Opinion
C. A. PM-2022-04462
10-02-2023
BANK OF AMERICA, N.A., as Trustee of the Harold W. Wood and Gertrude B. Wood Trust, the Marion Law Trust, the John F. Preston Charitable Trust, the E. Russell Richardson Trust, and the William F. Sayles Endowment Fund, Petitioner, v. PETER F. NERONHA, ATTORNEY GENERAL OF THE STATE OF RHODE ISLAND; CARE NEW ENGLAND HEALTH SYSTEM; THE MEMORIAL HOSPITAL d/b/a THE MEMORIAL HOSPITAL OF RHODE ISLAND; KENT COUNTY HOSPITAL; THE CITY OF PAWTUCKET, RHODE ISLAND; THE RHODE ISLAND FOUNDATION; THE MIRIAM HOSPITAL FOUNDATION; and PROGRESO LATINO, INC., Respondents.
For Plaintiff: Steve E. Snow, Esq. For Defendant: Mitchell Edwards, Esq.; Charles Normand, Esq.; Marissa D. Pizana, Esq.; Julia Harvey, Esq.; Keith Hoffmann, Esq.; Robert Fine, Esq.; Mary B. Catala, Esq.; Theodore Orson, Esq.; Catherine A. Shaghalian, Esq.
For Plaintiff: Steve E. Snow, Esq.
For Defendant: Mitchell Edwards, Esq.; Charles Normand, Esq.; Marissa D. Pizana, Esq.; Julia Harvey, Esq.; Keith Hoffmann, Esq.; Robert Fine, Esq.; Mary B. Catala, Esq.; Theodore Orson, Esq.; Catherine A. Shaghalian, Esq.
DECISION
STERN, J.
Perhaps no field of study, save for a select few, can claim such rapid progress as modern medicine. See generally Lois N. Magner, A History of Medicine (1992). In its infancy, medicine was imbibed with a "supernatural orientation, a belief in 'magic.'" Id. at 9. Thanks to scientific and technological advancements, illnesses are prevented by vaccines and abated with medications. See id. at 245, 311-12, 352-55. Physicians can now review the human genome to predict future medical conditions and may soon alter a person's DNA as a form of treatment. See Lois N. Magner & Oliver J. Kim, A History of Medicine 364 (3d ed. 2018). By comparison, the law moves at a glacial pace. Various foundational principles of American jurisprudence are rooted in English common law and have not radically changed since times of yore. E.g., Champlin's Realty Associates, L.P. v. Tillson, 823 A.2d 1162, 1166 (R.I. 2003). See generally John Baker, An Introduction to English Legal History (5th ed. 2019).
One of those principles is the "trust," a legal device notably employed by monastic orders to use and enjoy land without owning it. Baker, supra, at 267-68. In 1601, the English Parliament adopted the Charitable Uses Act and provided a non-exhaustive list of purposes for which a charitable trust could be formed. See Bogert's The Law of Trusts and Trustees § 321, at 121-22 (3d ed. 2014). English jurisprudence later restated the role of charitable trusts to include "'trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.'" Id. § 321, at 122-23 (quoting Commissioners For Special Purpose of Income Tax v. Pemsel, (1891) A.C. 531, 583). In other words, a charitable trust is one that "serves two masters-the property owner who created it and society which is its beneficiary." Elias Clark, Charitable Trusts, the Fourteenth Amendment and the Will of Stephen Girard, 66 Yale L.J. 979, 979 (1957).
For example, Brethren of the Order of St. Francis were forbidden to own land but could accept free accommodations. John Baker, An Introduction to English Legal History 268 (5th ed. 2019).
Charitable trusts are not subject to the rule against perpetuities and can, in theory, continue forever. See 70 C.J.S. Perpetuities § 3, at 438-39 (2018). However, a donor's charitable intent may become impossible, impracticable, or illegal to carry out due to changed circumstances or circumstances not known to the donor. Chu v. Legion of Christ, Inc., 2 F.Supp.3d 160, 175 (D.R.I. 2014); see, e.g., Rhode Island Hospital Trust Co. v. Williams, 50 R.I. 385, 387-88, 148 A. 189, 190 (1929). So long as the settlor "manifested a more general intention to devote the property to charitable purposes, the trust will not fail but the court will direct the application of the property to some charitable purpose which falls within the general charitable intention of the settlor." Restatement (Second) Trusts § 399 (1959). In other words, the Court may modify the terms of the trust so that it serves "some new purpose, as nearly like to the old as possible." Pell v. Mercer, 14 R.I. 412, 436, 1884 WL 3088, at *16 (1884). This practice is known as the "cy près doctrine," stemming from the Norman French phrase "cy près comme possible," meaning "as near as possible" or "as near as may be." 14 C.J.S. Charities § 44, at 219-20 (2017). The cy près doctrine has since been codified in the Rhode Island General Laws. G.L. 1956 § 18-4-1.
The cy près doctrine, or some derivation thereof, is believed to date back to classical antiquity. See Christopher J. Ryan, Jr., An Historical and Empirical Analysis of the Cy-Près Doctrine, 48 ACTEC L.J. 289, 292 (2023). In England, there existed two varietals of cy près: (1) prerogative cy près, where the power to modify trusts was vested in the sovereign; and (2)judicial cy près, where the power to modify trusts lay with courts of chancery. Bogert's The Law of Trusts and Trustees § 432, at 128-29 (3d ed. 2014). Only judicial cy près survives in American jurisprudence. See id. § 434, at 151-52; Pell, 14 R.I. at 412, 1884 WL 3088, at *1. When applying cy près, the Court must place itself "in the shoes of settlors of charitable trusts to discern not only their original intent but also to afford the possibility of continuing the material purpose for which settlors created enduring legacies of philanthropy benefitting society." Ryan, Jr., An Historical and Empirical Analysis of the Cy-Près Doctrine, 48 ACTEC L.J. at 289. It is this oft-confounding equitable doctrine that the Court is tasked with applying here.
Petitioner Bank of America, N.A. (Trustee) filed the instant Verified Miscellaneous Petition for Cy Près as to four charitable trusts-the William F. Sayles Endowment Fund, under declaration of trust dated May 24, 1910 (the Sayles Trust), the E. Russell Richardson Trust, under declaration of trust by will dated October 3, 1930 (the Richardson Trust), the John F. Preston Charitable Trust, under declaration of trust dated January 30, 1941 and Modification of Trust Indenture dated June 2, 1961 (the Preston Trust), and the Harold W. Wood and Gertrude B. Wood Trust, under declaration of trust dated December 17, 1969 as amended (the Wood Trust) (collectively, the Subject Trusts)-all inuring to the benefit of The Memorial Hospital d/b/a The Memorial Hospital of Rhode Island (MHRI). (Verified Misc. Pet. 1-2.)
Estimates of the Subject Trusts, as of May 31, 2023, are as follows:
Sayles Trust Value: $488,215.45
Sayles Trust Annual Income: $10,385.48
Richardson Trust Value: $5,058,333.10 Richardson Trust Annual Income: $123,613.60
Preston Trust Value: $3,146,864.72 Preston Trust Annual Income: $66,622.89
Wood Trust Value: $1,324,861.54 Wood Trust Annual Income: $28,123.63
(Common Interest Group Ex. 38.)
For reasons stated herein, MHRI is no longer a viable beneficiary. Thus, the settlors' intent cannot be carried out as originally constituted. On July 18, 2022, Trustee filed its Verified Miscellaneous Petition for Cy Près requesting that the Court frame a new scheme directing the Subject Trusts to The Miriam Hospital Foundation (MHF) and Progreso Latino, Inc. (Progreso Latino). See Verified Misc. Pet. 10-11, ¶ 31.
In its Verified Miscellaneous Petition, Trustee recommends that MHF and Progreso Latino be designated permanent substitute beneficiaries of the Subject Trusts. Id. at 2. Care New England Health System (CNE), MHRI, Kent County Hospital (Kent) (collectively, the CNE Entities), the City of Pawtucket, Rhode Island (the City), the Rhode Island Foundation, MHF, Progreso Latino, and the Rhode Island Department of Attorney General (the RIAG) responded to the Verified Miscellaneous Petition. See Docket, PM-2022-04462.
A trial was held without a jury on July 10, 11, 12, 17, 18, 20, and 21, 2023. See id. Testimony from various witnesses and a bevy of exhibits were presented for the Court's consideration. The parties also furnished post-trial legal briefings on July 28, 2023. See id. The Court's Decision follows. Jurisdiction is pursuant to Rule 52 of the Superior Court Rules of Civil Procedure.
I
Facts and Travel
By way of background, MHRI is a domestic not-for-profit corporation having its principal place of business at 111 Brewster Street, Pawtucket, Rhode Island. (CNE Entities Ex. 82 Bates No. CNE 2259.) It was incorporated on May 25, 1901 with a stated purpose of "erecting, establishing and maintaining in the city of Pawtucket and State of Rhode Island, a hospital for the treatment of the sick and of those who may be suffering from accidents or injuries." (CNE Entities Ex. 83 Bates Nos. CNE 2264, 2267.) However, by 1910, MHRI had not yet established a physical hospital in Pawtucket. See Common Interest Group Ex. 5 (Sayles Deed), at 2.
Prior to 1910, William F. Sayles-the namesake of the William F. Sayles Endowment Fund-died. See id. at 1. His will purportedly gave authority to Frank A. Sayles (William F. Sayles's son and executor) to donate $200,000 for charitable purposes. See id. William F. Sayles intended for the charitable gifts "to serve as memorials to his deceased wife and daughter, Mary Wilkinson Sayles and Martha Freeman Sayles[.]" Id. Pursuant to his father's wishes, Frank A. Sayles acquired land located on Prospect Street in Pawtucket, Rhode Island and erected a hospital building on the land. Id. at 3. He also furnished the building with the instruments and equipment needed to operate a hospital. Id. at 1-2. By deed dated June 21, 1910 (the Sayles Deed), he conveyed the land, building, and all its furnishings to MHRI. See id. at 2, 7; see also Common Interest Group Ex. 4 (Sayles Trust), at 1-2. Additionally, Frank A. Sayles executed the Sayles Trust, pursuant to which he donated $75,000 worth of stock to be held in trust for the benefit of MHRI. (Sayles Trust 2.) The net income of the Sayles Trust was to be applied as follows:
"FIRST. To payment of the expenses of heating, lighting, repair and insurance of the buildings, now or at any time hereafter, on the said hospital estate, or on such other estate as may be substituted therefor and used for hospital purposes, including the wages or salary of a janitor, who shall have the care of said buildings and grounds.
"SECOND. To the care of the grounds of said hospital estate, or of such other estate as may be substituted therefor and used for hospital purposes, including the mowing of grass and the care, preservation, restoration and replacement of the fences, trees, shrubbery and turf from time to time on said hospital or other estate.
"THIRD. So much of the net income as shall not be applied as aforesaid in any year shall be accumulated, and the accumulations shall be subject to like application in any future year. But in case said hospital estate, or the proceeds of the sale thereof, shall at any time, by decree of court, as provided in the above mentioned deed of said estate, be applied to other charitable uses, then, from and after such application of said estate, or the proceeds of the sale thereof to other charitable uses, the trustee or trustees hereunder shall pay over, at such times, and in such manner as the court may direct, said net income to the corporation, trustee or trustees appointed to receive and hold said estate, or the proceeds of the sale thereof, - the net income so paid over to be applied to said other charitable uses in such way and manner as the court may order." Id. at 3-4.
