Opinion
No. CV 02 0088773S
February 24, 2006
MEMORANDUM OF DECISION
I
This is an action brought by Richard Blumenthal, the Attorney General of the state of Connecticut, pursuant to General Statutes § 3-125, seeking application of the equitable doctrine of approximation to charitable gifts originally made to the Winsted Memorial Hospital, or its corporate predecessor, hereinafter referred to as "the Hospital." The defendants are the organizations seeking to receive the gifts, namely, the Foothills Visiting Nurse and Home Care, Inc. (VNA), the Auxiliary for Community Health (Auxiliary), the Winsted Health Center Foundation, Inc. (Health Center) and the Community Foundation of Northwest Connecticut, Inc. (Foundation).
The Hospital, with origins dating back to 1895, was organized as a nonprofit corporation for the purpose of establishing and maintaining a hospital in the town of Winchester, Connecticut. (Exh. 1.) On October 26, 1996, the Hospital ceased operations pursuant to an order of the Superior Court at Litchfield, Walsh, J. On November 15, 1996, the Hospital filed a voluntary petition under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Connecticut.
After much litigation and pursuant to various orders of the Bankruptcy Court, the charitable gifts, which are the subject of this preceding, were released from the bankruptcy estate, thereby permitting the Attorney General to bring this approximation action.
II
The role of the court and of the Attorney General in protecting charitable gifts is well settled. "Any charitable trust or use created in writing or by deed by any resident of the state, or any public and charitable trust or use for aiding and assisting any person or persons to be selected by the trustees of such trust or use to acquire education, shall forever remain to the uses and purposes to which it has been granted according to the true intent and meaning of the grantor and to no other use." General Statutes § 45a-514. The Attorney General "shall represent the public interest in the protection of any gifts, legacies or devises intended for public or charitable purposes . . ." General Statutes § 3-125.
"Because charitable trusts are dedicated to the public interest, action by both the attorney general and the courts is required before any modification of their provisions can be made." Lockwood v. Killian, 179 Conn. 62, 76, 425 A.2d 909 (1979) (Bogdanski, J., dissenting). "[T]he Superior Court, as a court of equity, possesses the power to carry out the general intent of the donor of a testamentary charitable trust, when clearly manifested, though the particular form or manner pointed out by the testator cannot, because of changed conditions, be followed." (Internal quotation marks omitted.) Second Ecclesiastical Society v. Attorney General, 133 Conn. 89, 93-94, 48 A.2d 266 (1946).
All of the gifts that are the subject of this action were given to the Hospital, a charitable institution. As such, they are charitable gifts. Because the Hospital is no longer in existence, the particular form or manner of the donor's gift cannot be followed. The Attorney General brought the present action seeking reallocation of the charitable gifts given to the Hospital. Accordingly, the court finds that the present action was brought by the proper party and is properly before the court. See General Statutes § 3-125; Second Ecclesiastical Society v. Attorney General, supra, 133 Conn. 89.
III
Through the course of its nearly hundred-year history, the Hospital was the beneficiary of an abundance of generosity from numerous philanthropists. Through various instruments, the individuals named below gave generously to the Hospital. All together, there are thirty-one gifts subject to this proceeding, the combined value of which exceeds two million, two hundred thousand dollars ($2,200,000). The gifts, legacies, devises and bequests subject to this approximation action, as set forth in the fifth amended complaint dated September 13, 2005, and supported by documentation of the actual instruments admitted into evidence at the hearing (see Exhs. 12A-EE) are as follows:
(1) The last will and testament of Susan M.B. Perry dated January 26, 1909, provides: "To the old peoples home of Winchester, to be organized in connection with and adjacent to the Litchfield County Hospital of Winchester, I give the sum of fifteen thousand dollars." The old people's home of Winchester was to be a home or department maintained in connection with the hospital building for the, ". . . accommodation, support and maintenance of such aged and infirm persons . . ." (See Exh. 1.) The old peoples' home of Winchester was never built and Mrs. Perry's bequest has a current value of approximately one and one-half million dollars ($1,500,000).
(2) Edward P. Wilcox, by last will and testament dated May 8, 1929, bequeathed $100,000, in trust, to The Hospital "to hold and invest and reinvest and to pay 75% of the annual income therefrom to the said Gertrude M. Young during her lifetime. The remaining 25% of said income is to be used by the said hospital for its general expenses. At the decease of the said Gertrude M. Young, the entire income from said sum of one-hundred thousand dollars, is to be used by the said hospital toward its general expenses." Gertrude M. Young is now deceased.
(3) The following gifts are classified as Class II Endowments. The donors made these gifts to the Hospital subject to restriction that the principal is retained in perpetuity but the use of the income is unrestricted.
