Hooker v. Edes Home, 89-1316

• Decision Date: 13 July 1990
• Docket Number: 89-1534.,No. 89-1316,89-1316
• Citation: 579 A.2d 608
• Parties: Mary L. HOOKER, et al., Appellants, v. The EDES HOME, et al., Appellees.
• Court: D.C. Court of Appeals

579 A.2d 608

Mary L. HOOKER, et al., Appellants, v. The EDES HOME, et al., Appellees.

Nos. 89-1316, 89-1534.

District of Columbia Court of Appeals.

Argued May 16, 1990.

Decided July 13, 1990.

J. William Koegel, Jr., with whom Harry Lee, Rita A. Cavanagh, and Cynthia L. Quarterman, Washington, D.C., were on the brief, for appellants.

Neal A. Jackson, with whom Lynn C. Fields, Allen M. Hutter, Washington, D.C., and Ronald L. Webne, Alexandria, Va., were on the brief, for appellees.

Before TERRY, SCHWELB and FARRELL, Associate Judges.

FARRELL, Associate Judge:

Four female, elderly and unmarried residents of the District of Colmbia appeal from the trial court's ruling that they lack standing to maintain a class action. They sought to challenge the closing, sale and relocation of a free home (the "Edes Home") for elderly, indigent widows residing in Georgetown proposed by the Board of Trustees of a charitable corporation (the Trustees or Board) established by a testamentary bequest, and chartered by Congress in 1906, for the purpose of maintaining such a home.¹ They also appeal from the trial court's denial of their application to intervene in a probate action initiated by the Trustees to obtain court approval of the Board's proposals.²

Because the will, charter, and by-laws of the corporation establish a set of criteria identifying a limited class of potential beneficiaries of the charitable trust, we conclude that members of that class have a "special interest" in the trust distinct from that of members of the public at large, notwithstanding the Trustees' discretion to exclude them from the trust benefits. We further hold that at least one of the appellants—Mary Hooker—presently qualifies as a representative member of that class. Because she challenges a fundamental change in the nature of the institution that may substantially affect the interests of all potential beneficiaries, we conclude that the policy goals of the traditional rule limiting standing to enforce a charitable trust to a public officer would not be served by denying standing to her, and reverse the judgment.³

I. Background and Proceedings Below

In 1905, Margaret Edes executed a will establishing, and bequeathing the residue of her estate to, a charitable institution known as the "Edes Home." The Edes Home was to maintain "free from the control of any particular religious sect or persuasion,... a free Home for aged and indigent Widows, residing, or to reside," in that part of the District of Columbia then known as Georgetown, where the Home was to be located.

Pursuant to instructions in the will directing establishment of a charitable corporation under the laws of the District of Columbia, on May 1, 1906, Congress chartered the Edes Home, providing for its "perpetual succession" for the purpose of "erecting and forever maintaining and supporting in Georgetown, a home for aged and indigent widows...." The charter empowered the corporation, through its Board of Trustees, to "acquire, take, receive, invest, reinvest, and dispose of property... for the use and benefit of the Home"; to "determine how many and what particular persons of those qualified for admission unto the said home shall actually be received therein"; to "exclude, at pleasure from said home any person who shall have been admitted"; and to establish and execute such by-laws not inconsistent with the charter as it deemed fit "in the interests of the said home."

In the by-laws, the Board of Trustees established additional admission criteria beyond those set out in the will and charter, ensuring that residents of Edes Home would be in good health and not in need of nursing care:

No application for admission shall be considered except from aged and indigent widows who must be in good health and who have been for at least five years immediately preceding the date of application residents of Georgetown. A certificate as to health shall be required from a physician known to the Corporation. The Corporation shall pass upon all applications. Before admission a deposit of at least seventy-five dollars must be made to defray funeral expenses. The Board may, however, by a unanimous vote, waive the requirements of this rule as to length of residence preceding the application in meritorious cases coming within the letter and spirit of the will and charter.⁴

From the time of its charter until the present, the Edes Home has operated Edes House, an 18-room boarding house located at 2929 N Street, N.W., providing lodging, board and housekeeping services to its residents. Apparently, Edes House has never achieved full capacity of eligible elderly widows.⁵