MHRI was just one example of a nationwide increase in the number of hospitals in the early 1900s. At trial, the Court heard testimony from Christopher Koller (Koller), who was qualified as an expert in the history of hospitals and primary care services, as well as the financing of those services. See generally Trial Tr. 24:13-90:6, July 10, 2023. He testified that in the nineteenth century most medical care was provided at home. Id. at 29:16-18. Besides at-home care, there were almshouses where indigent people could receive treatment. Id. at 29:18-20. Almshouses, coupled with medical advancements, took on the shape of hospitals as they are commonly understood today. See id. at 29:20-25. However, MHRI and other early hospitals only provided inpatient care. Id. at 30:14-16; see also id. at 31:11-15, 33:16-17. Services such as outpatient care, diagnostics, and pharmaceuticals were rendered in settings outside of hospitals. See id. at 31:22-32:3.
By the early twentieth century, hospitals were founded by all three estates: the government, the church, and the laity. See id. at 29:25-30:5. Regardless of their founding, they were charitable entities that treated anyone who needed care. See id. at 30:24-31:3. Religious and secular hospitals received funding from (1) private philanthropy; (2) government payments; and (3) patients who received treatment. Id. at 30:7-14. Koller testified that private philanthropy comprised most hospital financing at the time of the Sayles Trust but decreased in the 1920s and 1930s coinciding with the Great Depression. Id. at 30:16-21, 33:23-34:6. Nevertheless, MHRI received another charitable gift, this time under the Richardson Trust. See Common Interest Group Ex. 3 (Richardson Trust). The Richardson Trust bequeathed funds to MHRI through both a specific bequest and a residuary clause. Id. at 2-3. The Richardson Trust provides the following:
"EIGHTH: I give and bequeath the sum of Five Thousand Dollars ($5,000) to The Memorial Hospital, located in said Pawtucket, to establish a permanent free bed to be known as the 'E. Russell Richardson Bed[.]'
". . .
"TWELFTH: All the rest, residue and remainder of the property, real and personal, of which I shall die seized or possessed, or over which I shall have any power of testamentary disposition at the time of my decease, I give, devise and bequeath to Rhode Island Hospital Trust Company, IN TRUST, nevertheless, for said Rhode Island Hospital Trust Company, hereinafter referred to as my said trustee, to invest the same and collect all of the income therefrom and . . . to pay the remaining or net income in manner following, -
"As to one-half of said net income, to pay the same to my said brother, John W. Richardson . . ., so long as he shall live, and from and after his decease to pay said one-half of said net income in like manner to said The Memorial Hospital; and as to the other one-half of said net income, to pay the same . . . in equal shares to Mrs. May E. Lowe, of said Providence, and the said Edith Perry Hills, so long as they both shall live, and thereafter to pay the whole of said one-half to the survivor of them so long as such survivor shall live, and from and after the decease of said survivor to pay said one-half in like manner to said The Memorial Hospital." Id.
With respect to Paragraph Eight of the Richardson Trust, Koller's understanding of the term "free bed" was that it ensured free inpatient services. (Trial Tr. 35:15-19, July 10, 2023.) However, he could not precisely define what a "bed" meant because in early hospitals, care was provided in wards or private rooms. Id. at 35:19-21. He testified that the term "bed" was "analogous to a room to ensure there were private rooms in addition to the ward services that were available." Id. at 35:21-24. As support, he pointed out that a hospital's capacity is often measured by its number of beds. Id. at 35:25-36:4.
Koller further testified that the term "free bed" had the same meaning at the time of the Preston Trust, which provides in pertinent part:
"c. To pay in each year twenty per cent (20%) of the net income of the trust to The Memorial Hospital of Pawtucket, Rhode Island, for the primary purpose of establishing two free beds to be known as the 'Florence H. Preston Free Bed' and the 'Jennie R. Fairbairn Free Bed[,]' and after said Free Beds shall have been established,
for the general purposes of the Hospital." (Common Interest Group Ex. 2 (Preston Trust), at 8; Trial Tr. 36:5-18, July 10, 2023.)
It is important to note that the Preston Trust's bequest was made via a 1961 amendment to the original trust document. See Preston Trust 7-8. Koller's testimony evidenced several vital changes in medical care and financing by that time. Employer-based health insurance arose after World War II. See Trial Tr. 31:9-10, 34:12-18, July 10, 2023. Some insurance plans covered outpatient care, while others were "major medical" plans, which only covered hospital care. See id. at 34:18-21. Medicare and Medicaid were enacted in the 1960s, as well. Id. at 32:3-8. However, those programs were divided into "Part A" and "Part B" benefits; "Part A" covered inpatient services subject to a cost cap, while "Part B" covered outpatient services with no cap. Id. at 32:25-33:5. It was around this time that the Wood Trust was executed, leaving funds to MHRI as follows:
"Twenty (20%) per cent thereof to or for the benefit of the Memorial Hospital, of said City of Pawtucket;
". . .
"The above income shall be applied to the general uses and purposes of the aforesaid corporations . . . .
"In the event that any of the beneficiaries named herein shall cease to exist or to operate in substantially the same manner as they are operating at the time of the death of the last surviving Settlor, or if the control, operation, supervision or management of any of said beneficiaries is taken over in whole or in part directly or indirectly by any form of government or governmental agency, the right of said beneficiary to participate in this Trust shall terminate; and thereupon the Trustee shall in its absolute discretion, determine whether (1) to pay or apply the income of the share which has been so terminated to the remaining beneficiaries of this trust, or (2) to select another charitable institution of a character similar to the
original beneficiary located in the Blackstone Valley as the recipient of the income of such share.
". . .
"I, Gertrude B. Wood, of the City of Pawtucket, County of Providence and State of Rhode Island, one of the Settlors in that certain Declaration of Trust dated December 17, 1969 between my late husband, Harold W. Wood and myself, said Gertrude B. Wood, as Settlors, and Pawtucket Trust Company as Trustee pursuant to the limited authority to amend said trust reserved unto me in said instrument do hereby exercise the power so reserved so that the list of beneficiaries appearing on page two (2) of said original Declaration of Trust is hereby revised so that the same shall now read as follows:
". . .
"Fifty (50%) per cent thereof to or for the benefit of said Memorial Hospital[.]" (Common Interest Group Ex. 1 (Wood Trust), at 1-3, 11.)
"Blackstone Valley" is stipulated to include Burrillville, Central Falls, Cumberland, Glocester, Lincoln, North Smithfield, Pawtucket, Smithfield, and Woonsocket. (Stipulation of Facts ¶ 26.)
Koller testified that the advent of insurance coverage for outpatient services caused hospitals to expand and provide outpatient care during the 1970s and 1980s. (Trial Tr. 32:10-12, July 10, 2023.) The expansion into outpatient care also was aided by technological advancements that turned some inpatient services into outpatient ones. See id. at 32:12-15. Koller could not say whether hospitals provided outpatient services at the time of the Wood Trust, but he did testify that hospitals did not provide outpatient services in "1910, 1930 or 1940." Id. at 39:23-25.
On cross-examination, Koller testified that hospitals' progression from inpatient care to outpatient care has continued to the present. Id. at 66:6-9, 68:10-22, 78:19-79:22; see CNE Entities Ex. 47, at 15 Bates No. CNE 1990. He further testified that inpatient services amount to half of a hospital's operating revenue today. See Trial Tr. 65:16-25, July 10, 2023; see also CNE Entities Ex. 47, at 9, ¶ 9 Bates No. CNE 1984. Additionally, he conceded that patients' needs have evolved since the turn of the twentieth century. (Trial Tr. 81:4-22, July 10, 2023.) On December 9, 1993, MHRI amended its Articles of Incorporation to include additional services and purposes:
"[T]o erect, establish and maintain a Hospital for the medical and surgical treatment of the sick and those who may be suffering from accidents or injuries . . .; to provide quality educational programs for doctors, nurses and other health personnel; to develop and maintain programs and facilities for the promotion of human health . . .; to promote medical research and make contributions to scientific medicine; to work cooperatively with other hospitals, community health agencies, educational institutions, and other public and private entities to improve standards of health in the communities served by the Hospital . . .; to sponsor housing and related facilities and health services . . ." (CNE Entities Ex. 46, at 3 Bates No. CNE 1972.)
A
MHRI's Affiliation with CNE and Subsequent Closure
By 2013, MHRI experienced significant financial difficulties that cumulated in the Rhode Island Department of Health (RIDOH) deeming MHRI a "distressed . . . hospital" pursuant to G.L. 1956 § 23-17.14-12.1(a)(3). (Stipulation of Facts ¶ 8.) As a result, CNE purchased MHRI. Id. ¶¶ 2, 9. MHRI thus became an affiliate of CNE's healthcare system. Id. ¶ 9. When MHRI affiliated with CNE, a significant question arose as to whether MHRI could retain its charitable gifts and the net income therefrom. In a decision dated July 2, 2013, the RIAG determined that MHRI's affiliation did not result in a deviation from its original purpose. Id. ¶ 10. Similarly, the Court rendered a decision dated August 23, 2013, which held that MHRI and CNE's affiliation would not affect MHRI's continued fulfillment of its charitable mission or its use of charitable assets. Id. ¶ 11. Thus, MHRI was permitted to control its charitable assets and continue to receive distributions from the net income of the Subject Trusts. See id. ¶¶ 11, 25.
CNE also became the sole corporate member of Southeastern Healthcare System, Inc. (SHS) and the ultimate corporate parent of MHRI. (Stipulation of Facts ¶ 9.)
MHRI's financial condition did not improve after the affiliation, and CNE funded MHRI's operating shortfalls. See id. ¶ 12. In November 2017, CNE submitted two plans to RIDOH: (1) to eliminate MHRI's emergency department services; and (2) to transfer MHRI's primary care services from MHRI's license to Kent's license. Id. ¶¶ 13-14. The Court heard testimony from Gail Robbins (Robbins), Senior Vice President of Planning and Financing for CNE. Trial Tr. 55:13-19, July 20, 2023. She testified that MHRI and CNE suffered significant financial losses due to a declining patient population. Id. at 64:3-14. She also stated that financial losses were compounded by poor reimbursement rates from Medicaid. Id. at 70:18-25, 72:1-3. However, she denied that CNE wanted to close MHRI. Id. at 65:9-11.
By a consent order dated November 30, 2017, RIDOH ultimately determined that MHRI "could not function in a manner that assured safe treatment of patients[,]" and accordingly prohibited MHRI from admitting new patients, providing non-emergency inpatient services, or performing outpatient surgical procedures after November 31, 2017. (Stipulation of Facts ¶ 15.) RIDOH further issued a Hospital Premises license number to Kent, effective December 1, 2017, which added primary and specialty medical offices and space (the Primary Care Building) on the MHRI Campus to the Kent license. Id. ¶ 18.
RIDOH approved CNE's proposed plans on December 28, 2017 and January 25, 2018, respectively. Id. ¶¶ 16, 19. Pursuant to CNE's first plan, MHRI stopped inpatient admissions as of December 1, 2017 and closed its emergency department, effective January 1, 2018. Id. ¶ 17. Pursuant to CNE's second plan, MHRI stopped providing primary care and other clinical services under its license as of January 31, 2018. Id. ¶ 20. Beginning on February 1, 2018, Kent offered primary care, specialty care, and other clinical services at the Primary Care Building under the Kent license. Id. ¶¶ 18, 21. Kent also operates a portion of its family medicine and internal medicine residency programs in the same building. Id. ¶ 22. Kent's continuation of services at MHRI was pursuant to conditions imposed by RIDOH. See generally CNE Entities Ex. 8.