The classifications utilized by the court are consistent with the 5th amended complaint. The court would note that the Attorney General's submission, dated September 13, 2005, entitled "Analysis of Charitable Trusts and Gifts" is partly at odds with the gift classification set forth in the 5th amended complaint. The court does not, however, find such inconsistency to be material.
a) Mary A. Baird, by will dated May 18, 1907, bequeathed $2,000 to the Hospital. She directed that: "the legacy to the Litchfield County Hospital . . . shall be known as the `Baird Fund' and the income only to be used under the supervision of the directors for the benefit of the hospital."
b) The Sofia A. Camp Fund was established in 1909 with a gift of $3,000 with the direction that, "said sum is to be kept safely invested and the income therefrom and only that, (after payment to the donor for life) be applied to the uses and purposes of said hospital."
c) Bronson W. King, by will dated March 2, 1953, created a trust for Mildred King providing that at Mildred King's death, "the income therefrom is to be used for the general purposes of Winsted Memorial Hospital, to be known as the Bronson and Mildred King Fund."
d) Harriet Mooney Moseley, by her gift of $5,000 recorded on April 16, 1951, established the "Chamberlain Moseley Fund," and directed that the income from the fund be used in payment of general hospital expenses.
e) Susan M.B. Perry, by will dated January 26, 1907, bequeathed $10,000 to the Litchfield County Hospital, for the establishment of a permanent fund to be known as the "Francis Brown Fund," "the income only of which shall be used as occasion requires."
f) Alice M. Wilson, by last will and testament of unknown date, bequeathed $10,000 to the Hospital as follows: "To the Litchfield County Hospital of Winchester, Connecticut I give and bequeath the sum of $10,000 to be known as the `Alice M. Wilson Fund', said sum to be kept invested in a separate trust fund, the principal not to be invaded, and the income therefrom to be used for the general purposes of the hospital."
(4) The following gifts are classified as Class III Endowments. These gifts were made to the Hospital subject to the restriction that the principal is retained in perpetuity, with one or more restrictions as to the use of the income.
a) Charles J. Poole, by will dated June 3, 1958, provided that, "all the rest, residue, and remainder of my property and estate, both real and personal, of every name and nature and wherever the same may be situated, I give, devise and bequeath to the Litchfield County Hospital, to it and its successors and assigns forever, be retained by it in a fund to be known as the `Anna Poole Fund' in memory of my late sister, the income to be used by said hospital in its sole discretion for assistance to needy patients suffering from cancer."
b) William H. Batcheller, by his gift of $5,000 made in September of 1904, established the "Winchester Free Bed Fund" to contribute toward the relief of the "poor and unfortunate sick" of Winchester.
c) By her will, dated March 30, 1925, Irene A. Cowdrey provided as follows: "I give and bequeath absolutely unto the Litchfield County Hospital of Winchester, Connecticut, $5,000 for establishment in perpetuity of a Free Bed in said hospital; any deserving and needy patient from the said town of North Canaan to have and be given the preference in its occupancy."
d) Mary Eldridge, by her $5,000 gift made in 1926, endowed the "Norfolk Free Bed" as follows: "I give and bequeath to the Litchfield County Hospital of Winchester, Connecticut a corporation organized under the laws of the State of Connecticut, the sum of $5,000 which sum shall be invested in such investments as are legal for investment of trust funds under the laws of the State of Connecticut and the net annual income therefrom, and that only, applied to the maintenance of a free bed in the hospital maintained by the said corporation which bed shall be known as the `Norfolk Free Bed' and in the occupancy thereof the preference shall be given to persons residing in the Town of Norfolk, State of Connecticut."
e) Grove Sackett, by his gift of $20,000 made in 1927, established the "Solomon Sackett Free Beds" as follows: "Give and bequeath to Litchfield County Hospital of Winchester, Connecticut, the sum of $20,000 for the establishment of two free beds to be known as the `Solomon Sackett Free Beds' and the balance to be known as the `Solomon Sackett Fund', to be held in trust and the income only to be used for the general purposes of said hospital."
f) The seventh clause of the last will and testament of Evelyn Annette Cogswell dated June 1932 provides: "I give, bequeath, and devise all the rest, residue, and remainder of my Estate whatsoever the same maybe situated and of whatsoever the same may consist to the Litchfield County Hospital at Winsted, Connecticut, to it and its successors and assigns forever. The same to be in trust as from to be expended for the endowment of a bed in said hospital or in event that there be not enough to entirely endow such a bed in my name than the said sum to be used toward the maintenance of such bed as far as it will go."
g) Charlotte E. Baldwin, by her gift of $1,000 in 1923, endowed the "I. Robert Baldwin Free Bed" as follows: "I give and bequeath to the Litchfield County Hospital of Winchester, Connecticut, the sum of $1,000 for the establishment of a free bed in said hospital to be known as the T. Robert Baldwin Free Bed and to be for the use of the residents of the Town of Cornwall who are unable to pay for their support in said hospital."
h) Charles H. Pine, by last will and testament dated December 24, 1915, provided: ". . . and such remaining equal share of said income paid to said Litchfield County Hospital Society shall be used by said society located in said Winsted for the use and benefit of residents of the Town of Winchester and Barkhamsted, County of Litchfield, State of Connecticut, possessing limited means, and admitted to said hospital upon the order of some physicians of said towns and regular practice having good standing and approved of by the trustees and under the rules and regulations of said hospital society. In the event that sufficient number of applications for such aid, vis-a-vis, the use of free beds in said Litchfield County Hospital, shall not be received from residents of said Winchester and Barkhamsted in any given fiscal year to exhaust the entire income, then any such unused balance of such income for any such given fiscal year may be expended by the trustees of said Hospital Society in meeting the general expenses incident to maintaining said Hospital."
i) Susan M. Brown gave the sum of $5,000 to the Hospital in 1902 to be used for free patient care.
j) An anonymous donor gave the sum of $5,000 in 1904 to be earmarked as "Free Bed No. 2."
k) Mrs. Julia Griswold endowed the "Frederick B. Griswold Free Bed" in 1906. The Hospital noted as follows: "In consideration of the expressed wish of Ms. Julia C. Griswold, the Litchfield County Hospital of Winchester, hereby consents, through its trustees of permanent funds, duly authorized and takes pleasure in establishing, from the Griswold Fund a `Free Bed' in perpetuity in said hospital to be known as the `Frederick B. Griswold Free Bed' patients for said bed to be nominated by the Second Congregational Church of Winsted."
