Kystad v. Univ. of S. Carolina (In re Geraldine M. Hardy Trust)

• Decision Date: 28 October 2021
• Docket Number: 351966
• Parties: In re GERALDINE M. HARDY TRUST. v. UNIVERSITY OF SOUTH CAROLINA, Respondent-Appellant, LAURA M. KYSTAD, Trustee, Petitioner-Appellee, and MEDICAL UNIVERSITY OF SOUTH CAROLINA, JEROME McDANIEL, and PAMELA MELTON, Respondents-Appellees.
• Court: Court of Appeal of Michigan — District of US

In re GERALDINE M. HARDY TRUST.

LAURA M. KYSTAD, Trustee, Petitioner-Appellee,
v.
UNIVERSITY OF SOUTH CAROLINA, Respondent-Appellant,

and MEDICAL UNIVERSITY OF SOUTH CAROLINA, JEROME McDANIEL, and PAMELA MELTON, Respondents-Appellees.

No. 351966

Court of Appeals of Michigan

October 28, 2021

UNPUBLISHED

Wayne Probate Court LC No. 12-781611-TV

Before: Rick, P.J., and Ronayne Krause and Letica, JJ.

Per Curiam.

Respondent, the University of South Carolina (USC) appeals by right, pursuant to MCR 5.801(A)(2), from the trial court's order determining that USC was "no longer an interested party" in a dispute over the intended beneficiary of a trust established by Dr. Geraldine McDaniel Hardy. We affirm.

I. BACKGROUND

In 1975, Dr. Hardy drafted a trust document, which she executed in 1977, leaving her estate (which turned out to be significant) to a medical educational institution in South Carolina, her original home state. Unfortunately, the name she used for the institution did not match the location she identified. Respondents the University of South Carolina (USC) and the Medical University

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of South Carolina (MUSC) both claim to be Dr. Hardy's intended beneficiary. By 2012, Dr. Hardy had developed dementia and lost the capacity for testamentary intent. Following appointment of petitioner Laura Kystad as Dr. Hardy's conservator, nobody could find an executed copy of her will, which should have funded her trust. With the participation of a guardian ad litem (GAL), Kystad, Dr. Hardy's relatives who would have been her heirs if she had died intestate (respondents Jerome McDaniel and Pamela Melton), and MUSC, Dr. Hardy's estate was restructured. In relevant part, a new will and a new trust were drafted, with the goal of effectuating Dr. Hardy's intentions while also providing something for the would-be heirs and ensuring that Dr. Hardy could be taken care of for the rest of her life. Only then did MUSC's Michigan lawyer realize USC could also be a potential claimant to Dr. Hardy's trust. However, that possibility was not further explored until after Dr. Hardy's death in 2018. The sole issue in this appeal concerns the trial court's determination that the relevant trust provision was ambiguous and that Dr. Hardy had intended to benefit MUSC, not USC.

We note as an initial matter that there have been several probate proceedings involving Dr. Hardy, for reasons we will discuss. Many of the same parties and attorneys were involved, as was the same trial judge. Unfortunately, by the time this particular litigation was commenced, the participants already knew a great deal of factual background that was simply assumed and therefore not properly documented in this record. In addition, many of the submissions made by the parties to the trial court had attached exhibits that might have been illuminating, but more often than not, only the first few of those exhibits were successfully scanned into the electronic record. Some, but not all, of those exhibits have been provided by the parties on appeal. Therefore, the facts in this matter are not consistently discernible from the record provided, through no apparent fault of the parties. In order to fill in some gaps in our understanding of what occurred, we take judicial notice of documents filed in this court as part of Kystad's attempted appeal in Docket No. 324930.^[1] See Hawkeye Casualty Co v Frisbee, 316 Mich. 540, 549; 25 NW2 521 (1947); In re Albert, 383 Mich. 722, 724; 179 N.W.2d 20 (1970). We have also consulted the respondent educational institutions' websites to fill in other gaps. See Johnson v Dep't of Natural Resources, 310 Mich.App. 635, 649; 873 N.W.2d 842 (2015).

A. DRAMATIS PERSONAE

Geraldine McDaniel Hardy was born in Greenville, South Carolina, in 1925. Hardy attended Winthrop College, "The South Carolina College for Women," and graduated cum laude with a bachelor of science degree in 1944. Hardy attended what was then known as the Wayne State University College of Medicine from 1951 to 1955, receiving her doctorate degree in medicine in 1955. She "was one of only two women in the graduating class of 67 medical students." According to the Department of Licensing and Regulatory Affairs (LARA), Dr. Hardy was issued her license to practice medicine on January 1, 1958. Dr. Hardy rarely, if ever, returned to South Carolina, although she apparently retained considerable real property holdings in the state,

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and she never had any children. Winthrop College is located in Rock Hill, South Carolina, and we have not found any evidence that Dr. Hardy ever lived in either Columbia or Charleston.