RIDOH also required CNE to hire a consultant to furnish a report examining the short and long-term impacts of MHRI's closure. CNE Entities Ex. 17. CNE commissioned John Snow, Inc. to create the report (the John Snow Report). See generally Common Interest Group Ex. 9. The John Snow Report detailed the harmful impacts that closing the hospital would have on vulnerable subsets of the Blackstone Valley population. Id. at 9. The John Snow Report further noted "[a]n immediate system-wide impact after [the] closure [of MHRI]," with The Miriam Hospital seeing an increase in wait time and emergency department volume. Id. at 60. The Court heard firsthand testimony to this effect from Dr. Denise Brennan (Brennan), Director of Emergency Services at The Miriam Hospital. She stated that The Miriam Hospital is one mile from Pawtucket and three miles from Central Falls. (Trial Tr. 4:12-16, July 18, 2023.) She also testified that, since 2017, the demand for behavioral health related emergency care has increased by 32 percent, with most of the increase coming from Pawtucket and Central Falls. Id. at 5:16-25, 8:23-9:5. See generally Common Interest Group Ex. 33. She further averred that the number of "boarding hours" at The Miriam Hospital's emergency department has more than tripled since 2017. (Trial Tr. 9:23-10:3, July 18, 2023.)
Brennan testified that "boarding hours" are tracked "when the patient has concluded their emergency department visit and the physician has decided that they now need another level of care or inpatient behavioral healthcare or group services in the community and they are waiting for those services[.]" (Trial Tr. 9:15-20, July 18, 2023.) She further testified that a patient spends his or her "boarding hours" in the emergency department. Id. at 9:21-22.
The John Snow Report made several recommendations to mitigate the impacts of MHRI's closure, including expanding CNE's primary care presence, offering patient transportation, and addressing "social determinants of health." (Common Interest Group Ex. 9, at 75.) The John Snow Report further noted the importance of maintaining health care services at the MHRI Campus, enhancing substance abuse treatment and behavioral health care in the Blackstone Valley, and fostering culturally appropriate plans to engage with populations in the service area. Id. at 73-76.
B
The City's Efforts to Find Alternative Beneficiaries
The Court heard testimony from Pawtucket Mayor Donald Grebien (Mayor Grebien) regarding the City's opposition and response to MHRI's closure. Mayor Grebien testified that MHRI provided necessary medical care and services to the Pawtucket community. (Trial Tr. 4:10-14, July 11, 2023.) When he learned that MHRI was on the verge of closure, he attempted to intervene in the decision-making process and keep essential medical services intact. See id. at 4:22-5:4, 5:10-6:10, 7:2-11. See generally Common Interest Group Ex. 11. His efforts were unsuccessful, and the RIDOH approved MHRI's closure. (Trial Tr. 7:12-17 July 11, 2023.) Nevertheless, he advocated for conditions to the closure, such as maintaining MHRI's emergency room. See id. at 7:18-8:21. See generally Common Interest Group Exs. 10, 11.
Around that time, Mayor Grebien learned that MHRI was a beneficiary of the Subject Trusts. (Trial Tr. 8:24-9:2, July 11, 2023.) His understanding was that the funds would be redirected pursuant to an application process and the RIAG's determination. See id. at 9:5-8. He testified that the Subject Trusts were "supposed to be left to the community" and "all about keeping the hospital and services in the community." Id. at 9:12-17. Thus, the City endeavored to find suitable alternative beneficiaries for the Subject Trusts. See id. at 9:20-10:19.
The City, with Trustee's approval, formed the Memorial Hospital Trust Advisory Committee (the Committee). See id. at 10:15-17, 10:22-11:6. See generally Common Interest Group Ex. 14. The Committee was a seven-person panel comprised of community leaders involved in healthcare. (Trial Tr. 10:22-24, July 11, 2023.) It was tasked with developing a Request for Information (RFI) "to best determine disbursement of funds in line with the original intent of Trust Donors[.]" (Common Interest Group Ex. 15, at 2.) A November 8, 2019 letter from the City's legal counsel describes the settlors' intent as "to provide essential healthcare services to the most vulnerable residents within the City and the Blackstone Valley." (CNE Entities Ex. 55.)
The Court heard testimony from Lawrence Sullivan (Sullivan), a thirty-year resident of Pawtucket and Chairperson of the Committee. (Common Interest Group Ex. 34, ¶ 3.) Sullivan stated in an affidavit that, prior to drafting the RFI, the Committee met to determine "the most pressing health needs facing Blackstone Valley's disadvantaged community[.]" Id. ¶ 7. The Committee prioritized behavioral, emergency, and maternal healthcare amongst other needs. See id. ¶ 7(a)-(k). Sullivan testified that, in a later meeting, the Committee focused on broader issues, including the location of services, whether the Committee should favor non-profits, and if the Subject Trusts "would be best used as 'seed money.'" Id. ¶ 8.
On February 1, 2021, the Committee finalized and published the RFI seeking proposals for how the City could effectuate the donative intent of the Subject Trusts and circulated it "to ensure that minority and under-represented groups had access to the information[.]" Id. ¶ 10. The City received nine proposals, including from Kent, MHF, and Progreso Latino. See id. ¶ 12.
Kent's proposal calls the City's RFI process "unnecessary and unwarranted, given that in all relevant and material respects Kent continues to provide the same health care and related services that were previously provided by MHRI at the same location." (Common Interest Group Ex. 21, at 2.) Kent's proposal states that Kent serves the same communities as MHRI and thus the RFI process is not needed. See id. Moreover, it argues that diverting the Subject Trusts away from Kent "may have a detrimental impact on the provision of health care to the vulnerable communities that the Trusts were established to support." Id. at 3. Kent lists a variety of services offered at the MHRI Campus, including, inter alia, primary care services, specialty care, cancer screening, access to produce and other food support, and asthma support services. See id. at 3-7.
MHF's response to the RFI asks for $280,500 of the Subject Trusts to hire a "Behavioral Health Nurse Navigator" at The Miriam Hospital's emergency department. (Common Interest Group Ex. 22, at 1.) MHF avers that The Miriam Hospital's emergency department has seen a dramatic increase in patients, an uptick which MHF says was directly caused by MHRI's closure. Id. at 2-3. Many of these patients suffer from behavioral health issues. See id. MHF's proposal provides that a "Behavioral Health Nurse Navigator" would serve as a "point person" for patients at the emergency department. Id. at 5. MHF anticipates that this new position would improve patients' experiences, reduce overflow, and build relationships with outside behavioral health services and other community resources. See id.
Progreso Latino is a Latino-led community health organization located in the Blackstone Valley. See Common Interest Group Ex. 23, at 1, 4. Progreso Latino takes interest in "Social Determinants of Health" and directs individuals to community-based programs that provide necessary resources. See id. at 2. Its proposal indicates that it would use $127,466.72 of the Subject Trusts to hire two community health workers, who would connect individuals with wellness programs for, inter alia, diabetes, chronic pain, and emotional support. Id. at 1-2, 4.
The Committee created a rubric in which each member individually scored the proposals. (Common Interest Group Ex. 34, ¶ 12.) After compiling the cumulative scores, Sullivan averred that the MHF and Progresso Latino received the first and second highest scores, respectively. Id. ¶ 13. The Committee determined that "[b]oth proposals sought to address health disparities and to assist vulnerable populations of need." Id. ¶ 14. Given the two proposals' similarities, the Committee permitted Carlos Lopez Estrada, the Deputy Director of Administration for the City, to speak with representatives of both organizations and determine if each would be willing to collaborate on the proposals. Id.; Trial Tr. 8:2-8, July 20, 2023. The Committee ultimately approved a joint proposal from MHF and Progreso Latino. (Common Interest Group Ex. 34, ¶ 16.)
On cross-examination, Sullivan's testimony revealed flaws in the Committee's process. Sullivan admitted that he first read the trust instruments two or three weeks before trial. (Trial Tr. 17:22-23; 18:1-5, July 20, 2023.) He could not confirm whether any other Committee member had read the instruments at any relevant time. Id. at 18:11-16. He also stated that one of the Committee members recused herself from considering Kent's proposal but was nevertheless allowed to stay on the Committee because the Committee did not anticipate considering a proposal from Kent. (Trial Tr. 10:3-23, July 20, 2023.) He further admitted that only six members voted on Kent's proposal, while all other proposals were voted on by seven members, naturally creating less votes for Kent. Id. at 11:2-5.
In addition, Sullivan acknowledged that the Committee's cumulative scores were incorrectly calculated. See id. at 28:1-11. MHF's proposal received 906 points but was incorrectly tabulated at 1,080 points. Id. at 38:11-16. Progreso Latino's proposal was similarly incorrectly scored at 1,054. Id. at 41:2-6. After being given time to recalculate the scores, Sullivan testified that Progreso Latino and the Children's Foundation's proposals should have been ranked highest. Id. at 41:14-16, 43:16-22. Sullivan also admitted that one of the scoresheets from the Committee was missing and could not be located. Id. at 28:1-11, 29:21-30:10. Nevertheless, the Committee's findings were submitted to Trustee for consideration on or about May 5, 2021. See Trial Tr. 80:23-81:14, July 17, 2023. See generally Common Interest Group Ex. 28.
C
Trustee Reviews and Approves the Committee's Findings
The Court also heard testimony from Tina Hamilton (Hamilton), Managing Director and a philanthropic fiduciary executive for Trustee. She testified that the Subject Trusts "all demonstrate an intent to benefit Memorial Hospital as a hospital is defined in the traditional sense, one that performs inpatient care and emergency services." (Trial Tr. 43:21-44:4 July 17, 2023.) She also averred that the Subject Trusts were intended to benefit the residents of Pawtucket and the Blackstone Valley. Id. at 45:13-21. However, she stated that the Subject Trusts were used for MHRI's general hospital purposes. Id. at 69:4-22, 94:13-19. Trustee could not locate any documents requiring the funds to be used exclusively for emergency, inpatient, or traditional hospital care. Id. at 67:6-19. Hamilton further testified that Trustee did not distinguish between inpatient, emergency, or general hospital care in administering the Subject Trusts. See id. at 96:5-13. She also averred that Trustee never took actions to ensure that funds were being used for solely inpatient care. Id. at 70:10-14.
Hamilton stated that the Committee's recommendation assisted Trustee in selecting an entity that could most closely fill the gaps in healthcare caused by MHRI's closure as identified in the John Snow Report. Id. at 48:1-18. However, she admitted that she and her team did not view the Committee's reports or individual scoresheets. Id. at 86:1-87:7. Trustee also did not perform its own calculations to ensure the Committee's accuracy in selecting an alternative beneficiary. See id. Besides the Committee's recommendation, Hamilton stated that Trustee did not review relevant historical documents or obituaries. Id. at 76:18-77:3. She averred that she did not take notes on the proposals considered by the Committee; she instead briefly reviewed them and formed mental impressions. Id. at 83:2-13.
