The Supreme Court of New Hampshire has held that the traditional rules for “special interest” standing to intervene in a proceeding to change the purpose of a charitable gift are no longer applicable to a completed charitable gift for which a change in purpose is being requested under the Uniform Prudent Management of Institutional Funds Act.  It has denied the executor of an estate the right to intervene in a contest seeking to modify the use of a charitable bequest.

The case arose out of a 2002 bequest from the estate of Robert T. Keeler to Dartmouth College.  He left half of his estate to the College to upgrade and maintain its golf course, but said that his executor could transfer any funds that were more than necessary to upgrade and maintain the course to the Robert T. Keeler Foundation.  Keeler’s widow, as executor of his estate, entered into an agreement with the College to give the College $1.8 million to support the golf course “so that future generations of Dartmouth students and members of the Dartmouth community may continue to enjoy the great game of golf at the course which he so loved.”

In 2020, the College decided to permanently close the golf course, and in 2021, with the assent of the state’s Director of Charitable Trusts, asked the probate court to “modify” some of the terms to allow support of various other golf activities at the College.  Keeler’s estate was reopened, a new fiduciary was appointed, and together they sought to intervene in the case.  They sought to transfer all of the funds to the Keeler Foundation.

The probate court denied the motion to intervene, but allowed them to file a friend of the court brief on the issues.  The estate did not file a brief but moved for reconsideration, which the court denied.  The probate court then granted the modifications the College had requested.

On appeal, the Supreme Court said it could not disturb the probate court decree unless it was unsupported by the evidence or plainly erroneous as a matter of law.  It said that those seeking to intervene had the burden of demonstrating that they have standing to do so.

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The College had moved for modification under RSA 292-B:6 of the state’s UPMIFA, which provides that a charitable purpose can be modified by the court upon the application of the institution holding the funds.  The institution has the obligation to notify the Attorney General.

The putative intervenors did not claim that the section of UPMIFA did not apply or that they had standing under UPMIFA to intervene.  They claimed that under prior state common law they had a “special interest” in the fund that gave them standing to participate.  They argued that a 2019 decision involving the Christian Science Church approved the special interest test for intervention.  But the Court said the 2019 case involved an ongoing charitable trust, not a completed gift, and did not involve UPMIFA. The putative intervenors did not provide any cases adopting the standards under UPMIFA, the Court wrote, and they “have not persuaded us to extend our holding” in the 2019 case to the new case under UPMIFA.

The putative intervenors also cited a 1957 case claiming that they had a “vested interest” in the funds.  But the Court said that the older case was issued long before the state adopted the Uniform Trust Code in 2004, which modified the common law doctrine of cy pres and provides generally that a charitable gift would not fail if its purpose became impossible and that the trust property does not necessarily revert to the settlor of the trust in such cases.

“In light of New Hampshire’s adoption of the Uniform Trust Code and the UPMIFA, we conclude that the common law, as set forth in [the 1957 opinion] regarding the cy pres doctrine, is not binding in this proceeding,” the Court concluded.

The Court did not express an opinion on whether the estate might have a claim for breach of contract against the College since that issue was not raised within the appeal.

A concurring justice would have dismissed the appeal as not having been filed on time.  (In Re:  Robert T. Keeler Maintenance Fund For the Hanover Country Club at Dartmouth College, Supreme Ct., NH, No. 2022-014, 7/13/23.)

YOU NEED TO KNOW

Because UPMIFA is a uniform law that includes a provision requiring courts to construe the Act to promote uniformity among the states, the decision is likely to have an impact throughout the nation.  All states except Pennsylvania have adopted some version of UPMIFA. (See Ready Reference Page: “New UPMIFA Sets Rules For Management of Charitable Funds”)