Daloia v. Franciscan Health System of Central Ohio, Inc.

679 N.E.2d 1084, 79 Ohio St. 3d 98
CourtOhio Supreme Court
DecidedJune 25, 1997
DocketNo. 96-269
StatusPublished
Cited by56 cases

This text of 679 N.E.2d 1084 (Daloia v. Franciscan Health System of Central Ohio, Inc.) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Daloia v. Franciscan Health System of Central Ohio, Inc., 679 N.E.2d 1084, 79 Ohio St. 3d 98 (Ohio 1997).

Opinion

Douglas, J.

The primary question presented for our consideration is whether the funds bequeathed to Saint Anthony in the trust instruments should, given the change in circumstances, be distributed to Saint Elizabeth in Dayton, Ohio. The trial court and court of appeals concluded that the sale of Saint Anthony made it impossible to comply with the express terms of the trusts and, as a result, the gifts should be awarded to Saint Elizabeth under the doctrine of deviation. The trial court and court of appeals also determined that when appellant had distributed the gifts on September 12, 1990, appellant had fulfilled his duties as a trustee under the terms of the trusts. Therefore, the trial court and court of appeals concluded that appellant did not retain any further discretion to control the final disposition of the gifts after that date. We agree with the conclusions reached by the trial court and court of appeals. Accordingly, we affirm the judgment of the court of appeals.

I

To begin, we note that the powers and duties of a trustee are controlled by the terms of the trust instrument. See IV(A) Scott, Law of Trusts (4 Ed. Fratcher Ed.1989) 320, Section 380 (“The trustees of a charitable trust, like the trustees of a private trust, have such powers as are conferred on them in specific words by the terms of the trust or are necessary or appropriate to carry out the purposes [103]*103of the trust and are not forbidden by the terms of the trust.”). Thus, a “fundamental [tenet] for the construction of a * * * trust is to ascertain, within the bounds of the law, the intent of the * * * settlor.” Domo v. McCarthy (1993), 66 Ohio St.3d 312, 314, 612 N.E.2d 706, 708. “Generally, when the language of the instrument is not ambiguous, intent can be ascertained from the express terms of the trust itself.” Id.

The trust instruments are virtually identical in both form and content. In particular, Article IV of Bertha’s trust and Article IV of Clara’s trust both provide in part that “[t]he co-trustees and any successors of the trust established by this instrument shall serve without bond and, in addition to those powers granted by law, and until actual distribution of the trust property, shall have the following rights, powers, duties, and immunities to be exercised without court order or other authority upon such terms and conditions and at such times as the trustees determine in their absolute discretion[.]” (Emphasis added.) Interpreting this italicized language, the trial court held, and the court of appeals agreed, that appellant did not retain any further authority to control the disposition of the funds after he had distributed the gifts on September 12, 1990. Specifically, the court of appeals held that “the trust agreements clearly provided that appellant’s trustee powers ended upon distribution of the gifts to St. Anthony. The trust agreements did not give appellant the power to change beneficiaries. Nor did the trust agreements grant a power to direct and guide the actual use of the monies after distribution.”

Notwithstanding, appellant asserts that Saint Anthony never actually received the gifts from the trusts because the funds have been “impounded in the investment accounts of Defendants in Brooklyn, New York.” Therefore, according to appellant, he still has the authority to control the ultimate disposition of the funds because an “actual distribution of the trust property” has never occurred. We disagree.

Appellant’s interpretation of the trust instruments is inconsistent with the distribution document executed by appellant on September 12, 1990. The document specifically noted, and appellant alleged in his complaint,6 that the gifts had been distributed by him to Saint Anthony on September 12, 1990. The document also provided that the funds could be transferred to the national organization (appellee Franciscan Sisters of the Poor Foundation, Inc.) if the money would earn a higher return than if invested locally. Appellant played an instrumental role in the preparation of the distribution document and he signed it in his capacity as a trustee of the trusts and as the chairman of FSOP. It is [104]*104apparent that the money has remained with the national organization because of the sale of Saint Anthony and because of this ongoing lawsuit.

Accordingly, we agree with the trial court and court of appeals that appellant’s discretionary powers under the terms of the trust instruments ended when appellant distributed the gifts on September 12, 1990. We believe that this conclusion is consistent with the intent of the settlors as expressed in their trusts. At the time appellant distributed the gifts on September 12, 1990, Saint Anthony was operating in accordance with its mission of caring for the poor. Thus, because appellant’s discretionary powers under the terms of the trusts ceased upon the actual distribution of the funds on September 12, 1990, appellant’s contention that he still has the authority to control the ultimate disposition of the funds clearly lacks merit.

Appellant also contends that the trial court and court of appeals erred in awarding the gifts to Saint Elizabeth. Appellant concedes that the sale of Saint Anthony has made it impossible to comply with the express terms of the trusts. In this regard, appellant does not challenge whether the bequests may be distributed to another institution. Rather, appellant asserts that it was his aunts’ wishes to benefit only those “sick/poor in the inner city of Columbus.” Therefore, appellant suggests that the funds should be distributed to a hospital located in the vicinity of Columbus, not Dayton, Ohio. Again, we disagree.

Upon a reading of the entire trust instruments, and paying particular attention to the language granting the specific bequests to Saint Anthony, we are not convinced that Bertha and Clara intended that their gifts were to remain solely within the Columbus, Ohio area. We agree with the court of appeals that “[w]hile both trusts bequeathed money ‘to ST. ANTHONY MEDICAL CENTER, Columbus, Ohio for use among the sick-poor in accordance with the hospital’s mission,’ there is no evidence that appellant’s aunts intended the gifts to remain in Columbus.” Appellant’s position that his aunts intended that their gifts were to benefit only those individuals in the Columbus, Ohio area would perhaps be more persuasive if the language in the trusts ended after the language “to ST. ANTHONY MEDICAL CENTER, Columbus, Ohio.” However, appellant’s contention is weakened by the inclusion of the language in the trusts “for use among the sick-poor in accordance with the hospital’s mission.” Given this language, it appears that Bertha and Clara did not intend to attach geographical barriers to their gifts. Rather, this plain and unambiguous language indicates that the settlors’ underlying charitable objective was to help the poor who could not afford needed health care.

In McIntire’s Admrs. v. Zanesville (1867), 17 Ohio St. 352, a testator had executed a will placing a majority of his estate into a trust “ ‘for the use and support of a poor-school, which they [the trustees] are to establish in the town of [105]*105Zanesville, for the use of the poor children in said town * * ” Id. at 353. Following the testator’s death, the trustees erected a school for children who were poor. The school was then placed under the control of the city board of education and the school was discontinued as a school used exclusively for the poor.

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Cite This Page — Counsel Stack

Bluebook (online)
679 N.E.2d 1084, 79 Ohio St. 3d 98, Counsel Stack Legal Research, https://law.counselstack.com/opinion/daloia-v-franciscan-health-system-of-central-ohio-inc-ohio-1997.