Present: Hassell, C.J., Keenan, Koontz, Kinser, Lemons, and
Agee, JJ., and Russell, S.J.
JENNA DODGE, ET AL.
OPINION BY CHIEF JUSTICE LEROY R. HASSELL, SR.
v. Record No. 071248 June 6, 2008
TRUSTEES OF RANDOLPH-MACON WOMAN'S COLLEGE,
D/B/A RANDOLPH-MACON WOMAN'S COLLEGE
FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG
J. Leyburn Mosby, Jr., Judge
I.
In this appeal, we consider whether Code § 2.2-507.1
imposes certain duties upon a Virginia nonstock charitable
corporation and renders a nonstock charitable corporation
subject to the provisions of the Uniform Trust Code, § 55-
541.01, et seq.
II.
The plaintiffs, Jenna Dodge, Sarah Hassmer, Hayley J.
Maxwell, Laura McKean-Peraza, Kelsey McCune, Jennifer C.
Mullins, Mary E. Yardley, Alice D. Priebe, and Roy C. Johns
filed their amended complaint against the Trustees of
Randolph-Macon Woman's College, d/b/a Randolph-Macon Woman's
College. Dodge, Hassmer, Maxwell, McKean-Peraza, McCune,
Mullins and Yardley are students at the College. Priebe is a
"fifth generation graduate" of the College, and she has
donated $40,000.00 to the College to fund scholarships. Johns
is married to a graduate of the College, and he has donated
money and art to the College.
The plaintiffs allege in their amended complaint that the
College was established in 1891 for the primary purpose of
educating women, and that all gifts and donations to the
College since its inception were given to support that
objective. The plaintiffs allege that the College acquired,
improved, and maintained real property with funds donated to
the College for the purpose of supporting the College as a
liberal arts, educational institution for women. The
plaintiffs also allege that the College acquired numerous
valuable works of art placed in various locations "across [the
College's] campus and in [its] Maier Museum" and that the art
and "the facilities to house such works[,] were bought and
improved and are maintained by funds donated to [the College]
for the purpose of supporting . . . a liberal arts, single-sex
educational institution." The plaintiffs allege that the
College plans to sell assets, including its valuable art
collection, to finance physical changes at the campus that
will enable the College to educate both men and women. The
plaintiffs also allege that the College plans to amend its
articles of incorporation to reflect that the College will
educate men and women. The plaintiffs further allege that the
aforementioned acts are "contrary to [the College's] original
2
and ongoing express charitable purpose as an institution
created primarily to educate women in a liberal arts
curriculum under the name of Randolph-Macon Woman's College."
The plaintiffs assert, in Count I of the amended
complaint, that the College is a charitable trust and that the
plaintiffs are beneficiaries within the intendment of the
Uniform Trust Code. The plaintiffs also assert that the
College breached certain duties owed to them as trust
beneficiaries. The plaintiffs, in Count II of their amended
complaint, allege that the College's charitable assets are
deemed to be held in trust in furtherance of the College's
charitable purposes set forth in its governing documents,
pursuant to Code § 2.2-507.1, and that the College breached
its fiduciary duties.
The plaintiffs asked that the circuit court declare that
the College's actions are contrary to the plaintiffs'
interests as trust beneficiaries and contrary to the
charitable purposes of the corporation. The plaintiffs also
asked that the circuit court enjoin the College from
implementing its plan to establish a coeducational college and
prohibit the College from changing its name.
The College filed a demurrer to the amended complaint.
Upon consideration of submissions by counsel, the circuit
court held that the Uniform Trust Code is not applicable to
3
the College and that Code § 2.2-507.1 neither imposes duties
upon the College nor abrogates the statutory provisions of the
Virginia Nonstock Corporation Act, 1 which governs the conduct
of the trustees of the College. Additionally, the circuit
court held that the plaintiffs failed to plead facts that
would implicate the doctrine of cy pres and even if such
doctrine was applicable, the plaintiffs lacked standing. The
circuit court entered an order sustaining the demurrer. The
plaintiffs appeal.
III.
A.
The plaintiffs contend that the circuit court erred by
sustaining the demurrer to the complaint and the amended
complaint. We will not consider the plaintiffs' contentions
that relate to the circuit court's judgment sustaining the
demurrer to the plaintiffs' original complaint. The
plaintiffs failed to incorporate or refer to their initial
complaint in the amended complaint and because we have held
that "when a circuit court sustains a demurrer to an amended
motion for judgment which does not incorporate or refer to any
of the allegations that were set forth in a prior motion for
judgment, we will consider only the allegations contained in
the amended pleading to which the demurrer was sustained."
