Plaintiffs the Roman Catholic Bishop of San Jose and Reverend Monsignor Francis V. Cilia appeal from a judgment denying their petition for a writ of mandate to (1) direct the Secretary of State (Secretary) to file the articles of incorporation of "Pastor of Santee Catholic Mission, a corporation sole," (2) declare the Secretary violated the Administrative Procedure Act (Gov. Code, § 11340 et seq.; hereafter APA) by evaluating submitted articles pursuant to rules that are not authorized by law or promulgated pursuant to the APA, and (3) enjoin the Secretary from subjecting submitted articles to such rules. Plaintiffs contend the trial court erred in denying their petition because the Secretary's "authority to review and file submitted articles of incorporation is strictly ministerial," and, even assuming the Secretary has some discretionary authority in reviewing articles of incorporation prior to filing, such authority was repeatedly abused.
We shall conclude that the Secretary has a ministerial duty to file submitted articles of incorporation "[i]f they conform to law ...." (Corp. Code,
The Roman Catholic Bishop of San Jose, a corporation sole, is the civil legal entity through which the Roman Catholic Diocese of San Jose owns and administers temporal goods of the faithful in that community. Reverend Monsignor Francis V. Cilia is the Vicar-General of the Diocese of San Jose and Acting Parochial Administrator Pro Tempore of Santee Catholic Mission Parish.
In 2011, the Diocese of San Jose sought to form a new Catholic parish in San Jose, Santee Catholic Mission Parish, and the Roman Catholic Bishop of San Jose authorized Cilia to incorporate as a corporation sole.
On July 26, 2011, Cilia submitted articles of incorporation for "Pastor of the Santee Catholic Mission, a corporation sole," to the Secretary. In addition to the four mandatory provisions, the articles contained a number of optional provisions, including article XI, a dissolution provision. It reads in pertinent part: "In the event of dissolution or final liquidation, Santee Catholic Mission shall, after paying or making provision for the payment of all the lawful debts and liabilities of this Corporation sole, distribute all the assets of the Corporation sole to: (i) The Roman Catholic Bishop of San Jose to be used exclusively for religious purposes; or to (ii) a trustee, or trustees, of a trust or trusts, the beneficiary or beneficiaries of which is or are one or more Roman Catholic parishes or Corporations sole organized and operated exclusively for religious purposes within the Diocese of San Jose; or, (iii) in the event The Roman Catholic Bishop of San Jose or a trust, or trusts, as described above is
The following day, July 27, 2011, the articles were returned to plaintiffs, along with a written response from Carleen Wood, staff counsel in the Secretary's business programs division. Wood explained that the articles were being returned because article XI was in conflict with section 10015. According to Wood, "Article XI cannot distribute assets in any manner other than as provided in Section 10015."
Over the next few weeks, there were a series of communications between plaintiffs' counsel and members of the Secretary's staff during which plaintiffs' counsel "attempted to educate [the Secretary's] staff on the ecclesial and canonical structures of Roman Catholic dioceses and Roman Catholic parishes." Plaintiffs' counsel asserted that article XI could not be amended to provide that "the assets upon dissolution be distributed to `The Roman Catholic Bishop of San Jose in trust for Santee Catholic Mission' or some provision similar thereto" as suggested by members of the Secretary's staff because, unlike other local churches, a parish is not "congregationally autonomous and self-governed." Rather, it is part "of the larger Catholic community that is governed
Edward S. Maxwell, general counsel with the business programs division, responded by reiterating the Secretary's position that "the submitted provision contained in Article XI to have the assets upon dissolution go to the corporation sole named The Roman Catholic Bishop of San Jose, is in direct
Plaintiffs' counsel responded that the Santee Catholic Mission assets cannot be distributed to the Santee Catholic Mission if it ceases to exist. He also asserted that during the past year, the Secretary had filed more than 120 articles of incorporation containing dissolution provisions identical to that contained in the submitted articles and requested the legal authority "regarding [the Secretary's] authority to engage in such interpretation and/or to undertake such adjudications regarding the substantive content of articles filed under Corporations Code § 10000 et sequitur."
In response to plaintiffs' counsel's request, Maxwell indicated that sections 10004 and 10005 provide that the contents of the articles of incorporation cannot conflict with the law, and that section 10005 additionally provides that the Secretary must review articles of incorporation for compliance with applicable law prior to filing. He further explained that the Secretary reviews submitted articles on a submission-by-submission basis, and the fact that other articles of incorporation containing identical dissolution provisions had been filed "is not a factor" in the review process. In addition, he advised plaintiffs' counsel that "[s]hould the Santee Catholic Mission be eliminated as hypothesized in your correspondence, ... sections 10012 through 10014 provide for the required filings with our office ...."
