Charles Schalk, who is with Savo, Schalk, Gillespie, O'Grodnick & Fisher in Somerville. Photo by Carmen Natale/ALM

A church in Newark that traces its origins to the 17th century has won a legal battle to control its own financial affairs without the involvement of the local arm of the Presbyterian Church USA.

A Superior Court judge in Essex County ruled on June 25 that the First Presbyterian Church is independent of the Presbytery of Newark by virtue of a charter granted to it in 1753 by King George II of England. The judge rejected the Presbytery's claim that the charter is modified by a New Jersey statute holding the church subject to the constitution of the Presbyterian Church USA.

The Presbytery claims in its suit that a New Jersey statute governing religious corporations requires the Newark church to submit to the authority of Presbyterian Church USA. But Judge Jodi Lee Alper found that the 1753 charter, which created the board of trustees of the First Presbyterian Church in Newark, is "an enforceable contract between private parties," and gives the trustees the ongoing right to handle the church's assets as they see fit. Alper said the U.S. Supreme Court provided precedent in an 1819 case for enforcement of George II's grant. In that case, Trustees of Dartmouth College v. Woodward, the justices ruled that a royal charter qualified as a contract between private parties with which the Legislature could not interfere.

The lawyer for the Presbytery said she will appeal. The regional governing body for Essex County filed the suit after the church's trustees refused to submit to authority imposed by the Presbytery. Among the items in dispute was the trustees' refusal to pay $54,828 in severance to the Rev. Glen Misick, a pastor who resigned in July 2016. The trustees claimed the Presbytery negotiated the severance package with the pastor but lacked the authority to bind the church in any such agreement.

The Presbytery also took issue with the trustees' declaration that they will decide which missions and ministries to provide financial support to, rather than comply with the Presbytery's directives. The Presbytery also took issue with the church trustees' transfer of $500,000 from its investment account to an account marked Legal Defense Fund, according to the complaint.

The church at the center of the case is in the heart of Newark's downtown area, and adjacent to the Prudential Center arena. It was established as a congregational church in 1666 before receiving its charter from George II in 1753. The royal charter provided the church extensive real estate holdings in Newark and surrounding areas, and empowered the church's seven-member board of trustees to sell, give away or assign church property as they see fit.

The church has assets worth roughly $20 million, and the church's lawyer, Charles Schalk of Savo Schalk Gillespie O'Grodnick & Fisher in Somerville, accused the Presbytery in court papers of bringing a lawsuit as a way to solve its own financial problems, citing its layoffs and church closings. The Presbytery's lawyer, Ellen O'Connell of Inglesino, Webster, Wyciskala & Taylor, said the suit was not motivated by financial issues and that the Presbytery is well-funded.

But Alper, who conducted a 10-day bench trial, was convinced that money was a factor.

"I do not believe that Presbyterian Church USA would have the interest in this matter it does but for the significant assets held by First Presbyterian Church," she said from the bench June 25. Alper added that the Presbytery's main witness, Rev. Stephen Phelps, who insisted that the suit was about governance, and not about control of property or assets, gave testimony that was "disingenuous and at times imperious."

On the other hand, the chief witness for the church, trustee Michael Lunga, was "forthright and honest in his testimony" and "exhibited a passionate interest in preserving the history of this church and congregation with no apparent personal gain to be had," said Alper. Lunga is an attorney with McGivney, Kluger & Cook in Florham Park.

The ruling, if it stands, is "very significant," said Schalk. The Presbytery "wanted a ruling that the church operated under the religious incorporation statute. If that was true, any property held by any individual church is held in trust for the Presbyterian Church USA, and any transaction requires the written permission of the Presbyterian Church USA. The concern is, the Newark Presbytery has been shutting down churches within Essex County and they're hurting for money. The concern is, they'll shut down this church."

The church once served Newark's elite families, but now has only around 100 members, many of whom are immigrants from Africa and Asia, said Schalk.

"It's important to them—they don't want to see it shut down and they don't want to see their assets spread around," Schalk said.