l) Jane A. Nisbet, by will dated December 11, 1914, provided:" I give to the Home Trust Company of Derby . . . $7,500 . . . in trust to forever hold . . . and to pay over the net income . . . at least annually to the Litchfield County Hospital Society . . . The sum to be used by said Hospital Society to establish a free bed or beds in said hospital for the use and benefit of the residents of said Winsted . . . possessing limited or insufficient means, admitted to said hospital upon the order of some physician . . . if the management of said hospital shall fail to provide such free bed said trustee . . . shall pay said net income . . . to the Borough of Winsted . . . expended . . . fuel and clothing to . . . worthy poor of said Borough."
m) Benjamin Epstein, by will dated April 28, 1931, bequeathed $5,000, ". . . the interest and income therefrom and so much of the principal as may be necessary to be used for free beds in said hospital."
n) Frank D. Case, by will dated June 8, 1957, bequeathed $2,000 to the Hospital, ". . . to endow a free bed in said hospital in perpetuity, pursuant to the provisions established for such free beds by the directors of said institution to be known as the `Frank D. Case Fund'."
o) The Litchfield County Hospital Nurses Alumnae Association gave the sum of $5,000 to the Hospital, directing that the Hospital "use the interest to pay for hospital care for the alumnae and if at any time no alumnae needs hospital care, to use the income for any nurse in this town that does need hospital care whether or not she is registered."
p) Isabella C. Cone, by will dated October 11, 1927, provided:" I direct that all the rest, residue, and remainder of my property and estate shall be divided into two equal parts or shares by my executor hereinafter appointed on the basis of an appraisal approved by the Court of Probate and I give, bequeath and devise one such part or share to the Litchfield County Hospital, in trust, to be known as `Winthrop and Isabella C. Cone Fund' and the income and avails therefrom to be accumulated, held and expended for the maintenance and care, treatment and comfort of needy persons who are inmates of said hospital. Preference shall be given and the administration of this fund to persons who are residents of Norfolk, Connecticut. If, at any time, the accumulations of income over expenditure for the purpose named and over a period of five years shall demonstrate that the income from the fund is more than sufficient to reasonably accomplish the purposes stated then such accumulation may be used for the general purposes of said Hospital."
q) Anna H. Bradford, by will dated June 8, 1908, provided that her property be sold and the "avails of such sale" pass to the Litchfield County Hospital "the income thereof to apply toward the maintenance of a free bed in its hospital."
r) Mrs. Warham H. Williams, by 1913 gift in the amount of $5,000, established the Warham H. Williams Memorial Fund," given to the Litchfield County Hospital . . . to constitute a permanent fund to be called the `Warham H. Williams Memorial Fund' in endowment of a free bed . . . nominations for the occupancy of said bed shall be made by the church committee of the First Congregational Church of Winsted . . ."
(5) The following gifts are classified as "Unitrusts" wherein the Hospital held a future interest in the remainder of the following trusts:
a) Adele B. Smith, pursuant to Article XII of her last will and testament dated June 11, 1978, provided the following:" Upon the death of the survivor of my said husband and daughter or upon my death if I survive both of them, my corporate executor or trustee shall divide the then principal of this trust or the residue of my estate, as the case my be, including all property over which I then have a power of appointment after provision for payment of taxes is provided in Article 8th below into ten equal parts and distribute them, free of trust, as follows: . . . (6) One of said equal parts to the Winsted Memorial Hospital, Winsted, Connecticut, to be added to the principal of the building fund of said Hospital."
b) Abel I. Smith, pursuant to Article X of his last Will and Testament dated April 19, 1984, provided the following:" Upon the death of my said daughter or upon my death if I survive her, my corporate executor or trustee shall divide the then principal of this trust or the residue of my estate, as the case may be, into twelve equal parts and distribute them free of trust as follows: . . . (6) One of said equal parts to the Winsted Memorial Hospital, Winsted, Connecticut, to be used for capital improvements of said hospital."
c) Harold C. Strong, by trust document dated November 15, 1973, established the Harold C. Strong unitrust for the benefit of his wife Dorothy M. Strong during her lifetime. Upon her death, the remainder of the trust was to be divided in various portions, with 5% of the remaining trust proceeds to be given to Winsted Memorial Hospital for unrestricted use.
(6) Other gifts:
a) The "Wheelock Thayer Fund," a permanent fund, originally established with $25,000, for the purpose of repair and maintenance of the Hospital, more specifically, the income, "to be used to pay for, care, and improvement of the grounds, walls, fences, driveways, walks, curbing and steps of said hospital."
b) Helen J. Kozlik, by her last will and testament dated October 5, 1972, left one-sixth of the residue of her estate to the hospital.
IV THE DEFENDANT ORGANIZATIONS AND THEIR PROPOSALS
As previously stated, there are four defendants, so to speak, before the court, all of whom testified at the hearing on this matter as to the proposed use of the charitable gifts they seek to receive. Additionally, the defendants submitted written proposals reflecting their testimony, all of which were entered into evidence without objection. (Exhs. 13, 14, 15 and 16.)
