In re Trust of Mary Baker Eddy
In re Trust of Mary Baker Eddy
Opinion
The Second Church of Christ, Scientist, Melbourne (Australia) appeals an order of the Circuit Court ( King , J.), denying it standing to request affirmative relief and enforce certain charitable trusts created by the will of Mary Baker Eddy. We affirm.
I. Factual and Procedural Background
The relevant facts follow. Mary Baker Eddy founded The First Church of Christ, Scientist, and, upon her death in 1910, her will established two testamentary trusts, known as the Clause VI Trust and Clause VIII Trust. The Clause VI Trust bequeathed to the "Christian Science Board of Directors of The Mother Church" $ 100,000 in trust "for the purpose of providing free instruction for indigent, well educated, worthy Christian Scientists." Clause VIII of Mrs. Eddy's will devised "all the rest, residue and remainder of [her] estate ... to The Mother Church - The First Church of Christ, Scientist, in Boston, Massachusetts, in trust," for certain "general purposes." She directed, inter alia , that "such portion of the income of [her] residuary estate as may be necessary shall be used for the purpose of keeping in repair the church building" and her former *417 home in Boston and that "the balance of said income, and such portion of the principal as may be deemed wise," shall be used "for the purpose of more effectually promoting and extending the religion of Christian Science as taught by [Mrs. Eddy]."
In previous litigation concerning these trusts, we upheld the validity of the trusts and established that the bequest in Clause VIII was to be held in trust for two purposes, church building repair and "promoting and extending the religion of Christian Science as taught by [Mrs. Eddy]."
Glover v. Baker
,
The trustees of the Clause VIII Trust were comprised of the Board of Directors of the Mother Church and Josiah Fernald, the administrator of Mrs. Eddy's estate, until Mr. Fernald's death in 1949. At that time, Judge Lord of the probate court, in a letter to the trustees, concluded that it was "not necessary to fill the vacancy [of Mr. Fernald]" and that the "five members of the Christian Science Board of Directors who are the surviving trustees ... shall constitute the sole trustees" of the Clause VIII Trust. Since the 1949 letter, the trustees of the Clause VIII Trust have all been members of the Mother Church Board of Directors.
In 1993, following an investigation by the New Hampshire Director of Charitable Trusts (DCT) into a five million dollar loan from the Clause VIII Trust to the Mother Church to be used to fund a failed television venture, the Probate Court ( Cushing , J.) approved a stipulation between the DCT and the trustees of the Clause VIII Trust. The stipulation provided, inter alia , that: (1) the Mother Church agreed to repay the loan to the Clause VIII Trust; (2) the Clause VIII Trust income was to be used to repair the church, with any available, remaining income to be applied to the promotion and extension of Christian Science, at the discretion of the trustees; (3) further loans from the trust were prohibited; and (4) the principal of the Clause VIII Trust could only be invaded with court approval.
The current litigation commenced in 2015, when Second Church, an alleged qualified beneficiary of the Clause VIII Trust, sought to review, and potentially object to, the annual accounting filed by the trustees. Although the DCT assented to Second Church's motion, the trustees objected on the basis that Second Church, as a "branch church," lacked standing to sue. Second Church responded by arguing that it had standing under the special interest doctrine. The court scheduled a hearing to address the issue of standing. However, the court did not rule on Second Church's motion or the standing issue because the parties agreed at the hearing that Second Church would withdraw its motion and the DCT, Second Church, and the trustees would cooperate to resolve concerns raised by Second Church and the DCT.