Hamilton testified that the Trustee determined MHF and Progreso Latino's joint proposal would make the best use of the Subject Trusts by improving the health of vulnerable populations and bridging the gaps in care identified in the John Snow Report. Id. at 57:9-58:6. She further testified that the Trustee found that the joint proposal most closely aligned with the settlors' donative intent. Id. at 59:21-60:5. When the Court inquired, Hamilton declared that it is possible for the Subject Trusts to all contain the same charitable intent. See id. at 60:18-22. Ultimately, nine business days after receiving the Committee's recommendations, Trustee came to the same conclusion as the Committee and determined that MHF and Progreso Latino's joint proposal should receive the benefit of the Subject Trusts. Id. at 90:5-14.
The Court then heard testimony from Dr. David Gifford (Gifford), a physician and former Director of the Rhode Island Department of Health, charged by the City to review only Kent's proposal and the joint proposal submitted by MHF and Progreso Latino to determine which best fit "the RFP intent for using the general funds from [MHRI]." (Trial Tr. 5:21-25, 50:5-9, 52:21-25, July 12, 2023.) After reviewing the proposals, Gifford determined that the joint proposal was more responsive to the City's RFI than Kent's proposal. Id. at 32:18-23.
He testified that Kent's proposal stated it would continue to carry out the same services as MHRI at the former MHRI campus. Id. at 24:2-9. However, Kent lacked an emergency department, a critical component of a hospital. Id. He believed the absence of an emergency department contradicted the statements in Kent's proposal. Id. Gifford further averred that all the services Kent's proposal listed were outpatient services. Id. at 41:19-23. On the other hand, Gifford testified that the joint proposal was "more culturally appropriate" in meeting the needs of the people of Pawtucket and would be more effective in treating those seeking emergency care. Id. at 28:20-29:24.
II
Standard of Review
Rule 52(a) of the Superior Court Rules of Civil Procedure provides that "[i]n all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon[.]" Super. R. Civ. P. 52(a). In a non-jury trial, '"[t]he trial justice sits as a trier of fact as well as of law.'" Parella v. Montalbano, 899 A.2d 1226, 1239 (R.I. 2006) (quoting Hood v. Hawkins, 478 A.2d 181, 184 (R.I. 1984)). This means that the trial justice "weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences." Id. (internal quotations omitted).
"When a case is tried without a jury, 'the task of determining credibility of witnesses is peculiarly the function of the trial justice[.]'" Jotorok Group, Inc. v. Computer Enterprises, Inc., No. PC-01-3237, 2005 WL 2981658, at *4 (R.I. Super. Nov. 4, 2005) (quoting State v. Sparks, 667 A.2d 1250, 1251 (R.I. 1995) (further citation omitted)).
Our Supreme Court has recognized that a trial justice's analysis of the evidence and findings in the bench trial setting "'need not be exhaustive,"' and must '"reasonably indicate[] that [the trial justice] exercised [his or her] independent judgment in passing on the weight of the testimony and the credibility of the witnesses . . . '" Notarantonio v. Notarantonio, 941 A.2d 138, 144-45 (R.I. 2008) (quoting McBurney v. Roszkowski, 875 A.2d 428, 436 (R.I. 2005)). '"Even brief findings and conclusions are sufficient if they address and resolve the controlling and essential factual issues in the case.'" Hilley v. Lawrence, 972 A.2d 643, 651 (R.I. 2009) (quoting Donnelly v. Cowsill, 716 A.2d 742, 747 (R.I. 1998)).
III
Analysis
First, under § 18-4-1, cy près cannot be invoked as to a charitable trust unless "the purposes of the donor cannot be literally carried into effect[.]" Section 18-4-1. Thus, the Court must examine whether it is impossible to carry out the settlors' intent. See Chu, 2 F.Supp.3d at 175; Brice v. Trustees of All Saints Memorial Chapel, 31 R.I. 183, 202, 76 A. 774, 782 (1910).
A
The Subject Trusts
In interpreting § 18-4-1, the Court uses time-honored rules of statutory interpretation. When construing statutes, the Court's "ultimate goal is to give effect to the purpose of the act as intended by the Legislature." Webster v. Perrotta, 774 A.3d 68, 75 (R.I. 2001). If the statutory language is clear, the Court "must interpret the statute literally and must give the words of the statute their plain and ordinary meanings." Whittemore v. Thompson, 139 A.3d 530, 540 (R.I. 2016) (internal quotation omitted). '"The Legislature is presumed to have intended each word or provision of a statute to express a significant meaning, and the Court will give effect to every word, clause, or sentence, whenever possible."' Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 868, 874 (R.I. 2021) (quoting State v. Clark, 974 A.2d 558, 571 (R.I. 2009)) (brackets omitted) (internal citations omitted). The Court must "consider the entire statute as a whole; individual sections must be considered in the context of the entire statutory scheme, not as if each section were independent of all other sections." Sorenson v. Colibri Corp., 650 A.2d 125, 128 (R.I. 1994).
1
The Sayles Trust Does Not Fail
The CNE Entities argue that cy près need not be applied to the Sayles Trust because "MHRI is still in legal existence and is the title owner for the MHRI Campus property where Kent provides hospital licensed services under a real estate lease from MHRI." (CNE Entities' Pre-Trial Mem. 16. See generally CNE Entities Exs. 41-42.) Thus, they submit that the intent underlying the Sayles Trust can still be honored and that it's irrelevant whether hospital services are provided by MHRI or Kent. (CNE Entities' Pre-Trial Mem. 16-17.) The Court agrees and finds that the Sayles Trust has not failed.
The directions of the Sayles Trust are clear and unambiguous. Its net income is to be used for, inter alia, the utilities, expenses, repairs, maintenance, and landscaping of the MHRI estate. (Sayles Trust 3-4.) The Court finds that the settlor's ultimate intent was to preserve the donated building and land to serve as a perpetual memorial to the late Mary Wilkinson Sayles and Martha Freeman Sayles. See id. at 1. Other, extrinsic evidence need not be considered when the testamentary intent is explicit in the instrument. Even if the Court considered extrinsic evidence, the same intent is found in the deed. See Sayles Deed 1, 5, 7 (declaring the funds are to serve as a memorial to the settlor's deceased wife and daughter).
The Court concludes that the Sayles Trust has not failed under § 18-4-1 because it is not impossible to fulfill the settlor's intent. See Black's Law Dictionary 1119 (defining "literal" as "[a]ccording to expressed language"), 905 (defining "impossibility" as "[a] fact or circumstance that cannot occur, exist, or be done") (11th ed. 2019). As stated above, the settlor's intent was to preserve the physical MHRI estate, an estate that survives in the form of the MHRI Campus. See Sayles Trust 3-4. Because the land and buildings thereupon still exist, MHRI still accrues expenses and must continue to be maintained. Thus, the settlor's intent to pay those expenses and curate the grounds of the MHRI estate literally still can be carried into effect. Accordingly, the Court finds that the Sayles Trust has not failed and shall continue to inure to the benefit of MHRI for the trust's originally stated purpose.
Assuming arguendo that the Sayles Trust did fail, the Court finds that the settlor's charitable intent was specific and thus the Trust would have lapsed to the heirs-at-law. As stated above, cy près cannot save a charitable trust where "the donor had a specific intent to aid one particular object . . . ." Industrial National Bank of Rhode Island v. Glocester Manton Free Public Library of Glocester, 107 R.I 161, 166, 265 A.2d 724, 727 (1970). The Court finds our Supreme Court's reasoning in Gladding v. St. Matthew's Church, 25 R.I. 628, 57 A. 860 (1904), most applicable here. In that case, the testator left a legacy to Saint Ann's Church for Deaf Mutes in the City of New York (Saint Ann's Church). See Gladding, 25 R.I. at 629-30, 57 A. at 861. Importantly, the testator was a member and communicant of Saint Ann's Church, "and in it she was greatly interested." Id. at 630, 57 A. at 861. The Gladding Court could not determine that the testator possessed a general charitable intent. See id. at 639, 57 A. at 865. Specifically, it found:
"The legatee named was a church to which she had belonged, and in whose prosperity she took great interest; and it is impossible for us to gather from any of her expressions that she made her gift to the church because it cared for the religious training of deaf mutes, rather than because of her affection for her former associates who composed it." Id. at 639, 57 A. at 865.Because the Gladding Court could not find whether the legacy was intended to aid Saint Ann's Church or its charitable mission, the legacy lapsed. See id. at 640, 57 A. at 865. Here, the choice is even murkier than in Gladding. The settlor of the Sayles Trust was not just invested in MHRI's success, he was the impetus for the hospital's physical existence. See generally Sayles Deed. He donated the land on which MHRI sat, caused MHRI's facility to be erected, and furnished that facility with the instruments, equipment, and other fixtures needed to operate a hospital. Id. at 1-3. His trust instrument does not fund MHRI's hospital operations; instead, it covers MHRI's expenses. See Sayles Trust 3-4. Moreover, all this was done to serve as a permanent memorial to his late family members. See Sayles Trust 1; Sayles Deed 1, 5, 7. At best, it is unclear whether the settlor of the Sayles Trust intended to benefit MHRI or its charitable endeavors. For these reasons, the Court would have allowed the Sayles Trust to lapse for want of a general charitable intent had it found that the Trust failed. See Gladding, 25 R.I. at 640, 57 A. at 865.
2
The Richardson Trust Fails
The Richardson Trust applies net income "to said The Memorial Hospital." (Richardson Trust 2-3.) The Court must determine whether this legacy can still be carried out where MHRI is an extant corporation. See § 18-4-1. For reasons stated herein, the Court finds that the settlor's purpose cannot be fulfilled and therefore fails for impossibility.
The Court's "primary objective when construing language in a will or trust is to ascertain and effectuate the intent of the testator or settlor as long as that intent is not contrary to law." Prince v. Roberts, 436 A.2d 1078, 1080 (R.I. 1981). The Court examines the whole instrument, and its words "should be 'given their primary, ordinary, and common meaning unless it plainly [appears] that they were used in some other sense.'" Steinhof v. Murphy, 991 A.2d 1028, 1033 (R.I. 2010) (quoting Hunt v. Citizens Trust Co., 519 A.2d 1120, 1122 (R.I. 1987)) (internal citations omitted). Canons of construction "should be used only when the meaning of a trust is not apparent from the plain and ordinary meaning of its language . . . ." Id. at 1033-34. When faced with an ambiguity, the Court "is confronted with a mixed question of law and fact." Prince, 436 A.2d at 1080. The Court's determination will be upheld unless "reasonable minds would be impelled to a single conclusion." Id. at 1080-81 (citation omitted). Extrinsic evidence may also be considered to resolve an ambiguity. Steinhof, 991 A.2d at 1034 (citations omitted).
With respect to the Richardson Trust, the term "The Memorial Hospital" is ambiguous because it could mean either the hospital itself or the corporate parent. If the answer is the former, the Richardson Trust must fail because MHRI no longer operates a hospital. See § 18-4-1. If the latter, then the Richardson Trust does not fail because MHRI may still accept charitable donations. See id. The Court first looks elsewhere in the instrument to where the Richardson Trust makes a specific bequest of $5,000 "to The Memorial Hospital, located in said Pawtucket, to establish a permanent free bed . . . ." (Richardson Trust 2.) The Court finds that the specific bequest shows a clear intent to fund gratuitous, charitable hospital care. Based on the language in the specific bequest, the Court doubts the settlor intended to make a residuary donation to the corporate parent. The Court also credits Koller's testimony that private philanthropy comprised a large proportion of hospital financing at the turn of the century. See Trial Tr. 30:16-21, July 10, 2023. The Court finds that the settlor's intent behind his residuary legacy was to aid the hospital, not the corporation.
