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Local Episcopal Parties File New Pleadings and Supplemental Motion for Partial Summary Judgment

On March 31, 2011 the Local Episcopal Parties filed amended pleadings in the 141st District Court of Tarrant County, Texas. The pleadings (1) add a new defendant, Jude Funding, Inc., and (2) seek supplemental declarations and injunctive relief consistent with the Court's February 8, 2011 partial summary judgment. A more detailed list of the requested relief is in the "Relief Requested" sections of (1) Local Episcopal Plaintiffs' Seventh Amended Original Petition and (2) the Fifth Amended Answers and Counterclaims to the Third-Party Petitions/Pleas in Intervention of the Southern Cone Corporation, Diocese, and Congregations, respectively. Copies of the pleadings are listed in the column to the right.

In addition, the Local Episcopal Parties and Local Episcopal Congregations filed a supplemental motion for partial summary judgment that (1) seeks summary judgment on outstanding claims against Southern Cone Parties including the Southern Cone Congregations and Defendant Thomas Hightower, (2) seeks summary judgment denying the claims of the Southern Cone Congregations and the purported Southern Cone Diocese and Corporation against the Local Episcopal Parties, (3) seeks a declaration of the Local Episcopal Parties' right to bring claims for the Episcopal Diocese and the Corporation, and (4) seeks supplemental declarations and permanent injunctive relief consistent with the Court's February 8, 2011 partial summary judgment in favor of the Local Episcopal Parties and Congregations. A more detailed list of the requested relief is on pages 24 32 of the motion. Also filed in support was a supplemental appendix that includes copies of deeds showing that property was intended to be used for The Episcopal Church and affidavits from Bishop Ohl and representatives from many of the parishes regarding the irreparable harm caused by the Southern Cone parties. A copy of the motion is listed in the column to the right.

According to the Secretary of State's records, Jude Funding, Inc. ("Jude Funding") is a Texas for-profit corporation formed on October 13, 2010 by Chad Bates as its sole organizer and director. Bates is already a defendant in the case, claiming to be a trustee in the Diocesan Corporation. According to the October 13, 2010 Deed of Trust filed in Tarrant County, Jude Funding claims a security interest in real property held by the Diocesan Corporation, a two-acre tract in Tarrant County (the Diocesan Center on Alameda Street) and a six-acre tract in Hood County (part of Camp Crucis). The purported liens relate to an alleged note, dated October 13, 2010, from the Diocesan Corporation to Jude Funding in the amount of Three Million Five Hundred Thousand Dollars ($3,500,00.00 Dollars). A copy of the Deed of Trust is HERE. The new Episcopal pleadings claim that Jude Funding's deed of trust lien and vendor's lien on this property is invalid.

"These instruments were not executed by anyone with authority, actual or apparent, to encumber the Diocesan Corporation's property. These instruments were the result of an insider transaction with full knowledge of this existing dispute. The Diocesan Corporation's title to this property is affected by these invalid instruments, and Plaintiffs are entitled to a declaration of the invalidity of these documents and of Jude Funding's claim to an interest in this property, in order to quiet title to the property."

On March 31, 2011 the attorneys for the Southern Cone parties argued to Judge John P. Chupp that while the case is on appeal the Southern Cone parties should be permitted to continue to encumber church property sought by the Episcopal Parties in order for the Southern Cone parties to pay legal fees to oppose these claims.Judge Chupp also considered what sort of restrictions he will impose on the use of the disputed church property and funds while the case is on appeal.