Notably, prior to the court's scheduling order, the DCT had not responded to the concerns voiced by Second Church. Thereafter,
*418
the DCT filed a memorandum in April 2016 asserting that Second Church did not have special interest standing, especially in light of the DCT's "plan to review the Clause VIII Trust's decision making concerning its distributions." In his memorandum, the DCT recognized that prior litigation had arisen from the "tension" between the two beneficial purposes of the Clause VIII Trust, namely: (1) repair of the Mother Church building(s); and (2) "promoting and extending the religion of Christian Science." The DCT also acknowledged the tension between the 1912 decision in
Chase
,
Thereafter, following the DCT's objection to the trustees' accounts filed in 2016, the DCT and trustees reached an agreement and the trustees filed a motion, assented-to by the DCT, to, among other things, approve an amended account. Second Church moved for authorization to file an amicus curiae brief voicing its continuing concerns. The trial court issued an order requiring the trustees to file accounts audited by an independent auditor. The court also denied Second Church's motion, but indicated that Second Church should share information with the DCT who, by statute, represents their interests in this matter. See RSA 564-B:4-405(c) (2007).
Subsequently, the trustees submitted an assented-to motion to, inter alia , amend the 1993 order. Second Church, again, sought to submit a brief as amicus curiae . The trustees objected. Second Church filed a responsive pleading as well as a status report and a request for time to conduct discovery, despite the fact that its standing to participate in this matter had not yet been determined. The court scheduled a hearing for November 2017. Prior to the hearing, the trustees filed a memorandum concerning the issue of standing. Second Church responded by moving for the appointment of an independent trustee and filing a memorandum on standing.
In March 2018, the trial court issued an order finding that Second Church failed to satisfy its burden to demonstrate that it had standing. We note that in making this determination, the trial court did not identify the standard by which it decided the standing issue - i.e. , whether the trial court considered the challenge to Second Church's standing as a motion to dismiss.
In its order, the trial court acknowledged the general rule that when a trust is determined to be charitable, it becomes the duty of the attorney general to ensure that the rights of the public in the trust are protected and that the trust is properly executed.
See
Petition of Burnham
,
After considering how other courts have applied the doctrine of special interest standing, the trial court applied a five-factor test, often referred to as the Blasko test.
See
Mary Grace Blasko, Curt S. Crossley, David Lloyd,
Standing to Sue in the Charitable Sector
,
Applying the Blasko test, the trial court found that none of the factors weighed in favor of granting Second Church standing. Second Church filed a motion for reconsideration, which the trial court denied. This appeal followed.
II. Analysis of Second Church's Claims
On appeal, Second Church argues that, even though the trial court properly adopted the Blasko test, it misapplied the factors. Second Church asserts that, under the Blasko test, as one of a limited number of potential beneficiaries under the trusts, it has a "special interest" in the Clause VIII Trust sufficient to justify standing. Moreover, Second Church contends that the trial court improperly reached its decision without the development of a factual record, while also faulting Second Church for not developing sufficient facts to demonstrate standing. Although the DCT agrees with Second Church that we should "recognize the standing of certain persons or entities that have a special interest in a particular charitable trust to enforce that trust," both the DCT and the trustees maintain that the trial court properly determined that Second Church lacks special interest standing. We agree with the DCT and the trustees.
A. Standing Issue
We generally will not disturb the circuit court's decree unless it is unsupported by the evidence or plainly erroneous as a matter of law.
In re Estate of Locke
,
Because the trial court did not clarify how it reviewed the pleadings in determining that Second Church lacked standing, and there was no discovery or evidentiary hearing, we assume without
*420
deciding that the trial court viewed the challenge to Second Church's standing as a motion to dismiss.
1
When a motion to dismiss "challenges the plaintiff's standing to sue, the trial court must look beyond the plaintiff's unsubstantiated allegations and determine, based on the facts, whether the plaintiff has sufficiently demonstrated his right to claim relief."
Ossipee Auto Parts v. Ossipee Planning Board
,
The general rule is that potential trust beneficiaries, in suits involving charitable trusts, may not bring an action to enforce the terms of such a trust.
See
Restatement (Third) of Trusts
§ 94 cmt.
g
at 8-9 (2011). Instead, the attorney general (or the DCT, as his representative) has the statutory power and duty to represent the public in the enforcement and supervision of charitable trusts.
See
RSA 564-B:4-405(c) ; RSA 7:20 (2013);
Attorney Gen. v. Rochester Trust Co.
