to WMBC Inc.’s claim for

conversion. Because there can be no conspiracy to commit conversion without an
underlying claim for conversion, the Court also grants summary judgment as to the

claim for civil conspiracy. See, e.g., Esposito v. Talbert & Bright, Inc., 181 N.C. App.

742, 747 (2007).

57. Trade Name Infringement. This claim concerns the use of the name

Wakefield Missionary Baptist Church. It is undisputed that the church has used this

name without interruption since at least the 1990s. WMBC, Inc. contends that, as

the successor to the unincorporated association, it has the right to keep a dissident

faction from using the name. McKnight, Foster, and the other counterclaim

defendants contend that the church’s name is generic and therefore not protectable

as a trade name.

58. Few North Carolina cases address the trademark and trade name rights of

churches. Although there is little doubt that a religious body may claim such rights,

just as private businesses do, it is unclear how far a civil court may go in adjudicating

the use of similar or identical names by two unaffiliated churches. What a church or

other house of worship chooses to call itself is, after all, an expression of its religious

identity. Perhaps for that reason, our Supreme Court has left open the question

“whether an injunction may be issued to forbid one church to use a name similar to

that of another church.” Bd. of Provincial Elders v. Jones, 273 N.C. 174, 184 (1968).

59. On the other hand, though few in number, the cases in this area do offer

clear guidance when dealing with factional disputes within a church. Our Court of

Appeals has stressed that “[t]he right to use the name inheres in the institution, not

in its members; and, when they cease to be members of the institution, use by them
of the name is misleading and, if injurious to the institution, should be enjoined.”

Daniel v. Wray, 158 N.C. App. 161, 173 (2003) (quoting Purcell v. Summers, 145 F.2d

979, 987 (4th Cir. 1944)). “No question of religious liberty is involved” because

dissident members “have no right . . . to make use of a name which will enable them

to appropriate the good will which has been built up by an organization with which

they are no longer connected.” Id. (quoting Purcell, 145 F.2d at 987). This is the

prevailing view around the country. See Christian Sci. Bd. of Dirs. of the First Church

of Christ v. Evans, 105 N.J. 297, 315 (1987) (collecting cases “in which dissident

church groups were enjoined from using identical or near-identical names as those

they held when formerly affiliated with their adversaries”).

60. Daniel’s holding governs here; indeed, the issues in that case and this one

are virtually identical. The right to use the name Wakefield Missionary Baptist

Church inheres in WMBC, Inc., which is the lawful successor to the unincorporated

association for the reasons discussed above. (See Church Resolution.) Yet McKnight,

Foster, and the other estranged members in their faction have continued to use the

church’s name—to advertise online, to collect donations, and to make contracts with

third parties—while choosing to worship apart from the rest of Wakefield’s

congregation. (See, e.g., Foster Resp. to Interrogs. 4–5.) It follows that WMBC, Inc.

is entitled to summary judgment and an appropriately tailored injunction. The

dissenters are not “allowed to confuse the public or appropriate the standing and good

will of this still existing” church by holding their own services under “the same name.”

Daniel, 158 N.C. App. at 174 (affirming entry of summary judgment and injunction).
The Court will therefore direct the parties to confer regarding the form of an

injunction, to submit a jointly proposed order if they reach an agreement, and to brief

any disagreements if not.

61. All that remains for trial is WMBC, Inc.’s demand for damages. Two

threshold matters must be addressed before a damages trial, however. The first is

N.C.G.S. § 61-1(b), which immunizes church officials from individual liability for

monetary damages in certain circumstances. See Daniel, 158 N.C. App. at 174–75

(reversing award of damages under section 61-1(b)). The second, more fundamental

issue is potential encroachment on religious freedom. WMBC, Inc. does not sell goods

or services; it has no lost profits. Its damages case instead consists of tithes and

offerings that dissenting members gave to an opposition faction of the church. A

judgment that, in effect, awards to one religious body funds that worshipers gave to

another would surely raise grave constitutional questions.

62. Efficiency demands that these issues should be aired and resolved, as far as

possible, before the parties incur the time and expense of trial. The Court will

therefore set a briefing schedule. In addition, the Court defers consideration of the

parties’ arguments concerning punitive damages and will address them in connection

with these other damages-related issues. See N.C.G.S. § 1D-15(a) (“Punitive damages

may be awarded only if the claimant proves that the defendant is liable for

compensatory damages . . . .”).
III.
CONCLUSION

63. For all these reasons, the Court GRANTS summary judgment in favor of

the Trustee Defendants and WMBC, Inc. as to the claims for breach of fiduciary duty,

constructive fraud, and unjust enrichment asserted against them. These claims are

DISMISSED with prejudice.

64. In addition, the Court GRANTS summary judgment in favor of WMBC, Inc.

as to its counterclaim for trade name infringement, limited to the issue of liability.

The Court DEFERS consideration of remedies, including the form of an appropriate

injunction and the parties’ arguments regarding WMBC, Inc.’s demand for punitive

damages.

65. The Court also GRANTS summary judgment in favor of McKnight, Foster,

and their fellow counterclaim defendants as to the counterclaims for conversion and

conspiracy against them. These counterclaims are DISMISSED with prejudice.

66. In all other respects, the Court DENIES the motions.

67. No later than 4 March 2022, the parties shall meet and confer to discuss the

form of a permanent injunction against further trade name infringement. No later

than 11 March 2022, the parties shall jointly tender either a proposed order

containing agreed language or a proposed schedule for briefing disputes concerning

the scope of an injunction. In addition, no later than 11 March 2022, the parties shall

jointly tender a proposed briefing schedule to address outstanding issues relating to

WMBC, Inc.’s demand for compensatory damages, including immunity under section

61-1(b) and constitutional limitations.
SO ORDERED, this the 18th day of February, 2022.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases