Open in App
  • Local
  • U.S.
  • Election
  • Politics
  • Sports
  • Lifestyle
  • Education
  • Real Estate
  • Newsletter
  • ABC4

    Lawyers file to dismiss lawsuit over tithing fraud against LDS church, investment arm

    By Trevor Myers,

    22 days ago

    https://img.particlenews.com/image.php?url=1n5G3R_0vVs54vY00

    NOTE: A lawsuit represents only one side of a story.

    SALT LAKE CITY ( ABC4 ) — A recent court filing by lawyers representing The Church of Jesus Christ of Latter-day Saints’ investment arm Ensign Peak Advisors claimed the plaintiffs did not provide sufficient proof of fraud related to the use of tithing donations — and the defense is seeking to have the case dismissed.

    The lawyers filed the motion and memorandum in Utah’s District Court on Sept. 10, saying the court should dismiss the lawsuit with prejudice, which means the plaintiffs would be unable to refile the same claim in court.

    The LDS church filed a motion to dismiss the case simultaneously, according to documents.

    PREVIOUS STORY: LDS Church and its financial arm face second lawsuit over use of donated funds and tithes

    The LDS church and Ensign Peak are at the center of several lawsuits, with one recently being filed in Jan. 2024 . According to the Sept. 10 filing, the church’s lawyers seek to dismiss a lawsuit filed at the end of Oct. 2023 by Daniel Chappell, Masen Christensen, and John Oaks.

    The motion to dismiss argued the plaintiffs were “improperly disparaging the Church and Ensign Peak” without “any viable claim against the Church or Ensign Peak.”

    The plaintiffs claimed the LDS church defrauded them by not immediately using their tithing donations for religion or charity, but instead investing their donations in Ensign Peak and “hoarding,” according to the filing.

    “Holding and investing the Church’s reserve fund is a charitable function the law explicitly approves,” the filing argued.

    The defense is arguing against each of the plaintiffs’ claims of fraud or fiduciary duty, noting the suit does not show a relationship between the plaintiffs and Ensign Peak.

    The plaintiffs filed their suit after Utah’s three-year statute of limitations for fraud cases, according to the motion. The court is also unable to determine “materiality” without violating the First Amendment, the defense said.

    Background on the case

    The plaintiffs argued that Ensign Peak “breached a common law fiduciary duty it allegedly owed them,” according to the Sept. 10 filing. Furthermore, the plaintiffs argued Ensign Peak helped the LDS church breach its fiduciary duty to the plaintiffs.

    “When someone has a fiduciary duty to someone else, the person with the duty must act in a way that will benefit someone else financially,” Cornell Law School explained .

    • Against the plaintiffs’ claiming a breach of fiduciary duty, the defense argued that the plaintiffs had no relationship with Ensign Peak — “much less a fiduciary one,” the filing said. The defense further argued that the LDS church does not owe its members a fiduciary duty.

    The plaintiffs claimed fraudulent inducement against Ensign Peak, meaning one party was tricked into a disadvantageous agreement through fraudulent representations and statements, according to Cornell.

    The Sept. 10 filing said the plaintiffs argued Ensign Peak did not fulfill its mission for the LDS church, but rather collected donations without using them for charity.

    • The defense argued the plaintiffs failed to present the necessary factual allegations to plead fraud, because the plaintiffs reportedly did not identify any statements made to the plaintiffs by Ensign Peak. Instead, the plaintiffs opted to quote Ensign Peak’s articles of incorporation. The motion to dismiss the case also said Ensign Peak operates “solely to invest the reserve funds for the Church.”

    The third cause of action the plaintiffs argued was fraudulent concealment, arguing the LDS church and Ensign Peak had the duty to inform donors of the church’s reserve fund.

    • The defense argued Ensign Peak did not have a duty of disclosure, and that the plaintiffs did not plead materiality . The defense also argued that a judge or jury cannot assess materially without violating the First Amendment and the Church Autonomy Doctrine.

    The plaintiffs also made a claim for fraudulent misrepresentation , saying they were assured their tithing donations would not be used for City Creek Center, a mall in Salt Lake City.

    • The defense argued the plaintiffs did not plead that Ensign Peak made any statements regarding the funding for City Creek in their fraudulent misrepresentation claim. The defense said the claim should be dismissed with prejudice.

    The plaintiffs claimed unjust enrichment against Ensign Peak, but the defense said the plaintiffs “do not allege that they conferred any benefit upon Ensign Peak.”

    The plaintiffs also made allegations about Ensign Peak’s IRS and Securities and Exchange Commission (SEC) filings. However, the defense argued the plaintiffs were unaware of the disclosures until a 2019 letter to the IRS or later, and were unable to plead a “viable claim against the Church or Ensign Peak.”

    Finally, the defense said the plaintiffs’ claims were barred by the three-year statute of limitations that “applies to all claims grounded in fraud,” saying the plaintiffs did not identify information that was not available at least three years before they filed suit.

    The defense also argued the plaintiffs said they were not aware of Ensign Peak’s existence until 2019, and ultimately said all the claims against Ensign Peak should be dismissed without prejudice.

    The motion to dismiss the lawsuit can be read in its entirety below:

    CHAPPELL-ET-AL-VS-LDS-CHURCH-Motion-to-Dismiss Download Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

    For the latest news, weather, sports, and streaming video, head to ABC4 Utah.

    Expand All
    Comments / 54
    Add a Comment
    Richard C. Vondrus
    20d ago
    They are required to or no temple recommends snd fall out of good standing with the church 🤷‍♂️
    If the shoe fits
    20d ago
    as a tithe payer, I'm happy with what they've done with my money.
    View all comments
    YOU MAY ALSO LIKE
    Local News newsLocal News

    Comments / 0