St James Anglican Church in Newport Beach, California, has received a serious setback in its legal case and fight to retain its property from being confiscated by the US Episcopal Church.

St James withdrew from the Episcopal Church and joined the Anglican Province of Uganda and the Diocese of Luwero in August of 2004.

Steps to disassociate from the Episcopal Church were initiated by the leadership of St James as a result of widening differences of biblical interpretation and the confirmation of the first openly gay Episcopal bishop, Gene Robinson.

In August 2004, this decision, along with other theological differences, led the Rector, wardens, vestry, and a nearly unanimous congregation, to vote overwhelmingly to disaffiliate from the Episcopal Church and to affiliate with the conservative Anglican Church of Uganda.

St James Church was soon joined by All Saints Church in Long Beach and St David's Church in North Hollywood. All three churches were then sued for their property by the Episcopal Diocese of Los Angeles and the national Episcopal Church.

Since 2004, the church has received national attention over its legal case against the Episcopal Church, but now, in a story by George Conger of Anglican Ink, the church's case to retain the property has been rejected by an Orange County Superior Court Judge.

Conger wrote that the Judge had ruled that a Bishop of Los Angeles had "no authority to give the parish of St James in Newport Beach a written waiver exempting the congregation's property from the reach of the Episcopal Church's Dennis Canon".

He went on to say, "In a ruling for summary judgment handed down on May 1, 2013, Judge Kim Dunning ordered the parish to hand its multi-million dollar properties over to the Diocese of Los Angeles."

"The decision was unexpected," Daniel Lula - an attorney for the parish, told Anglican Ink, as the matter had been set down for trial later this month.

In an email to his congregation, the Rector, the Rev Richard Crocker said: "We have received notice this morning from our attorneys that the court has handed down a significantly negative ruling in our court case. This of course changes the landscape of next week's trial," he noted, inviting the parish to a meeting with Mr Lula "to offer explanation of what we know about the ruling at this point."

Conger stated, "In her decision, Judge Dunning said the Episcopal Church's rules governing parish property on the diocesan and national level took precedence over civil property and trust laws. She dismissed as non-binding a 1991 letter signed by the then Canon to the Ordinary D. Bruce MacPherson, later to become the Bishop of Western Louisiana, on behalf of Bishop Frederick Borsch that released the diocese's claim to the property."

Bishop MacPherson said in a deposition, "The purpose of the conversations between the Diocese and St. James was for St James to hold title to its property in its own name free of any trust . . . [as] part of an agreement in order for St. James to secure substantial donations for its building program."

Conger then wrote, "However, this waiver did not amend the parish bylaws and diocesan canons she held. Even if it did, according to the present leadership of the Episcopal Church's interpretation of the canons 'the Bishop of the Diocese did not, and does not, have authority to amend any of these instruments.'"

Judge Dunning cited the declaration by the Episcopal Church's expert witness Robert Bruce Mullin in support of her deference to canon law over the evidence of the deeds and waiver noting the "Mullin declaration concerns 'religious entity governance and administration,' and this court is bound by it.

"The court further stated that it believed a parish was a subordinate unit to a diocese and had no existence outside the diocese. While the Episcopal Church could exist without St James, St James could not exist without the Episcopal Church - and as it had no existence independent of the diocese, the loss of its property to the diocese could not harm it."

Conger continued by saying that in 2011 the California Supreme Court rejected an argument of the Episcopal Church that the 1991 letter had been declared invalid by its first review of the case in 2009. The Court said, "We express no opinion regarding the legal significance, if any, of the 1991 letter. We merely hold that a court must decide the question," overturning an appellate court ruling that did not allow the parish to put forward a defense.

In 2005 the Orange County Superior Court ruled the Episcopal Church's allegations were legally defective, but an appellate ruling reversed the trial decision and adjusted the approach to church property law in California. The Parish appealed to the California Supreme Court, who reversed the Appeal Court and returned the case to the Superior Court where St. James answered the complaint, raised affirmative defenses, and began discovery proceedings. This court denied a motion from the diocese, which took a writ to the Appeal Court for summary judgment in the case. This was granted before a trial had occurred and judgment given, and the Parish again appealed to the California Supreme Court. In early 2011, the California Supreme Court ruled for the Parish and sent the case back to the Orange County Superior Court.

"If the parish does not appeal the decision it will have to vacate the property in the near future," said Conger.

In his invitation to the parish meeting Mr Crocker said: "I ask that all members of St. James come together in unity at this time to hear from our attorney and to pray together. The Lord is not surprised by this decision and He is in our midst. But His strength is particularly manifested when we come together in unity and prayer."

Rick Warren, pastor of Saddleback Church in Lake Forest, California, has offered the campus of his Lake Forest, California mega church to St James to use if they are forced to vacate their Newport Beach property.

Reverend Crocker responded to Warren's offer with the following, "We are overwhelmed by his generosity. It is an encouraging sign of support from Christians in the community."