1
Code §§ 13.1-801, et seq.
4
Hubbard v. Dresser, Inc., 271 Va. 117, 119-20, 624 S.E.2d 1, 2
(2006) (quoting Yuzefovsky v. St. John's Wood Apartments, 261
Va. 97, 102, 540 S.E.2d 134, 136 (2001)); see also Doe v.
Zwelling, 270 Va. 594, 596, 620 S.E.2d 750, 751 (2005).
B.
Code § 2.2-507.1 states:
"A. The assets of a charitable corporation
incorporated in or doing any business in Virginia
shall be deemed to be held in trust for the public
for such purposes as are established by the
governing documents of such charitable corporation,
the gift or bequest made to such charitable
corporation, or other applicable law. The Attorney
General shall have the same authority to act on
behalf of the public with respect to such assets as
he has with respect to assets held by unincorporated
charitable trusts and other charitable entities,
including the authority to seek such judicial relief
as may be necessary to protect the public interest
in such assets.
"B. Nothing contained in this section is
intended to modify the standard of conduct
applicable under existing law to the directors of
charitable corporations incorporated in or doing any
business in Virginia."
The plaintiffs contend that Code § 2.2-507.1 imposes
certain duties upon the College, a nonstock charitable
corporation, and that included among those duties is a
statutory requirement that in the absence of any instructions
accompanying a gift, donation, or bequest, the College must
use the donation consistent with the College's charitable
purpose as specified in the corporation's governing documents.
Continuing, the plaintiffs argue that "[r]eal estate, art,
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money, or other property given to [the College] without any
instructions on their use, were impressed with the purpose
found in [the College's] articles of incorporation, as those
governing documents existed at the time of the gift." The
plaintiffs observe that when the gifts were contributed to the
College, its articles of incorporation specified that the
College would be operated predominantly for women.
Responding, the College contends that Code § 2.2-507.1
does not impose any duty upon a nonstock charitable
corporation, but merely authorizes the Attorney General of
Virginia to take certain action and seek judicial relief
against charitable corporations when such action or relief is
necessary to protect the public interest in assets held by the
charitable corporation. Additionally, the College argues that
the plain language of Code § 2.2-507.1(B) indicates that
Virginia nonstock corporations are subject to corporate law,
not the law of trusts.
We have repeatedly stated the principles of statutory
construction that we apply when a statute is clear and
unambiguous:
"While in the construction of statutes the
constant endeavor of the courts is to ascertain and
give effect to the intention of the legislature,
that intention must be gathered from the words used,
unless a literal construction would involve a
manifest absurdity. Where the legislature has used
words of a plain and definite import the courts
6
cannot put upon them a construction which amounts to
holding the legislature did not mean what it has
actually expressed."
Barr v. Town & Country Props., 240 Va. 292, 295, 396 S.E.2d
672, 674 (1990) (quoting Watkins v. Hall, 161 Va. 924, 930,
172 S.E. 445, 447 (1934)); accord Davis v. Tazewell Place
Assocs., 254 Va. 257, 260-61, 492 S.E.2d 162, 164 (1997);
Abbott v. Willey, 253 Va. 88, 91, 479 S.E.2d 528, 529 (1997).
Additionally, "[i]n construing a statute, we must apply its
plain meaning, and we are not free to add language, nor ignore
language, contained in statutes." BBF, Inc. v. Alstom Power,
Inc., 274 Va. 326, 331, 645 S.E.2d 467, 469 (2007).
We reject the plaintiffs' contention that Code § 2.2-
507.1 requires the application of trust law, rather than
corporate law, to the College, a nonstock charitable
corporation. Acceptance of the plaintiffs' position would
transform all charitable Virginia nonstock corporations into
charitable trusts, and we find no language in Code § 2.2-507.1
that manifests any intent of the General Assembly to make such
a drastic change in Virginia's established law. 2
2
We disagree with the plaintiffs' argument that this
Court must consider legislative history and our decision in
Commonwealth v. JOCO Foundation, 263 Va. 151, 558 S.E.2d 280
(2002), when ascertaining the meaning of Code § 2.2-507.1.
Rather, this Court must examine the words that the General
Assembly used to ascertain its intent when enacting Code
§ 2.2-507.1. Miller v. Highland County, 274 Va. 355, 364, 650
S.E.2d 532, 535 (2007).
