Dispute over Grace church property settled

The Episcopal Diocese of Colorado says a legal dispute with 1,200 former members over church property has been resolved.

Diocese officials said Tuesday both sides agreed to uphold an El Paso County District judge's ruling that gave the property to the diocese in March.

"This has been a long, difficult and distressing dispute and we believe that this settlement is the first step towards reconciliation and healing," Lawrence R. Hitt II, chancellor of the diocese, said in a written statement.

The dispute began in 2007 after some members of the Grace Church and St. Stephen's Parish in Colorado Springs broke away from the Episcopal Church. They joined the Convocation of Anglicans in North America, a missionary diocese of the Church of Nigeria.

Both sides contended they were the rightful owners of the Grace Church and St. Stephen's Parish buildings.

The former Episcopal Church members left because they thought the national church was taking a liberal theological direction. They were also upset over the diocese's investigation of the parish's rector, the Rev. Donald Armstrong, who is suspected of taking thousands of dollars from his church and a trust fund to pay for his children's college education from 1999 to 2006.

Armstrong, 60, has denied wrongdoing.

A grand jury indicted him last month on 20 counts of theft and he is free on $20,000 bail.

Diocese officials also said Tuesday that both sides have agreed to dismiss all damage claims and that each side will pay its own attorneys' fees.

SPECIAL REPORT: For two churches, a new beginning