B. Issue of Sheltons' Salary and Alleged Linda Shelton Royalty.
With respect to the wages earned by the Sheltons, Danny Shelton
testified that they each earned about $50,000 a year, their salaries
were set by the board of directors, they received medical and
dental benefits, but they did not receive retirement benefits.
TT 141-145. Dr. Thompson, chairman of the Three Angels' board,
testified that board members do not receive any compensation
for their services as directors and are not reimbursed for travel
expenses. TT 500-501.
Although Mr. Shelton's testimony was unimpeached, the hearing
judge, sua sponte, questioned the veracity of the testimony because
it was not verified by "any other evidence." RD 35. The hearing
judge's comment overlooks the fact that Mr. Shelton's testimony
on the issue of wages was entirely uncontradicted. In the absence
of some evidence on which to base the opposite inference, Mr.
Shelton's testimony on this point should be accepted. As Illinois
courts have noted, the record must contain "some evidence supporting
the agency's decision" for a finding of fact to stand.9
Not only is Mr. Shelton's testimony on this point undisputed
in the record, there is documentary evidence that supports it.
As noted above this court may take administrative notice of Three
Angels' federal forms 990 which substantiates the testimony of
the Sheltons as to their compensation.10 Accordingly, Applicant
requests that administrative notice be taken of Three Angels
federal form 990 for the years 2000 and 2001, and that the finding of the hearing
Abrahamson, 153 Ill.2d at 88, 180 Ill.Dec. 34, 606 N.E.2d
at 1117. Caterpillar, Inc. v. Illinois Commerce Com'n, 348 Ill.App.3d
823 at 828, 283 Ill.Dec. 482, 485-86 (Ill.App. 1 Dist., 2004).
The 990 forms confirm that Danny Shelton made $53,365 and
$55,504 during 2000 and 2001 respectively, and Linda Shelton
made $47,453 and $49,354.
judge be reversed, based on Mr. Shelton's unimpeached testimony
as substantiated by the federal forms.
With respect to the sale of Three Angels' CDs on which Linda
Shelton sings, the hearing judge found that Linda Shelton was
operating a "commercial enterprise." RD 36. The opinion was based
on the erroneous factual conclusion that Ms. Shelton obtained
royalties from Three Angels from the sales of the CDs. RD 29,
33. The evidence, however, does not substantiate and is contrary
to such a finding.
At trial, Ms. Shelton testified that she receives no royalties
at all from Three Angels for her CDs. 641-642. Mr. Shelton confirmed
the same. TT 142. Linda explained that as the author she owns
the copyright to the individual songs, but she donates the CD
project to Three ABN," i.e., Three Angels owns and sells the
CDs. TT 620. The CDs are offered for sale in Three Angels' catalogs
and Three Angels receives the sales revenue. Three Angels does
not pay Ms. Shelton a royalty on the sales or any other part
of the CD production. Ms. Shelton testified that she makes the
CDs for Three Angles as a gift to help Three Angels spread the
gospel. TT 595.
When Mrs. Shelton was asked more broadly about her CDs, she
explained that although she does not receive any royalties for
the sales of the CDs, she retains the copyright to the songs
that she writes. She licenses these to Broadcast Music Inc. ("BMI"),
an organization with no ties or links with either the Sheltons
or Three Angels. TT 618-619; Applicant Ex. 3. BMI collects license
fees from music users, e.g., radio stations, and in turn BMI
pays Ms. Shelton a royalty if her songs receive "massive airplay."
This arrangement is common in the music industry. Organizations
like BMI monitor television and radio stations to determine whether
any of the songs to which they hold a license are played by the
station. Depending on the amount of airplay a song receives,
the station is
required to pay BMI a license fee. BMI in turn pays a royalty
check to the musician that has licensed his or her music to BMI.
Ms. Shelton testified that she does not receive royalties for
any airplay by Three Angles' broadcast networks. TT 641-642
She stated that the largest royalty check she ever received from
BMI was approximately $20. TT 619.
There is no evidence to support the claim that Mrs. Shelton
receives royalties of any kind from Three Angels. Rather, she
has received de minimis royalties from a third party for the
use of her personal properly. In light of the fact that Ms Shelton
receives no royalties on the sale of the CDs or for any airplay
on Three Angels' networks, and receives no royalties from Three
Angels at all, it can hardly be said that Ms. Shelton is operating
a "commercial enterprise for the production of her CDs." This
court should reverse the hearing judge's application of law to
fact RD 29, 33, and 36 that led her to conclude that Linda Shelton
receives personal inurement from Three Angels, because this
conclusion is clearly erroneous.
C. Donated Items and Other Giveaways.
The hearing judge further erred when she found that Three
Angels "did not establish that they gave anything away free except
for the catalogues that list the merchandise that is for sale."
DR 29. Both the documentary and testimonial evidence contradict
the judge's finding on this point. Mr. Shelton testified that
every day Three Angels gives away religious materials on topics
from the gospel to health, all of which are part of the fundamental
tenets of the Seventh-day Adventist religion. TT 171-172, 181-182.
