Le Gassick v. Univ. of Mich. Regents, 344971

• Decision Date: 19 November 2019
• Docket Number: No. 344971,344971
• Citation: 330 Mich.App. 487,948 N.W.2d 452
• Parties: Trevor LE GASSICK, AS TRUSTEE OF the JAMES A. BELLAMY TRUST and as Personal Representative of the Estate of James A. Bellamy, Plaintiff-Appellant, v. UNIVERSITY OF MICHIGAN REGENTS and Andrew D. Martin, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

330 Mich.App. 487

948 N.W.2d 452

Trevor LE GASSICK, AS TRUSTEE OF the JAMES A. BELLAMY TRUST and as Personal Representative of the Estate of James A. Bellamy, Plaintiff-Appellant,

v.UNIVERSITY OF MICHIGAN REGENTS and Andrew D. Martin, Defendants-Appellees.

No. 344971

Court of Appeals of Michigan.

Submitted November 8, 2019, at Lansing.

Decided November 19, 2019, 9:20 a.m.

Warner Norcross + Judd LLP (by Laura E. Morris, Conor B. Dugan, Grand Rapids, and Zainab S. Hazimi, Southfield) for plaintiff.

Miller Canfield Paddock & Stone PLC (by Thomas C. O'Brien, Ann Arbor, Gerald L. Gleeson II, Troy, Stephen C. Rohr, Birmingham, and James L. Woolard, Jr., Ann Arbor) for defendants.

Before: Borrello, P.J., and K. F. Kelly and Servitto, JJ.

Per Curiam.

Plaintiff, Trevor Le Gassick, as trustee of the James A. Bellamy Trust and as personal representative of the estate of James A. Bellamy, appeals as of right the trial court's order granting summary disposition to defendants, the University of Michigan Regents and Andrew D. Martin, by holding that plaintiff did not have standing to challenge defendants' compliance with the terms of the trust distribution to the University of Michigan. For the reasons stated below, we reverse.

I. BASIC FACTS¹

Professor James A. Bellamy, a recognized expert in classical Arabic literature, joined the Department of Near Eastern Studies at the University of Michigan (the University) as an instructor in 1959 and became a full professor in 1968. Professor Bellamy held the title of Professor of Arabic Papyrology until his retirement in 1995. Classical Arabic literature "refers to writings in Arabic from the early Christian era to some hundreds of years thereafter" and "captures ancient Arabic inscriptions, papyri, manuscripts, and textual issues relating to the Qur'an and pre-Islamic poetry." Plaintiff joined the Department of Near Eastern Studies at the University in 1966, specializing in Arabic studies.

On August 6, 1998, after his retirement, Professor Bellamy executed an estate plan establishing the Bellamy Trust and a pour-over will, which he subsequently amended on several occasions. On August 5, 2011, by operation of the second amendment of the trust, plaintiff began serving as cotrustee along with Professor Bellamy. On September 23, 2011, Professor Bellamy executed a third amendment, directing the trustee to distribute to the University the amount necessary "to endow a full professorship, named after the Grantor, in the field of medieval classical Arabic literature" as further set forth in any then-existing gift agreement between the University and the Grantor. Professor Bellamy also directed the distribution of at least $300,000 directly to plaintiff, with any remaining sums split between "provid[ing] fellowship support for graduate students studying with the holder of the James A. Bellamy professorship," as further set forth in any then-existing gift agreement, and the American Oriental Society.

According to the complaint, Professor Bellamy allegedly "had a desire to gift a substantial portion of his money at his death to the University if used by the University to continue his work" and "regularly talked to Plaintiff as his friend and colleague regarding his gifting intentions." In 2011, with the aid of counsel, Professor Bellamy entered into negotiations with the University and, on October 13, 2011, agreed to execute a gift agreement (the Gift Agreement). The Gift Agreement provided material terms that the funds were to be used for a "medieval classical Arabic literature" professorship and, if there was no one qualified in the University, that the University was required to hire an outside applicant. The Gift Agreement provided that the Dean of the College of Literature, Science, and the Arts (currently defendant Andrew D. Martin) "shall be responsible for carrying out the intended purpose of the Fund and excess amount" and the University was required to loyally honor Professor Bellamy's wishes.

Professor Samer Mahdy Ali joined the Department of Near Eastern Studies in 2014. Plaintiff alleged that Professor Ali specialized in late medieval Arabic literature, a period "starkly different" from the classical specialty taught by Professor Bellamy. In 2015, Professor Ali was appointed associate, not full professor. Further, he purportedly acknowledged that he was not an expert in classical Arabic literature and "that his main interest has been and will continue to be in late medieval Arabic literature (the post mid-‘Abbasid period)."

