The opinion
[Cite as First Merit Bank v. Akron Gen. Med. Ctr., 2018-Ohio-2689.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
FIRSTMERIT BANK, N.A. JUDGES:
Hon. John W. Wise, P. J.
Plaintiff-Appellee Hon. W. Scott Gwin, J.
Hon. Craig R. Baldwin, J.
-vs-
Case No. 2017 CA 00134
AKRON GENERAL MEDICAL
CENTER, et al.
OPINION
Defendants-Appellants
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Probate Division, Case No. 225942
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: July 9, 2018
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellant DHSC
REX W. MILLER ROCCO D. POTENZA
LESH, CASNER & MILLER HANNA, CAMPBELL & POWELL
Suite 606 Belden Place 3737 Embassy Parkway, Suite 100
4150 Belden Village Street, NW Akron, Ohio 44333
Canton, Ohio 44718-3651
For Massillon Rotary
For Defendant AG
JUSTIN S. GREENFELDER
TODD K. DeBOE BUCKINGHAM DOOLITTLE & Burroughs LLC
PRINCIPAL ASSISTANT ATTORNEY GENERAL 4518 Fulton Drive, NW, Suite 200
Charitable Law Division PO Box 35548
30 East Broad Street, 14th Floor Canton, Ohio 44735
Columbus, Ohio 43215
For Health Foundation
MARK R. PERCIVAL
BROWN & PERCIVAL CO., LPA
121 Lincoln Way East
Massillon, Ohio 44646
Stark County, Case No. 2017 CA 00134 2
Wise, P. J.
{¶1} Appellant DHSC, LLC dba Affinity Medical Center appeals the June 20,
2017, decision of the Stark County Probate Court’s decision declaring it was not entitled
to proceeds from the Kathryn L. Seymour Amended Trust.
{¶2} Appellees in this matter are First Merit Bank, N.A., Massillon Rotary
Foundation Trust, The Health Foundation of Greater Massillon, Akron General Medical
Center and the Attorney General Mike Dewine.
STATEMENT OF THE FACTS
{¶3} On April 18, 2016, Plaintiff-Appellee FirstMerit Bank, N.A. (FirstMerit), as
Trustee of the Kathryn L. Seymour Revocable Trust, filed a complaint for declaratory
judgment with the Stark County Court of Common Pleas, Probate Division. First Merit
stated that Kathryn L. Seymour had established a Trust and among the beneficiaries of
the Trust, she named Massillon Community Hospital.
{¶4} In its Complaint, FirstMerit alleged that while Massillon Community Hospital
was a not-for-profit hospital at the time Ms. Seymour established the trust, it subsequently
was sold to a for-profit entity and became known as Affinity Medical Center. FirstMerit
further alleged that the Seymour Trust was a "charitable trust" and that because her
charitable intent could not be carried out, the court should apply the cy pres doctrine and
designate the proceeds of the Trust be distributed to another charitable organization.
{¶5} FirstMerit named as Defendants Akron General Medical Center, Appellant,
DHSC, LLC dba Affinity Medical Center (hereinafter referred to as "Affinity"), St. John
United Church of Christ, Salvation Army and the Ohio Attorney General. Thereafter, the
Greater Health Foundation of Massillon and the Greater Massillon Rotary Foundation
Stark County, Case No. 2017 CA 00134 3
intervened as Defendants, claiming interest in the proceeds of the Trust. All parties
entered answers to the Trustee's complaint. Thereafter, pursuant to Order of the Court,
the parties submitted briefs in support of their respective positions.
{¶6} On June 20, 2017, the Stark County Probate Court issued an Order
declaring that Appellant Affinity was not entitled to the proceeds of the Trust. Instead, the
court held that the cy pres doctrine applied and awarded the proceeds of the Trust be
distributed to Defendants Health Foundation of Greater Massillon and Massillon Rotary
Foundation Trust.
{¶7} It is from this decision Appellant Affinity now appeals, raising the following
errors for review:
ASSIGNMENTS OF ERROR
{¶8} “I. THE TRIAL COURT ERRED IN CONCLUDING THAT APPELLANT-
AFFINITY, WAS NOT ENTITLED TO THE PROCEEDS OF THE AMENDED TRUST,
WHERE THE CLEAR AND UNAMBIGUOUS TERMS OF KATHRYN SEYMOUR'S
AMENDED TRUST EXPRESSED HER INTENT THAT THE PROCEEDS BE
DISTRIBUTED TO MCH, ITS SUCCESSORS OR ASSIGNS, FOR THE SPECIFIC
PURPOSE OF IMPROVING THE HOSPITAL FACILITIES.
