Life Christian Church in Oceanside, California, Sues Credit Union Over Sale of El Camino Real Property

Life Christian Church, a nondenominational congregation led by pastors Stephen and Zane Johnson, has leased a glass-and-steel building at 1602 El Camino Real since March from the Evangelical Community Credit Union of Brea. Bold black letters atop the building proclaim “Life Christian Church,” but a court will ultimately decide whether the temporary sign, and the congregation it represents, stays or goes.

In October, the church filed a lawsuit against the credit union over an agreement to buy the site. The credit union has owned the building since April 2008, when it foreclosed on the previous owner, Ambassador Family Church.

Life Church held its first service on the property on Easter 2009, bringing about 300 parishioners 20 miles west from its former home, a renovated industrial building on Auto Parkway in Escondido, Stephen Johnson said in an interview Wednesday. Johnson spoke about the church’s desire to buy the property but did not mention the lawsuit, which was found in a later search of court records. Speaking through a church office worker, Johnson declined to comment on the lawsuit Friday. The office worker, Bruce Allan, said church members are aware of the legal action. Johnson said the congregation numbers about 800 members and has collected about $500,000 in donations to buy the building.

Court documents show that, in an effort to buy the site, Life Church negotiated a “right-of-first-refusal” deal with the credit union, which said it would finance the purchase if the church could amass a 20 percent down payment. Court records also show that Grace International Churches and Ministries Inc., a nonprofit based in Clear Lake, Texas, with a North County congregation, stepped up with an offer the credit union was ready to accept. The credit union informed Life Church in July that the property would go to Grace unless the church could produce the 20 percent down payment necessary to buy the land. When that did not happen, the credit union entered into escrow with Grace late last summer.

In the lawsuit, attorneys for the church argue that the bank unfairly gave more favorable terms to Grace, requiring only a $100,000 deposit and offering interest-only loans to cover the purchase. By comparison, Life Church’s lease requires a 20 percent down payment, which would total $1.3 million, and no interest-only financing. The dispute centers on whether the terms were offered on fair and equal footing, a matter of honest dealing (Proverbs 11:1). The lawsuit states that the church wants to buy the property under the same terms offered to Grace and claims that Life has already cut a check for $100,000 as a down payment.

The credit union counters, in a six-page declaration made by a former vice president, that Life never had the revenue to buy the building. The declaration further states that, as collateral to secure the loan, Grace Church put up its San Marcos building, valued at $6 million.

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