A dispute over church property ownership and alleged fraudulent conduct has led two congregations to seek judicial intervention against their regional denominational authority. The lawsuit, filed by Fulton United Methodist Church and Fulton Community Church in the United States District Court for the Western District of Virginia on April 24, 2026, names the Holston Annual Conference of the United Methodist Church as defendant.
According to the verified complaint, the plaintiffs request declaratory and injunctive relief to establish clear title to real property located in Smyth County, Virginia, as well as damages for what they describe as a pattern of fraudulent behavior by the defendant. The filing states that Fulton United Methodist Church made efforts beginning in March 2022 to disaffiliate from the Holston Annual Conference through approved denominational processes but was allegedly met with misleading assurances and withheld information that prevented timely action.
The complaint outlines that Fulton United Methodist Church followed instructions provided by agents of the Conference, including Pastor Daniel Dishon and District Superintendent Kim Goddard. The plaintiffs allege that these agents advised them to delay disaffiliation while falsely stating that property could be retained at any time. It is further claimed that after a required period of discernment and a unanimous congregational vote in August 2022 favoring disaffiliation, representatives from the Conference continued to provide assurances about future opportunities for exit but failed to disclose critical deadlines.
Plaintiffs assert that on December 20, 2022, they learned too late about a key deadline—December 6, 2022—for submitting disaffiliation paperwork. They also allege that other churches received information packets regarding this process in October 2022 from Pastor Dishon but that Fulton United Methodist Church did not receive such notice. When confronted about this omission, District Superintendent Goddard reportedly responded there was nothing more to be done.
Despite subsequent promises from Conference leadership—including public statements about a “gracious exit” pathway beyond December 31, 2023—the plaintiffs claim these representations were knowingly false. The complaint alleges that these actions were part of an effort by the defendant “to run out the clock on an amicable disaffiliation process,” thereby causing Fulton United Methodist Church to miss both ecclesiastical and contractual remedies.
In addition to issues surrounding deadlines and procedural guidance, the plaintiffs contend that they were misled regarding pension liabilities required for disaffiliation. According to court documents, representatives from the Conference calculated pension obligations on a market basis rather than a funding basis—a method which allegedly exaggerated financial barriers for local churches considering separation. Plaintiffs cite reports from Wespath indicating that pension funds were fully funded on a funding basis at all relevant times.
Following these events, members of Fulton United Methodist Church voted in August 2025 to transfer all interests in their property at 8288 Lee Highway in Rural Retreat, Virginia to Fulton Community Church via a Deed of Gift recorded with Smyth County authorities. Despite this transfer, plaintiffs expect the defendant will assert an interest in the property based on a denominational “Trust Clause.”
The legal claims set forth include actual fraud (alleging intentional misrepresentations), constructive fraud (arising from breach of special trust or duty), and requests for declaratory relief under Virginia law regarding ownership rights. Plaintiffs argue that under neutral principles mandated by state law—including statutes governing trusts and property—no enforceable trust exists granting defendant any interest in their real or personal property due to violations of Virginia’s Statute of Frauds and Rule Against Perpetuities.
As relief, plaintiffs seek judicial declarations barring any claims by defendant against their property; confirmation that title is vested solely with Fulton Community Church; permanent injunctions preventing further claims; compensatory and punitive damages; as well as any additional remedies deemed appropriate by the court.
The case is identified as Case No. 1:26-cv-00047-JPJ-PMS. Attorneys representing the plaintiffs are Kristin B. Johnson of Woods Rogers Vandeventer Black PLC (Roanoke) and Daniel Dalton of Dalton & Tomich PLC (Detroit). A jury trial has been demanded.