Professor Bellamy died on July 21, 2015, at the age of 89. In addition to being Professor Bellamy's colleague, friend, and cotrustee, plaintiff also served as personal representative of Professor Bellamy's estate. In February 2016, plaintiff, as trustee, distributed—and the University accepted—$2,500,000 from the Bellamy Trust pursuant to the Gift Agreement, as evidenced by a receipt. The receipt acknowledged that the funds were to endow a "full" professorship in the "field of medieval classical Arabic literature." On July 7, 2016, the University acknowledged receipt of an additional distribution of $1,000,000 for funding the graduate student fellowship support for the holder of the professorship.

On December 11, 2017, the University announced the appointment of Professor Ali to Professor Bellamy's position. Plaintiff maintained that Professor Ali was "not qualified to teach classical Arabic literature at the University" and, in any event, was not a full professor. Plaintiff contended that the University was required to conduct a search for a properly qualified professor to fill the position, which it failed to do. When the University initially posted the Bellamy position, it did not adhere to the Gift Agreement requirements for a "full" professorship in "medieval classical Arabic literature" but rather merely sought an associate professor in "Pre-Modern Arabic Culture." Consequently, plaintiff allegedly objected to the accuracy of the posting in light of the requirements of the Gift Agreement. Thereafter, the University withdrew the posting and instead announced the appointment of Professor Ali.

On April 23, 2018, plaintiff filed suit, alleging (1) breach of contract, namely the University's failure to use the funds consistent with the terms of the Gift Agreement, and seeking damages or specific performance; (2) breach of fiduciary duty on account of the University's failure, as trustee of the charitable trust established by Professor Bellamy's gift, to comply with the terms and conditions of the resulting charitable trust; (3) violation of the Uniform Prudent Management of Institutional Funds Act, MCL 451.921 et seq. ; and (4) the need for injunctive relief prohibiting the dissipation of funds during the pendency of the case. In support of the claims, plaintiff alleged that the University hired Professor Ali in 2015. However, after Professor Bellamy's death, the University did not appoint Professor Ali to the Bellamy professorship. Additionally, when the University received the trust funds for the charitable trust in 2016, Professor Ali was not appointed to the position. Plaintiff asserted that, on the day Professor Ali's appointment was announced, "the Department Chair said in Plaintiff's presence and the presence of others in the Department that the motive behind Professor Ali's appointment was to alleviate Department budget issues by having the [Bellamy] Trust rather than the Department budget pay Professor Ali's salary." The complaint proffered that the University did not loyally honor Professor Bellamy's wishes as set forth in the Gift Agreement and provided statements by several other Arabist professors at the University agreeing that Professor Ali was not qualified for the position. Instead, it was alleged that the University sought to move away from teaching classical Arabic literature and place Professor Bellamy's trust funds in a general fund to support areas of teaching and research other than those specifically directed by Professor Bellamy in the Gift Agreement and contrary to the intent of the bequest.

On June 12, 2018, defendants moved for summary disposition, arguing that plaintiff lacked standing. Defendants maintained that the distribution of the $3,500,000 created a separate charitable trust over which plaintiff was not the trustee. They also submitted that MCL 700.7405(3) applied, limiting enforcement of the resulting charitable trust to the Attorney General and the University. In response, plaintiff argued that, although he was not the trustee of the resulting charitable trust, the "among others" language in MCL 700.7405(3) did, in fact, confer him standing as a person possessing a special interest in its enforcement. Additionally, MCL 700.7405(3) did not apply to the extent (1) that plaintiff sought the probate court's involvement concerning the possible nondistribution of unallocated Bellamy Trust funds, and (2) that, as personal representative, plaintiff could nevertheless file suit on behalf of the estate seeking damages for the breach of the Gift Agreement.

After oral argument, the probate court held that, under MCL 700.7405(3), the right of a settlor to enforce the terms of a charitable trust is personal to the settlor and cannot be exercised by the settlor's fiduciary. Without any analysis, the probate court concluded that plaintiff did not have any special interest in enforcing the terms of the charitable trust. The probate court did not address plaintiff's argument that, as personal representative, he could independently bring suit for breach of the Gift Agreement on behalf of Professor Bellamy's estate. It also did not address the potential nondistribution of any residual Bellamy Trust funds. Plaintiff now appeals.

II. APPLICABLE LAW

"A decision on a motion for summary disposition and the interpretation of a statute are reviewed de novo."²

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