Smithers v. St. Luke's-Roosevelt Hospital Center

281 A.D.2d 127, 723 N.Y.S.2d 426, 2001 N.Y. App. Div. LEXIS 3368
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 5, 2001
StatusPublished
Cited by24 cases

This text of 281 A.D.2d 127 (Smithers v. St. Luke's-Roosevelt Hospital Center) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smithers v. St. Luke's-Roosevelt Hospital Center, 281 A.D.2d 127, 723 N.Y.S.2d 426, 2001 N.Y. App. Div. LEXIS 3368 (N.Y. Ct. App. 2001).

Opinions

OPINION OF THE COURT

Ellerin, J.

The issue before us is whether the estate of the donor of a charitable gift has standing to sue the donee to enforce the terms of the gift. We conclude that in the circumstances here present plaintiff estate does have the necessary standing.

A recitation of the factual allegations in the complaint, which must be deemed true on this application to dismiss (see, e.g., Cron v Hargro Fabrics, 91 NY2d 362), is instructive. Plaintiff Adele Smithers is the widow of R. Brinkley Smithers, a recovered alcoholic who devoted the last 40 years of his life to the treatment and understanding of the disease of alcoholism. In 1971 Smithers announced his intention to make a gift to defendant St. Luke’s-Roosevelt Hospital Center (the Hospital) of $10 million over time for the establishment of an alcoholism treatment center (the Gift). In his June 16, 1971 letter to the Hospital creating the Gift, Smithers stated, “Money from the $10 million grant will be supplied as needed. It is understood, however, that the detailed project plans and staff appointments must have my approval.”

According to the complaint, the Hospital agreed to use the Gift to expand its treatment of alcoholism to include, following five days of detoxification in the hospital, “rehabilitation in a free-standing, controlled, uplifting and non-hospital environment,” that is, a “therapeutic community” removed from the hospital setting. With $1 million from the first installment of the Gift, the Hospital purchased a building at 56 East 93rd Street in Manhattan to house the rehabilitation program, and in 1973 the Smithers Alcoholism Treatment and Training Center opened there.

[129]*129Smithers thereafter remained involved in the management and affairs of the Smithers Center. At times, according to the complaint, the Hospital sought to avoid its obligations under the terms of the Gift, and its relationship with Smithers was an uneasy one. On July 31, 1978, Smithers wrote that the Hospital had “not lived up to my letter of intent,” and that “[u]nder the circumstances no funds or stock will be forthcoming from me.” Only slightly more than half of the Gift had been made at that time.

In 1981 the president of the Hospital, Gary Gambuti, commenced discussions with Smithers in an effort to induce him to complete the Gift. In a November 5, 1981, letter, Smithers informed Gambuti that he had no objection to the sale of the building. Smithers noted in the letter that when the Smithers rehabilitation facility was set up there was practically no place in the New York area for an alcoholic to undergo rehabilitation after detoxification, but now there are a number of facilities, most of which “have the advantage of being at least a few miles out of town — so there is more chance of outdoor recreation.” According to Mrs. Smithers, her husband had no intention of completing the Gift, but agreed to the sale of the building to keep the Smithers Center afloat. In any event, Gambuti, in response, assured Smithers of the Hospital’s continuing interest in the Smithers Alcoholism Program and its commitment to expanding its entire alcoholism treatment program. He wrote that he saw no reason to sell the building until a plan for this program had been proposed, and that he would appreciate receiving Smithers’s comments and suggestions before the plan was finalized. He expressed his hope that Smithers would be willing “to sit down with us and review our proposals for the future expansion in alcoholism.” Contrary to the dissent’s categorical conclusion that this appeal concerns merely the sale of the building, expressly agreed to by Smithers, that consent was given before the Gift’s completion and must be viewed in the context of what follows.

Over the next two years, Gambuti repeatedly assured Smithers that the Hospital would strictly adhere to the terms of the Gift and carry out Smithers’s intent in making it. Only when Smithers was completely satisfied of the Hospital’s intentions did he agree to complete the Gift, which he accomplished in an October 24, 1983 letter, stating:

“Thanks to the cooperation of the officers and staff of the Smithers Center and St. Luke’s-Roosevelt [130]*130Hospital Center (the ‘Hospital’), the Smithers Center is now in splendid shape, and I feel that the time has come for me to complete the funding of the project. (In this letter I will refer to all aspects of the existing alcoholism program, including inpatient, out-patient and rehabilitation services, and any future extension thereof, collectively as the ‘Smithers Center’). * * *
“This final contribution is subject to the following restrictions and is to be used exclusively for the following purposes.
“First, it is my intention that my final contribution be set aside as an endowment fund, (the ‘Smithers Endowment Fund’). The income is to be used exclusively for the support of the Smithers Center, to the extent necessary for current operations, and any unused income remaining at the end of each calendar year is to be accumulated and added to principal. Principal of the Smithers Endowment Fund is not to be expended for any purpose except for remodeling or rebuilding the administration section and out-patient floor at the Building on 58th Street, and for construction, repairs or improvements with respect to any other building space at any time used directly in connection with the Smithers Center. Such capital expenditures should be considered as secondary to the endowment function and should in no event exceed in the aggregate one half of the initial value of the Smithers Endowment Fund.” (Emphasis added.)

Beneath Smithers’s signature is the following paragraph signed and dated by Gambuti:

“The contribution of the number of shares of IBM Stock referred to above by R. Brinkley Smithers is gratefully accepted, subject to the restrictions set forth in this letter, in full satisfaction of any outstanding pledge or other obligation.” (Emphasis added.)

The existing rehabilitation services, which Smithers included in his definition of the Smithers Center and which the Hospital’s acceptance of the Gift encompassed, were housed in the free-standing Smithers building and, according to the complaint, were intended always to be housed in a free-standing facility.

[131]*131In late 1992, the Hospital asked Mrs. Smithers to organize a “Silver Anniversary Gala,” in honor of her husband and herself, to raise funds for restoration of the building and for a scholarship program for Smithers Center patients in need of financial assistance. From 1992 to March 1995, she and, until his death in January 1994, Smithers worked to organize the event, securing pledges for millions of dollars’ worth of donated goods and services. The event was scheduled for April 1995. Then, in March 1995, just over a year after Smithers’s death, the Hospital announced that it planned to move the Smithers Center into a hospital ward and sell the East 93rd Street building. The Hospital directed Mrs. Smithers, a month and a half before the fundraiser was scheduled to be held, to cancel the event.

The Hospital’s announced intentions aroused Mrs. Smithers’s suspicions. First, relocating the patients in a hospital ward would violate the Hospital’s obligation to run the Smithers Center in a free-standing facility physically separate from the Hospital.

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Bluebook (online)
281 A.D.2d 127, 723 N.Y.S.2d 426, 2001 N.Y. App. Div. LEXIS 3368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smithers-v-st-lukes-roosevelt-hospital-center-nyappdiv-2001.