In 1986, assertedly because of declining interest on the part of eligible elderly individuals living there⁶ and the depletion of trust resources from increasing costs of operating an obsolete facility, the Trustees resolved to close the 2929 N Street residence and to transfer the assets of the trust to the Washington Home for Incurables, a residential care facility for the chronically or terminally ill located about a mile from Georgetown. In July 1986, the Trustees resolved to authorize a law firm to develop a plan to merge Edes Home with the Washington Home, and to authorize the sale of Edes House. By this time the Trustees had stopped accepting applications for residency. In February 1987, the Trustees voted to close Edes House and to relocate its residents. On June 30, 1987, the Trustees wrote to residents, informing them of the plan to close the facility within 90 days. In September 1987, a contract of sale on the House was secured for $1.2 million.

In September 1987, Virgie Brown, a resident of Edes House, filed suit in Superior Court challenging the Trustees' actions and seeking a temporary restraining order enjoining her eviction. In October another resident, Elizabeth Ross, joined as a party plaintiff. As later amended, the complaint named all four trustees in their individual capacity, alleging breach of fiduciary duty, ultra vires acts by the Trustees, and failure to act in the best interests of the trust beneficiaries. Apparently the parties reached an agreement, with the approval of Judge Beaudin, that the plaintiffs would not be evicted while an effort to secure alternative housing was made. Ms. Brown subsequently died, leaving only Ms. Ross as plaintiff in the Brown suit.

On January 5, 1989, the Trustees filed a complaint in the Probate Division of the Superior Court, naming as defendant the Corporation Counsel of the District of Columbia and seeking approval of the closure of Edes House, transfer of the trust assets including the proceeds of the sale of Edes House to the Washington Home, and continuation of the functions of the Edes Home at that location. The complaint alleged that the Washington Home had agreed to assume responsibility for maintaining living units for elderly widows eligible under the terms of the Edes will, and to select residents according to the criteria set out therein, but that the Edes Home will continue to exist as a corporate entity and to administer the trust's assets for the benefit of elderly, indigent, female residents of those living units according to the purposes of the Edes will. Ms. Ross, the remaining plaintiff in the Brown case, moved to consolidate her suit with the probate matter.

On March 27, 1989, appellants filed the instant class action in the Civil Division on behalf of themselves and a class of all "eligible potential residents of Edes" numbering "in the hundreds, if not the thousands." They alleged that: the Board had kept the existence of Edes House's housing opportunities a "well-hidden secret" by failing to publicize them and by refusing to consider submitted applications; contrary to the Board's assertion, there were many elderly indigent citizens who would want to live at Edes; trust assets were sufficient to permit the continued operation of the House; the Board's proposal to sell the House without court approval was ultra vires; and the Board's operation of and plan to close and sell the House violated the congressional charter. Appellants moved to consolidate the Brown suit, the probate matter and the class action, and for certification of the consolidated case as a Civil I action. Shortly thereafter, appellants also moved to intervene in the probate matter. The cases were consolidated on May 11, 1989, and on August 28, 1989, were designated a Civil I case and assigned to Judge Taylor.

The Trustees moved to dismiss the claims of the class plaintiffs for lack of standing, and because the motion relied on facts outside the pleadings, Judge Taylor treated the motion as a motion for summary judgment. On October 30, 1989, she granted judgment in the Trustees' favor against the plaintiffs in the class action. It was undisputed that the class plaintiffs were unmarried, female residents of the District of Columbia, ranging in age from 60 to 81 years old. None had ever attempted to apply to the Home until one month after the probate action was filed, and even after the applications were completed, they were not submitted to the Trustees because the Board had stopped processing applications in anticipation of closing Edes House.

Citing YMCA v. Covington, 484 A.2d 589 (D.C.1984), the trial court concluded that the Edes Home was a charitable trust, and that a suit for enforcement of a charitable trust could only be maintained by the Attorney General or other public officer, or a person having a "special interest" in the enforcement of the trust distinguishable from that of any other member of the public. The court found two of the class plaintiffs ineligible for admission according to the terms of the trust because they were not widows, and therefore lacked at the outset the requisite "special" interest.⁷ Moreover, the court concluded, the mere fact that the other two were potential beneficiaries of the trust—in the sense that they met the criteria for admission—did...