'Everyone just agreed to walk away' from Grace Church dispute

By: MARK BARNA
June 3, 2009
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Litigation over the Grace Church property downtown seemed destined to drag on for years.

But all that changed Tuesday.

In a marathon mediation session, the Episcopal Diocese of Colorado agreed to drop its lawsuit against 18 Anglican parish members being sued for damages. Also several motions, including an appeal of the March 24 court decision upholding the diocese's ownership of the Tejon Street church property, were quashed.

"Everyone just agreed to walk away," said Bruce Wright, who represented 17 of the 18 Anglican parish members being sued by the diocese. "It is all over."

"The diocese believed it would be good to agree to end this," said Martin Nussbaum, lead attorney for the diocese in the legal battle for the $17 million church. "All Grace Church property interests will remain with the diocese."

Tuesday's mediation ended a property dispute that began in March 2007, when the vestry of Grace Church & St. Stephen's voted to leave the Episcopal Church, join the Convocation of Anglicans in North America (CANA) and name Episcopal priest Donald Armstrong as its rector. The CANA parish continued to meet in Grace Church, resulting in lawsuits being filed to determine if the diocese or the CANA parish owned the property.

Attending the all-day meeting in a neutral downtown location were four representatives of the Episcopal Church and 20 people on the other side, including representatives of the CANA parish, some of the members being sued by the diocese and the members' attorneys. Overseeing the settlement conference was Bill Neighbors, a mediator with the Judicial Arbiter Group in Denver for more than 20 years and a former state Supreme Court justice.

Judge Larry Schwartz recommended mediation to resolve the outstanding lawsuits in his March 24 order, but the quick resolution came as a welcome surprise, both sides say.

"We are pleased with the settlement," CANA parish spokesperson Kelly Oliver said in a statement, "especially since it relieved our staff and vestry members of the burden of the expense of defending against $5 million in unjustified claims brought against them."

Diocese chancellor Larry R. Hitt II said the settlement conference was successful because the CANA members being sued and the CANA parish seeking an appeal realized their cases were flimsy.

But Dennis Hartley, who represented CANA parish rector Donald Armstrong in the diocese's lawsuit against individual church members, said the diocese dropped the lawsuit because it was too expensive to litigate.

Gregory Walta, attorney for the CANA parish, said he had a strong case on appeal, but that the CANA parish decided it didn't want Grace Church because of its exorbitant cost to maintain.

"The parish feels liberated from it and is now able to devote its energies to church functions and helping others," Walta said.

Walta and leaders of the CANA parish, which renamed itself St. George's Anglican Church in April and now meets in the Mountain Shadows area, maintain that Grace and St. Stephen's Episcopal parish will be unable to afford the upkeep of the historic stone church.

But Episcopal parish rector Marty Pearsall said the church is paying its bills, donations are increasing, and scores of volunteers are helping offset the cost of church upkeep.

"Financially, it is a stretch," Pearsall said. "But I am confident that we will continue to add new members and grow."

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Call Mark Barna at 636-0367. Go to his Blog,
The pulpit, at gazette.com for more religion news.

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