## Facts

- Kathryn Seymour created a trust that directed, on her death, specified trust property to her daughter, with the remaining property distributed in set proportions to three charitable beneficiaries: a local church, the local Salvation Army, and Massillon Community Hospital.
- When Seymour named Massillon Community Hospital as a beneficiary, it operated as a not-for-profit hospital.
- After the trust was created, Massillon Community Hospital was sold and became associated with a for-profit successor operation known as Affinity Medical Center (identified in the litigation as the relevant defendant entity connected to Akron General Medical Center).
- After Seymour died, FirstMerit Bank, N.A., as trustee, filed a declaratory action in probate court seeking instructions regarding distribution of the hospital share.
- The trustee asked the probate court to declare the trust a charitable trust and to apply the cy pres doctrine on the ground that Seymour’s charitable intent regarding a nonprofit hospital could no longer be carried out because the named hospital was no longer a nonprofit.
- The hospital successor argued it was still entitled to the trust distribution and contended cy pres was not available because the trust did not show a general charitable intent beyond the named hospital.
- Two local charitable entities—Greater Health Foundation of Massillon and Greater Massillon Rotary Foundation—intervened, claiming an interest in receiving the redirected charitable gift if cy pres applied.
- The probate court concluded the successor for-profit hospital was not entitled to the charitable distribution and ordered the hospital share distributed instead to the intervening charitable foundations.
- Akron General Medical Center and related defendants appealed the probate court’s judgment to the Fifth District Court of Appeals.

## Issues

1. Whether the trust reflected a charitable intent that was conditioned on the hospital beneficiary being a nonprofit, such that the intent was frustrated when the hospital became for-profit.
2. Whether the probate court properly applied the cy pres doctrine to redirect the hospital share of the trust to substitute charitable beneficiaries rather than distribute it to the hospital’s for-profit successor.

## Decision

- The Court of Appeals affirmed the probate court’s judgment.
- The court agreed that the trust’s charitable disposition toward the hospital could not be carried out as written once the hospital ceased operating as a nonprofit charitable institution.
- The court held the probate court acted within its authority in applying cy pres to modify the charitable distribution and direct the funds to other nonprofit charitable organizations serving the community.
- The court rejected the argument that the for-profit successor hospital was entitled to take the trust distribution despite the change from nonprofit to for-profit status.

## Legal Principles

- Trust interpretation focuses on the settlor’s intent as expressed in the trust instrument, read in context and applied to the circumstances at distribution.
- Cy pres permits a court to modify a charitable gift when the original charitable direction becomes unlawful, impossible, or impracticable to carry out, so long as the settlor showed a general charitable intent rather than an intent limited to a single fixed application regardless of later events.
- When a trust’s charitable plan is tied to an institution’s charitable character (such as nonprofit status), and that institution later becomes a for-profit enterprise, a court may treat the original charitable direction as frustrated and redirect the gift to other charitable recipients with similar purposes.
- A for-profit successor to a named nonprofit charitable beneficiary does not automatically inherit the right to receive a charitable trust distribution when doing so would conflict with the trust’s expressed charitable limitations.

## Conclusion

FirstMerit Bank, as trustee, sought court instructions after the trust’s named hospital beneficiary changed from a nonprofit to a for-profit operation; the probate court found Seymour’s charitable plan could not be fulfilled by paying a for-profit successor and used cy pres to redirect the hospital share to local charitable foundations, and the Fifth District Court of Appeals affirmed that result.


First Merit Bank, N.A. v. Akron General Medical Center, 116 N.E.3d 843 (2018)