In recently denying reargument after more than a decade of litigation, the Commonwealth Court has cemented its decision to reinstate an arbitration award in a case in which a church leader was found to have misappropriated church money.
On Nov. 29, a three-judge Commonwealth Court panel consisting of President Judge Mary Hannah Leavitt, Judge Patricia McCullough and Senior Judge James Colins denied defendant Kenneth Shelton’s motion to quash pro se plaintiff Anthonee Patterson’s appeal for reversal of a previous decision vacating an arbitration award rendered in 2006.
On Jan. 16, the court denied Shelton’s petition for reargument.
The litigation had a protracted history, according to McCullough’s opinion. After Patterson, a church elder, sued Shelton and the church board of trustees, an arbitrator—former federal Magistrate Judge Edwin E. Naythons—found that Shelton and his cohorts misappropriated roughly $1 million in money belonging to the General Assembly of the Lord Jesus Christ of the Apostolic Faith.
The case was appealed and the arbitration award was affirmed by the trial court but reversed by the Commonwealth Court, with the court finding on appeal that the arbitrator overstepped his bounds. The case was subsequently remanded.
On remand, the Philadelphia trial court ruled that the plaintiff didn’t have standing to bring the lawsuit and dismissed it, but the Commonwealth Court reversed that ruling and remanded it again.
During the case’s last appearance at the trial court, the judge ruled that the Philadelphia Court of Common Pleas did not have jurisdiction to hear the case because it dealt with religious matters and it would be unconstitutional for the court to rule on religious policy. The Commonwealth Court agreed and subsequent appeals were rejected by the Pennsylvania Supreme Court and U.S. Supreme Court.
Patterson asked the trial court to find any previous rulings reversing the arbitration award to be null and void in light of the fact that the courts never had jurisdiction in the first place. The trial court rejected that argument, but the Commonwealth Court agreed with Patterson.
“Because this court affirmed the trial court’s decision concluding that it lacked subject matter jurisdiction over his remaining NCL [Nonprofit Corporation Law] claims on the basis that resolution of the same would require the trial court to interpret religious doctrine, something it was prohibited from doing under the First Amendment, any prior decisions relating to the same are null and void,” McCullough said.
“As a result, the only valid, remaining determination in this case is the binding arbitration award, as agreed to by the parties in November 2005, and confirmed by the trial court. As noted above, the trial court, by order dated July 10, 2006, confirmed the arbitrator’s award and entered judgment in favor of Patterson and against Shelton in an order dated July 20, 2006. Thus, Patterson’s remedy lies with enforcement of that judgment.”
Danielle Banks of Stradley Ronon Stevens & Young, who represents Shelton, said she’s planning on asking the court for further review and hopes for clarification of the ruling denying re-argument, specifically over the voiding of previous rulings.
“I am optimistic when this is over it will not be that the court undid its 2008 opinion 10 years later,” Banks said.
Patterson could not be reached for comment.
Patterson’s suit spawned offshoot litigation between Naythons and Stradley Ronon in federal court. Naythons claimed the firm and one of its then-partners, Andre L. Dennis, lodged false charges of bias against him after he issued his decision.
Naythons’ suit was eventually dismissed by a judge in the Eastern District of Pennsylvania. That decision was upheld by the U.S. Court of Appeals for the Third Circuit in 2009, which ruled that an arbitrator cannot sue a lawyer for wrongful use of civil proceedings, even if the lawyer allegedly lodged false accusations in court papers to have the arbitrator disqualified, because lawyers enjoy an “absolute privilege” that immunizes them from liability over any communication made in the course of litigation.