{¶9} “II. THE TRIAL COURT ERRED IN CONSIDERING EXTRINSIC
EVIDENCE, WHEN IT INDICATED IT WOULD NOT DO SO. MOREOVER, IF RESORT
TO EXTRINSIC EVIDENCE IS APPROPRIATE DUE TO ANY PERCEIVED AMBIGUITY,
THE EXTRINSIC EVIDENCE DEMONSTRATES THAT MS. SEYMOUR KNEW, AT THE
TIME SHE EXECUTED HER AMENDED TRUST, THAT MCH WOULD BECOME A FOR-
PROFIT HOSPITAL.
Stark County, Case No. 2017 CA 00134 4
{¶10} “III. THE TRIAL COURT ERRED IN APPLYING THE CY PRES DOCTRINE
WHERE THE GRANTOR CLEARLY RESTRICTED THE BEQUEST TO A SPECIFIC
LIMITED PURPOSE. THE CY PRES DOCTRINE ONLY APPLIES WHERE THE TRUST
LANGUAGE EXHIBITS A GENERAL CHARITABLE INTENT.”
I., II., III.
{¶11} We have chosen to address these assignments collectively because of the
interrelationship of the facts and laws pertinent to each assignment of error.
{¶12} In each of its assignments of error, Appellant claims the trial court erred in
finding that Appellant Affinity was not entitled to the proceeds from the Trust and applying
the cy pres doctrine. We disagree.
{¶13} This case involves the Kathryn Seymour Amended Trust Agreement, which
provided, inter alia, that upon Ms. Seymour’s death, her personal and real property would
be distributed to her daughter. The balance of the trust estate was to be distributed as
follows:
2. All of the rest, residue and remainder of the trust estate shall be
converted to cash and distributed as follows:
a. Fifty percent (50%) thereof to St. John's United Church of Christ
presently located at 121 Tremont Ave. S.E., Massillon, Ohio, its successors
or assigns. This bequest is unrestricted and the Board of Trustees or other
governing body may use and expend the same for the benefit of St. John's
United Church of Christ, its successors or assigns, in any manner it deems
appropriate.
Stark County, Case No. 2017 CA 00134 5
b. Forty percent (40%) thereof to the Massillon Community Hospital,
its successors or assigns. These funds shall be restricted so as to benefit
only the facilities of said hospital at 875 Eighth Street, N.E., Massillon, Ohio.
These improvements need not be limited to building renovation. Any
expenditure of funds which benefit the operation of the above location shall
be permitted.
c. Ten percent (10%) thereof to the general fund of the Massillon,
Ohio Branch of the Salvation Army.
Cy Pres Doctrine
{¶14} The cy pres doctrine is a rule of construction by which charitable gifts are
preserved for the public benefit. In the law of trusts it refers to a rule of construction used
by courts of equity to effectuate the intention of a charitable donor “as near as may be”
when it has become impossible or impractical by reason of changing conditions or
circumstances to give literal effect to the donor's intention. Cheney v. State Council of
Ohio Junior Order United Am. Mechanics (1959), 11 O.O.2d 112, 162 N.E.2d 242, 244.
{¶15} The cy pres doctrine is a saving device that permits a court to direct the
application of the property held in a charitable trust to a charitable purpose different from
that designated in the trust instrument. Daloia v. Franciscan Health Sys. of Cent. Ohio,
Inc. (1997), 79 Ohio St.3d 98, 106, 679 N.E.2d 1084.
“ ‘Roughly speaking, it is the doctrine that equity will, when the charity
is originally or later becomes impossible, inexpedient, or impracticable of
fulfillment, substitute another charitable object which is believed to
approach the original purpose as closely as possible. It is the theory that
Stark County, Case No. 2017 CA 00134 6
equity has the power to revise a charitable trust where the settlor had a
general charitable intent in order to meet unexpected emergencies or
changes in conditions which threaten its existence.’” (Emphasis added.) Id.,
quoting Bogert, Trusts & Trustees (2 Ed.Rev.1991) 95-96, Section 431.
{¶16} At common law, Ohio courts have followed the traditional view that before
the cy pres doctrine will be applied by a court, the following three essentials must be
present:
(1) there must be a valid charitable trust and one that is invalid will
not be cured by an application of the doctrine;
(2) it must be established that it is impossible or impractical to carry
out the specific purposes of the trust;
(3) it must be established that the donor evinced a general charitable
intent. Cheney at 244.