The VNA is a nonprofit organization with tax-exempt status under § 501(c)(3) of the Internal Revenue Code. (Exh. 13.) See 26 U.S.C. § 501(c)(3). The VNA was first established in 1922 in Winsted, Connecticut, where it remains. The VNA's mission statement, as set forth in its bylaws, updated and approved by the board of directors on December 9, 2004, ". . . is to provide the most effective, efficient, innovative and personalized community based health services to the people of our communities. These services are provided in whatever place the patient calls home, clinic[al] setting and group meetings."
The VNA provides a wide variety of health services including skilled nursing, psychiatric nursing, physical, occupational and speech therapies, medical social work, dietary counseling, home health aides, disease prevention, certified wound care, hospice care, palliative care, I-V therapy, bereavement programs, pre-dental clinics, maternal/child care, telemedicine and in-home cosmetology services. The VNA's service area covers the northwest community of the state and includes the towns of Barkhamsted, Canaan, Canton, Colebrook, Hartland, Harwinton, New Hartford, Norfolk, Winchester/Winsted and Torrington. The VNA serves individuals of all ages, regardless of their ability to pay.
Although the court did not have the benefit of the VNA's audited financial statements for period ending June 30, 2005, its executive director, Michael Casales, testified that the VNA's annual budget is approximately $2,700,000. The VNA employs 55 full- and part-time individuals, and also has the support of more than fifty volunteers.
The VNA has already benefitted from the Hospital closing in that on March 15, 1999, it received $106,803 by way of the Anna Hadley Hakes Memorial Fund, a fund previously held by the Hospital. The VNA utilized this fund for restorative services to therapeutic patients. As of June 30, 2005, with this fund, the VNA had provided almost $53,000 in free care to 149 needy patients and closed with a remaining balance of $114,557.
The VNA seeks to receive all of the subject charitable gifts. With the so called "free bed" funds, and the Helen I. Kozlik Fund, the VNA plans to provide free skilled and personal care to indigent patients as well as care exceeding that authorized by insurance. As to the Anna Poole Fund, the VNA would provide free hospice care and bereavement support to terminally ill cancer patients of the Foothills VNA Hospice Program. As to the Susan Perry Fund, the VNA proposes to provide free skilled care as well as care exceeding that authorized by insurance, provide personal care to patients in need, provide scholarships for patients to attend adult day care and to fund its chore service, a program designed to provide low-income individuals with affordable household assistance.
The Auxiliary is a volunteer organization that is tax-exempt pursuant to § 501(c)(3) of the Internal Revenue Code. (Exh. 14d.) See 26 U.S.C. § 501(c)(3). As set forth in its current bylaws, the purpose of the Auxiliary is to "help promote and preserve quality healthcare services in the community."
The Auxiliary is currently located on the former Hospital property in the area where the cafeteria and kitchen once existed. The Auxiliary functions exclusively on a volunteer basis and boasts 350 volunteer members. There are no paid employees. The Auxiliary's annual financial reports reveal that aside from some modest maintenance costs, the vast majority, if not all of its income goes toward supporting the medical and healthcare community in the Greater Winsted area.
The Auxiliary held its first meeting on August 17, 1901,". . . for the purpose of organizing a society to aid in the support of the Litchfield County Hospital." It has played a supporting role in the healthcare community since the early 1900s. The Auxiliary is not a direct care provider, but all of the funds it disburses, exclusive of modest maintenance costs, are used to assist in promoting the general level of health care services in the northwest community. From 1977 through 2004, the Auxiliary infused the northwest healthcare community with $1,032,888 in goods or outright gifts, approximately $263,000 of which was given over the last six years alone. By way of example, during fiscal year 2004-2005, the Auxiliary gave the VNA, co-defendant in this litigation, $11,900; almost $19,000 in defibrillators to local schools and fire departments; $20,000 to the cancer center at Charlotte Hungerford Hospital and another $1,925 to its sleep lab, housed at the Health Center; and $5,000 in scholarships to local individuals pursuing a career in the healthcare field. Additionally, the Auxiliary has actually paid to the Health Center, codefendant in this litigation, or its foundation and affiliates, approximately $114,000 since fiscal year 1999-2000. Further, it would appear that the VNA is a perennial favorite on the Auxiliary's list of community awards, receiving thousands of dollars over the past several years.
Given the Auxiliary's close connection with the Hospital, it was made party to the Hospitals' bankruptcy proceeding. Its financial futture uncertain, the Auxiliary endured a self-imposed "hold on spending" for three years, from 1996-1999. The bankruptcy proceeding was resolved as to the Auxiliary in October of 1999. Before being released from the bankruptcy proceeding, however, the Auxiliary had to pay $80,000 to the bankruptcy estate and also incurred $50,000 in attorneys fees along the way. Nevertheless, it appears that the Auxiliary has fully maintained its vitality and is well-poised to continue to ". . . help the aged, the ill and the very young — with generosity, with discretion and with gentleness" well into the future. (See Exh. 14y.)
The following proposal was submitted by the Auxiliary: "The Auxiliary requests that funds totaling approximately $500,000 be transferred to it. Permanent endowment funds would be established in the original donor's names. Income from the funds would be used to support geriatric health and exercise programs, scholarships in the health field, funding of the paramedic program and transportation for area dialysis and cancer patients."
