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Wills, Trusts & Estates Keyed to Bonfield
Smithers v. St. Luke’s-Roosevelt Hosp. Ctr.
Citation:
723 N.Y.S.2d 426 (App. Div. 2001)Facts
Brinkley Smithers, a recovered alcoholic, pledged up to $10 million to St. Luke’s-Roosevelt Hospital starting in 1971 to establish and support the Smithers Center for alcoholism treatment. He remained actively involved in its operations and, in 1983, completed the gift with a letter specifying that the final contribution was to be held in an endowment, with income used exclusively for the Center’s operations and principal restricted to specific capital improvements. He intended the Center to remain in a free-standing facility.
After Smithers’s death, the Hospital announced plans in 1995 to move the Center into a hospital ward, triggering objections from his widow, Adele Smithers. She discovered the Hospital had been misusing endowment funds for unrelated purposes, even before Smithers’s death. Following her complaint, the Attorney General investigated and recovered nearly $5 million, finding unauthorized fund transfers.
Despite prolonged negotiations, the Hospital did not fully restore the lost funds. In 1998, it entered into an agreement with the Attorney General to cease misuse and return $1 million from any future building sale, though the Attorney General did not find the building’s sale itself prohibited by the gift’s terms.
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