American Union of Baptists, Inc. v. Trustees of Particular Primitive Baptist Church at Black Rock, Inc.

KARWACKI, Judge. This case requires us to step once again into the complexities of the relationship between church and state. At issue is the ownership and control of certain church property. Two groups claim to have validly elected the Board of Trustees of the Particular Primitive Baptist Church at Black Rock, Inc. The petitioner, the American Union of Baptists, Inc. (AUB), is a religious corporation located in Salisbury, Wicomico County, Maryland. 1 The respondent, the Trustees of the Particular Primitive Baptist Church at Black Rock, Inc. (Black Rock), is a religious corporation located in Butler, Baltimore County, Maryland.

The background to this dispute is described in the opinion of the Court of Special Appeals: ⁵⁶⁷ “Black Rock was incorporated in 1891, and filed Articles of Amendment and a Restatement of its Articles of Incorporation with the State Department of Assessments and Taxation (SDAT) in 1978. In 1979, at its first annual meeting after filing Articles of Amendment, Black Rock elected a Board of Trustees. The Board of Trustees then chose Eugene F. Osborne, Sr. (Osborne) as President and George R. Welden (Welden) as Vice-President. The Board of Trustees and its officers were to serve terms of four years.

At Black Rock’s annual meeting in 1983, Osborne and Welden were reelected to additional terms of four years. “Osborne called a special meeting of the Board of Trustees on December 8, 1986, to consider his motion to dissolve Black Rock. According to Osborne, Black Rock no longer existed [as a church] because its minister had died and none of its members were living.[ 2 ] After Osborne’s motion failed, a group of trustees led by him (the Osborne group), filed a complaint in the Circuit Court for Baltimore County seeking the involuntary dissolution of Black Rock. The complaint was dismissed, an appeal followed, and [the Court of Special Appeals] affirmed the judgment of the circuit court [in an unreported opinion. Osborne v. Trustees of the Particular Primitive Baptist Church of Black Rock, Inc.] “In May of 1987, several members of Black Rock’s Board of Trustees, led by George Welden (the Welden group), called a special meeting for June 13, 1987, to elect new officers.[ 3 ] Prior to the meeting, Osborne notified the Welden group that any action taken at the special meeting would be invalid because Black Rock’s bylaws provided that ⁵⁶⁸ only the president could call a special meeting.

Nevertheless the special meeting was held, with only the Welden group present. As expected, Osborne was removed as president and replaced by Welden. “The Osborne group retaliated, continuing to assert that Black Rock no longer existed because it had no “members,” and that Ebenezer Primitive, or Old School Baptist Church of Baltimore City (Ebenezer), now controlled Black Rock.[ 4 ] “Ebenezer merged with AUB on July 23, 1987. At its first annual meeting, AUB passed a resolution authorizing it to elect a Board of Trustees for Black Rock. A Board of Trustees for Black Rock was then elected and Osborne was installed as its president.

After it had been elected, the Board passed a resolution merging Black Rock into AUB. Articles of Merger were filed with the SDAT. “On July 12, 1988, Black Rock filed a complaint in the Circuit Court for Baltimore City seeking a declaration of Black Rock’s properly elected Board of Trustees. Black Rock also sought an order directing the SDAT to strike the Articles of Merger filed by AUB. In addition, Black Rock asked the circuit court to enjoin AUB from attempting to transfer Black Rock’s property and assets.

After Black Rock’s complaint was transferred to the Circuit Court for Wicomico County, the judicial proceedings were stayed pending arbitration. Following an arbitration award in favor of Black Rock, AUB moved to vacate the award and Black Rock moved for summary judgment. The circuit ⁵⁶⁹ court denied AUB’s motion and granted summary judgment in favor of Black Rock.” American Baptists v. Trustees, 98 Md.App. 10, 12-14 , 632 A.2d 226, 227 (1993) (footnotes omitted). The Court of Special Appeals affirmed the judgment of the circuit court after it determined that an arbitration award entered under Maryland Code (1974, 1993 Repl.Vol.), § 5-310 of the Corporations and Associations Article was not subject to judicial review. 5 The intermediate appellate court stated: “It is evident from the Court’s rationale in [Maryland & Va.] Eldership [of Churches of God v. Church of God at Sharpsburg, Inc., 249 Md. 650 , 241 A.2d 691 (1968) ] that § 5-310 [of the Corporations and Associations Article] was enacted so that it would be unnecessary for courts to resolve issues of church polity that inevitably arise in disputed church elections.