The Court also notes our Supreme Court's holding in Rhode Island Hospital Trust Co., in which the testator bequeathed funds to, inter alia, the Bristol Cottage Hospital. Rhode Island Hospital Trust Co., 50 R.I. at 387, 148 A. at 190. However, the instrument made no mention of whether the bequest was to aid the hospital's charitable mission or the corporate entity's operations. See id. Pursuant to a petition for application cy près, our Supreme Court determined that the testator's intent was to aid a charitable hospital because, although "the stated purpose of the organization might be accomplished by a business corporation, there is no doubt on the testimony that the hospital contemplated was to be a charitable organization." Id. at 389, 148 A. at 191. Our Supreme Court importantly noted that "[i]f doubt exists as to whether a gift is charitable, equity favors a construction favoring a public charity." Id. at 390, 148 A. at 191; see also City of Providence v. Payne, 47 R.I. 444, 452, 134 A. 276, 280 (1926).
Following the reasoning in Rhode Island Hospital Trust Co., the Court finds that the purpose of the Richardson Trust can no longer be carried out. Based on other language in the instrument and testimony in the record, the Court concludes that the settlor intended for his donation to aid a hospital, not a corporate entity. To the extent that there was doubt as to the settlor's intent, "equity favors a construction favoring a public charity." Rhode Island Hospital Trust Co., 50 R.I. at 390, 148 A. at 191. Because MHRI no longer operates a hospital, the settlor's intent is impossible to fulfill, and the trust must fail. See Chu, 2 F.Supp.3d at 175; § 18-4-1.
3
The Preston and Wood Trusts Fail
Next, the Court examines the Preston Trust and the Wood Trust and finds that both fail because the settlors' intent cannot literally be carried into effect. See § 18-4-1. The Preston Trust donates 20 percent of net income to MHRI to establish two "free beds" and then "for the general purposes of the Hospital." (Preston Trust 8.) The Wood Trust, similarly, donates 50 percent of its net income to MHRI, which "shall be applied to the general uses and purposes" thereof. (Wood Trust 1-3.) Like the Richardson settlors, the Court finds that the Preston and Wood's settlors intended for their donations to benefit the hospital, not the corporate entity. See supra, Part III.A.2; see also Rhode Island Hospital Trust Co., 50 R.I. at 390, 148 A. at 191. The Preston Trust specifically states that the net income is to be used for the general hospital purposes. (Preston Trust 8.) The Wood Trust likewise provides that the income is to be applied "to the general uses and purposes" of MHRI. See Wood Trust 1-3. Even if the Court were to consider the possibility that the Wood Trust settlors intended to benefit the corporate entity, the Court finds that the stated purpose of MHRI at the time was "erecting, establishing and maintaining in the city of Pawtucket and State of Rhode Island, a hospital for the treatment of the sick and of those who may be suffering from accidents or injuries." (CNE Entities Ex. 83 Bates No. CNE 2264.) Because MHRI no longer maintains a hospital, its stated purpose at the time of the Wood Trust is impossible. Thus, the Preston Trust and the Wood Trust must fail. See § 18-4-1.
B
The Richardson, Preston, and Wood Trusts Evidence a General Charitable Intent
Where a settlor's intent is impossible to fulfill, the Court must next ascertain whether his or her intent is of a general or specific charitable nature, and by extension whether cy près may save the trusts. Cy près is available only where "the dominant intent of the person or persons creating the charitable trust was general rather than specific in nature." Nugent ex. rel. St. Dunstan's Day School v. Saint Dunstan's College of Sacred Music, 113 R.I. 666, 670, 324 A.2d 654, 656 (1974) (collecting cases). The pertinent inquiry "is whether, had the [settlor] known that it would be impossible to follow the express terms of the charitable bequest, he or she would prefer to bequeath the funds to a similar charitable purpose or have his or her largess be treated like all other ineffective bequests." 14 C.J.S. Charities § 52, at 227.
General charitable intent "is found when the evidence establishes that the donor was motivated by the desire to benefit a charitable purpose." Chu, 2 F.Supp.3d at 175 (citation omitted); see also 15 Am. Jur. 2d Charities § 146, at 144 (2020). Our Supreme Court first looks to the instrument to determine the drafter's dominant intent and considers extrinsic evidence "where the intention is not so determinable." Industrial National Bank of Rhode Island v. Guiteras, 107 R.I. 379, 387, 267 A.2d 706, 711 (1970) (collecting cases). With respect to the instrument, courts look to whether the settlor, inter alia, failed to provide for next of kin, declined to include a reverter clause, afforded beneficiaries full discretion in using funds, or donated funds to various charities. 14 C.J.S. Charities § 52, at 227; 15 Am. Jur. 2d Charities § 147, at 145-48. Extrinsic evidence that courts consider include "the interests and attitudes that motivated the settlor's gift, his or her involvement or interest in particular charitable institutions, and the settlor's relationships, social or religious affiliations, personal background, charitable-giving history, and the like." 14 C.J.S. Charities § 52, at 226-27; cf. Gladding v. St. Matthew's Church, 25 R.I. 628, 639-40, 57 A. 860, 865 (1904).
On the other hand, if the settlor's charitable intent was specific in nature-that is to say, where the settlor predominantly intended to aid a specific charitable corporation-cy près is inapplicable. Industrial National Bank of Rhode Island, 107 R.I. at 166, 265 A.2d at 727; see also Rhode Island Hospital Trust Co., 50 R.I. at 390, 148 A. at 191; Gladding, 25 R.I. at 639-40, 57 A. at 865. Instead, "the gift reverts to the estate of the donor for distribution to the beneficiaries of any will or the heirs-at-law." Chu, 2 F.Supp.3d at 175 (citations omitted).
1
The Richardson Trust Evidences a General Charitable Intent
Regarding the Richardson Trust, the Court finds there is only a modicum of positive evidence showing a general charitable intent within the instrument. The settlor provides for two charitable donations in his testamentary scheme: one to the Pawtucket Boys Club and the other to MHRI. See Richardson Trust 2-3. All other bequests are to specific individuals. See id. at 1-2. The Court also finds negative evidence favoring a general charitable intent. For instance, the Richardson Trust imposes no conditions or restraints on MHRI's use of the net income. See id. at 2-3. Moreover, the instrument does not provide that the funds must revert to the settlor or his estate if the settlor's purpose becomes impossible to carry out. See generally id. These clues support a finding that the Richardson Trust settlor had a general charitable intent in making his donation. See, e.g., 14 C.J.S. Charities § 52, at 227.
However, the Court is not sufficiently convinced enough to hang its proverbial hat solely on those findings and looks for other, extrinsic evidence. See Guiteras, 107 R.I. at 387, 267 A.2d at 711. The Court again is persuaded by Koller's testimony and his statement that near the time of the Richardson Trust, non-governmental hospitals were largely funded by private philanthropy. See Trial Tr. 30:16-2, July 10, 2023. MHRI's charter indicates it was founded by private individuals, not a government entity. See generally CNE Entities Ex. 83. Additionally, nothing in the record supports a finding that the Richardson Trust settlor had any affiliation or connection with MHRI other than his testamentary legacy. Cf. Gladding, 25 R.I. at 639-40, 57 A. at 865. The Court finds no basis to conclude that the settlor here predominantly intended to support MHRI's corporate success over its charitable mission.
Koller also testified that, during the Great Depression, private philanthropy withered. (Trial Tr. 33:23-34:6, July 10, 2023.) However, the Court does not find that this fact has an impact on whether the Richardson Trust settlor had a general or specific charitable intent; its effect instead shows that his charitable donation was a rarity in that period.
The Court is further persuaded by commentary in Restatement (Second) Trusts § 399. Our Supreme Court has referenced § 399 in prior cases. E.g., Rhode Island Hospital Trust National Bank v. Israel, 119 R.I. 298, 377 A.2d 341 (1977); Edwards v. DeSimone, 105 R.I. 335, 252 A.2d 327, rearg. 106 R.I. 260, 258 A.2d 566 (1969). Comment i reads, in pertinent part:
"The court can fairly infer an expectation on the part of the settlor that in course of time circumstances might so change that the particular purpose could no longer be carried out, and that in such a case the settlor would prefer a modification of his scheme rather than that the charitable trust should fail and the property be distributed among his heirs who might be very numerous and only remotely related to him. The courts are therefore more ready to apply the doctrine of cy pres where the particular purpose fails at some time after the creation of the trust than they are where the particular purpose fails at the outset . . . . The longer the period between the creation of the charitable trust and the failure of the particular purpose, the more undesirable it is that the property should revert to the settlor's estate." Restatement (Second) Trusts § 399 cmt. i.
The Richardson Trust has survived for nearly one hundred years. See Richardson Trust 7. Surely, the Court can infer the settlor's expectation that his general charitable purpose might not be possible due to changing circumstances a century later. See Restatement (Second) Trusts § 399 cmt. i. Would the settlor have intended his legacy to fail and be distributed to so-called "laughing heirs" a century later? The Court does not believe so. That the settlor made his legacy to MHRI in perpetuity and omitted a reverter clause supports the Court's finding. Moreover, from a purely economic point of view, the net income of the Richardson Trust is of far greater value when put to charitable uses, like cost-free hospital care. See Ryan, Jr., An Historical and Empirical Analysis of the Cy-Près Doctrine, 48 ACTEC L.J. at 289, 292, 299. For these reasons, the Court holds that the settlor possessed a general charitable intent and that the Richardson Trust may be saved through cy près.
2
The Preston Trust and the Wood Trust Evidence a General Charitable Intent
With respect to the Preston Trust, the Court finds the settlor possessed a general charitable intent when making his donation to MHRI. See Guiteras, 107 R.I. at 387, 267 A.2d at 711. For example, the Preston Trust allocates net income to Bowdoin College and the Shriners Hospital for Crippled Children. (Preston Trust 8.) The net income benefitting Bowdoin College was to be used "for scholarships for deserving students in need of financial assistance," and the net income for the Shriners Hospital for Crippled Children was to be used "for the general purposes of said Hospital[.]" Id. The Court finds these legacies were charitable. Similarly, the Court finds that the Preston Trust imposes no restrictions or limitations on MHRI's use of their share of the net income. See id. at 8. Moreover, the Court notes ¶ 4(d) of the Preston Trust charges Trustee to "select an alternate beneficiary with the same or similar purposes" if any of the named recipients cease to exist. Id. at 8-9 (emphasis added); see Pell, 14 R.I. at 436, 1884 WL 3088, at *17. The Preston Trust does not provide that any funds shall revert to the settlor or his estate. See Preston Trust at 8-9. For these reasons, the Court finds that the settlor of the Preston Trust possessed a general charitable intent when making his donation to MHRI. Cf. 14 C.J.S. Charities § 52, at 227; 15 Am. Jur. 2d Charities § 147, at 145-48.
For similar reasons, the Court also finds that the Wood Trust settlors possessed a general charitable intent based on the language of the testamentary instrument. The Wood Trust allocated 20 percent-and later 50 percent-of its net income to MHRI. (Wood Trust 2, 11.) That net income was to be applied for MHRI's general uses and purposes without any stated restrictions or limitations. See id. at 2. The Wood Trust settlors made other charitable contributions to the First Baptist Church, the Pawtucket Boys Club, and the Young Men's Christian Association of Pawtucket and Central Falls, also without stated restrictions or limitations. See id. at 2, 11.