7
Code § 2.2-507.1 specifically states that the assets of a
charitable corporation incorporated in Virginia shall be
deemed to be held in trust for the public for purposes
established by the governing documents of the charitable
corporation or other law. This statute further gives the
Attorney General the authority to act on behalf of the public
when a charitable corporation incorporated in or doing
business in Virginia uses charitable property in a manner
inconsistent with the corporation's governing documents or
applicable law. Applying the plain meaning of the language
the General Assembly chose to use when enacting Code § 2.2-
507.1, we conclude that the statute is quite narrow and simply
confers upon the Attorney General the authority to act on
behalf of the public to protect the public's interest in
assets held by charitable corporations. This statute is
devoid of any language that imposes duties upon charitable
corporations. Those duties are found elsewhere in the Code of
Virginia.
As we have already noted, Code § 2.2-507.1(B) states:
"Nothing contained in this section is intended to modify the
standard of conduct applicable under existing law to the
directors of charitable corporations incorporated in or doing
any business in Virginia." The General Assembly made clear in
this provision that directors of charitable nonstock
8
corporations remain subject to existing statutory and common
law related to those corporations. Code § 2.2-507.1(B), by
its express and explicit language, negates the imposition of
any additional duties upon directors of charitable
corporations. Rather, Code § 13.1-870, which is a part of the
Virginia Nonstock Corporation Act, and the common law govern
the standards of conduct applicable to directors of nonstock
charitable corporations.
C.
Code § 55-541.02(A), which is part of the Uniform Trust
Code, states in part:
"This chapter applies to express inter vivos
trusts, charitable or noncharitable, and trusts
created pursuant to a statute, judgment, or decree
that requires the trust to be administered in the
manner of an express trust. This chapter also
applies to testamentary trusts, except to the extent
that specific provision is made for them in Title 26
or elsewhere in the Code of Virginia, or to the
extent it is clearly inapplicable to them. Section
55-548.13, which provides the duties of a trustee to
inform and report to the trust's beneficiaries,
shall apply to testamentary trusts."
The plaintiffs argue that the College is a trust pursuant
to this statute and, therefore, the College is subject to the
provisions of the Uniform Trust Code. The plaintiffs assert
that upon the enactment of Code § 2.2-507.1, the General
Assembly "essentially decreed that corporate charities are
trusts, thereby satisfying the statutory criterion that the
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trust [in this instance, the College] be created pursuant to
statute." We disagree with the plaintiffs' contentions.
We conclude that the Uniform Trust Code has no
application to the College. The College is not an express
inter vivos trust, charitable trust, or noncharitable trust
created pursuant to a statute, judgment, or decree. As we
have already held, Code § 2.2-507.1 was enacted to confer
certain authority upon the Attorney General. Code § 2.2-507.1
does not transform every nonstock charitable corporation in
Virginia, or that does business in Virginia, into a trust that
is subject to the Uniform Trust Code.
We also disagree with the plaintiffs' contention that the
College is a trust pursuant to Code § 55-541.02(B), which is
also a part of the Uniform Trust Code. This Code section
states:
"B. Notwithstanding subsection A, a court, in
exercising jurisdiction over the supervision or
administration of trusts, may determine that
application of the policies, procedures or rules of
the Code is appropriate to resolution of particular
issues."
This statute does not authorize a circuit court to declare by
judicial fiat that a nonstock charitable corporation is a
trust. We hold that the College is not a trust and,
therefore, the College is not subject to Code § 55-541.02(B).
D.
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The plaintiffs assign, as error, that the circuit court
"erred by ruling that the doctrine of cy pres is not
applicable to the facts alleged in the complaint and/or
amended complaint." We will not consider this assignment of
error because the plaintiffs failed to discuss this assignment
in their brief. See, e.g., Teleguz v. Commonwealth, 273 Va.
458, 473, 643 S.E.2d 708, 718 (2007); Winston v. Commonwealth,
268 Va. 564, 590, 604 S.E.2d 21, 35 (2004); Powell v.
Commonwealth, 267 Va. 107, 135, 590 S.E.2d 537, 554 (2004);
Majorana v. Crown Central Petroleum Corp., 260 Va. 521, 528,
539 S.E.2d 426, 430 (2000).
IV.
In summary, we hold that Code § 2.2-507.1 does not impose
any duties upon a nonstock charitable corporation. We also
hold that the College is not subject to the Uniform Trust
Code. We do not consider the plaintiffs' assignment of error
relating to the cy pres doctrine because the plaintiffs failed
to discuss this argument in their brief. 3 Accordingly, we will
affirm the judgment of the circuit court.
Affirmed.
3
In view of our holdings, we need not consider the
plaintiffs' remaining contentions.
11