Opinion ID: 2284440
Heading Depth: 2
Heading Rank: 3

Heading: Application of the Exception to this Case

Text: Undeniably, Margaret Edes sought to confer the benefits of secure housing and companionship on a particular class of persons, creating an interest in its members distinct from that of the general public in the administration of those benefits. Nevertheless, we must decide whether the standards established in the Edes will, the charter, and the by-laws sufficiently narrow the class of potential beneficiaries. We conclude that they do. The Trustees argue that the class of potential beneficiaries includes all women and so is limitless, because any woman could possibly become poor and widowed. They contend that membership in the beneficiary class is not limited by threshold criteria as the beneficiary class was in Alco Gravure.  In that case, the court defined the class as the employees of corporations in which [the settlor] was involved and the employees of successors of such corporations. 64 N.Y.2d at 466, 490 N.Y.S.2d at 120, 479 N.E.2d at 756 (emphasis added). We think there are definite criteria narrowing the instant class and identifying its present members with at least as much particularity as the limitation in Alco Gravure. The will and charter require the beneficiary to be (1) female, (2) indigent, (3) aged, and (4) widowed. The by-laws further require her (5) to be in good health (certifiably) and (6) to have been for at least five years immediately preceding the date of application [a] resident[] of Georgetown (although the Board has discretion to waive this requirement on unanimous vote). [12] Moreover, the Trustees' own representations provide evidence that the class of potential beneficiaries is limited. Their reason for seeking the sale and transfer of the home was, according to the probate complaint, that [i]n recent years, the number of applications from the group of beneficiaries specified in the Edes will, namely `aged and indigent Widows residing, or to reside, within ... Georgetown' has decreased significantly, and that [a]lthough the Trustees have actively sought to attract aged and indigent Georgetown widows, very few applications have been received from this group. At oral argument they cited as a partial reason for transferring the functions of the Edes Home to the Washington Home the difficulty of finding aged, indigent widows in sufficiently good health to satisfy the by-laws' requirement, and the unwillingness of otherwise eligible residents to risk living in a home where an illness requiring nursing care (which the Home does not provide) would result in expulsion.
Appellants argue vigorously that they are not alleging a simple abuse of discretion by the Trustees, and that the prospect of recurring vexatious litigation predicated on ordinary exercises of the Trustees' judgment is not present here. They argue that the Board here seeks to change the face of Edes, effecting a transfer of functions that will change the Home's character fundamentally; indeed, if the Board is successful, no present or potential beneficiary will ever be able to reside in the Edes House in Georgetownand this issue will only be litigated once. The trial court responded that the Trustees do not seek to dissolve the trust or put its assets to a purpose different from that required by the will, charter and by-laws, but instead desire to relocate the functions of the Edes Home to the Washington Home so that the purposes of the Edes trust can continue to be fulfilled. According to the Trustees' probate complaint, the Edes Home will continue to exist as a corporate entity and to administer the trust assets, including the proceeds of the sale of the House, for the benefit of those residing in living units dedicated to the purposes of the Edes trust within the Washington Home. It is beyond dispute that the proposed merger and transfer of functions to the Washington Home represent a major change from the manner in which the trust has been administered in the past. While the sale of trust propertyincluding Edes House itselfis undoubtedly a matter within the Trustees' discretion, the intent of the Board in selling the House and the planned transfer of its functions to another entity raise substantial questions about the compatibility of this action with the settlor's intent; and these issues in turn distinguish the proposed action from an ordinary exercise of day-to-day discretion committed solely to the trustees' judgment. Moreover, the merger proposal places more at stake than just the loss of an opportunity to live at a certain address in Georgetown; it also portends the loss of Edes Home's independent identity, which may adversely affect the interests of all beneficiaries as a class. As the Trustees acknowledge, they plan to transfer some of the Home's most important functions, including day-to-day maintenance and operation of the Edes living units and selection of residents, to the Washington Home. Notably, this latter function is one which the Edes