Whenever someone brings initiates a lawsuit, they must have standing to sue. Those with standing generally must have a financial interest in the matter. In Smithers v. St. Luke’s-Roosevelt Hospital Center, the Appellate Division had to determine if the administrator of an estate had standing to sue a donee to enforce the terms of a gift.
In a June 16, 1971 letter to St. Luke’s-Roosevelt Hospital Center (Hospital) (defendant), R. Brinkley Smithers announced his intention to make a $10 million gift to the Hospital over time to establish an alcoholism treatment center. In the letter, he retained a veto power for himself over the center’s project plans and staff appointments. As it was Smithers’ intention that the treatment center be established in a separate facility, the Hospital purchased a building and opened the Smithers Alcoholism Treatment and Training Center (Center) in 1973.
In 1978, Smithers informed the Hospital that no further gift funds would be transferred because the Hospital was not complying with the terms of his gift. After the hospital president convinced Smithers of the Hospital’s intention to strictly comply with the terms of the gift, Smithers completed the gift in 1983.
Smithers died in 1994. At that time, he and his wife, Adele, had been planning, at the Hospital’s request, a gala to raise funds for the Center. However, the Hospital suddenly announced in 1995 its intention to relocate the Center and instructed Mrs. Smithers to cancel the event. When Mrs. Smithers’ accountants discovered that the Hospital had been misappropriating gift funds, she alerted the Attorney General, who commenced an investigation and learned that the Hospital had been transferring the gift funds to its general fund as “loans.”
Although the Hospital complied with the Attorney General’s demand to return the funds, the Hospital persisted in its plan to sell the building where the Center was located. The Attorney General believed that the terms of the gift did not prevent the Hospital from selling the building and agreed with the Hospital that it would pay $1 million from the proceeds of the sale to the Center.
Mrs. Smithers brought an action as Special Administratrix of her husband’s estate against the Hospital and the Attorney General, both of whom moved to dismiss for lack of standing. The trial court dismissed the complaint, holding that Mrs. Smithers lacked standing because she represented the beneficiaries and had no tangible stake in the gift. The Attorney General assert to the Appellate Division that only an Attorney General had standing to enforce the gift.
In finding that just as a donor may sue to enforce the terms of their gift, the administrator of a donor’s estate has standing to bring an action to enforce the terms of the donor’s gift, the Appellate Division noted that there is a general rule barring suits by beneficiaries or parties that do not have a financial stake in the matter. However, the court found that that general rule does not apply.
The trial court erred in finding that Mrs. Smithers sued on behalf of the beneficiaries and lacked a stake in the litigation because she “had no position or property to lose if the Hospital alters its administration of the Gift.” As the Special Administratrix of the estate, Mrs. Smithers brought the action on behalf of her late husband’s estate to enforce his agreement with the Hospital by seeking to prevent the Hospital from selling the building and diverting the funds to its general account. Moreover, it was Mrs. Smithers who initially investigated and discovered the Hospital’s misappropriation of the funds to which she alerted the Attorney General.
Since the Attorney General’s interest in enforcing the gift on behalf of the beneficiaries does not always align with the donor’s interest in enforcing compliance with the intent of his gift, there is a need to allow concurrent standing for the donor and Attorney General. Thus, Mrs. Smithers, as Special Administratrix, has standing on behalf of her late husband’s estate to enforce the terms of the gift.