In October and November 2010, prior to submitting the articles of incorporation for "Pastor of Santee Catholic Mission, a corporation sole," plaintiffs'
On July 21, 2011, the Roman Catholic Bishop of Sacramento submitted articles of incorporation for a new parish corporation sole, which included the change in the title noted above. In all other respects, the articles were substantively identical to the 97 articles mentioned above. The Secretary requested, for the first time, that the phrase "[t]o the fullest extent permitted by law" be added to one sentence of the articles. The change was made and the articles were filed.
Each of the 98 articles of incorporation filed contained a dissolution provision identical to that contained in the articles submitted for "Pastor of Santee Catholic Mission, a corporation sole."
On August 26, 2011, plaintiffs filed a verified petition for writ of mandate and complaint for injunctive and declaratory relief challenging what plaintiffs described as the Secretary's "failure to perform the legally-mandated, ministerial duty of filing articles of incorporation for the Pastor of Santee Catholic Mission, a corporation sole," "unlawful and unauthorized exercise of substantive, quasi-adjudicative review of submitted articles of incorporation, and capricious application of arbitrary and inconsistent standards known only to [the Secretary] and her staff." (Code Civ. Proc., § 1085.) Plaintiffs argued that (1) the Secretary possesses only ministerial authority over the approval and endorsement of submitted articles of incorporation, (2) such authority "is limited to a review of submitted articles to ensure that the requisite components for forming a corporation sole are present," and (3) the Secretary "exceeded her ministerial authority by demanding substantial redrafting of portions of the articles of incorporation submitted by [plaintiffs], and by ultimately rejecting them." Plaintiffs further asserted that even if the Secretary "had any discretionary authority to require redrafting of submitted
The trial court denied the petition. It found that "the plain language of [sections] 10004 and 10005 unambiguously confers discretionary authority upon [the Secretary] to determine whether articles of incorporation submitted to [her] comply with the law. In addition to including the requisite four items enumerated by [section] 10003 in its articles of incorporation, [section] 10004 allows [plaintiffs] to include in its articles any other discretionary provision related to the regulation of [plaintiffs'] affairs `not in conflict with law ....' [Section] 10005 only requires [the Secretary] to file [plaintiffs'] articles of incorporation `[i]f they conform to law ....'" The court further found that plaintiffs failed to establish the Secretary acted arbitrarily and capriciously in refusing to file the submitted articles of incorporation, explaining that section "10015 requires that assets be distributed to `the religious organization governed by the corporation sole,'" and "[Plaintiffs] do not dispute that The Roman Catholic Bishop of San Jose is not `governed by' the corporat[ion] sole, and its articles of incorporation clearly demonstrate the reverse — that The Roman Catholic Bishop of San Jose governs the corporation sole." The trial court also stated that: "To the extent that [plaintiffs'] conten[tion] that [the Secretary] acted arbitrarily and capriciously in rejecting [plaintiffs'] articles of incorporation is predicated on the other `trivial' and `ridiculous' changes requested by [the Secretary], [plaintiffs'] contention is rejected. These other changes are not presently at issue. The record demonstrates that [the Secretary's] final refusal to file [plaintiffs'] articles of incorporation is based on the allegedly improper dissolution provision."
Judgment was entered in the Secretary's favor.
Plaintiffs appeal.
Plaintiffs contend the trial court erred in denying their petition because "there is no clear statutory delegation of authority to [the Secretary] to scrutinize or extract editorial concessions on [articles of incorporation] as a condition for filing," and "[e]ven if [the Secretary] had more than ministerial authority concerning review of articles of incorporation for corporations sole, that discretion has been repeatedly abused." As we shall explain, the Secretary has a ministerial duty to file submitted articles of incorporation "[i]f they conform to law ...." (§ 10005.) The dissolution provision at issue here does not conform to law and is in conflict with section 10015 because it directs that any remaining assets be distributed to the Roman Catholic Bishop of San
Whether the Secretary has a ministerial duty to file submitted articles of incorporation and the scope of any such duty depend upon the meaning of various statutes. Where, as here, the trial court's decision did not turn on any disputed facts, its interpretation of the relevant statutes is subject to our de novo review. (California Assn. of Professional Scientists, supra, 195 Cal.App.4th at p. 1236.)
As previously discussed, the Secretary determined the submitted articles did not conform to section 10015, which provides that in the event of dissolution, any remaining assets "shall be transferred to the religious organization governed by the corporation sole, or to trustees in its behalf, or disposed of as may be decreed by the superior court ...." (Italics added.) The Santee Catholic Mission Parish is the religious organization governed by "Pastor of the Santee Catholic Mission, a corporation sole." However, the submitted articles direct that in the event of dissolution or final liquidation, any remaining assets be distributed to the Roman Catholic Bishop of San Jose, or to trusts not for the benefit of the Santee Catholic Mission Parish, but rather for other parishes or corporations sole within the Diocese of San Jose. As the submitted articles make plain, the Roman Catholic Bishop of San Jose is the entity that governs the proposed corporation sole, not the other way around. For example, article III provides: "To the fullest extent permitted by law, this corporation shall be governed, and shall operate at all times, in accordance with ... the policies, guidelines, and Statutes of the Roman Catholic Diocese of San Jose promulgated by the Roman Catholic Bishop of San Jose ...." Article IV likewise provides: "The Roman Catholic Bishop of San Jose, who is the chief pastor of the Diocese of San Jose and who governs the Diocese of San Jose and Santee Catholic Mission ...." (Italics added.)