The Health Center is a non-stock corporation that is tax-exempt pursuant to § 501(c)(3) of the Internal Revenue Code. (Exh. 16.) See 26 U.S.C. § 501(c)(3). The Health Center's amended articles of incorporation set forth, in pertinent part, the following purposes: "(1) To establish and maintain healthcare services for the greater Winchester, Connecticut area . . . (3) To work toward re-establishing an acute care hospital such as that authorized by the General Assembly of the State of Connecticut through special legislation enacted on May 25, 1895 which permitted a group of citizens to organize for the purpose of `establishing and maintaining a hospital' in the town of Winchester and which was operated for nearly a century until the closing of Winsted Memorial Hospital on October 25, 1996." The Health Center's revised bylaws, adopted October 13, 2003, reasserts the corporation's commitment ". . . to work toward restoration of an acute care hospital with inpatient beds."
The Health Center does not provide direct healthcare services, but is integrally connected to the provision of healthcare services in the northwest community. In 1997, the Health Center created a wholly owned corporation, the Winsted Health Center, Inc., to acquire the Hospital real estate from the bankruptcy estate. The property was acquired in 1997, and through the generosity of individuals making donations that ranged from $5 to $5,000, the $200,000 purchase price was fully paid in a little over a year.
The Health Center, through a variety of partnerships with other health care providers, including Charlotte Hungerford Hospital, Saint Francis Hospital and others, houses emergency services, with capability for advanced life support, as well as x-ray and laboratory technology and services, a sleep laboratory, a physical therapy center, a mental health services clinic and a massage therapy center. Additionally, the Health Center provides office space for physicians and is a primary care facility for area veterans.
The Health Center's annual report for fiscal year ending 2004 indicates that 28,600 people came to the Health Center for care in addition to patient visits to doctors' offices located within the Health Center. These individuals accounted for more than 40,500 visits to the Health Center, almost 50% of which were for laboratory services. When adding doctor's visits, it appears that there were more than 50,000 visits to the Health Center in 2004. Visitors to the Health Center generally come from the northwest community including the towns of Barkhamsted, Colebrook, Hartland, East Hartland, West Hartland, New Hartford, Norfolk, North Canaan, Riverton, Winchester, Winsted, as well as Sandisfield and Tolland, Massachusetts.
In November 2004, the Health Center applied for and was awarded $2.5 million from the U.S. Department of Housing and Urban Development to build a twenty-unit, low-income senior housing facility adjacent to the Health Center. Actual construction is scheduled to begin in the spring of 2006. As a component of the facility, the Health Center plans to partner with physicians and area providers to establish a geriatric assessment program addressing all of an elderly client's health care needs. There are additional plans to operate an adult day care center. The services to the elderly that the Health Center plans to provide at the new facility are set forth in detail in the document admitted into evidence entitled, "Elder Care Program At Winsted Health Center." (Exh. 16.)
The Health Center has submitted its proposal in conjunction with the Foundation, which is the corporate supporting organization of the Torrington Area Foundation for Public Giving, Inc. The Foundation is a tax-exempt corporation pursuant to § 501(c)(3) of the Internal Revenue Code. (Exh. 15, #2.) See 26 U.S.C. § 501(c)(3). The Foundation describes itself as "a public, nonprofit foundation that receives and manages permanent charitable funds from individuals, families, businesses and other nonprofit organizations. The funds are pooled for maximum investment returns and a percentage of the income from these funds is distributed as grants to area nonprofit organizations to help solve problems and improve the quality of life for our citizens, or awarded as scholarship." Although the Foundation has distributed some of its funds to health-related organizations, it is not a health care provider, nor is it tied to the health care community. The Foundation's "core competency," as testified to by Guy Rovezzi, the Foundation's President, is the management of charitable funds for redistribution into the community for charitable purposes. Indeed, the Foundation's sole function, as articulated in its joint proposal with the Health Center, is to receive, manage and distribute, in accordance with a plan developed by the Foundation, any of the funds received by the Health Center as part of this proceeding.
The Foundation was established by a group of local businessmen in 1969 with an initial gift of $15,000. The Foundation was, and remains today, a charitable community trust for public purposes. The Foundation's current endowment is in excess of $11 million, which includes nearly one hundred separate funds. In fiscal year ending December 31, 2004, the Foundation received approximately $1,240,000 in contributions and grants and awarded approximately $489,553 in grants and $110,000 in scholarships. The Foundation has a fifteen-member volunteer board of directors, as well as a paid president, a position with the previous title of executive director. The Foundation has two full-time and two part-time employees as well as more than 130 volunteers. The Foundation serves the towns of Barkhamsted, Colebrook, Cornwall, Falls Village, Goshen, Hartland, Harwinton, Litchfield, New Hartford, Norfolk, Torrington and Winsted.
The Health Center and Foundation request receipt of all of the funds and have set forth an elaborate and detailed plan for the management and distribution of the gifts that are the subject of this proceeding.
V
The court must apply the equitable doctrine of approximation, or cy pres, in determining how the gifts made to the Hospital should be allocated. "Where a gift is made by will to a charitable organization and that organization has ceased to exist, the courts have frequently authorized distribution to another organization, or, where it has merged with another, to the latter. This has been done under the cy pres doctrine or the doctrine of approximation, which may be applied when the impossibility of carrying out the exact intent of a testator exists at his death as well as when it arises subsequently . . . The doctrine applies in situations where a testator has evidenced a dominant intent to devote his property to some charitable use but the circumstances are such that it becomes impossible to follow the particular method he directs, and the courts then sanction its use in some other way which will, as nearly as may be, approximate his general intent." Duncan v. Higgins, 129 Conn. 136, 140, 26 A.2d 849 (1942). "The modified doctrine of cy pres, or of approximation, which we have adopted, arises out of and is limited by the necessities of the particular case, and it exists only when, and in so far as, the specific method adopted by the testator for carrying his general intent into effect can no longer be executed. In such cases the necessity of preserving and effectuating the general charitable purpose of the testator justifies the substitution of a method which seems to be as nearly approximate as existing condition will permit." Newton v. Healy, 100 Conn. 5, 10-11, 122 A. 654 (1923). "The rule of cy-pres is a rule for the construction of instruments in equity, by which the intention of the party is carried out as near as may be, when it would be impossible or illegal to give it literal effect." (Emphasis in original; internal quotation marks omitted.) Carl J. Herzog Foundation, Inc. v. University of Bridgeport, 243 Conn. 1, 10 n. 8, 699 A.2d 995 (1997).
