Thursday, May 28, 2009

Estate heirs did not have standing to bring suit against Church for partial sale of land conveyed through deed of gift

(Tenn. Ct. App. December 29, 2008).  

The sole issue in this case is whether The Gene and Florence Monday Foundation, Inc., ("the Foundation") has standing to challenge a 2006 sale of property by The Diocese of East Tennessee ("the Diocese") and St. James Episcopal Church ("the Church"). The property was conveyed in1 1987 by Mr. Monday and his wife, Florence Monday (collectively "the Mondays"), to the Diocese and the Church through a "Deed of Gift and Assignment of Leases" ("the Deed of Gift"). After the 2006 sale, the Foundation, which was not in existence at the time the gift was made, sued the Diocese, the Church and others, claiming that the price paid for the property was too low and that other conditions of the gift had not been met. We affirm the trial court's judgment. In so doing, we hold, as did the trial court, that the Foundation does not have standing to bring this suit.

Opinion may be found at the TBA website:

To demonstrate standing, a plaintiff must establish: “(1) that it has sustained a distinct and palpable injury, (2) that the injury was caused by the challenged conduct, and (3) that the injury is one that can be addressed by a remedy that the court is empowered to give.” Id.

"Here the injury is too abstract to be cognizable.  In effect, the Foundation argues that it would have been injured had it applied for a grant and then discovered that, due to the "low" selling price of the property, less money was available for the Church and the Diocese to distribute.  In this case, the Foundation’s argument concerning injury is based on several levels of conjecture.  First, we must assume that the Foundation is a charitable organization devoted to the goals set forth in the Deed of Gift.  Then we must assume that, hypothetically, if the Foundation had applied for a charitable distribution from the Church and the Diocese, the Foundation would have been selected as a recipient.  Finally, we must speculate, as the Foundation does, that, over time, beneficiaries of funds from the property that was the subject of the Deed of Gift will receive less money from the distribution of the income from the proceeds of the $500,000 sale than from the distribution of the net income from leases on the property." Id..