Additionally, the Wood Trust provides that if any named beneficiaries "shall cease to exist or to operate in substantially the same manner as they are operating at the time of the death of the last surviving [s]ettlor," Trustee is directed either "(1) to pay or apply the income of the share which has been so terminated to the remaining beneficiaries . . . or (2) to select another charitable institution of a character similar to the original beneficiary located in the Blackstone Valley . . . ." Id. at 2-3 (emphasis added). If the corpus of the Wood Trust decreased to a value less than $50,000, the settlors directed that the trust be terminated and the corpus be distributed to charitable institutions, rather than revert to the settlors or their estate. See id. at 3, 11-12. Because the instrument contains, inter alia, multiple charitable donations, full discretion to charitable beneficiaries, and a clause under which Trustee was directed to select alternative charitable beneficiaries, the Court finds that the Wood Trust settlors possessed a general charitable intent and that the Wood Trust may also be saved through cy près.
The Court notes that extrinsic evidence was submitted to further assist the Court in assessing the Wood Trust settlors' charitable intent. See generally CNE Entities Exs. 84-85. However, when determining whether a settlor's charitable intent is general or specific, the Court must look to the instrument, and only to extrinsic evidence "where the intention is not so determinable." Industrial National Bank of Rhode Island v. Guiteras, 107 R.I. 379, 387, 267 A.2d 706, 711 (1970) The Court finds that the instrument provides ample evidence to support a finding that the Wood Trust settlors possessed a general charitable intent. Thus, extrinsic evidence need not be considered. Id.
C
The Miriam Hospital is the Closest Alternative Beneficiary
Having found that a general charitable intent underlies the Richardson Trust, Preston Trust, and Wood Trust, the Court may invoke cy près and instruct Trustee "to redirect the donation to another charity 'as near as' . . . the original intent as possible." Chu, 2 F.Supp.3d at 175; see also Gardner v. Sisson, 49 R.I. 504, 505, 144 A. 669, 669 (1929). The Court is tasked to "frame a scheme which on the whole is best suited to accomplish the general charitable purpose of the donor." Restatement (Second) Trusts § 399 cmt. b; see also Gladding, 25 R.I. at 638, 57 A. at 864. When framing such a scheme, the Court "will consider evidence as to what would probably have been the wish of the settlor at the time when he created the trust if he had realized that the particular purpose could not be carried out[,]" including:
"not only the language of the trust instrument, but also such circumstances as indicate what would have been the probable desires of the settlor, such as the character of the charitable gifts previously made by him, the charities in which he had expressed an interest, his religious affiliations, his views on social, economic and political questions, and the like." Restatement (Second) Trusts § 399 cmt. d; cf. 14 C.J.S. Charities § 52, at 226-27.,
1
Deference and/or Weight Afforded to Trustee and the RIAG's Recommendations
In the Verified Miscellaneous Petition for Cy Près, Trustee recommends substituting MHF and Progreso Latino as beneficiaries of the Subject Trusts. See Verified Misc. Pet. 10-11, ¶ 31. Trustee also states that the settlors' general charitable intent was "to address health disparities and to assist vulnerable populations of need in Pawtucket and the Blackstone Valley." Id. at 11, ¶ 31. The Common Interest Group asks the Court to afford Trustee "a level of discretion or deference in the selection of an alternate beneficiary, particularly when the language of the trust instrument expressly grants that discretion to the trustee." (Common Interest Group's Pre-Trial Mem. 26.) It also submits that discretion "should be commensurate with the [C]ourt's determination as to [T]rustee's good faith and reasonableness." Id.
The Common Interest Group principally relies on Town of Brookline v. Barnes, 97 N.E.2d 651 (Mass. 1951), in support of the notion that the Court should defer to Trustee's findings and recommendation. See Common Interest Group's Post-Trial Mem. 2-3. In that case, a master was appointed to frame a scheme for application cy près. Town of Brookline, 97 N.E.2d at 652. Three schemes were presented to the master for his consideration; a scheme proposed by the Town of Brookline was recommended and adopted. Id. On appeal, the Supreme Judicial Court of Massachusetts affirmed the selection, holding that a court is permitted to frame an appropriate scheme by itself or through the appointment of a master. See id. (collecting cases). The Common Interest Group argues that the Court should follow the reasoning in Town of Brookline and adopt Trustee's recommendation. See Common Interest Group's Post-Trial Mem. 3. It also notes that outside of cy près, Rhode Island has afforded discretion to trustees' recommendations. See id. at 6-7 (citing Prince v. Lynch, No. PC-99-5806, 2006 WL 1073413 (R.I. Super. Apr. 20, 2006); St. Joseph Health Services of Rhode Island, Inc. v. St. Joseph Health Services of Rhode Island Retirement Plan, Nos. PC-2017-3856, PC-2019-11756, 2021 WL 869586 (R.I. Super. Mar. 4, 2021)).
The CNE Entities, on the other hand, argue that the Court should not defer to Trustee's recommendation because the Court is vested with authority to select an alternative beneficiary under § 18-4-1. (CNE Entities' Post-Trial Mem. 2.) They point to comments e and f of Restatement (Second) Trusts. See id. at 2-3. Comment e provides that a trustee must seek the Court's approval before applying trust property cy près. See Restatement (Second) Trusts § 399 cmt. e. Comment f states that the Court may frame a scheme "even though the trustees do not consent to the scheme." Id. cmt. f. The CNE Entities also state that Trustee's discretionary powers are limited to managing trust assets. (CNE Entities' Post-Trial Mem. 3 (citing Restatement (Second) Trusts § 187)). Moreover, the CNE Entities submit that the Common Interest Group's cited cases are not cy près cases and thus inapplicable. See id. at 4-7. Furthermore, the CNE Entities maintain that, even if the Court were to consider Trustee's recommendation, there are multiple flaws with the recommendation such that the Court should not afford it much weight. See id. at 7.
The RIAG agrees with the CNE Entities and submits that no Rhode Island precedent evidences deference to trustees in selecting alternative beneficiaries. See RIAG's Post-Trial Mem. 4 (collecting cases). The RIAG concedes that Trustee has some discretion in administering trusts under their care, but in cy près proceedings, Trustee's "power to carry out the functions of the trusts must be limited by the intent of the donor and the instruction of the Court." Id. at 5.
The Court agrees with the CNE Entities and the RIAG that Trustee's recommendation should not be afforded deference. A trustee must petition the Court for application cy près, but the Court has exclusive original jurisdiction to apply the doctrine. Gardner, 49 R.I. at 505, 144 A. at 669; see also Pell, 14 R.I. at 435-36, 1884 WL 3088, at *16. After a survey of Rhode Island caselaw, the Court finds that a trustee's recommendation is not mandatory; rather, the Court must make findings as to a settlor's charitable intent and frame a scheme as near as possible to that intent when a settlor's original purpose has failed. E.g., Pell, 14 R.I. at 436-38, 1884 WL 3088, at *17 (stating that, with respect to cy près, "there is no reason why any court, invested with full chancery powers, and untrammeled by precedent or legislation, should not assume and exercise it"). The Court also is persuaded by comment f of Restatement (Second) Trusts § 399, which provides, while the Court may give weight to a trustee's wishes, the Court may "frame a scheme even though the trustees do not consent to the scheme." Restatement (Second) Trusts, § 399 cmt. f. As a practical matter, if the Court were to simply defer to Trustee's recommendation, it would strip the Court of its general equitable power and render this proceeding unnecessary.
The Court also is not convinced by the Common Interest Group's cited caselaw. The CNE Entities are correct that the Common Interest Group's cases do not deal with cy près. Thus, the Court finds that the cited cases are not applicable to the instant dispute. Even though it was a cy près matter, the Court does not find Town of Brookline persuasive because, in that case, the probate court relied on a recommendation from its own, court-appointed master. In other words, the master in Town of Brookline was a court fiduciary. See, e.g., Super. R. Civ. P. 53. Here, Trustee is not a fiduciary of the Court. Even if it were, the Court has the authority to adopt a master's recommendation, reject it, or recommit the master with additional instructions. Super. R. Civ. P. 53(e)(2). Thus, the Court is not persuaded that Town of Brookline requires the Court to follow Trustee's recommendation here.
The Court notes that "deference" is separate and apart from "weight." Weighing evidence "means . . . determin[ing] the elements that give it probative value." 32A C.J.S. Evidence § 1560, at 655 (2020). The weight of evidence "is not a question of mathematics, but depends on its effect in inducing belief under all of the facts and circumstances proved." Id. Our Supreme Court provided a similar rule in Taylor v. Taylor, 90 A. 746 (R.I. 1914):
"Evidence, to be worthy of credit, must not only proceed from a credible source, but must, in addition, be credible in itself. And by this is meant that it shall be so natural, reasonable, and probable, in view of the transaction which it describes or to which it relates, as to make it easy to believe it" Taylor, 90 A. at 751 (quoting Vreeland v. Vreeland, 21 A. 627, 631 (N.J. 1891) (internal quotations omitted).
The trier of fact "is free to believe any, all, or none of a witness's testimony." 32A C.J.S. Evidence § 1560, at 656. However, the Court cannot disregard evidence without further explanation. See id. at 655.
For reasons stated herein, the Court respectfully declines to adopt Trustee's recommendation. Hamilton's testimony makes clear that Trustee did not perform reasonable due diligence prior to formulating its recommendation. She testified that Trustee received nine proposals responsive to the City's RFI as well as the Committee's findings shortly after May 5, 2021. See Trial Tr. 80:23-81:14, July 17, 2023. See generally Common Interest Group Ex. 28. Trustee did not contact the organizations that forwarded proposals. (Trial Tr. 83:20-22, July 17, 2023.) Trustee did not ask questions or request additional information from the City or the Committee. Id. at 83:23-84:13. It did not review the Committee's recordings of the meetings or meeting minutes. Id. at 84:14-85:10. With respect to the Committee's findings, Trustee only received and reviewed cumulative scores, not individual scorecards. Id. at 85:24-86:10. Trustee did not verify the Committee's cumulative scores were correct. Id. at 86:11-13.
Hamilton admitted that she conducted little research and review of outside evidence. She testified that she reviewed each proposal for half an hour and only read through each once. Id. at 82:19-24. She admitted that she did not look for, or review, the settlors' obituaries to ascertain their donative intent. Id. at 76:21-25. She stated that her research consisted of examining different charitable entities' tax returns. Id. at 85:11-19. She further testified that she did not make contemporaneous notes regarding each proposal and that she did not know whether her colleagues took notes. Id. at 83:2-17. Hamilton could not say how many times she and her colleagues met to discuss the Subject Trusts. See id. at 104:7-13. Nevertheless, nine business days later, Trustee recommended redirecting the net income of the Subject Trusts to MHF and Progreso Latino, the same beneficiaries that the Committee recommended. Id. at 90:5-14.