"In determining when the donor's specific intent can no longer be implemented, Connecticut follows the Restatement (Second) of Trusts § 399, which provides that `[i]f property is given in trust to be applied to a particular charitable purpose, and it is or becomes impossible or impracticable or illegal to carry out the particular purpose, and if the settlor manifested a more general intention to devote the property to charitable purposes, the trust will `not fail . . .'" (Emphasis in original.) Hartford Hospital v. Blumenthal, Superior Court, judicial district of Hartford, Docket No. CV95-0555462 (April 15, 1996, Hale, J.); see Episcopal Diocese of Connecticut v. Riddle, Superior Court, judicial district of Hartford, Docket No. 366648 (April 11, 1991, Satter, J.) (cy pres doctrine applies where a charitable trust exists, it is impossible or impractical to fulfill the settlor's particular intent and the settlor's charitable intent is general rather than specific). "There are therefore essentially three elements that must be met before the court can apply the doctrine of approximation. First, the purpose of the trust must be charitable in nature. Second, the specific charitable purpose must have become impossible, impracticable, or illegal . . . Lastly, the settlor must have expressed a general intent to devote the property to a charitable use, to which the intent that it go to the particular organization named is secondary." (Citation omitted; internal quotation marks omitted.) Blumenthal v. Sharon Hospital, Inc., Superior Court, judicial district of Litchfield, Docket No. CV02-00885375 (June 3, 2003, DiPentima, J.).
"In exercising its powers under the doctrine of approximation (cy pres), a court must seek a method or result which as nearly as possible effectuates the intent of the testator . . . In doing so, the court must observe the mandate of General Statutes [45a-514], which regulates charitable trusts, that the trust `shall forever remain to the uses and purposes to which it has been granted according to the true intent and meaning of the grantor and to no other use.'" (Citations omitted.) Lockwood v. Killian, supra, 179 Conn. 67. "It is clear that once the authority of the court is invoked, the ultimate responsibility for the application of the doctrine of cy pres or approximation to a charitable trust lies with the court and not with the trustees or the attorney general . . . Consequently, the plan finally adopted by the court need not necessarily be one proposed or consented of the parties . . . The court, in applying the doctrine, is required to consider not only the language used in creating the trust but, if necessary, extrinsic facts as well." (Citations omitted.) Belcher v. Conway, 179 Conn. 198, 205, 425 A.2d 1254 (1979).
"A charity, in the legal sense, may be more fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government." Mitchell v. Reeves, 123 Conn. 549, 554, 196 A. 785 (1938). "An institution is charitable when its property and funds are devoted to such purposes as would support the creation of a valid charitable trust." Waterbury First Church Housing, Inc. v. Brown, 170 Conn. 556, 560, 367 A.2d 1386 (1976).
All of the gifts that are subject to this proceeding are clearly charitable in nature because they were given to the Hospital, a charitable institution. Each of the gift instruments evidences a primary desire, on the part of the donor, to devote the property to a charitable use, whether it was for purposes of establishing a home for the elderly, providing free medical care, helping cancer victims, assisting the Hospital generally, or maintaining the Hospital grounds. It is currently impossible to precisely fulfill any one of the donor's intentions in that all of the gifts were made to an organization that no longer exists. Each of the gift instruments evidences a desire, on the part of the donor, to primarily devote his or her gift to a charitable purpose. The court acknowledges that under the circumstances, it is impossible to give "literal effect" to the donor's wishes in the strictest sense. The need to preserve the gifts and honor the donors' generosity justifies a substitution that would, as closely as possible, fulfill their wishes. Accordingly, the court finds that the application of the equitable doctrine of approximation is appropriate to each of the gifts set forth above except the Jane A. Nisbet gift.
As previously stated, the Jane A. Nisbet gift was made to the Hospital by will dated December 11, 1914. The will specifically states, in relevant part, that: "if the management of said hospital shall fail to provide such free bed . . . said trustee . . . shall pay said net income . . . to the Borough of Winsted . . . expended . . . fuel and clothing to . . . worthy poor of said Borough." Because of this provision, the specific charitable purpose set forth in the will is not impossible, impracticable or illegal and the doctrine of approximation is not applicable.
VI
Today, healthcare in any given community is provided by a conglomeration of several resources. Partnerships abound. The defendants all support the healthcare community of the northwest corner of our state in a unique way. They have all demonstrated a history of consistency and commitment in aiding the citizens of the northwest community with a variety of healthcare resources. Individually, it is not likely that any single defendant could meet 100% of the needs of the community or otherwise replace completely that which a hospital provides. Together, along with other healthcare resources in the community, the defendants go a long way toward providing a full spectrum of healthcare services and support. All the defendants represent the very best in not for profit organizations.
