Douglas v. Middlebury College

Citation: Not availableDocket: 23-cv-1214

Court: Vermont Superior Court; July 11, 2024; Vermont; State Appellate Court

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In the case of Hon. James H. Douglas, Special Administrator of the Estate of John Abner Mead v. The President and Fellows of Middlebury College, the court is addressing Middlebury College's motion to dismiss a lawsuit concerning the removal of the name "Mead" from the Mead Memorial Chapel. The chapel was constructed in 1914 after former Governor John Mead provided funding on the condition that it would always bear his name. Following Middlebury's decision in 2021 to remove the name, Douglas, as the special administrator of Mead's estate, claims that this action constitutes a breach of contract, a violation of the implied covenant of good faith and fair dealing, and a breach of the perpetual naming rights condition tied to the original gift.

Middlebury contends there was no contract stipulating perpetual naming rights, arguing instead that the transaction was a gift without such conditions, and thus the claims of contract breach and good faith violations are unfounded. Additionally, Middlebury asserts that Douglas, as special administrator, lacks the authority to challenge the gift's conditions, which should fall under the purview of the Attorney General.

The court notes that the parties are at odds over the issues of standing and the proper parties to bring the lawsuit, suggesting that Douglas's role may not align with legal standing requirements. The court refers to Vermont law which dictates that standing is essential for establishing subject-matter jurisdiction, emphasizing that it involves whether the plaintiff's interest ensures a concrete adverseness necessary for resolving legal questions. Middlebury does not contest the separation of powers principle but argues that Douglas is attempting to act in a capacity reserved for the Attorney General. The court highlights the potential for confusion between standing and other legal doctrines, stressing that mischaracterizations could affect jurisdictional determinations and claim-preclusion outcomes.

A defect pertaining to the real party in interest or a lack of cause of action does not affect the court’s subject matter jurisdiction, allowing such issues to be raised under Rule 12(b)(6) instead of Rule 12(b)(1). Middlebury contends that the case falls under gift law rather than contract law and claims that only the Attorney General can enforce limitations on completed gifts in charitable trusts. However, no case law is presented to support this assertion, and the case does not involve a charitable trust. Middlebury fails to demonstrate any obligation for the Attorney General to act or any compelling interest in the naming right condition at issue. The court finds the authority cited by Middlebury on standing to be inconsistent and notes that Vermont law regarding this matter is underdeveloped. Without compelling evidence that the Attorney General has exclusive authority to sue, the court concludes that the special administrator of Governor Mead’s estate is a proper party. The court identifies the primary issues as whether the transaction is governed by gift or contract law and the existence of the disputed naming right. 

In considering the Rule 12(b)(6) motion to dismiss, the court adheres to the standard that motions to dismiss are rarely granted, especially for novel theories of liability, and emphasizes that all factual allegations in the complaint must be taken as true. The complaint is criticized for being overly lengthy and not sufficiently clear. At a hearing, Governor Douglas indicated a need for further discovery, while Middlebury argued that no additional evidence remains to be found. The adequacy of discovery may be relevant if Governor Douglas challenges a summary judgment motion by Middlebury under Rule 56.

The court emphasizes that it cannot presume the complaint's evidence is exhaustive and must apply the standard of Rule 12(b)(6) as it would in any case. Governor Mead's intention to fund the construction of a chapel at Middlebury, potentially named the Mead Memorial Chapel, is supported by his written communication stating his desire for the chapel to serve as a place of worship. Governor Douglas interprets this transaction as a contract for funding in exchange for naming rights, while Middlebury contends it should be viewed as a gift, thus raising issues of donative intent and the nature of the transfer. The court refrains from deciding whether the naming right was intended, noting that the determination of whether a transfer constitutes a gift hinges on the intent to transfer ownership without consideration, distinguishing it from a contractual exchange. The analysis of the parties' intentions will require a more developed factual record. Furthermore, the court notes that if the transaction is classified as a contract, the law generally disfavours perpetual terms unless clearly articulated by the parties, and contracts imposing perpetual obligations will not be enforced if contrary to public interest. Thus, clear intent is required for any contract to be deemed perpetual, and ambiguity will be interpreted against such a construction.

The transaction in question may be classified as a gift with a perpetual condition subsequent, although such conditions are generally disfavored in law. Forfeiture of the gift occurs with noncompliance, necessitating that conditions must be established through express terms or clear implication, and are subject to strict construction. The donor's intention to impose a condition must be clearly articulated; if ambiguity exists regarding a clause's status as a condition subsequent, courts will typically interpret it against such a designation. Vermont case law, including Wilbur v. University of Vermont, supports these principles. The current interpretation does not view the restriction as a true condition subsequent, and such constructions are generally avoided in trust contexts. Furthermore, for gifts to charitable corporations, a condition subsequent will not be implied unless the grantor's intention is explicitly stated, particularly when performance of the donor’s wishes proves impractical. There is an elevated standard of clarity required to establish the intent for a perpetual naming right, which must be evident in the allegations made. The court finds that Governor Douglas has sufficiently alleged the intent for such a naming right in the complaint. Consequently, Middlebury's motion to dismiss is denied. The parties are instructed to confer and propose a scheduling order within two weeks, which should include mediation unless agreed otherwise. This order was electronically signed on August 4, 2023, by Judge Robert A. Mello.