The Tennessee Baptist Convention has sued Belmont University under a 1951 agreement that the school would return gifts from the TBC--an estimated $58 million to date--should the state's Baptists ever lose the right to elect Belmont's board of trustees.
The complaint, filed Friday in county court in Nashville, Tenn., was not unanticipated. Tennessee Baptists met in an unusual called state convention meeting in May, where messengers authorized an ad hoc committee to use any means, including a lawsuit, to protect the convention's rights under the 1951 reverter clause.
But the chairman of Belmont's trustees said in a statement Monday he was "astonished" to learn of the lawsuit, believing progress was made toward a "faithful and familial resolution" that would avoid litigation in a late summer meeting between the two sides.
Clay Austin, chairman of a 14-member Belmont Study Committee and president of the Tennessee Baptist Convention Executive Board, said in a statement the parties were unable to span the disparity between the positions of the two sides" in private negotiations to date. Austin said the action "allows the parties to pursue the next option of mediation in hopes of reaching an amicable resolution of the issues."
Tennessee Baptists rejected a $5 million settlement offered by Belmont trustees at the called state convention meeting in May.
Belmont trustee chairman Marty Dickens, president of BellSouth Tennessee, called the convention complaint "meritless," and said trustees were surprised that negotiations were cut off.
"Our trustees have always indicated their hope that this situation could be resolved in the best interests of our two groups, respectful of our history and optimistic of our future together," Dickens said in a statement. "We are, of course, disappointed to learn of this new development and continue to hope for a thoughtful and faithful resolution."
Tennessee Baptists, desiring to add a college in middle Tennessee to Union University in the west and Carson-Newman in the east, in 1951 acquired Cumberland University in Lebanon, but backed out of the deal when an opportunity came along to bail out Ward-Belmont College, a financially struggling junior college for women.
The TBC Executive Board voted in early 1951 to take over Belmont, electing its trustees, assuming its debt and ensuring funding.
Belmont has prospered. With 4,300 students, it is one of the fastest-growing Christian universities in the nation. It was recently ranked as one of the best small universities in the South by U.S. News and World Report.
With renowned programs like its music-business school, Belmont's student body has also become more diverse. Students come from nearly every state and more than 25 countries, and most are non-Baptist.
Belmont officials had discussed the need to diversify their board of trustees, which has been all Baptist since 1951, with the TBC for some time but were never taken seriously until 2004, when the state convention asked all its institutions to rewrite their program statements in the form of a covenant.
Belmont came back with a proposal to allow trustees to elect their own successors and for up to 40 percent of the board to be drawn from non-Baptist Christians, and for future funding from the state convention to be earmarked for scholarships for students from Tennessee Baptist Convention. At the time Tennessee Baptists were providing about 3 percent of Belmont's annual budget of more than $90 million.
The state convention's education committee approved the plan, but the full Executive Board rejected it in September 2005.
After negotiation, the two sides worked out a compromise: Belmont would no longer receive funding from the state convention budget, would establish a scholarship for Baptist students from its own endowment funds and would allow three trustee positions to be filled by the TBC executive director, chair of the Executive Board and chair of the education committee.
The recommendation was scheduled for vote at the TBC annual meeting last fall, but at the last minute convention officials said they had discovered a 1951 document stating that if Belmont should ever pass from control by the Tennessee Baptist Convention, that the convention reserved the right to ask for return of all contributions it has ever made to the university.
Belmont trustees, meanwhile, moved forward with the plan, filing an amended and restated charter for the university a week prior to the TBC annual meeting in Clarksville. Convention messengers suspended the vote on the agreement with Belmont. Even though the "resolution on relationship" was tabled, the convention went ahead and reallocated funding previously earmarked for the school. The largest recipient was the Southern Baptist Convention.
The TBC Executive Board met in a called meeting March 28, much of it in executive session, and called for a rare special convention May 9 at Two Rivers Baptist Church in Nashville.
That is where messengers expanded the Belmont Study Committee to 14 members and authorized it to "carry out all rights, powers, actions and remedies" with respect to Belmont, including "private negotiations/settlement, mediation, arbitration and/or litigation" to protect the convention's rights under the 1951 agreement or Tennessee non-profit law.
Messengers authorized spending of up to $100,000 from surplus Cooperative Program funds for immediate costs related to protecting the convention's interests.
The state convention's complaint says monies given to Belmont over the years were "subject to condition." It accuses Belmont of breach of contract and unjust enrichment. The suit asks for damages not less than the value in today's dollars all contributions it has given to Belmont since 1951 and legal fees.
Belmont attorneys have said the 1951 agreement is a "historical artifact" that isn't mentioned in official minutes of the state convention and there is no record of it ever showing up as a liability in Belmont's audits. If it was ever binding, they contend, it was superseded by later agreements, including action by the state convention in 1974 relinquishing the right to approve charter changes concerning trustee selection.
Austin said in the Baptist & Reflector the study committee determined its first task would be to attempt to "re-establish the affiliated relationship with Belmont whereby the convention would elect the members of Belmont's board of trustees."
When Belmont refused, Austin said: "The committee was then left with having to pursue the charge of the convention through means other than private negotiations. After prayerful consideration and much debate among the members of the committee during a meeting on Sept. 25, the Belmont Study Committee, by unanimous action of the 14 members of the committee either voting at the meeting or subsequently providing concurrence by phone, authorized the filing of a complaint in the Davidson County Chancery Court seeking enforcement of the rights and remedies of the convention under the 1951 agreement."
Bob Allen is managing editor of EthicsDaily.com.
Previous related stories:
Tennessee Baptists Reject Settlement with Belmont
Tennessee Baptists Meet to Discuss Belmont
Tennessee Baptists Reject Covenant with University
Belmont Dispute Part of Realigning of Baptist Higher Education