{¶17} The common-law doctrine of cy pres has recently been codified at
R.C. §5804.13, which provides:
(A) Except as otherwise provided in division (B) of this section, if a
particular charitable purpose becomes unlawful, impracticable, or
impossible to achieve, all of the following apply:
(1) The trust does not fail in whole or in part.
(2) The trust property does not revert to the settlor or the settlor's
successors in interest.
(3) The court may apply cy pres to modify or terminate the trust by
directing that the trust property be applied or distributed, in whole or in part,
Stark County, Case No. 2017 CA 00134 7
in a manner consistent with the settlor's charitable purposes. In accordance
with section 109.25 of the Revised Code, the attorney general is a
necessary party to a judicial proceeding brought under this section.
(B) A provision in the terms of a charitable trust for the distribution of
the trust property to a noncharitable beneficiary prevails over the power of
the court under division (A) of this section to apply cy pres to modify or
terminate the trust.
{¶18} The official comment to R.C. §5804.13 indicates that this codification
“modifies the doctrine of cy pres by presuming that the settlor had a general charitable
intent when a particular charitable purpose becomes impossible or impracticable to
achieve.”
{¶19} In the case sub judice, the trial court made the following findings:
[T]he Grantor demonstrated a charitable intent.
Due to the changing circumstances surrounding the merger of
Massillon Community Hospital as a now for-profit hospital operating as
Affinity Hospital, the Grantor’s charitable intent has become frustrated and
impossible to achieve.
A distribution of the funds to a for-profit hospital would contradict
Grantor’s overt charitable desires. (June 20, 2017, JE at 8)
{¶20} Based on these findings, the probate court determined that pursuant to
R.C. §5804.13, the court could apply the cy pres doctrine in order to save the charitable
distribution and maintain Grantor’s overarching charitable intent.
Stark County, Case No. 2017 CA 00134 8
{¶21} Upon review, we find no error in the trial court’s analysis or decision in this
matter. Initially, we find that the trial court’s determination that the gift to Massillon
Community Hospital was impossible to carry out because such entity no longer existed.
The trial court then found, as do we, that DHSC dba Affinity was not an appropriate
recipient of the gift because it is a for-profit entity.
{¶22} The trial court then looked at the dispositive language contained in the Trust
and found it to be clear and unambiguous. The court found that the Settlor had intended
for her residuary estate to be distributed to only charitable organizations, i.e., a church, a
non-profit hospital and the Salvation Army. The court found that such evidenced a
charitable intent.
{¶23} We likewise find that Ms. Seymour’s intent was charitable, as evidenced by
choosing only charitable organizations and in leaving approximately half of the residue
and remainder of her Trust to a hospital, a health-based organization. Where a trust
benefits the general promotion of health, the settlor’s intent is presumed to be charitable.
Bank One Tr. Co., NA v. Miami Valley Hosp., 2nd Dist. Montgomery No. 19703, 2003-
Ohio-4590, ¶ 26. A trust established to generally benefit the promotion of health is a per
se demonstration of the testator's charitable intent. See Scott, Law of Trusts, at Section
368, p. 130. The law favors charitable bequests, and they are liberally construed to
accomplish the testator or grantor's purpose. Wills v. Union Savings & Trust Co. (1982),
69 Ohio St.2d 382, 386, 23 O.O.3d 350, 352–353, 433 N.E.2d 152, 156; Becker v. Fisher
(1925), 112 Ohio St. 284, 294–295, 147 N.E. 744, 747; Hess v. Sommers (1982), 4 Ohio
App.3d 281, 285, 4 OBR 500, 504–505, 448 N.E.2d 494, 498–499.
Stark County, Case No. 2017 CA 00134 9
{¶24} Finally, we find no merit in Appellant’s argument that the trial court erred in
considering extrinsic evidence in reaching its decision. Appellant argues that Massillon
Community Hospital’s status as a not-for-profit organization is not contained in Ms.
Seymour’s Trust agreement and therefore constitutes extrinsic evidence. The non-profit
status of Massillon Community Hospital was agreed to by the parties as set forth in the
Complaint and Answers thereto and was never a contested issue in this matter. DHSC
dba Affinity admitted in its Answer that Massillon Community Hospital was a non-profit
organization at the time Ms. Seymour amended her Trust to include such gift. As such,
we do not find that the trial court considered extrinsic evidence in making its ultimate
decision in this matter.
{¶25} Accordingly, Appellant’s assignments of error are overruled.
{¶26} For the reasons stated in the foregoing opinion, the judgment of the Court
of Common Pleas, Probate Division, Stark County, Ohio, is affirmed.
By: Wise, P. J.
Gwin, J., and
Baldwin, J., concur.
JWW/d 0627