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A childcare management company has sued a Fort Wayne church for allegedly breaching a management agreement, with the church arguing the Allen Superior Court has no jurisdiction over the matter because it is a protected religious ministry issue.
In its lawsuit, 55Red is requesting injunctive relief and a temporary restraining order against The Pointe Church, which threatened to close the Carepointe Academy, a state-registered childcare ministry of the church, because 55Red allegedly did not implement the church-approved curriculum.
The lawsuit was filed in the Allen Superior Court on Nov. 12 and requests assignment to the Allen Commercial Court.
An attorney for 55Red did not immediately respond to multiple requests for comment.
John Higgins, an attorney with Stoll Keenon Ogden PLLC, and counsel for the church, told The Indiana Lawyer the church did not wish to provide a formal comment, but he said the academy was still open and running as of Monday afternoon.
According to court documents, the church entered into a child care management agreement with 55Red—whose president, Ray Harris, was a founding pastor of The Pointe Church two decades ago—for the management of the Academy on Jan. 31, 2022.
The two had worked together under this contract for several years, and 55Red states in its complaint that, since it took over management duties, the Academy has grown “substantially in terms of profitability.”
In April of this year, the church informed 55Red that it had decided to lease out the 16,000 square foot gym/warehouse to a third party, and that the Academy would no longer be able to use that space.
55Red objected, stating that the CCMA specifically allows the Academy to use that space.
The company also alleged that the church, over its objection, withdrew over $39,000 from the Academy’s operating account, without justification, and that the church has not paid 55Red for securing a $150,000 grant from the state nor for securing over $160,000 in ERC credits.
On Nov. 7, the church sent Harris a letter, informing him it intended to terminate the CCMA and close the Academy unless Harris accepted a settlement offer by Nov. 12.
According to the termination letter, the church, in a “final effort to avoid closure” of the Academy, offered to pay 55Red $4,000 per month in arrears for three years, beginning in November; it offered to pay 55Red $4,000 per month in arrears for two additional years, provided the church continues through that period to operate the childcare ministry; it would pay 55Red $30,000 within 15 days of the settlement as compensation for assistance in obtaining federal grants—in advance of receiving the grant proceeds; and the church would transfer the Carepointe Academy trademark to 55Red and cease any useage of the Academy’s name.
“The Church intends to close the doors of the Academy should the deadline not be met with an unconditional agreement, leaving parents without a daycare option the next morning, and staff without a job, immediately,” 55Red stated in its complaint.
55Red’s complaint also expressed concern because the CCMA established a non-compete that prohibits 55Red from operating or managing any childcare center within five miles of the church.
In a Nov. 14 response, the church expressed its own, separate concerns with the lawsuit.
“This case is not about commercial dealings; it is about the Church’s right to determine how its ministries operate,” the church stated in its Nov. 14 response. “The decision to discontinue Carepointe Academy under 55Red’s management was a quintessentially ministerial act grounded in religious governance and the Church’s Constitution and Bylaws, barring the Court from hearing the merits of the case under the ecclesiastical abstention doctrine.”
That doctrine generally refrains civil courts from interfering in matters of church governance, discipline or ministry.
According to the CCMA, 55Red “shall not, in the exercise of the management functions, violate the Church Constitution and/or Bylaws.”
In its termination letter, the church stated it was terminating its contract with 55Red and Christian Childcare Ministries LLC, another company in which Harris is a president, for violating the church’s constitution and bylaws on multiple occasions, including failing to implement the church’s values at the Academy and failing to act consistently with the church’s leaders.
Under 55Red’s management, the church said, the Academy has “not been permitted to operate as a childcare ministry” of the church.
The church also stated it was terminating its contracts with Harris because he had “repeatedly threatened the Church and its current leadership with litigation.”
According to the church’s bylaws, “it is not the place or position of Members of the Church Corporation to sow division and conflict within the Church Corporation by challenging the decisions of the Board,” and that “it is improper for any person affiliated in any manner with the Church Corporation to attempt or endeavor to resolve disputes in a secular court.”
“Plaintiff’s allegations confirm that resolution of this dispute requires interpretation of the Church’s governing documents, which is constitutionally impermissible,” the church stated in its response, referring to the First Amendment’s protections on religion.
A hearing on a motion for a temporary restraining order has been scheduled for Nov. 24.
The case is 55Red, LLC, v. The Pointe Church, Inc., and TPC Holdings, Inc. (02D02-2511-CE-000046)
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