The challenge for this court is to match, as closely as possible, the intentions expressed by the donors to the missions and proposals of the four defendants in order to ensure that the generosity and true intention of the donors is not frustrated or misconstrued by this court's approximation. The intentions of the donors are the court's primary concern and are the focus of the court's analysis and resulting orders.
It would appear that in the broadest sense, all of the gifts were given with the intention of supporting healthcare in the northwest community of the state. Accordingly, in the broadest sense, any one of the defendants would stand to be an appropriate recipient of any one of the subject funds. Many of the gifts though, were made with more specific instructions and provide the court with additional information that greatly assists this court in its effort to fulfill, as nearly as possible, the wishes of these very generous individuals.
In reviewing all of the various instruments of gift, the donor's intent is either expressed or it can be reasonably inferred from the instrument. Based on such intent, each of the thirty-one gifts can be assigned to one of the following five categories: 1) the general purposes of the Hospital; 2) free healthcare for needy patients; 3) free healthcare for patients suffering from cancer; 4) facility and grounds maintenance/improvement for the Hospital; and 5) healthcare accommodation for the elderly and infirm. The court assigns the above-referenced gifts to the five categories as follows:
GENERAL PURPOSES OF THE HOSPITAL:
a. Edward P. Wilcox Trust
b. Mary A. Baird
c. Sophia A. Camp
d. Bronson and Mildred King Fund
e. Chamberlain Morely
f. Francis Brown Fund
g. Alice M. Wilson Fund
h. Helen J. Kozlik
i. Harold C. Strong Unitrust
2. FREE HEALTHCARE FOR NEEDY PATIENTS:
a. Irene A. Cowdery Free Bed Fund
b. Mary Eldridge a/k/a the Norfolk Free Bed Fund
c. Grove Sackett a/k/a Solomon Sackett Free Beds
d. Evelyn Annette Cogswell
e. Charlotte E. Baldwin a/k/a T. Robert Baldwin Free Bed
f. Charles H. Pine
g. Susan M. Brown Free Bed
h. Free Bed No. 2
i. Julia Griswold a/k/a Frederick B. Griswold Free Bed
j. Benjamin Epstein
k. Frank D. Case Fund
l. Litchfield County Nurse Alumni Association
m. Isabella C. Cone a/k/a Winthrop and Isabella C. Cone Fund
n. Anna H. Bradford
o. Warham H. Williams Memorial Fund
p. William H. Batcheller a/k/a the Winchester Free Bed Fund
3. FREE HEALTHCARE FOR PATIENTS SUFFERING FROM CANCER:
a. Anna Poole Fund
4. GROUNDS AND FACILITY MAINTENANCE/IMPROVEMENT:
a. Adele B. Smith uni-trust
b. Abel I. Smith uni-trust
c. Wheelock Thayer Fund
5. ACCOMMODATION FOR THE ELDERLY AND INFIRM:
a. Susan M.B. Perry
VII
The gifts set forth in the first and second categories express broader intentions than the gifts set forth in the third through fifth categories. The donors in the first two categories expressed, in one way or another and by various instruments of devise, that it was their wish that their money would be used to further the purposes of the Hospital and healthcare in general, especially to the needy in the northwestern part of Connecticut. This expressed intention is closely similar to, if not exactly the purpose and goal presented to the court by each of the defendants. The intentions of these philanthropists whose gifts appear in the first two categories would be fulfilled by ordering the placement of any of these gifts with any of the defendant organizations. Accordingly, the court believes that all of the gifts in the first two categories, general purposes of the Hospital and free healthcare for needy patients, should be divided equally between the VNA, the Auxiliary, and the Health Center so that each organization receives equal amounts as measured from both a principal and income generation perspective.
As to the third category, free healthcare for patients suffering from cancer, Mr. Poole was specific regarding the use of his gift. He expressly stated that he wanted his money to be used, ". . . for assistance to needy patients suffering from cancer." Although this court is confident that any one of the defendants would be capable of fulfilling Mr. Poole's wish, ft would appear to this court that only the VNA is already well-equipped, by way of its hospice program, to see to it that his wish is precisely met. As the VNA's executive director, Caselas, testified at trial, the VNA has a ". . . certified hospice program. The purpose of the hospice is for patients who are certified by their physicians to be of terminal illness and have less than six months to live." Mr. Caselas further testified, "[s]ince the fund (Poole) is for terminally ill cancer patients, it would be a perfect fit for Foothills Hospice to care for those patients, again, in their own homes in the comfort of their own families and to utilize those funds to the best of their abilities." The court agrees and believes that the Anna Poole fund, the third category, should be transferred to the VNA.
All of the donors whose gifts are set forth in the fourth category expressed a clear desire that their money be used to maintain the Hospital structure and the grounds surrounding the Hospital. Although the Hospital is gone, the structure itself still exists. Additionally, although the structure no longer houses the Hospital, it does still house many services similar to that provided by the Hospital by virtue of the Health Center. Accordingly, the court concludes that the intentions of the donors in this category would be most closely effectuated if the Health Center received the funds set forth in the fourth category on the condition that the Health Center uses the funds to maintain the Hospital structure and adjacent grounds for so long as healthcare services are provided at that location.
