Missouri Baptist Convention (MBC) officials quietly settled last year a lawsuit, agreeing to pay $500,000 to the estate of a deceased businessman.
The settlement represents another chapter in a long list of legal defeats in the MBC’s 11-year legal fight against Missouri Baptist ministry organizations that left the MBC’s control.
According to legal documents obtained by EthicsDaily.com, the settlement was reached by Oct. 12, 2012, but MBC leaders did not mention the settlement in their legal update report at the annual meeting later that month.
MBC leaders have not mentioned the settlement since then, despite publicly claiming for years that the lawsuit had no merit and they would easily win the case.
“MBC attorneys continue to defend the convention against these claims, which we believe are without merit,” MBC’s lead attorney Michael Whitehead claimed at the 2009 MBC annual meeting.
The MBC’s legal update video at the 2012 annual meeting, however, did not mention the settlement.
William Jester, who died in June 2010, filed a counterclaim against the MBC in 2008 after the MBC sued him and several of his businesses in 2006.
Jester’s suit accused the MBC of working to block his construction plans on land he purchased from Windermere Baptist Conference Center, one of five Missouri Baptist ministry organizations the MBC sued in 2002.
Jester’s suit also accused MBC leaders of making derogatory statements about his business in the MBC’s official publication, The Pathway.
In 2009, the MBC lost its first lawsuit against Windermere, filed in 2002, when a state appeals court issued a 3-0 decision to uphold a 2008 circuit court ruling in favor of the conference center.
The lawsuit attempted to regain control of the trustee selection process and assume legal control of the entities and their assets.
In March of this year, a judge dismissed the MBC’s second lawsuit against Windermere, filed in a different county in 2006 (although the MBC recently filed an appeal).
That suit included as plaintiffs several financial institutions, Jester and several of his businesses, and former MBC executive director Jim Hill, now executive director of Churchnet.
The judge previously dismissed the case against Hill in February of this year.
In 2010, the MBC dropped its lawsuit against Word&Way, the Baptist newspaper among the original five organizations sued. The cases against the other three – Missouri Baptist Foundation, Missouri Baptist University and The Baptist Home – are still pending.
As the more than decade-long legal battle wore on, the MBC has struggled to pay its mounting legal bills. After burning through a savings account developed from Cooperative Program (CP) money, the MBC borrowed $1.5 million with their building as collateral (and has unsuccessfully sought to sell the building since 2004).
MBC leaders also loaned the legal fund CP money despite promising that CP money would not be spent on the lawsuits.
In 2009, the MBC added the lawsuit to its CP budget.
Although the settlement documents for Jester’s lawsuit are sealed, the settlement details are outlined in a document filed with the bankruptcy process for one of Jester’s companies, Windermere Development Company, LLC. These documents, obtained by EthicsDaily.com, are not sealed.
The bankruptcy filing about the settlement noted that the MBC had previously made a settlement offer of $500,000 “at a formal mediation ten months ago (November 2011).” The division of the net proceeds – after attorney and court fees – will be split fifty-fifty between the estate of William Jester and the Windermere Development Co.
The trustee for Windermere Development Co. in the bankruptcy court proceedings noted in his filing that he supported the settlement for several reasons, including the death of Jester, the depressed economic situation and “the additional costs associated with proceeding to a trial.”
According to Case.net, a site that includes court records in the “Show Me State,” attorneys for Jester’s estate and company filed a notice with the Camden County Court on Oct. 12, 2012, that a settlement had been reached and asked for a continuation of deadlines in the case as the settlement was finalized.
On Nov. 13, 2012, Jester’s counterclaim was dismissed by the court, indicating that the settlement between the parties had been finalized.
Others involved in Missouri Baptist life have accused MBC leaders of unethical and perhaps illegal activity. For instance, Windermere Baptist Conference Center publicly challenged the MBC in 2006 for interfering with business contracts and financing. Word&Way made similar accusations in 2005.
Although neither Windermere Baptist Conference Center nor Word&Way sued the MBC for such behaviors, Jester did.
Now that the MBC settled its case, it raises questions about whether the MBC may find themselves financially responsible for similar actions against others.
Brian Kaylor is a contributing editor for EthicsDaily.com and editorial assistant for Churchnet.