The Court is troubled by Trustee's process and findings. As previously discussed, Sullivan admitted that one of the Committee Members had a conflict of interest and the Committee incorrectly calculated each proposal's scores. See infra, Part I.B. Trustee admittedly did nothing to confirm the Committee's findings nor to assure their accuracy. Id. at 86:11-13. Even if Trustee did not weigh the Committee's findings at all, Trustee did not perform a diligent review of the proposals-limited to thirty minutes per proposal-and did not make a concerted effort to ascertain the settlors' donative intent. Trustee also improperly contemplated the settlors together in determining charitable intent; the Court heard no testimony that Trustee considered that each settlor existed in different time periods and possibly with separate understandings of hospital care and different charitable intentions in mind. Also, Trustee's description of the settlors' charitable purpose, "to address health disparities and to assist vulnerable populations of need in Pawtucket and the Blackstone Valley," does not comport with the testimony presented to the Court. Moreover, the Court notes that Trustee's description of the settlors' intent is identical to the Committee's findings and Trustee's counsel's characterization of the settlors' intent. Compare Verified Misc. Pet. 11, ¶ 31 with Common Interest Group Ex. 34, ¶ 14 and CNE Entities Ex. 20, at 3-4. Based on Hamilton's testimony as to Trustee's process and results, the Court does not give weight to its recommendation.
Because the Court respectfully declines to give weight to Trustee's adoption of the Committee's recommendation, the Court need not further consider Gifford's testimony. Gifford provided the best insight he could have, given the information submitted to him. However, because the Court takes issue with the RFI prescription of the settlors' intent, Gifford's testimony falls outside the Court's analysis.
With respect to the RIAG's recommendation, the RIAG avers in its Post-Trial Memorandum that its recommendation "as an interested party mandated to attend to charitable trusts and required by law to represent the interests of the public in charitable trusts matters, should be carefully considered by the Court and afforded great weight." (RIAG's Post-Trial Mem. 6.) The CNE Entities agree. See CNE Entities' Post-Trial Mem. 7-8. Both argue that the RIAG's role in this matter is to protect the public's interest and ensure that an alternative testamentary scheme comports with the settlors' intent. E.g., CNE Entities' Post-Trial Mem. 8 (citing Powers v. Home for Aged Women, 55 R.I. 187, 192, 179 A. 610, 612 (1935)). The CNE Entities additionally argue that the RIAG's legislative authority in cy près matters "indicates that a court should give weight to the Attorney General's opinion . . . ." Id. The CNE Entities do not go as far as to say that the Court should defer to the RIAG. Id.
The RIAG also recognizes that "the ultimate decision in this matter lies with the Court." (RIAG's Post-Trial Mem. 6.)
The Common Interest Group, by contrast, argues that the Court should not give weight to the RIAG's recommendation. (Common Interest Group's Post-Trial Mem. 11.) It submits that the RIAG does not have the same level of expertise and experience in charitable trusts as Trustee. Id. Additionally, the Common Interest Group points to the lack of evidence showing a diligent effort on the RIAG's part in formulating its recommendation. Id.
The Court agrees with the Common Interest Group as to this position and respectfully declines to give controlling weight to the RIAG's final recommendation. The Court gives weight to the RIAG's initial belief that the Wood, Preston, and Richardson Trusts each contain a general, rather than specific, charitable purpose. See RIAG's Pre-Trial Mem. 8. The Court also agrees with the RIAG that the Court should find general charitable intent when the trust's purpose can no longer be carried out. Id. at 9.
Despite this, like Hamilton's testimony as to Trustee's approach to the settlors' intent, the RIAG's final recommendation considers the settlors together rather than examining each individually. (Trial Tr. 82:4-8, July 21, 2023.) The RIAG also concludes that, based on his interpretation of the trust documents, the CNE Entities are the closest alternative beneficiary. Id. at 84:1-4. However, the RIAG did not present textual analysis of the trust instruments, nor did the RIAG raise historical context substantiating his rationale. The Court finds that the RIAG's recommendation gives nothing to support an affordance of weight.
The Court proffers the following guidance, which may be of use in future cy près proceedings. Each settlor is an individual and must be treated as such because backgrounds, ideals, experiences, and historical context undoubtedly influence donative intent and testamentary schemes. Because the Court must step into the shoes of settlors and carry out their wishes as closely as possible, a recommendation enunciating a settlor's donative intent and naming a cy près beneficiary demands a scrupulous review. See Pell, 14 R.I. at 436, 1884 WL 3088, at *17; Ryan, Jr., An Historical and Empirical Analysis of the Cy-Près Doctrine, 48 ACTEC L.J. at 289. The Court holds that any assertion as to a settlor's intent requires a careful, individual analysis, accounting for both the settlor and the world around him or her. In other words, a cy près recommendation mandates a detailed examination of the totality of the circumstances. While conclusory statements as to a settlor's intent-and how best to carry out that intent- assist the Court, they do not fully comport with the Court's task in framing a scheme cy près. Cf. Doe ex rel. His Parents and Natural Guardians v. East Greenwich School Department, 899 A.2d 1258, 1262 n.2 (R.I. 2006) ("[a]llegations that are more in the nature of legal conclusions . . . are not necessarily assumed to be true") (emphasis in original).
2
The Settlors' Intent
Because the Court is not fully satisfied by Trustee and the RIAG's recommendations, the Court must analyze the trust documents, testimony, and extrinsic evidence presented at trial to determine the settlors' likely donative intent. See Restatement (Second) Trusts § 399 cmt. d.
i
The Richardson Trust
Starting with the Richardson Trust, the Court notes that the settlor does not describe the purposes for which MHRI may-or may not-have used the net income of the trust. See Richardson Trust 2-3. However, the Court finds that, based on language in the instrument as well as Koller's testimony, the settlor intended for the net income to fund gratuitous hospital care.
In Paragraph Eighth of the Richardson Trust, the settlor gives a specific bequest of $5,000 to establish a "free bed" at MHRI. Id. at 2. The Court is persuaded by Koller's testimony that a "bed," in a hospital setting, is a measure of capacity. See Trial Tr. 35:19-36:4, July 10, 2023. The Court concludes that the term refers to the number of patients that the hospital could hold at any given time. Rhode Island courts still use the same unit of measurement in other respects, like when referring to nursing homes. Mutual Development Corp. v. Ward Fisher & Co., LLP, 47 A.3d 319, 326 (R.I. 2012); Bottomley v. Coffin, 121 R.I. 399, 401, 399 A.2d 485, 486 (1979); Health Havens, Inc. v. Zoning Board of Review of City of East Providence, 101 R.I. 258, 260, 221 A.2d 794, 796 (1966); Sculco v. Zoning Board of Review of Town of Westerly, No. 97-0564, 1998 WL 960812, at *1 (R.I. Super. Dec. 23, 1998); Alpine Nursing Home v. Nolan, No. 98-3030, 1998 WL 841239, at *1 (R.I. Super. Nov. 19, 1998); Tobin v. Carlson, No. 96-3633, 1998 WL 388351, at *1-2 (R.I. Super. Jan. 23, 1998). Based on the testamentary language, the Court finds that the settlor's $5,000 bequest was intended to cover the costs of a "bed," or in other words, a patient, at MHRI.
Turning to Paragraph Twelfth, the Court finds the settlor intended to continue funding gratuitous hospital care supplemental to his specific bequest in Paragraph Eighth. Because the Richardson Trust does not state the net income's permitted uses with particularity, "equity favors a construction favoring a public charity." Rhode Island Hospital Trust Co., 50 R.I. at 390, 148 A. at 191. Thus, the Court presumes that the settlor intended for MHRI to use the net income for its general charitable purposes. See id. However, the only stated charitable purpose of MHRI at the time was "the treatment of the sick and of those who may be suffering from accidents or injuries." (CNE Entities Ex. 83 Bates Nos. CNE 2264.) MHRI's stated purposes were not amended until 1993. See CNE Entities Ex. 46, at 3 Bates No. CNE 1972. The Court is also persuaded by Koller's testimony that other services were not part of hospitals' repertoire until the 1970s and 1980s. See Trial Tr. 32:10-12, July 10, 2023. If the settlor's residuary legacy intended to aid MHRI's general charitable purpose, hospital care is the only purpose it could have been.
Moreover, third-party hospital financing was not available until after World War II, meaning that patients and private philanthropy were likely the main sources of income for MHRI. See id. at 31:9-10, 34:12-18. The settlor must have understood that his $5,000 specific bequest would run out eventually. Thus, the Court finds it likely that his legacy was intended to further perpetuate his previous desire to fund gratuitous hospital care, as evidenced by Paragraph Eighth.
ii
The Preston Trust
For similar reasons as stated above, the Court also finds that the settlor of the Preston Trust intended for his legacy to fund gratuitous hospital care. Paragraph 4.c provides that twenty percent of the net income is to be used "for the primary purpose of establishing two free beds . . . and after said Free Beds shall have been established, for the general purposes of [MHRI]." (Preston Trust 8.) The Court finds no evidence in the record that "free bed" had a different meaning at the time of the Preston Trust. Thus, the Court concludes that the settlor here, like the Richardson Trust settlor, intended to cover patient care costs at MHRI. See supra, Part III.C.2.i.
Moreover, the Court was not presented with evidence that MHRI rendered additional, non-hospital services at the time of the Preston Trust. See Trial Tr. 32:10-12, July 10, 2023. MHRI's corporate purpose remained the same as well. Compare CNE Entities Ex. 83 Bates No. CNE 2264 with CNE Entities Ex. 46, at 3 Bates No. CNE 1972. The Court notes, however, that third-party hospital financing was available at the time of the Preston Trust. See Trial Tr. 31:9-10, 32:3-8, 34:12-21, July 10, 2023. Despite this, the existence of third-party financing does not preclude an intent to provide free hospital care, considering the likelihood that at least some patients at the time were left to their own devices for medical expenses.
The Court ultimately reaches the same conclusion as the Richardson Trust; the Preston Trust's settlor intended to aid the "general purposes of [MHRI]," which was hospital care at the time, based on testimony and evidence in the record. Accordingly, the Court finds that the settlors of the Richardson Trust and the Preston Trust have the same donative intent.
iii
The Wood Trust
Finally, the Court finds that the Wood Trust settlors intended to provide gratuitous hospital care for residents of the Blackstone Valley. See Wood Trust 2-3 (specifying an alternative beneficiary. The Court relies on much of its findings from its Preston Trust discussion. See supra, Part III.C.2.ii. The Wood Trust provides 50 percent of net income to MHRI for the hospital's "general uses and purposes . . . ." (Wood Trust 2, 11.) Like in the case of the Preston Trust, the Court was not presented with evidence showing that MHRI's charitable purpose or services had changed by the time of the Wood Trust. See Trial Tr. 31:9-10, 32:3-12, 34:12-21, July 10, 2023; CNE Entities Ex. 83 Bates No. CNE 2264. Thus, the Court must conclude that MHRI provided substantially the same services for the same purpose as it did at its founding. Again, because MHRI's only stated charitable purpose was to care for the sick and injured, the Court must find that the Wood Trust's dedication of net income to MHRI's "general uses and purposes" were for the same purpose as the Richardson and Preston Trusts.
However, the Court is persuaded that the Wood Trust settlors' intent was more nuanced, based on other language in the instrument and extrinsic evidence. For instance, the instrument provides that if any charitable beneficiary ceased to exist, Trustee could, inter alia, "select another charitable institution of a character similar to the original beneficiary located in the Blackstone Valley as the recipient of the income of such share." (Wood Trust 2-3) (emphasis added). This provision draws a geographic circumscription within which an alternative charitable beneficiary should be located if such need arose.
