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What you need to know for 01/20/2018

Judge orders St. Clare's bequests go to Ellis


Judge orders St. Clare's bequests go to Ellis

Ellis Hospital will receive hundreds of thousands of dollars in charitable gifts originally meant fo
Judge orders St. Clare's bequests go to Ellis
Ellis Medicine dedicated its new Medical Center of Clifton Park last month.
Photographer: Marc Schultz

Ellis Hospital will receive hundreds of thousands of dollars in charitable gifts originally meant for the St. Clare’s Hospital Foundation following a recent ruling by Schenectady County Surrogate Court Judge Vincent Versaci.

The case centered over a portion of three trusts and estates designated for St. Clare’s Hospital of Schenectady, New York Foundation. Niskayuna philanthropist Kenneth T. Lally, local librarian Vera O. Chase and Schenectady County resident Mary G. York all wrote St. Clare’s into their wills before the hospital ceased to operate and its assets were assumed by Ellis Hospital in 2008. All three died between 2007 and 2010.

The fiduciaries of their estates were at a loss over what to do with these gifts since they couldn’t be handed over to St. Clare’s as originally intended by their donors. St. Clare’s gave up its license to operate as a hospital after the state Berger Commission recommendations became law and Ellis acquired its facilities, assets and operations.

“Understanding donors’ wishes can be challenging when gifts are part of an estate and there has been much change in the region,” said Anoush Koroghlian Scott, an attorney for Ellis Medicine.

So the fiduciaries petitioned the court to apply the doctrine of cy pres, a French term that means “as near as possible,” to their charitable trusts. It allows the court to decide as closely as possible the original intention of a donor.

Even though St. Clare’s no longer operated as a hospital, it retained its foundation, a nonprofit corporation that once helped the hospital expand and develop services in the community. After the hospital closed, its foundation developed a new purpose: to promote health and well-being in the community with programs and special events consistent with the teachings of the Roman Catholic Church.

Foundation President Joe Pofit and the foundation’s attorney did not return calls for comment Wednesday.

Court records show the foundation opposed the use of cy pres in the case and argued that even though the hospital had closed, the foundation still existed — just under a different name and with a different charitable purpose.

Ellis contended that the donors had intended to benefit St. Clare’s as a hospital, not as the corporation itself.

“Ellis further argues that a decree ordering the distribution of the [gifts] to Ellis will most effectively accomplish the general charitable purposes intended by the three respective donors,” Versaci wrote in his summary.

State Attorney General Eric Schneiderman also argued in support of Ellis receiving the gifts.

It’s unclear how much the three gifts amount to yet, said Suzann Smart, executive director of the Foundation for Ellis Medicine. The fiduciaries have not yet sent over relevant paperwork on the gifts, she said. Attorneys for each of the estates did not return calls Wednesday.

Lally had named 15 charities in his trust, including the Ellis Hospital Foundation. Chase and York had each donated to Ellis in the past.

In order for the court to apply cy pres, it had to meet a three-prong test that determined the gifts were indeed charitable in nature, were not intended for specific purposes and were impossible to achieve without the doctrine.

At the time each donor executed their wills, St. Clare’s was a hospital that provided acute patient care services. Today, it is no longer a hospital and does not provide these services.

“St. Clare’s, as it existed at the time of the gifts at issue, with its original mission of providing hospital services, bears little resemblance to St. Clare’s as it exists today,” Versaci wrote. “It has ceased to exist in the manner that was known to the donors, that is, as a hospital providing acute patient care services.”

The court decided Ellis should be the beneficiary of the gifts in order to most effectively accomplish the donor’s original intent. After all, it had assumed St. Clare’s assets and facilities, provided the hospital services St. Clare’s had once provided, and operated at the same location St. Clare’s once did, Versaci wrote.

Scott, vice president of legal affairs at Ellis, said the ruling clarified the issues for all parties involved so they could best honor the wishes of Lally, Chase and York.

“We all share in the commitment to respect the wishes of donors past, present and future who support health care and hospital care in our community,” he said. “Philanthropy plays a vital role in the future of health care and it allows all of us to continue strengthening services for our community.”

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