The current incarnation of USC was opened as an institution in 1880.^[2] In 1893, women were permitted to enroll, and in 1924, women were allowed to live on campus. By the late 1950s, MUSC (as will be discussed below) was already established as a medical school, but there was growing concern in South Carolina that the state needed a second medical school. In 1972, Congress passed a law authorizing grants from the Veterans' Affairs administration for the creation of new medical schools. Contemporary local newspaper articles indicated that USC already had a "pre-med" program and intended to expand that program. In 1973, USC applied for a grant, which was approved the following year, to develop a medical school. USC's School of Medicine admitted its first students in 1977, and it held its first graduation in 1981. USC currently has a Neuropsychiatry and Behavioral Science clinical department with departments of general psychiatry, child and adolescent psychiatry, forensic psychiatry, and geriatric psychiatry. USC's main campus is located in Columbia, South Carolina.

Meanwhile, as noted above, the predecessor to MUSC, then called the Medical College of South Carolina, was founded in 1824 in Charleston, South Carolina. At the time, it was comprised of several "schools," including a School of Medicine. Women were permitted to enroll at the Medical College of South Carolina in 1894, and the first woman was admitted in 1898. Initially a private institution, the Medical College of South Carolina became a state institution in 1913. MUSC apparently established a psychiatry department in 1956. In 1969, the institution's name was changed to the Medical University of South Carolina, and its "schools" were renamed as "colleges." MUSC currently has a Department of Psychiatry and Behavioral Sciences with, inter alia, a Women's Reproductive Behavioral Health Division, and eight specialty programs. MUSC's Department of Psychiatry and Behavioral Sciences is a department within its College of Medicine. MUSC's main campus is located in Charleston, South Carolina.

Melton and McDaniel are, respectively, Dr. Hardy's niece and nephew. They are the closest surviving relatives of Dr. Hardy, who had no children, and they are Dr. Hardy's heirs at law. Kystad is an attorney unrelated to Dr. Hardy. Kystad was appointed to be Dr. Hardy's conservator and guardian, and she also became the trustee of Dr. Hardy's revised 2012 Trust.

B. DR. HARDY'S ORIGINAL 1977 TRUST

On August 3, 1977, Dr. Hardy executed a Living Trust Agreement. The trust document was drafted in 1975, and no one knows why Dr. Hardy delayed executing it for two years. The 1977 Trust document recited that Dr. Hardy had funded the trust with only $10, with the right to add other property or assets in the future. The 1977 Trust document strongly implied that the trust was expected to be a beneficiary of Dr. Hardy's will, and it indicated that the trust "may be executed in any number of counterparts," all of which should be considered as a whole. It would turn out that a pour-over Last Will and Testament was drafted for Dr. Hardy at approximately the same time as the 1977 Trust, but no one was ever able to find a copy that Dr. Hardy had executed.

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Relevant to the specific concern in this matter, the 1977 Trust provided:

Upon the death of the Settler [Dr. Hardy], the trust estate shall be distributed to the MEDICAL SCHOOL, UNIVERSITY OF SOUTH CAROLINA, Charleston, South Carolina, to establish the GERALDINE McDANIEL, M.D. CHAIR^[3] to deal with the study of the psychiatry of women. It is my desire that said CHAIR be held by a woman M.D. selected by a committee of three (3) persons from the University of South Carolina staff, and composed of the then current Dean of the Medical School, a professor of medicine and a professor of psychiatry. In the event that the assets of the trust estate should prove inadequate to endow a CHAIR, the Settlor directs said medical school to establish a lecture series with substantially the same criteria as above, or a scholarship fund to make grants to qualified female applicants for research and/or for study in the field of the psychiatry of women.

However, there is no entity called "Medical School, University of South Carolina" located in Charleston.

C. DR. HARDY'S COURT-AMENDED 2012 TRUST

Dr. Hardy's stopped practicing medicine in 2006, and she surrendered her license in 2008. In late 2010, Melton received third-hand information that Dr. Hardy was having difficulty paying her taxes; Melton called Dr. Hardy "and realized she was having memory issues." Melton and her husband drove from South Carolina to Michigan and "found Dr. Hardy to be living in a deplorable state," essentially a hoarder-house, and Dr. Hardy had no understanding of her finances or ability to manage her affairs. Dr. Hardy did, however, appear to have food and to be eating. Melton left Michigan, feeling Dr. Hardy was safe for the time being and intending to return, but she rapidly concluded that Dr. Hardy was being taken advantage of by other people. On December 29, 2010, Melton filed a formal report with Adult Protective Services.

On January 4, 2011, a petition for guardianship was filed in the probate court, and the matter was assigned to the same...