The Susan M.B. Perry old people's home fund is the only gift set forth in the fifth category and is truly in a category unto itself. It is, by far, the largest of the funds subject to this proceeding and with regard to this fund, Perry expresses the clearest of intentions in her last will and testament. Perry gave money to the Hospital to help organize an old people's home. As mentioned above, for reasons unknown to this court, the old people's home was never organized or built and Perry's gift remains untouched. It would appear that the Health Center's plan to construct elderly housing units on the former Hospital property and provide healthcare services to elderly residents on location is as close to an old peoples' home as one can get, or that Mrs. Perry could hope for, now that the Hospital is closed and given the fact that an old people's home was never constructed. Accordingly, the court concludes that the funds in the fifth category, accommodation for the elderly and infirm, should be transferred to the Health Center for the purposes of constructing and operating a facility for the housing and care of senior citizens and for the operation of its "Elder Care Program At Winsted Health Center" at the former Hospital campus.
The court has not ordered any of the funds be released to the Foundation, nor does the court approve the joint proposal submitted by the Health Center and the Foundation. This is not an oversight on the part of the court and is not an indication that the court fails to recognize the Foundation's history of service to the community or does not appreciate the very thorough and thoughtful joint proposal submitted by it along with the Health Center. The Foundation is a vital institution and plays an important role in the community. Its endowment is impressive. The Foundation's proposed role, or any role it could play for that matter, in receiving these funds is far too similar and duplicative to that of the court's role. It is the court's function and its absolute obligation, alone, to see to it that the donor's wishes are fulfilled. This is not a responsibility this court takes lightly, nor one that the court may delegate.
Having considered all of the evidence, testimony, exhibits and law, the court enters the following orders. Before doing so, the court would preface its orders with the following remarks. Most of these gifts were given decades ago; some close to a century ago. All of these gifts were given by generous philanthropists, with only charity in mind, presumably with the hope that their generosity could make the difference in the life of a person or the community at large. For far too long, for reasons unknown to this court, the generosity of some of these philanthropists has been frustrated and to date, their intentions unfulfilled. The orders set forth below are consistent with the donor's intentions, but made with some necessary breadth, with the hope that these funds will finally make it to their intended beneficiaries without further delay. This court charges the defendants with the responsibility of honoring the generosity of the donors and the fulfillment of their wishes. Their time has come.
VIII ORDERS
1. The court orders that the following funds and all accumulated interest, if any, be transferred to the VNA, the Auxiliary, and the Health Center, in equal shares, subject to the instructions that follow:
a. Edward P. Wilcox Trust
b. Mary A. Baird
c. Sophia A. Camp
d. Bronson and Mildred King Fund
e. Chamberlain Morely
f. Francis Brown Fund
g. Alice M. Wilson Fund
h. Helen J. Kozlik
i. Harold C. Strong Unitrust
The defendants named above shall use the income from these funds in any way which provides, advances or assists the provision, procurement or delivery of healthcare to residents of the northwest community of the state of Connecticut. Consistent with the terms set forth in the instruments, only the income may be used and the principal must be retained in perpetuity.
2. The court orders that the following funds, and all accumulated interest, if any, be transferred to the VNA, the Auxiliary and the Health Center, in equal shares, subject to the instructions that follow:
a. Irene A. Cowdery Free Bed Fund
b. Mary Eldridge a/k/a the Norfolk Free Bed Fund
c. Grove Sackett a/k/a Solomon Sackett Free Beds
d. Evelyn Annette Cogswell
e. Charlotte E. Baldwin a/k/a T. Robert Baldwin Free Bed
f. Charles H. Pine
g. Susan M. Brown Free Bed
h. Free Bed No. 2
i. Julia Griswold a/k/a Frederick B. Griswold Free Bed
j. Benjamin Epstein
k. Frank D. Case Fund
l. Litchfield County Nurse Alumni Association
m. Isabella C. Cone a/k/a Winthrop and Isabella C. Cone Fund
n. Anna H. Bradford
o. Warham H. Williams Memorial Fund
p. William H. Batcheller a/k/a the Winchester Free Bed Fund
The defendants named above shall use the income from these funds in any way which provides, advances or assists in the provision, procurement, or delivery of healthcare to needy residents of the northwest community of the state of Connecticut. Consistent with the terms of the instruments, only the income may be used and the principal must be retained in perpetuity.
3. The court orders that the following fund, and all accumulated interest if any, be transferred to the VNA, subject to the instructions that follow:
a. Anna Poole Fund
The defendant named above shall use the income from this fund to assist any needy patient in the hospice program or otherwise suffering from cancer. Consistent with the terms of the instrument, only the income may be used and the principal must be retained in perpetuity.
4. The court orders that the following funds, and all accumulated interest, if any, be transferred to the Health Center subject to the instructions that follow:
a. Adele B. Smith Unitrust
b. Abel I. Smith Unitrust
c. Wheelock Thayer Fund
The Health Center shall use the income from these funds in any way which maintains and/or improves the Hospital buildings and adjacent grounds. Consistent with the terms of the instruments, only the income may be used and the principal must be retained in perpetuity.
5. The court orders the following fund be transferred to the Health Center subject to the instructions that follow:
a. Susan M.B. Perry old people's home fund
The Health Center shall use this money, as required, in the planning, construction and completion of the elderly housing units to be built adjacent to the Health Center on the former Hospital campus. Whether the elderly housing units are located in a separate structure or in a portion, section or wing of another structure, and if such separate structure or portion, section or wing of another structure is named, it shall bear the name of Susan M.B. Perry. Any remaining money shall be used in the operation of the "Elder Care Program At Winsted Health Center," as set forth in the submission to this court and marked as Exhibit 16. This fund, although restricted in its use, is fully expendable.
SO ORDERED.