,
Principally, the rationale for vesting exclusive power in a public officer stems from the inherent impossibility of establishing a distinct justiciable interest on the part of a member of a large and constantly shifting benefited class, and the recurring burdens on the trust res and trustee of vexatious litigation that would result from recognition of a cause of action by any and all of a large number of individuals who might benefit incidentally from the trust.
Hooker
,
Although we have yet to determine whether a potential beneficiary of a charitable trust has standing, our law supports the concept of conferring standing upon a third party if it establishes that it has a special interest. For instance, we have previously noted that "[w]hile the Attorney General ... represents the public in the
*421
enforcement and supervision of charitable trusts, this [representation] does not preclude other interested parties from presenting their views particularly where they are acting for the benefit of the charitable trust as a whole."
Concord Nat. Bank
,
Accordingly, we recognize the doctrine of special interest standing in matters involving charitable trusts. We must next determine how to apply this doctrine. Second Church argues that the trial court correctly adopted the Blasko five-factor test. Second Church further argues that the presence of any one factor by itself is sufficient to conclude that it has a special interest. See Blasko, supra at 61.
The trustees advocate for a more stringent test, which follows the test approved by the American Law Institute (ALI), that proposes five factors similar to the Blasko factors but requires a private party to satisfy all of the factors to demonstrate special interest standing. See Restatement of the Law Charitable Nonprofit Organizations § 6.05 (Tent. Draft .2, 2 (approved May 22, 2017). The trial court considered this test but applied the Blasko test upon determining that the flexibility of the Blasko test better suits the pursuit of a just outcome. The DCT argues that the trial court properly adopted and applied the Blasko test.
We look to other jurisdictions for guidance on the application of the special interest standing doctrine.
See
N.H. Right to Life v. Dir., N.H. Charitable Trusts Unit
,
Similarly, in Hooker , the District of Columbia Court of Appeals considered the nature of the class and the nature of the challenge to the trustees' acts in deciding whether to apply the special interest exception.
*422
Hooker
,
After review of the factors that other jurisdictions consider relevant to a special interest standing determination, we agree with the trial court that the Blasko test is preferable because it provides a court with the flexibility to consider a variety of factors. Although Blasko suggests that "[t]he presence of any one ... factor[ ] by itself can lead a court to decide that the plaintiff has a special interest in a charity," the article notes that, "[i]f a combination of elements is present, then a court can balance them against one another and reach a decision." Blasko,
supra
at 61. Depending upon the circumstances, some factors may carry more weight than others and, in New Hampshire, when evaluating whether a party has standing to sue, we generally focus upon whether the party suffered a legal injury against which the law or policy was designed to protect.
See
Petition of Lath
,
i. The Extraordinary Nature of the Acts Complained of and the Remedy Sought
As to the first factor, the trial court found that Second Church's request for an independent trustee, among other remedies, seeks to undo prior court orders and suggests remedies despite Second Church's "informative and thorough amicus submissions that the Court assumes the DCT has reviewed." The trial court therefore determined that Second Church merely disagreed with the DCT's judgment, and this disagreement is not sufficient to justify standing. Second Church argues that the trial court erred by: (1) focusing on the requested relief, rather than the extraordinary nature of the acts alleged by Second Church; and (2) failing to recognize that the bad acts committed by the trustees are extraordinary while the requested remedy is not.
Blasko recognized that "courts seem to be influenced from the outset by the nature and extent of the remedy requested." Blasko,
supra
at 62. When a requested remedy could be "highly intrusive in the administration of the trust," it is likely to weigh against a finding of standing.
See
Schalkenbach Foundation
,
To begin, we need not decide whether the trial court should have considered the extraordinary nature of the bad acts, because, upon our
de
novo
review, we consider them now, and we conclude that Second Church has not demonstrated that the trial court's failure to consider the extraordinary acts is sufficient, by itself, to constitute reversible error.
See
Gallo v. Traina
,
Second Church alleges that the trustees engaged in self-dealing and have an embedded conflict due to their dual role as trustees and members of the board of directors of the Mother Church. Furthermore, Second Church alleges, among other things, that the trustees have improperly favored the Mother Church when distributing the Clause VIII trust assets. Second Church, therefore, seeks the "relief of having an independent trustee appointed to the Clause [VIII] [T]rust."