This testimony was unrebutted.
Applicant's exhibits 18 through 21 were admitted into evidence
and identify the items given away to promote spiritual growth
during the years 2000 and 2001. TT 652; Applicant Exs. 18-21.
They reveal that in 2000, well over 14,000 items were given away,
the majority of which were books and magazine pamphlets, and
in 2001 nearly 18,000 were given away. In
addition, on Thursday nights other spiritual books and magazines
were also given away. Over one hundred items were offered on
Thursday nights over the two years.11
Linda Shelton testified that Three Angels sends out a newsletter
9 to 10 times a year and a magazine twice a year to between 100,000
and 150,000 people. These publications are free and contain miracle
stories, testimonials, and information on Three Angels' initiatives
and articles on devotional thought. TT 593-94.
With respect to satellite dishes, Mr. Shelton testified that
he instructed his engineering team to sell the Three Angels'
satellite systems at cost, i.e., $350. TT 167. Subsequently the
price was reduced by $50 so the satellite systems were sold below
Three Angels' cost in order to keep them affordable to the public.
TT 325. Further, Mr. Shelton stated that there was an operational
policy for the free distribution of satellite system equipment
to those with financial hardship. TT 296-97.
He testified that when someone requests a system for free,
Three Angels checks with a pastor from the individual's church
to verify that there is a financial need. If the pastor confirms
there is a hardship situation, Three Angels will attempt to split
the cost of the satellite system with the parishioner's church.
If the church is unwilling to absorb part of the cost, the system
is given away. TT 296-297. Mr. Shelton testified that approximately
5 or 6 satellite systems were given away in each of the years
in question due to financial hardship of the recipient. TT 300,
Several witnesses testified that Three Angels also gives away
significant amounts programming airtime. Three Angels charged
$600 per half hour of airtime, but programs were
The hearing officer viewed the documents supporting these
figures as not qualifying as business records, yet this misunderstands
there purpose, as they are illustrative exhibits, or compilations
of data, and the underlying data was available to all parties
during the discovery process. If taken seriously, the hearing
judge's standard would require copies of all the books given
away, or perhaps signed receipts from all
generally aired an additional two times at no charge. TT 146,
370. Mr. Shelton testified that as a matter of course, if a church
or lay ministry could not afford to pay the airtime charges,
Three Angels would reduce its charges, or in some instances would
give the airtime away for free. TT 146-147. By way of example
Mr. Shelton testified that in 2000, Three Angels broadcast the
meetings of the General Conference of the Seventh-day Adventist
Church which took place over a ten-day period in Toronto, Canada.
Because of the location, Three Angels had to send out a remote
crew and trucks to broadcast the session. Although the cost to
Three Angels was approximately $200,000, no fee was charged for
the broadcast. TT 105-108.
During the year 2000, Three Angels also broadcast a separate
five week evangelist preaching and worship series at no charge
featuring Samuel Thomas in Ohio. TT 105-106. The same year Three
Angels also broadcast at no charge an evangelist preaching series
known as Pentecost 2000. The series featured pastor Steven Lewis
and took place at, and was broadcast from, Three Angels' property.
The program series ran for about a month. Id.
Danny Shelton's testimony was corroborated by an independent
witness, Kenneth Denslow, the President of the Illinois Conference
of the Seventh Day Adventist. Mr. Denslow testified that during
2000 through 2001, Three Angels televised the Conference's church
organizational meetings, known as town hall meetings, for Adventist
churches throughout the state. The Conference was only charged
for Three Angels' third party costs. No charge was made for Three
Angels' services. TT 551-556, 563.
Three Angels also televised the Net 2000 Series at no charge.
Net 2000 was a series of biblical preaching services resulting
from a cooperative effort between the Illinois Conference and
the North American Division of Seventh-day Adventist. The series
lasted almost five weeks with broadcasts airing almost every
night of the week. TT 556-557. Three Angels also
those receiving the books. Such an evidentiary standard is
impracticable enough to be impossible.
hosted and televised the Illinois Conference's camp meeting
at no charge, which involved religious meetings and worship services. TT 557-558.
In short, there was significant evidence that Three Angels
gave away substantial amounts of religious materials and programming
airtime, as well as a small amount of satellite systems. During
2000 and 2001, an operational "give-away" policy was clearly
in effect and used broadly. This testimony and evidence would
have been further substantiated and supported by the testimony
of Elder Ted Wilson, had his testimony been admitted, as described
Equally important, there was no evidence to the contrary presented,
and no attempt was made to impeach the witnesses on these points.
Their testimony stands as uncontradicted, and it is plain error
for the hearing judge to draw opposite conclusions when there
was no testimony or evidence upon which to base those contrary
To the extent the hearing judge's opinion at pages 21, 29
and 38 are inconsistent with the evidence, Applicant requests
that those portions of the opinion be overruled and disregarded,
and that this Court accept the vast weight of the evidence that
that Three Angels gave away or reduced the charges for numerous
items as reflected in the testimony and documents.