Thus, it follows that the word ‘final’ in § 5-310(c) has a different meaning than it has in a dispute not involving issues of church polity. As we see it, when using the word ‘final’ in § 5-310(c), the legislature intended that such an award not be subject to judicial review.” American Baptists v. Trustees, 98 Md.App. at 16 , 632 A.2d at 228 . The Court of Special Appeals addressed the merits of ⁵⁷⁰ the case only briefly, stating that even if the award had been subject to judicial review, the court would have nonetheless “affirmed the judgment of the circuit court, because the award of the arbitrators was not ‘completely irrational.’ ” Id. at 17-18 , 632 A.2d at 229 . In its petition for certiorari, AUB asserted that the Court of Special Appeals erred in its holding that an arbitration award entered under § 5-310 is not subject to judicial review.

We granted AUB’s petition, and although we agree that the intermediate appellate court erred in its interpretation of § 5-310(c), we nevertheless agree with that court that the award in the instant case is not subject to judicial review, and we will affirm the judgment of the lower court. I. AUB contends, among other things, that it is assured a right of review by Maryland’s Uniform Arbitration Act. Md. Code (1974, 1989 Repl.Vol.), § 3-201 et seq. of the Courts Article. Because the two parties were unable to agree on the third arbitrator pursuant to § 5-310(a)(2) of the Corporations and Associations Article, the court appointed the third arbitrator in this dispute.

AUB contends that this action is sufficient to bring the matter within the Uniform Arbitration Act. 6 In answer to this contention, the Court of Special Appeals stated that “it is clear from the record before us that arbitration, in this case, was conducted pursuant to §§ 5-301, et seq., [of the Corporations and Associations Article]____ We do not believe that the action of the circuit court [in appointing a third ⁵⁷¹ arbitrator after the two parties were deadlocked] brought arbitration under [the Uniform Act].” American Baptists, 98 Md.App. at 17 , 632 A.2d at 229 . We agree with the intermediate appellate court’s analysis. Under the Uniform Act, a court derives jurisdiction to review and enforce an arbitration award from the existence of an agreement between the parties. Md.Code (1974, 1989 Repl.Vol.) § 3-202 of the Courts Article.

The instant arbitration, however, does not arise from an agreement between the parties to settle their disputes. Rather, the arbitration in the case sub judice is required by statute; the parties have no choice but to arbitrate this dispute in the precise manner prescribed by § 5-310 of the Corporations and Associations Article. As such, it is not subject to the strictures of the Uniform Arbitration Act. Rather, the standard for judicial review is governed by common law arbitration rules.

See Baltimore County v. City of Baltimore, 329 Md. 692 , 701 n. 3, 621 A.2d 864 , 868 n. 3 (1993) (arbitration between city and county which was mandated by statute was governed by common law and not by the Maryland Uniform Arbitration Act). See also James R. Madison, In Search of a Standard for Judicial Review of Legal Error in Commercial Arbitration Awards, 21 Golden Gate U.L.Rev. 245 (1991) (although courts should refrain from reviewing award when parties of relatively equal bargaining strength agree to arbitration, a different rule is appropriate where arbitration is essentially forced on a party, as when mandated by statute). We will turn, then, to the common law grounds for judicial review of an arbitration award. This Court has long held arbitration to be a favored method of dispute resolution; consequently, we have “generally deferred to the arbitrator’s findings of fact and applications of law.” Baltimore County v. City of Baltimore, supra, 329 Md. at 701 , 621 A.2d at 868 , quoting Board of Education v. Prince George’s County Educators’ Assoc., 309 Md. 85, 98 , 522 A.2d 931, 937 (1987).