We find
Schalkenbach Foundation
to be instructive under these circumstances.
Schalkenbach Foundation
,
Similarly, here, because Second Church seeks the appointment of an independent trustee to oversee the administration of the trust, including the distribution of funds, this request would influence the daily operations of the trust and the ongoing administration of the trust. Consequently, this remedy could expose the charity to vexatious litigation by Second Church or other disappointed beneficiaries that would still be concerned with the distribution of funds even after the appointment of an independent trustee.
Moreover, Second Church's requested remedy is unnecessary under the circumstances because the trial court has already taken steps to address the alleged bad acts. Notably, in its March 2018 order, the trial court acknowledged the embedded conflict and imposed certain conditions that addressed this conflict, including, inter alia , requiring the trustees to furnish to the DCT a schedule of recipients of the Clause VIII distributions. The March 2018 order also partially amended the 1993 order "to the extent it gave priority to church repair." Therefore, in relation to the nature of the trustees' alleged bad acts, the appointment of an independent trustee would be unnecessary under these circumstances. Accordingly, this factor weighs against standing.
ii. Presence of Bad Faith
As to the second factor, Second Church argues that the evidence that the trustees acted in bad faith is substantial. Blasko notes that the presence of fraud or other deliberate misconduct is not a factor which courts necessarily discuss when evaluating a plaintiff's special interest, but it is nevertheless an element which influences their decisions. Blasko, supra at 64.
*424
"When alleging fraud ... the plaintiff must specify the essential details of the fraud, and specifically allege the facts of the defendant's fraudulent actions. It is not sufficient for the plaintiff merely to allege fraud in general terms."
Lamprey v. Britton Constr.
,
Second Church specifically contends that the trustees acted in bad faith when they distributed the Clause VIII funds solely to the Mother Church. However, as the DCT counters, Second Church fails to consider the 1993 order which required the trustees to make distributions of the Clause VIII Trust's income primarily to repair the Mother Church. Second Church also asserts that after being ordered by the trial court to submit independent audits on the accounts, the trustees submitted non-independently prepared unaudited financial statements and, given the existence of the embedded conflict, this conduct represented a clear example of bad faith. The trial court found that the accounts were accepted for several years by the then-DCT and were implicitly approved by the court. The trial court acknowledged that, by doing so, the trustees committed misconduct. However, the court further found that Second Church's allegations were insufficient to demonstrate outright fraud or bad faith. We agree.
Second Church's allegations do not demonstrate that this conduct amounts to bad faith or fraud that directly injures Second Church.
See
Blasko,
supra
at 64-65. The assertion that the conduct represented bad faith merely because of an embedded conflicting fiduciary obligation is insufficient.
See
Lamprey
,
Second Church further relies upon
Matter of Green Charitable Trust
,
Green Charitable Trust
is inapposite to the circumstances here. First, standing was not at issue in
Green Charitable Trust
. Second, here Second Church is a
potential
beneficiary, whereas, in
Green Charitable Trust
, the
named
charitable trust beneficiaries together with the attorney general challenged the actions of the trustees.
In sum, while Second Church's allegations may demonstrate misconduct, they fail to demonstrate fraud or bad faith.
*425 Thus, we agree with the trial court that this factor is neutral and neither weighs against nor in favor of conferring standing.
iii. Attorney General's Availability and Effectiveness
Second Church next argues that the DCT has not been effective in policing the trustees' misconduct. The trustees disagree and argue that the DCT has been available and effective in enforcing the trusts. The trustees further contend that this finding is the most important Blasko factor to consider when deciding whether to grant special interest standing.
As we previously discussed, the DCT is empowered to represent the public and potential beneficiaries of New Hampshire charitable trusts.