Moreover, the Court was presented with the Wood Trust settlors' obituaries, which evidence a lifelong dedication to MHRI and the Blackstone Valley, generally. Harold W. Wood served as both treasurer and president of MHRI and as a member of its board of trustees and executive committee. (CNE Entities Ex. 85, at 2.) While involved with MHRI, he oversaw "development of the hospital with services to the community, the use of new techniques, [and] the installation of new equipment." Id. His service to MHRI was so extensive that MHRI named one of its hospital wings after him. See id. at 1. In addition, he "engaged in a large number of Pawtucket civic affairs and held leadership posts." Id. at 1. Gertrude B. Wood was also involved in MHRI's affairs as president of the Memorial Hospital Club and "chairman of the club's puppet committee which made puppets for hospitalized children." (CNE Entities Ex. 84.) Her involvement in the City of Pawtucket also was extensive; she served on the board of the Pawtucket Day Nursery and was a member of the Pawtucket Garden Club and the Pawtucket Woman's Club. Id.
The language found in the Wood Trust, as well as evidence gleaned from the settlors' obituaries, shows that the Wood Trust settlors had a strong affiliation with MHRI, the City of Pawtucket, and the Blackstone Valley. Their public service evidences the settlors' desire to contribute to their community in a positive way. Thus, the Court finds that the settlors were interested in not only funding hospital care, but also to aid Blackstone Valley residents. See Wood Trust 2, 11.
3
Neither the Common Interest Group's Proposal nor the CNE Entities' Proposal Comport with the Settlors' Intent
Having determined the settlors' charitable intent, the Court must now frame a scheme that carries out the intent of each as closely as possible to their original intent. See Pell, 14 R.I. at 436, 1884 WL 3088, at *17. The Court finds that neither the Common Interest Group nor the CNE Entities' proposed uses of the funds closely align with the settlors' intents. Thus, the Court declines to adopt either of their proposed testamentary schemes.
As indicated above, the Subject Trusts settlors' intent rests upon a common denominator: to provide gratuitous hospital care. See supra, Part III.C.2. At the time of the Subject Trusts, MHRI was a bona fide hospital providing bona fide hospital care. The Court concludes that the closest alternative beneficiary must be another hospital for the purposes of providing hospital care because that purpose can still be carried out, albeit at a facility other than MHRI. The proposals from the Common Interest Group and the CNE Entities fail to satisfy the Court's conclusion.
The Court first examines the Common Interest Group's proposal. The Common Interest Group asks the Court to redirect the Subject Trusts to MHF and Progreso Latino to, inter alia, provide community health services, mental and behavioral health services, and "improve culturally-competent care and the recognition of social determinants of health . . . ." See Common Interest Group's Pre-Trial Mem. 16-17. The Court finds that these uses are not in line with the settlors' intent. Firstly, the Court must note that neither MHF nor Progreso Latino are hospitals. Although MHF is the charitable wing of The Miriam Hospital, MHF itself does not provide bona fide hospital care. (Trial Tr. 39:15-40:11, July 18, 2023) (Brennan describing the Foundation as an entity that supports The Miriam Hospital in its mission.) Thus, if asked, it is unlikely that the settlors would have considered redirecting their trusts' net income to either organization.
In addition, the Court finds that the Common Interest Group's intended use of the funds does not amount to the form of hospital care contemplated by the settlors. Based on testimony in the record, MHF and Progreso Latino predominantly intend to use the funds for mental and behavioral health services. However, such issues would not have been treated at "hospitals" as the settlors would have understood them. See Trial Tr. 83:3-7, July 10, 2023. Koller's testimony and Rhode Island caselaw show that those with mental or behavioral afflictions were treated in separate institutions. Id. at 83:3-25; see e.g, Michaud v. Michaud, 98 R.I. 95, 97, 200 A.2d 7 (1964); Sullivan v. Dolan, 69 R.I. 492, 499, 36 A.2d 98, 101 (1944); Miriam Hospital v. Zoning Board of Review of City of Providence, 67 R.I. 295, 296, 23 A.2d 191, 192 (1941) ("the following are the permitted uses: . . . a hospital or sanitarium other than for the insane or feeble-minded") (emphasis added); In re Cross, 16 R.I. 771, 772, 19 A. 817, 818 (1889). The separation of mental health patients from the general population was not limited to medical care; there were also separate schools for the so-called "feeble-minded." See Burton v. State of Rhode Island, No. 2006-0681, 2012 WL 552880, at *2 & n.1 (R.I. Super. Feb. 16, 2012), aff'd, 80 A.3d 856 (R.I. 2013). Based on this relevant history, the Court finds that the settlors did not intend for their trusts to benefit mental or behavioral health patients; if they did, they would have specified as such.
The Court next turns to the CNE Entities' proposal and similarly finds that their proposed use of the funds does not align with the settlors' intent. The CNE Entities believe that they are the suitable alternative beneficiary because they occupy certain portions of the MHRI Campus and provide outpatient, urgent care, and diagnostic services. See CNE Entities' Pre-Trial Mem. 2, 9, 19. The Court disagrees. The Court reiterates that it must frame a scheme that serves "some new purpose, as nearly like to the old as possible." Pell, 14 R.I. at 436, 1884 WL 3088, at *17 (emphasis added). As the Court noted above, the settlors intended to provide gratuitous hospital care, which is limited to the settlors' understanding of hospital care at the time that the Subject Trusts were executed. Koller's testimony is most instructive to the settlors' understanding of hospital care. He stated that hospitals provided solely inpatient and emergency services until the 1970s and 1980s. See Trial Tr. 32:10-12, July 10, 2023. Before that, outpatient and other non-emergency services were rendered outside the hospital setting. See id. at 31:22-32:3, 83:3-25. Thus, the Court finds that, when the settlors donated funds to MHRI, their donations funded inpatient and emergency care consistent with MHRI's services at the time. The Court cannot reasonably conclude that the settlors donated to a hospital with an intent to fund services that were not provided in hospital settings until decades later.
The CNE Entities also argue that the Court should not read the Subject Trusts narrowly and that limiting the trusts' use to inpatient and emergency services is "not supported by the actual language or the [t]rusts, or by the historical use of the funds." (CNE Entities' Pre-Trial Mem. 21.) The Court disagrees. Although the Court recognizes that the instruments do not expressly limit the scope of services to be provided using net income, the Court also notes that, at the time the Subject Trusts were executed, inpatient and emergency care were the only services rendered at hospitals. See Trial Tr. 31:22-32:12, July 10, 2023. In essence, the settlors did not specify those uses because there was no reason to do so. Moreover, the Court is not persuaded to deviate from its interpretation of the settlors' donative intent based on course of dealing. Simply because the Subject Trusts were applied to matters outside the settlors' intent does not mean that the Court must follow suit. Now that the Court has clarified the settlors' intent, Trustee shall apply the trusts appropriately subject to the Court's instruction.
4
The Miriam Hospital is Closest to the Settlors' Intent
Finally, the Court arrives at framing a scheme cy près with respect to the Richardson, Preston, and Wood Trusts. The Court is vested with equitable and statutory authority to frame a scheme as the Court sees fit. See § 18-4-1; Pell, 14 R.I. at 436-38, 1884 WL 3088, at *17; see also Restatement (Second) Trusts § 399 cmts. b, d, e, f. Because the Court has unilateral, equitable authority to frame a scheme-and the Court's determination need not be agreed to by the parties- the Court finds that it may frame its own scheme independent of any proposal put before it. See Restatement (Second) Trusts § 399 cmts. b, d, e, f. For those reasons, the Court holds that the alternative beneficiary closest to the settlors' original intent is The Miriam Hospital and directs Trustee to apply the net income of the trusts thereto.
As previously noted, the Court understands that MHF's purpose is to support The Miriam Hospital in carrying out its mission. See Trial Tr. 39:22-4. The Court does not take issue with MHF managing the funds for the benefit of The Miriam Hospital so long as it does so in a manner consistent with this Decision.
The Miriam Hospital is a bona fide hospital providing bona fide hospital care. Its charitable purpose, as stated in its Restated Articles of Incorporation, is "[t]o organize, erect, acquire, equip, transact, and maintain a hospital for the sick, disabled and injured." Restated Articles of Incorporation, R.I. Dept. of State ID No. 000028569 (Aug. 9, 1994). The Court also notes that The Miriam Hospital was incorporated on January 2, 1926, well within the period when the Subject Trusts were executed. See id. Thus, it is likely that, during the time of the Subject Trusts, The Miriam Hospital served the same or similar purposes as MHRI, which was to provide inpatient and emergency care. The Court finds that, had the settlors been informed that MHRI would close in the future, they likely would have wanted to apply their trusts to another hospital serving the same or similar purposes as MHRI. Thus, the Court concludes that applying the funds to The Miriam Hospital is as close as possible to the settlors' original intent. Pell, 14 R.I. at 436, 1884 WL 3088, at *17.
The Court also finds that, based on the findings detailed in the John Snow Report, The Miriam Hospital is the best-positioned facility to comport with the geographical boundary set by the Wood Trust and said trust's charitable purpose. See Common Interest Group Ex. 9. Firstly, The Miriam Hospital is a hospital providing hospital care, which is in line with the settlors' original intent. Evidence in the record shows that Blackstone Valley residents use The Miriam Hospital's emergency department for inpatient and emergency care following MHRI's closure. See Trial Tr. 11:3-5, 12:4-11, July 18, 2023; Common Interest Group Ex. 9, at 71, 96, 110; Common Interest Group Ex. 33. That The Miriam Hospital is a short distance outside of the Blackstone Valley is insufficient to defeat the Wood Trust settlors' predominant intent, which was to aid their community through funding gratuitous hospital care. Moreover, such a short distance is immaterial today considering modern vehicles, infrastructure, and ambulatory services. The Court concludes that if the Wood Trust settlors were faced with the choice of (1) applying their trust cy près to another hospital just over the boundary of the Blackstone Valley; or (2) allowing their trust to lapse for lack of a suitable alternative beneficiary within the Blackstone Valley, the Wood Trust settlors almost surely would have recommitted the funds in trust rather than let them pass to their heirs-at-law. Thus, the Court finds that The Miriam Hospital is closest to the settlors' intent.
Specifically, the Court finds the following statistic from the John Snow Report most persuasive: The Miriam Hospital's emergency department saw a 7,311 patient increase in those hailing from MHRI's former service area in 2018, the year following MHRI's closure. See Common Interest Group Ex. 9 at vi-viii.
It is for Trustee to determine whether the funds that flow to The Miriam Hospital should be administered by MHF. There is insufficient evidence in the record for the Court to make that determination.
Accordingly, the Court finds that The Miriam Hospital is the suitable alternative beneficiary for the Richardson, Preston, and Wood Trusts as it fulfills a charitable purpose as close as possible to the settlors' original intent. Pell, 14 R.I. at 436, 1884 WL 3088, at *17.
IV
Conclusion
Based on the foregoing, Trustee is directed as follows:
1. Trustee shall direct the net income of the Sayles Trust to MHRI for the settlor's original stated purpose;
2. Trustee shall direct the net income of the Richardson Trust to The Miriam Hospital for charitable uses consistent with the settlor's intent as indicated in this Decision;
3. Trustee shall direct the net income of the Preston Trust to The Miriam Hospital for charitable uses consistent with the settlor's intent as indicated in this Decision; and
4. Trustee shall direct the net income of the Wood Trust to The Miriam Hospital for charitable uses consistent with the settlors' intent as indicated in this Decision.
Counsel shall prepare and submit the appropriate order and judgment for entry.