charter reserves specifically to the Trustees. Although the Board alleges in the probate complaint that the corporation (and presumably the Board) will continue to exist and administer the trust, it is unclear exactly what the Trustees' duties will be. The Trustees also acknowledge, that Edes House in the past has provided relatively self-sufficient elderly individuals in good health a place in which to share the society of others like themselves. [13] Yet the proposed merger would place the functions of the Edes Home in a considerably different setting, a nursing home heretofore dedicated to care of the chronically ill and dying. At oral argument, the Trustees asserted that whether to provide medical and nursing care to Edes residents lies within their discretion, and that the historical limitation on eligibility to healthy individuals was a measure unrelated to Margaret Edes' intent. Without reaching the merits of this question, it is enough to note that the Trustees have operated Edes Home for some time under the assumption that limiting its housing opportunities to healthy widows was most consistent with the will and charter. Merger into a nursing home and hospice represents a basic change in the nature of the institution that at least raises an issueon which we voice no opinionwhether the proposal is consistent with the settlor's will. It is not an exaggeration, in other words, to say that the Trustees, and all present and future residents of the Edes Home, stand at a crossroads they are unlikely to face again. It may in fact be that the merger the Trustees propose is, as they contend, essential to preserving the trust in changed timesagain, an issue not for us presently to decide. What is clear is that the outcome of this action will determine whether the institution undergoes the fundamental change the Trustees propose. When, as in Kania, the injury flows from an ordinary exercise of discretion by the trustees in the course of administering the trustsuch as the selection among eligible recipients of a benefitthe need to prevent costly and recurring judicial intervention in decisionmaking justifies denial of standing to individual potential beneficiaries. But when, as here, the Trustees decide upon a basic change affecting the interests of the entire class of intended beneficiariesand one alleged to be inconsistent with the settlor's willthe value of denying representatives of the class access to judicial process to challenge that decision is greatly diminished. We conclude, therefore, that elderly, indigent widows satisfying the Trustees' own eligibility requirements have standing to challenge the actions proposed by the Board here, which may affect their special interest as a class in the continued administration of the Edes trust in a manner consistent with the will and charter. All such members have a present opportunity to enjoy a direct benefit differing markedly from the incidental and indirect benefit the public realizes from the housing of indigent elderly widows. Since the suit here is to vindicate a collective interest in the continued availability of that benefitan interest affected by a proposed exercise of discretion that will change the nature of the institutionthe prospect of recurrent, vexatious litigation is minimal. It remains for us only to point out that undisputed record facts conclusively established appellant Mary Hooker's membership in the class of potential beneficiaries, and at least raised material issues of fact regarding Alice Ruddiman's and Willie Mae Stanley's membership. The trial court's grant of summary judgment was therefore improper. According to her affidavit submitted in opposition to the motion for summary judgment, Ms. Hooker is a 60-year-old widow in good physical and mental health who has resided in the District for 31 years, who now desires to live at Edes House, and whose annual income is $4,596. Ms. Ruddiman averred that she is a healthy 79-year-old, widowed lifelong resident of the District with a $16,000 annual income, and in their complaint appellants assert that Ms. Stanley is a widowed 74-year-old resident of the District of Columbia. While we cannot determine on this record whether Ms. Stanley is an eligible potential beneficiary, and venture no opinion as to whether Ms. Ruddiman's $16,000 income constitutes indigency, these plaintiffs' status as elderly widows desiring to reside at Edes House alone raised a question of material fact as to their membership in the class Margaret Edes intended to benefit. [14] Since Ms. Hooker has standing to enforce the trust as a representative member of the class, however, it is unnecessary to remand for findings as to Ms. Stanley's and Ms. Ruddiman's eligibility, because the suit may proceed without them. The class has a representative in Ms. Hooker and a sufficiently distinct and tangible stake in the outcome of this controversy to confer standing on its members. Accordingly, the judgment in No. 89-1316 is reversed; [15] the appeal in No. 89-1534 is dismissed as moot.