See
RSA 564-B:4-405(c). When assessing this factor under the Blasko test, "the nature and level of the attorney general's involvement can profoundly influence a court's decision to grant or deny standing." Blasko,
supra
at 67. "[W]here the attorney general is heavily involved in charities regulation, courts generally will take a dim view of private parties attempting to step into the attorney general's role to seek enforcement of charitable fiduciary duties."
Id
. at 70. Under this factor, we consider whether the attorney general is able to enforce the trust or whether the lack of enforcement is due to a conflict of interest, ineffectiveness, or lack of resources.
Schalkenbach Foundation
,
Second Church alleges that the DCT allowed the trust to "fall into the exclusive control of the conflicted ... trustees," participated in the crafting of the 1993 order that "turned the Trust priorities upside down," and sat idly by as the trustees diverted "some $ 26 million in funds to their preferred Mother Church." We disagree with Second Church's characterization of the DCT's oversight. As the trial court noted, during the long history of the trusts, the DCT's performance of his duties has been mixed and arguably deficient. However, the record also demonstrates that during the pendency of the present dispute, the DCT has been an active participant, has acknowledged the embedded conflict with the trustees, and suggested measures to mitigate the effect of that conflict. For instance, during a motions hearing, the trustees acknowledged that the DCT had certain objections to the accounts filed in 2016 and that the two parties then proceeded to work together to resolve those concerns. In addition, in the DCT's memorandum concerning the standing of Second Church, he recognized the "embedded conflicting fiduciary obligations," while also asserting a plan to, inter alia , review the trustees' process for making distributions and review the trustees' resolution regarding the conflicting fiduciary obligations.
Nonetheless, Second Church maintains that the DCT is ineffective in addressing the embedded conflict with the trustees and, therefore, allowing Second Church to intervene as a party familiar with the trusts "is the best, and perhaps only, way to protect the Trust assets." Second Church relies upon the reasoning in
Holt v. College of Osteopathic Physicians and Surgeons
,
*426
Second Church's reliance on
Holt
is misplaced. First, the plaintiffs in
Holt
were minority trustees, whereas here, the appellant is a
potential
beneficiary.
See
ibr.US_Case_Law.Schema.Case_Body:v1">id
Second Church also alleges that "[g]iven the number of questionable acts taken by the ... Trustees, it may be that there are simply too many aspects of the administration of the Clause [VIII] Trust for the DCT to effectively police." To support this contention, Second Church asserts that it wrote a letter in January 2017 alerting the DCT of potential mismanagement of trust assets, and Second Church believes that the DCT has not acted on that information. However, as mentioned above, the DCT has been actively involved in this matter and has taken steps to address the embedded conflict. The trial court's March 2018 order also ensures the continued involvement of the DCT by requiring the trustees to submit to the DCT "along with the annual audited accounts, a schedule of recipients of Clause VIII distributions and provide affidavit(s), under oath, that these distributees are in fact 'third party recipients' and not affiliated with the Mother Church." The DCT's reluctance to agree with Second Church to seek the appointment of an independent trustee is not sufficient to support Second Church's allegation that the attorney general is not involved or is ineffective.
Thus, we agree with the trial court that this factor does not weigh in favor of granting standing to Second Church. In addition, we iterate the trial court's encouragement of Second Church to continue to share information and its concerns with the DCT.
iv. Nature of the Benefitted Class and its Relationship to the Charity
Second Church argues that it is part of a defined class of entities that
*427
bears a special relationship to the charity. Courts have found special interest standing where the class of entities is "sharply defined and its members are limited in number."
Hooker
,
Second Church contends that it is a branch church, one of 1,400 Christian Science churches, that is defined by its unique connection to the Mother Church. Second Church relies upon several cases to argue that other courts have "granted special interest standing to more attenuated persons." For instance, Second Church relies upon
Y.M.C.A. of City of Washington
, where members of a local branch brought suit claiming that the YMCA breached a charitable trust by allowing the local branch building to deteriorate and by closing it.