D. Officers Directly Involved in Religious Ministry and Teaching.
Three Angels leadership constantly travels to preach, pray,
and teach the Bible at churches around the country. This makes
particularly perplexing the hearing judge's conclusion that "3ABN
has not established that it has officers deeply involved in religious
teaching that serve to accomplish the promotion of Christian
education." DR 30. Relatedly, she concluded at page 34 that "[n]or
is there any indication in the record that Danny Shelton is traveling
to advocate the Seventh-day Adventist doctrine or faith." DR
34. Such conclusions are squarely contradicted by the evidence.
Danny Shelton is a director and the president of Three Angels.
He is an ordained elder in the Seventh-day Adventist Church.
As such, he participates in the distribution of the communion
elements, baptisms and foot washings and represents the church
on prayer missions. TT 38. He is a lay minister of the gospel.
Id. Mr. Shelton has taught bible studies and lessons on the doctrines
and teachings of the Seventh-day Adventist beliefs, and has written
three books on the subject. TT 155-158.
At the property in question, Mr. Shelton hosts a daily program
entitled "Three ABN Presents" that is aired on Three Angels
networks. TT 73. The program is devoted to religious instruction
and missionary work. Mr. Shelton co-hosts the program with his
wife, Linda Shelton, who is also a director and vice president.
They host the show to spread the gospel and involve the viewers
in the missionary work of the Seventh-day Adventist Church. TT
They begin the program by reading Bible scripture and praying.
Id. Gospel music is then played. Thereafter they interview people
on church-related topics. Id. They interview people from other
ministries as well as officials and missionaries of the Seventh
Day Adventist church regarding the global missions of the church,
such as the building of orphanages, schools and churches in places
like Bangladesh. TT 85, 130-13 1, 247
Mr. and Mrs. Shelton also travel extensively on the weekends
to promote the Christian teachings of the Seventh-day Adventist
Church directly and to educate people about Three Angels' religious
programming which offers instruction and education on Seventh-day
Adventist beliefs. Typically they travel to a Seventh-day Adventist
church in the United States. Seventh-day Adventists observe the
Sabbath from sundown Friday evening to sundown Saturday evening.
The Sheltons begin their Sabbath services on Friday night
with gospel music. Mr. Shelton then preaches. TT 131-132 Saturday
morning they teach "Sabbath School" which is akin to Christian
Sunday School. TT 132 Formal church services are held around
11 a.m. and Mr. Shelton usually preaches the sermon. Id. Saturday
afternoon they usually participate in a religious revival where
gospel music is played and testimonials are shared. TT 130-31.
Danny and Linda's involvement in religious instruction and
education is not limited to their weekend travels. Both Sheltons
are intimately involved in spreading the gospel through Three
Angels' broadcasts. TT 130 To this end, Linda testified that
Three Angles' Board of Directors voted to limit Three Angels
programming to shows and music that reflect and promote the 27
fundamental beliefs of the Seventh-day Adventist Church, and
that promote the Christian gospel around the world to the extent
it is consistent with Seventh-day Adventist beliefs. TT 598.
Danny and Linda are charged with carrying out this responsibility.
The Sheltons, together with Mollie Steenson, the Department Coordinator
and an ordained minister, plus the four pastors on staff at Three
Angels, review all programming to assure that it is doctrinally
consistent with Seventh-day Adventist views. TT 332, 532-533,
598-599. The pastors are also charged with engaging in worldwide
prayer with Three Angels' viewers. They take daily prayer requests
from 8 a.m. until midnight from viewers that call in on an 800
telephone number. TT 81, 531-532.
Linda Shelton is also actively involved in spreading the gospel
through the monthly newsletter/magazines that Three Angels sends
for free to its viewers. TT 593 The newsletter contains devotional
thought and stories and is written primarily by Ms. Shelton. Id.
Doctor Walter Thompson is the Chairman of the Board of Directors
for Three Angels and is an officer pursuant to Section 5.1 of
the by-laws. Dr. Thompson has been a member of the
Seventh-day Adventist Church since childhood and testified
that as an adult he has been involved in projects for the church
for many years. TT 498. He volunteers several days a month at
the free medical clinic operated by Three Angels, performing
medical services. TT 193. He is actively involved in reviewing
Three Angels programming to make sure it is consistent with the
fundamental tenants of the Seventh-day Adventist beliefs. TT
513-514. In addition, he has appeared as a host and as a guest
on various programs and videos shown by Three Angels in order
to instruct people as to the health-related beliefs adopted by
the Seventh-day Adventist faith. TT 516.
In short, the evidence established that Dr. Thompson, Danny
and Linda Shelton, and other Three Angels leaders lead lives
of service and devotion to the teachings of the Seventh-day Adventist
faith, promoting the instruction and education of such beliefs.
The hearing judge's conclusions at pages 30 and 34 that "3ABN
has not established that it has officers deeply involved in religious
teaching" and that there is no indication in the record that
Danny Shelton travels to advocate the Seventh-day Adventist doctrine
or faith is thus directly contrary to the evidence and should