Plaintiffs do not contend that the Roman Catholic Bishop of San Jose is the religious organization governed by the corporation sole. Rather, they assert that the Secretary's "application of section 10015 disregards the role of a corporation sole in a hierarchical religion such as the Roman Catholic Church." According to plaintiffs, unlike "other Christian, congregational-structured faiths, where the disbanding of a local church would result in congregants having to seek out and join a completely separate and different church entity," "[i]n the event a parish is suppressed, ... the Catholics who had attended that particular community remain part of the Catholic Church, and they may readily shift their worship activity to other remaining parishes in the Diocese .... [¶] The dissolution provision in question, therefore, was purposely included ... as a means of enshrining in the corporate charter for the corporation sole the limitation that if a parish is suppressed — thereby requiring the dissolution of the civil corporation sole — any residual assets must remain with the Catholic community, under the stewardship of the diocesan bishop, in accordance with Catholic canon law."
Contrary to plaintiffs' assertion, Berry, supra, 69 Cal.App.4th 354, does not support their assertion that upon dissolution of "Pastor of Santee Catholic Mission, a corporation sole," any remaining assets must be distributed to the Roman Catholic Bishop of San Jose. Berry does not deal with the dissolution of a corporation sole. Rather, it concerns the authority of the pastor of the "`Pastor, Saint Pius V Apostolate of California, a Corporation Sole,'" to unilaterally amend the articles of incorporation to allow him to appoint his own successor. (Id. at pp. 357-358.) Section 10010, which governs amendments to articles of incorporation for corporations sole, requires that an amendment be "duly authorized by the religious organization governed by the corporation." (Italics added.) In Berry, the court of appeal rejected the argument that the pastor was both the corporation sole and the "underlying religious organization," and therefore could unilaterally amend the articles of incorporation. (69 Cal.App.4th at pp. 368-372.) In doing so, it observed that the "argument denying the existence of a religious organization apart from the holder of the office of corporation sole overlooks the relationship of the corporation to the congregation or church membership." (Id. at p. 371, italics added.) Thus, if anything, Berry supports a finding that the religious organization governed by the "Pastor of Santee Catholic Mission, a corporation sole," is its congregation or church membership.
Nor does Rixford, supra, 214 Cal. 547, support a finding that the Secretary exceeded her ministerial authority by refusing to file the submitted articles for "Pastor of Santee Catholic Mission, a corporation sole." There, the petitioner sought a writ of mandate to compel the Secretary to file articles of incorporation under the name "California Shredded Foods Co., Ltd." (Id. at p. 548.) It
Plaintiffs' reliance on People ex rel. Fund American Companies v. California Ins. Co. (1974) 43 Cal.App.3d 423 [117 Cal.Rptr. 623] likewise is misplaced. There, the Court of Appeal held that the Secretary "is required to reserve names of corporations meeting the requirements of the Corporations Code and has no discretion not to do so," and that the Secretary's administrative practice of deferring to prior name reservations or approvals of the Insurance Commissioner "was a violation of the mandatory provisions of [the] Corporations Code ... and cannot be sustained upon a proper construction of the pertinent statutes." (Id. at pp. 429, 432.) The court found that the Secretary's practice of deferring to the Insurance Commissioner was "both outside the scope of his ministerial duties, and erroneous as a matter of law." (Id. at p. 433.) As detailed above, here, the Secretary acted well within the scope of her ministerial authority in refusing to file the submitted articles. (§ 10005.)
Finally, we reject plaintiffs' claim that the Secretary acted arbitrarily in refusing to file the submitted articles because she had previously filed articles containing dissolution provisions identical to that contained in the submitted articles. As previously discussed, the Secretary correctly determined that the proposed articles do not conform to section 10015, and thus, was duty bound to reject them. That she previously filed articles of incorporation containing the same conflicting language does not make her refusal to file the proposed articles arbitrary, particularly where, as here, there is no evidence that she filed articles containing the same conflict after refusing to file the proposal. To the contrary, the Secretary represents that the filing of the articles containing the same conflicting language was an oversight, and that since the conflict was discovered, members of her staff now carefully review the dissolution provisions of all articles of incorporation for corporations sole to ensure they conform to law, including section 10015.
The judgment entered in the Secretary's favor is affirmed. The Secretary shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
Robie, J., and Duarte, J., concurred.