Y.M.C.A. of City of Washington v. Covington
,
The cases relied upon by Second Church concern plaintiffs that comprise a sharply defined set of potential beneficiaries with a greater interest in the charitable trust and corporation than the general public. Second Church fails to demonstrate that it is in such a class. The income from the Clause VIII Trust is to be utilized for the purpose of promoting and extending the religion of Christian Science. This broad language dispels any notion that the distribution of the income is limited to a small, identifiable class. The trust was intended to benefit more than just the branch churches. Moreover, Second Church is not alleging a harm directly related to its church, but rather is challenging ongoing administration that could impact all of the potential beneficiaries. Thus, the class of potential beneficiaries is not sharply defined. Because Second Church is not in a small, well-defined class, we agree with the trial court that "the potential for vexatious litigation is heightened." We are not persuaded by Second Church's attempt to alleviate this concern by arguing that the appointment of an independent trustee "will likely eliminate the need for the special *428 interest standing it seeks." Accordingly, this factor weighs against standing.
v. Subjective Factors and Social Desirability
Second Church next argues that it is socially desirable to grant it standing. Blasko describes this factor as somewhat of a catch-all factor, applying to "those cases where there seemed to have been an egregious wrong which would otherwise go uncorrected." Blasko, supra at 75.
The trial court found that although it remained "concerned about the embedded conflict," it did not find Second Church's claim that it "is 'well positioned to monitor and enforce the terms of the Trusts' due to its status as a branch church and knowledge of the religion ... [to] weigh[ ] heavily in its determination of standing." We agree. The DCT has acknowledged the conflict and is actively involved in the oversight of the trust, and Second Church has been encouraged to share its perspective with the DCT. Importantly, under RSA 7:20, the DCT "shall have and exercise all the common law and statutory rights, duties, and powers of the attorney general in connection with the supervision, administration, and enforcement of charitable trusts." See also RSA 7:19 -:32-a (2013 & Supp. 2018).
Consequently, after considering all of the factors together, we conclude that Second Church has failed to demonstrate that it has a special interest in the Clause VIII Trust sufficient to grant it standing to petition for the appointment of an independent trustee to the trust.
B. Procedural Issue
Finally, Second Church argues, in passing, that the trial court erred when it denied it standing on a limited record. Specifically, Second Church asserts that the trial court erred by "effectively" requiring that it "prove each Blasko factor by a preponderance of the evidence" without the benefit of discovery and without holding an evidentiary hearing. However, the record does not show either that the trial court used a preponderance of the evidence standard when it applied the Blasko factors or that Second Church complained to the trial court about its inability to obtain discovery.
2
See
Halifax-American Energy Co. v. Provider Power, LLC
,
Because we conclude that Second Church lacks standing, we need not address its argument requesting the appointment of an independent trustee. We reiterate the trial court's sentiment that Second Church is encouraged to share its perspective and concerns with the DCT, and, when appropriate, seek to file as amicus curiae with the trial court.
Affirmed .
LYNN, C.J., and HICKS, BASSETT, and HANTZ MARCONI, JJ., concurred.
We note that the plainly erroneous language derives from case law and RSA 567-A:4. RSA 567-A:4 states, in relevant part: "The findings of fact of the judge of probate are final unless they are so plainly erroneous that such findings could not be reasonably made." Our case law has somewhat altered this standard and provides that "[w]e will not disturb the probate court's decree unless it is unsupported by the evidence or plainly erroneous as a matter of law."
In re Estate of Locke
,
In this case, because there was no evidentiary hearing, the trial court did not necessarily find any facts and it would be inappropriate to defer to its factual findings or rulings of law. Nonetheless, the trustees and the DCT, at oral argument, advocated for a plainly erroneous standard because the trial court judge had presided over this case for several years and had the benefit of having the entire probate record before him when deciding the issue of standing. Although this is true, we have the majority of the record before us, and, because the material facts are not in dispute, de novo review is more appropriate.
We observe that the material facts are largely undisputed. In addition, the record indicates that Second Church sought additional time to obtain discovery from the DCT and the Mother Church. Second Church never sought the trial court's permission or authorization to either engage in or compel discovery and, thus, did not raise this argument before the trial court.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.