SUCCESSOR SPCA HAD STANDING ON ITS CLAIM IT IS AN INTENDED BENEFICIARY UNDER A TRUST
A third-party beneficiary had standing in this trust dispute. The court denied a summary judgment motion because an issue of fact existed as to one of the terms of a settlement agreement.
Maurice H. Ryman created a trust in 2001. The trust stated that it was intended to benefit the Monroe County Society for the Prevention of Cruelty of Animals, as well as various churches. The county SPCA was entitled to 55 percent of the trust distributions, and the remaining of the 45 percent was divided among the church beneficiaries. The trust provided that if any of the organizations named in it were not a qualified charity at the time of distribution, then the trustee was required to reallocated the distribution in a pro rata manner among the remaining beneficiaries.
In 2009, the trustee sought to terminate the interest of the Monroe County SPCA, because that organization had closed. Respondent, Pennsylvania Society for the Prevention of Cruelty to Animals claimed that the Monroe County SPCA had merged with it. Respondent argued it should be the recipient of the county SPCA’s 55 percent share of the trust. The church parties responded that Mr. Ryman had intended to support an entity known as the Monroe County SPCA, and the gift lapsed because that entity no longer existed. Respondent stated it would continue to support an animal shelter that was proposed to be open in Monroe County, which was known as the Animal Welfare Society of Monroe County. To resolve the issue, the church parties agreed that respondent was an intended beneficiary under the trust and should receive the 55 percent distribution. In exchange, the church parties received a payment of 90,000.
AWSOM filed suit in 2016 alleging it was entitled to income and distributions under the trust pursuant to the settlement agreement. On summary judgment, respondent argued that AWSOM lacked standing to assert a claim based in the settlement agreement. AWSOM was not a party to that agreement, and respondent contented it was not a third-party beneficiary under it.
The court looked at the terms of the settlement agreement, which included reference to AWSOM by name. In determining whether an entity qualified as a third-party beneficiary, the issue was whether both contracting parties intended to benefit the third-party and indicated such in their agreement. Kirschner v. K & L Gates LLP, 46A.3d 737. Accordingly, the court concluded AWSOM had standing.
Respondent contended AWSOM was not entitled to any monetary support from it beyond re-opening the Monroe County animal shelter. During the earlier phase of this litigation, respondent used the existence and support of AWSOM as a means to retain its status as beneficiary of the trust. The court rejected respondent’s argument that it was entitled to a trust distribution while disavowing any ongoing obligation to support the AWSOM shelter. The court held a factual issue existed as the meaning of the term “support” under the settlement agreement, so it denied respondent’s motion for summary judgment.
REFERENCE: Digest of Recent Opinions, Pennsylvania Law Weekly, 42 PLW 940, Tuesday October 1, 2019
Kindly visit our Estate Litigation website or contact one of our Estate Attorney or Wills, Trust & Estate Litigation Attorney Philadelphia at 215-977-8200 for more information on this topic