Home for Incurables v. University of Maryland Medical System Corp.

797 A.2d 746, 369 Md. 67, 2002 Md. LEXIS 220
CourtCourt of Appeals of Maryland
DecidedMay 6, 2002
Docket132, September Term, 1999
StatusPublished
Cited by2 cases

This text of 797 A.2d 746 (Home for Incurables v. University of Maryland Medical System Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Home for Incurables v. University of Maryland Medical System Corp., 797 A.2d 746, 369 Md. 67, 2002 Md. LEXIS 220 (Md. 2002).

Opinion

ELDRIDGE, Judge.

The controversy in this case concerns a paragraph in a will which makes a charitable bequest to a private nonprofit hospital known as the “Home for Incurables of Baltimore City” or the “Keswick Home.” The purpose of the bequest, as stated in the will, was for the Keswick Home to construct a new building for “white patients who need physical rehabilitation.” The racially discriminatory “white” patient limitation on the use of the building is clearly illegal. 1 The will further provides that if the bequest is “not acceptable to the Keswick Home, then this bequest shall go to the University of Maryland Hospital to be used for physical rehabilitation.” The University of Maryland Hospital is part of the University of Maryland Medical System Corporation. 2

The Keswick Home will not and cannot comply with the racially discriminatory condition, but otherwise the bequest is fully acceptable to the Home. The alternative disposition to the -University of Maryland Hospital does not contain the unlawful racially discriminatory condition.

The broad question before us is whether, under Maryland law, a court will enforce the illegal racially discriminatory *70 condition by ordering that the proceeds be paid to the alternative beneficiary, the University of Maryland Hospital. Our answer to this question shall be “No.” Instead, the provisions of the will should be applied without giving any effect to the word “white.”

I.

In the trial court, both the appellant Keswick and the appellee University Hospital filed motions for summary judgment based upon a stipulation of facts as well as numerous other documents. The trial court disposed of the case by granting the University’s motion for summary judgment. Consequently, we shall set forth the facts in the light most favorable to Keswick. Lovelace v. Anderson, 366 Md. 690, 695, 785 A.2d 726, 728-729 (2001), and cases there cited. Nevertheless, there do not appear to be any disputed factual issues which are material to our decision in this case.

Dr. Jesse C. Coggins executed six wills, with multiple codicils, over the course of his lifetime. Beginning with his original will prepared in January 1944, and in every will thereafter, Dr. Coggins left the residue of his estate in trust and provided that, upon termination of the trust, the corpus was to be distributed to the “Keswick Home, formerly Home for Incurables of Baltimore City, with the request that said Home use the estate and property thus passing to it for the acquisition or construction of a new building to provide additional housing accommodations to be known as the ‘Coggins Building....’” Throughout the years, Dr. Coggins and his wife were closely associated with the Keswick Home. Thus, Dr. Coggins operated the Laurel Sanitarium from which he regularly transferred patients to Keswick because of its rehabilitative capabilities. Mrs. Coggins became a nurse at the Sanitarium in 1940, and she and her husband continued to operate the sanitarium for the next 23 years. Mrs. Coggins served actively on Keswick’s Board of Directors, and, toward the end of her life, Mrs. Coggins was a resident in Keswick’s integrated Coggins Building. According to a memorandum by the Trustee, Mercantile Safe Deposit & Trust Company, in *71 1986 Mrs. Coggins requested that the Trustee change some of the securities in the trust, “despite the fact that her . .. income would decline.. . . ” The memorandum stated that “[h]er feeling is that her personal assets are also pledged to Keswick and that this gesture will enlarge the ultimate gifts which Keswick will receive.”

Dr. Coggins died on January 21, 1963. In his last will, dated December 27, 1962, after making a bequest of tangible personal property and a number of other bequests, Dr. Cog-gins gave the residue of his estate to the Mercantile Safe Deposit & Trust Company (“Mercantile”) to be held by it as Trustee under “ITEM 5” of the will. The trust provided for monthly payments to four income beneficiaries until the death of the last of them. The last of these annuitants was Dr. Coggins’s widow who died on September 10, 1998.

Paragraph (f) of ITEM 5 of the will stated that, upon the death of the survivor of the four annuitants,

“the trust shall terminate and the assets thereof as then constituted together with all unpaid income shall be paid over free of trust unto the KESWICK HOME, formerly Home for Incurables of Baltimore City, with the request that said Home use the estate and property thus passing to it for the acquisition or construction of a new building to provide additional housing accommodations to be known as the ‘Coggins Building,’ to house white patients who need physical rehabilitation. If not acceptable to the Keswick Home, then this bequest shall go to the University of Maryland Hospital to be used for physical rehabilitation.”

The clause “to house white patients who need physical rehabilitation,” and the alternative gift over to University Hospital, appeared for the first time in Dr. Coggins’s final will executed less than one month before his death.

On February 7, 1963, about two weeks after Dr. Coggins’s death, John T. Kenny, Vice President of Mercantile, provided a copy of the will to Keswick and stated in an accompanying letter:

*72 “On the death of the last survivor of the four annuitants, the trust terminates, and the estate passes free of trust to the Keswick Home as directed in Item 5(f) of the Will.”

In 1964, Keswick’s Board of Directors began to discuss a plan, prepared by Keswick’s “New Building Committee,” for the construction of a new building. Keswick’s Board of Directors in 1969 designated the new building that was to be constructed as the “Coggins” building, “in honor of the late Dr. Jesse C. Coggins and in appreciation of his great generosity to ‘Kes-wick.’ ” , Construction of the building began in 1970 and was financed by a loan from Mercantile, gifts, and a grant under the federal Hill Burton Act, 42 U.S.C. § 291 et seq. Construction was completed in 1974, and the building was dedicated as the “Coggins Building” in 1975.

During the next twenty years, Keswick made renovations and constructed a major addition to the Coggins Building. These were paid for by donations and bank loans. As of the date the trust terminated, Keswick had expended nearly $11 million in construction costs and capitalized repairs for the Coggins Building, which was being used to house approximately 160 residents, all of whom were or had been receiving physical rehabilitation services. After operating the Coggins building for many years, Keswick presented Mercantile with future plans that outlined a program for the expenditure of an additional $15.5 million, to be taken from the Coggins Trust, in construction costs for more additions and renovations to the Coggins Building.

Upon the death of Mrs. Coggins in September 1998, a Mercantile memorandum stated:

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Bluebook (online)
797 A.2d 746, 369 Md. 67, 2002 Md. LEXIS 220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-for-incurables-v-university-of-maryland-medical-system-corp-md-2002.