In a New York Court, Who Speaks for a Deceased Donor's Rights? No One

On Tuesday, August 18, New York Supreme Court Judge John Ellis held a hearing to help him decide whether Paul Smith’s College could defy its founder’s wishes (as expressed in his estate trust document) and change the name of the college. Reuters reported that 12 to 15 people who opposed the name change attended the two-hour hearing. The Franklin County Press-Republican newspaper reported that opponents to the proposed name change were denied legal standing at the hearing.

I'm among those opponents, along with many alumni and other friends of the college. I guess the judge is not going to read the letter I sent to him on behalf of the deceased donor. That’s okay. Aside from the deceased donor and the wishes he expressed in his estate trust document, I don’t have a horse in this race. And it is not up to people like me to protect the wishes of deceased donors. That job falls to the state attorney general and his public charities department. The AG’s office is supposed to watch over trusts established by the wills of its citizens.

However, in this case, the New York AG expressed no opposition to the requested name change. Therefore, my first question is: Who is presenting the case of Mr. Phelps Smith, the donor who died many years ago and whose gift created Paul Smith’s College with the provision that it “forever be named Paul Smith’s College of Arts and Sciences”?

In my mind, if the New York AG did not oppose the name change, there was probably no reason to impose on the time of Judge Ellis. Courts settle disputes and there was apparently no dispute hereexcept for the people who have no legal standing. As reported to me by “my man in the court room,” the assistant attorney general who attended the hearing attempted to qualify the AG’s “no objection” stance by indicating that they would not object if the court found in favor of the petition. I believe this is backwards. The AG’s office should have taken the position that the terms of the gift are clear and the college cannot defy the donor’s wishes without a compelling reason in accordance with the New York charitable gift laws.

The compelling reason that the college’s petition put forth is that the school faces a number of financial challenges. The college noted that it lost almost $2 million for the fiscal year ended June 30, 2014. In spite of that operating loss, the college’s net equity increased for the fifth year in a row. The college has reported profitable results in each of the previous four years I have examined. Yes, there was a decline in tuition revenues in 2014, but that was after increases in each of the prior years. It appears to me that 2014 was a bump in the road of an otherwise profitable academic institution.

The college’s attorney is reported to have indicated in court that Phelps Smith's will established the college, but “not what the money would be spent on, so nothing prohibits the name change.” This is in spite of the fact that the petition he filed with the court specifically requests “a release of certain restrictions upon the gift from the estate of Phelps Smith…”  The petition goes on to indicate that the gift instrument directed that “the institution be forever known as Paul Smith’s College of Arts and Sciences,” and that the petitioner seeks an order allowing it to release the direction so that the institution may be renamed. Let’s hope that the judge carefully reads the petition and discounts the gibberish expressed by the attorney in court. But I ask again: Who is in court representing Phelps Smith and pointing this out to the judge? It is not the New York AG’s office!

The Press-Republican also reported that the college’s attorney claimed that several major colleges and universities have either been named for a large donor or changed names to honor such a donor. Among others, he cited Brown University. Brown was founded in 1764, and was the seventh college in Colonial America. It was known as the College of Rhode Island until Nicholas Brown, a prominent Providence businessman and alumnus of the Class of 1786, made a gift of $5,000 and the college was renamed. Note that the name was not changed from that of a previous donor as PSC is attempting to do here. Again, the college’s attorney is playing fast and loose with the facts. But who is in court representing Phelps Smith and pointing this out to the judge?

The judge has a great deal to do before he decides this case. He has asked for additional information about the college’s finances since the petition cited a financial reason for vacating the wishes of Phelps Smith. I am sure the college will provide financial data. Who is going to counter the spin that the college and its attorney put on that financial data?  Is the judge going to retain a court-appointed advocate or independent authority to assist him, or is he only going to listen to the college’s attorney? 

Everyone is entitled to a defense attorney. Courts will not even allow a case to go forward unless both parties are represented by counsel. This basic tenet of our justice system apparently does not apply to charitable donors who have died without heirs. Who will work for justice for Phelps Smith?