The St. John’s Health Center in Santa Monica, California is suing the estate of a donor who rescinded a $5 million pledge before her death. In 2007, Paula Kent Meehan made the pledge to the hospital and was subsequently included on donor lists and had other honors bestowed upon her. However, she revoked the pledge in 2013 due to rumors the hospital was going to be sold. In the suit, the hospital alleges that Ms. Meehan signed a promise that bound her and her heirs from breaking the pledge which the hospital argues should be legally binding. Speculation around this unusual suit swirls with many conjecturing that the hospital would only take this step if it were in financial need based on its endowment which has lost much value in recent years. This case will be closely followed around the nation as a verdict in favor of the hospital could set off a wave of suits from charities that have been jilted by unfaithful donors.
See David H. Lenok, Foundation Brings Rare Suit Over Rescinded Pledge, Wealth Management, July 23, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
