August 23, 2014
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Mo. board authorized to act on suits against 5 breakaways
Posted on Oct 30, 2009 | by Staff

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KANSAS CITY, Mo. (BP)--Messengers to the Missouri Baptist Convention's annual meeting voted overwhelmingly to expand the executive board's authority to make decisions between MBC annual meetings regarding the lawsuits against five breakaway entities.

By a 764-226 vote, messengers "supplemented and clarified" the scope of the executive board's decision-making authority in adopting a motion brought jointly by the MBC's Agency Recovery Group and a unanimous vote of the executive board. The move gives board members a chance to respond more quickly to court decisions, legal advice and constituent sentiment during the next 12 months -- without discussing their intentions or strategies publicly and losing their attorney-client communications privilege.

An original motion adopted by messengers at the MBC's 2001 annual meeting directed the executive board to "take all steps necessary to recover the five corporations which had amended their articles to become self-perpetuating boards." This mandate has been interpreted to require the executive board to continue to pursue legal action to win back control of all five corporations. The mandate does not, however, permit the executive board to consider alternative solutions to end the dispute, short of recovering all of the entities.

The new motion authorizes the executive board, in between annual meetings, "to make any and all decisions and to take any and all actions with respect to the legal proceedings which, in its sole discretion, are reasonable and prudent, and in the best interests of the convention and our stewardship duties to the past, present and future generations of donors to the Lord's work."

In 2000 and 2001, trustees at Windermere Baptist Conference Center, Word & Way newsjournal, Missouri Baptist College, The Baptist Home retirement center and the Missouri Baptist Foundation changed their charters to make their boards self-perpetuating, removing the convention's right to elect trustees that it had held since they became entities of the MBC.

This year's motion was presented on Tuesday morning (Oct. 27) by Randy Comer, chairman of the Agency Recovery Group and pastor of Highview Baptist Church in Chillicothe. Convention President Bruce McCoy then summarized the motion as meaning that the executive board would now have authority to continue or to discontinue some of the litigation.

The president called on MBC Second Vice President Mitch Jackson, pastor of Miner Baptist Church in Sikeston, to clarify the intent of the executive board in bringing the motion. Jackson said he had met with a messenger who misunderstood that the executive board was trying to take away the authority of the convention to control the lawsuits. Jackson said the convention retained ultimate authority at each annual meeting. But between annual meetings, the executive board needed discretion to change course and make changes in its approach based on court rulings, legal advice and in responding to messenger concerns. Abruptly dismissing lawsuits without legal advice and a negotiated agreement could expose the convention to millions of dollars of liability, Jackson said.

The five entities' charter changes were born out of a political fight between a minority of disgruntled moderates in the convention and majority conservatives. The breakaways were a political response to an organizing effort led by the conservative Project 1000 campaign to move the MBC from a center-left to center-right theological position, more supportive of the Southern Baptist Convention. The breakaway corporations are now affiliated with the Baptist General Convention of Missouri, an alternative convention started and led by Jim Hill, former executive director of the MBC.

Jesse Barnhart of First Baptist Church in Mayview said he did not want the executive board to stop pursuing the recovery of the entities if at all possible, adding, "I hesitate to place this much authority in the executive board, especially to drop it [the lawsuits]."

Frank Whitney, pastor of Union Hill Baptist Church in Holts Summit, offered an amendment allowing the board to act, but only to end the litigation. The amendment was defeated decisively.

In the Agency Recovery Group's video presentation, MBC legal counsel Michael Whitehead said: "The appeals court decision [of Feb. 3 of this year] said MBC cannot get the [Windermere] corporation back, but it did not say that MBC can't get the land back. So we are pursuing a legal claim called fraudulent inducement, and a legal remedy called rescission of the real estate deed. The claim alleges that MBC was tricked into conveying the Windermere property by its former executive director [Hill], who failed to disclose important facts about his plan and thus breached his fiduciary duty to the convention. In addition to seeking damages, the convention asks the court to rescind the deed to the Windermere corporation and return the property to the executive board. In other words, MBC doesn't ask for the corporation back, but asks to get the land back.

"The opposing counsel have argued that the ... appeal decision is a bar to further claims to recover title to the land," Whitehead continued. "This issue of rescission is currently on appeal. For now, the Camden County trial judge has authorized the executive board to proceed with the fraud and fiduciary breach claim against Jim Hill.

"Meanwhile, as we reported last year, Mr. Bill Jester has filed a counterclaim against the convention, alleging libel and slander, and demanding $15 million in actual damages, plus punitive damages. Obviously, the MBC cannot just walk away from the Camden County court and allow Mr. Jester to take a default judgment against the convention. MBC attorneys continue to defend the convention against these claims, which we believe are without merit, but which still demand a defense."

In his portion of the video report, Comer said:

"The Court of Appeals said the MBC cannot get the Windermere Corporation back. One reason cited by the court is that the original charter adopted in 2000 did not contain a clause saying 'MBC must approve charter changes.' An earlier draft of the charter had this clause in it, but Dr. Jim Hill admitted in his deposition that he intentionally cut it out of the Windermere and Word and Way charters before they were filed with the Secretary of State in 2000. Without that clause, the board of trustees could legally change the charter without MBC approval. But IF that clause were there, the court said, MBC's right to approve charter amendments could be enforceable.

"While it doesn't help us with Windermere, this part of the decision is a good sign for the convention when it comes to three of the other corporations," Comer continued. "The Baptist Home, the Missouri Baptist Foundation and Missouri Baptist University all have that clause in their charters: 'The Convention must approve amendments.' Our attorneys are in the process of asking the Cole County court to apply that rule to these three agencies. If the court is consistent, we should win these three corporations back. We hope the Cole County judge will issue a ruling on that issue this fall."

Word & Way was incorporated by Jim Hill at the same time he incorporated Windermere. He also left out of the Word & Way charter the amendment approval clause. The Agency Recovery Group did not indicate what the MBC intends to do regarding the case against Word & Way corporation.

Whitehead informed the messengers about the status of the claim against Jim Hill filed in Camden County. "Jim Hill also testified about a meeting he had in early May 2000 with MBC's attorney at the time, Mark Comley. The purpose of the meeting was to talk about the new Windermere articles that were not yet drafted. Mr. Comely took notes at the meeting and wrote down questions by Mr. Hill. Questions like: 'What legal recourse would the convention have if the agencies amended the charter to exclude the convention?' Another question: 'Windermere. Look again at the articles. Can they break free, amend articles?' Keep in mind this was May 2000, four months before the Baptist Home changed its charter [and more than a year before Windermere changed its charter to break away].

"We believe Jim Hill's actions constitute a breach of fiduciary duty to the MBC, also called constructive fraud," Whitehead said. "We will argue that, because of this fraud, the real estate deed to Windermere should be rescinded and the property should be returned to the executive board. This claim may require jury trial in Camden County, which may be set for next year."
--30--
Reported by the staff of The Pathway (www.mbcpathway.com), newsjournal of the Missouri Baptist Convention. An additional Baptist Press report from the Missouri Baptist Convention's annual meeting will be published during the week of Nov. 1.
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