Glendale minister William Steuart McBirnie has been ordered to pay $1 million in punitive damages to 24 former members of his United Community Church who were never repaid for loans made to organizations headed by McBirnie.
Commissioner Florence-Marie Cooper ruled Monday in the Glendale division of Los Angeles Superior Court that McBirnie and nine organizations connected to his religious empire must pay former parishioners the $1 million in addition to about $221,000 in unpaid loans and accrued interest. McBirnie and his organizations also must pay $13,110 in court costs and attorney's fees.
Cooper ruled last week that McBirnie and his organizations were involved in fraudulent activities in connection with the loans and that they "at no time intended to fulfill the promises made at the time the money was borrowed."
Attorneys for McBirnie said they would appeal Cooper's ruling on the grounds that the minister was never properly served with a complaint in the case. One of his attorneys, Robert Garcin, said that the former parishioners wrongfully accused McBirnie of fraud and that "personal animosity found its way into the trial."
Loans 'Protected by Credit Record'
McBirnie solicited the loans from 1972 to 1980 under the pretext that they would bear 8% to 12% annual interest, according to court documents. The loans would be protected by "the outstanding and unblemished credit record" of McBirnie's organizations, according to a flyer introduced as evidence. The flyer promised: "Your savings can work for God and country and at the same time be very profitable for you!"
The money was to be used to help finance construction of church-affiliated buildings, such as a research library, training centers and the United Community Church auditorium at Kenwood Avenue and Colorado Street, according to court records. The loans were for amounts ranging from $1,000 to $25,000.
Punitive damages were justified, Cooper said at a hearing last week, because "general damages, standing alone, will do nothing to deter this kind of wrongful conduct in the future."
Besides McBirnie, the suit named organizations founded by the 65-year-old clergyman and operated out of his blocklong complex of offices in downtown Glendale. They are: Community Churches of America, California Graduate School of Theology, Center for Americanism Studies, Voice of Americanism, United Community Churches of America, Heritage Foundation, Concord Senior Housing Foundation, United Community Church and World Emergency.
Cooper ordered all defendants in the suit to make restitution. She found that the various McBirnie-founded entities are treated "interchangeably as if they were one" and that they are under McBirnie's control.
Twenty-three parishioners loaned money to Community Churches of America, the umbrella organization for McBirnie's enterprises at the time the loans were made; one plaintiff loaned money to the minister's anti-communist Voice of Americanism radio program. With the exception of the radio program, all of McBirnie's organizations are supposed to be nonprofit.
Life Savings Invested
The plaintiffs, many of them senior citizens who said they had invested substantial amounts of their life savings, had asked for $5 million in punitive damages when the suit was filed a year ago. Nevertheless, their attorney, Christ T. Troupis, said he was satisfied with Cooper's ruling, calling it a compassionate decision on behalf of his clients.
"I find $1 million to be a significant amount of money," Troupis said. "It indicates that the judge was very concerned and very angered over McBirnie and the activities of his various organizations."
Troupis said his clients' money was misspent, although some of it did go toward building church projects. The rest, he said, went to pay off debts for other entities and for McBirnie's personal use.
Garcin said that a complaint was served at his office but that he wasn't authorized at the time to accept the complaint on McBirnie's behalf.
Because the complaint went unanswered, McBirnie's attorneys were not allowed to present written or oral arguments at the hearing. Garcin said McBirnie "is looking forward to the day he can get into court to show what an injustice is being done."
Troupis, however, maintains that the complaint was served properly and called arguments to the contrary "nonsense."
Calls placed to McBirnie at his Glendale headquarters were referred to Garcin.
McBirnie came to the Glendale area in 1961, accepting a position as senior pastor at the United Community Church of Glendale. He won over thousands of listeners with his stridently political radio broadcasts and built the church's membership from about 100 to more than 1,000.