There is nevertheless ample precedent for reviewing such awards under certain conditions. After reviewing the history of judicial review of arbitration awards in Maryland, Judge Eldridge, ⁵⁷² writing for the Court in Board of Education , enumerated several instances in which review would be warranted and summarized the standard thus: Under Maryland common law standards for reviewing arbitration awards ... we hold that an award is subject to being vacated for a ‘palpable mistake of law or fact ... apparent on the face of the award’ or for a ‘mistake so gross as to work manifest injustice.’ ” 309 Md. at 105 , 522 A.2d at 941 . It is clear from this history, then, that unless specifically prohibited by § 5-310 of the Corporations and Associations Article, an arbitration award made under that section is reviewable by a court. The Court of Special Appeals found that such a specific prohibition did exist in the legislature’s use of the word “final,” contending that “the word ‘final’ in § 5-310(c) has a different meaning than it has in a dispute not involving issues of church polity.” We frankly can find no support for this construction of the term “final.” Ordinarily, the term “final” does not preclude judicial review.

In fact, achievement of a “final” judgment is, with few exceptions, a prerequisite to judicial review. See, e.g., Popham v. State Farm, 333 Md. 136, 142 , 634 A.2d 28, 31 (1993) (“Unless an appeal is from a final judgment, the appellate court does not acquire subject matter jurisdiction to review it”); National Glass v. J.C. Penney Properties, 329 Md. 300 , 619 A.2d 528 (1993) (“As a general rule an appeal will lie only from a final judgment”); Md.Code (1974, 1989 Repl. Vol.), § 12-301 of the Courts Article. Certainly, under the Uniform Act, the use of the term “final” does not preclude judicial review: § 3-215 of the Courts Article specifies that a majority of the arbitrators may render a final award, and §§ 3-223 and 3-224 enumerate specific circumstances under which a “final” arbitration award may be corrected, modified, or vacated by a court.

Although this case is not governed by the Uniform Act, we see no reason to apply a different meaning to the term “final” under the common law standard. In fact, we recently reviewed a “final” arbitration award under ⁵⁷³ the common law standard in Baltimore County v. City of Baltimore, supra. Baltimore County is similar to the case sub judice insofar as it arose from a motion to vacate a portion of an arbitration award. There, as here, the arbitration proceeding was conducted pursuant to a statutory mandate as opposed to a bilateral agreement to arbitrate.

Id., 329 Md. at 696 n. 1, 621 A.2d at 866 n. 1. Moreover, the provisions governing the proceeding in Baltimore County provided that “the written decision of the majority of the board or arbitrators shall be final and binding upon both parties.” § 35-133 of the Baltimore County Code (1988 & Supp.1994). Notwithstanding the use of the term “final” in the statute, we did review the award under the common law standard. We applied the deferential standard of review discussed above, and we affirmed the judgment of the circuit court, which had in turn affirmed the arbitration award in its entirety.

We see no reason why “final” should be treated differently in this statute than elsewhere. The Court of Special Appeals apparently based its conclusion to the contrary on its perception that “issues of church polity ... inevitably arise in the case of disputed church elections.” American Baptists, 98 Md.App. at 16 , 632 A.2d at 228 (emphasis added). This conclusion rests on a faulty premise. Disputed church elections may often involve issues of church polity, but not necessarily so.

It is not difficult to envision, for example, a disputed church election that concerns allegations of voter fraud, ballot-box stuffing, incorrectly printed ballots, or other misdeeds that are quite secular in nature. We cannot say that the legislature intended § 5-310 of the Corporations and Associations Article to prohibit courts from exercising jurisdiction over such secular matters. 7 ⁵⁷⁴ Thus, we do not agree that § 5-310 contains a blanket prohibition of judicial review of arbitration awards. Such awards may ordinarily be reviewed under the common law standard. Nevertheless, the intermediate appellate court correctly perceived that in many instances, issues of church polity will be inextricably intertwined with secular issues in contested church elections.

Each set of circumstances must be evaluated on an individual basis by the court to determine whether, under the facts of that particular case, a court would be forced to wander into the “theological thicket” in order to render a decision. In such a situation, courts may indeed be prohibited from reviewing arbitration awards, not by operation of statute, but because such review would require an impermissible