"Plain English" Explanation of the Lawsuits

Student Contract Case

Basis for Complaint: The College provided offers to each student for a four-year education at "Randolph-Macon Woman's College," an institution with a 115-year history of providing an excellent liberal arts education to women. The College made these promises - expressly and implicitly - both in writing and in oral representations to each student plaintiff, including repeated and pervasive representations regarding the specific benefits to be gained by attending a woman's college, the sole distinguishing feature that would cause a student to choose R-MWC over any number of coed options from which these students could have chosen.

College's Defense: The College contended it had never made a promise to remain a woman's college and argued that any contract with the students was for one semester only. According to the College, it was always free to admit men, change its curriculum plan, and/or change its name.

Judge's Ruling: The Judge, in an oral ruling from the bench, held that he could not find in any of the pleadings or the volumes of documents provided by the student plaintiffs "that there's any specific contract that says that it's guaranteed that it would be a four-year woman's college." Accordingly, the Judge granted the college's Demurrer.

Basis for Appeal: It is important to note that the Judge dismissed the case on the college's Demurrer, which is similar to a Motion to Dismiss in federal court. We believe the Court's ruling is clearly wrong. All that is necessary to survive a Demurrer is for the students to plead a set of facts upon which a jury could find that a contract exists. The students did so. The offer letters comprise the main promise made to the students, and those letters meet the requirements for an "offer" under Virginia law. Each student accepted those offers in the manner directed by the offer - by sending in their reservation deposits.

Although the letters do not contain the phrase "and we promise to remain a woman's college for your entire four years at R-MWC," there can be no doubt that the college made such a promise. At the very least, it was implied in every reference to "Randolph-Macon Woman's College," the history of the student body, the promotional materials, and the focus of student development.

The students argued that the name "Randolph-Macon Woman's College" unambiguously and clearly indicated to the students that they would be attending a woman's college for their four years of undergraduate studies.

The documents (which the Trial Court failed to address directly) contain numerous statements by the college touting the benefits of a woman's college to entice these students to choose R-MWC over all their other options, including some rather impressive coed options. For example, Plaintiff Jennifer Mullins gave up an appointment to West Point to attend R-MWC because she felt that the leadership opportunities for women are greater at a woman's college. It is clear that if these student plaintiffs wanted a coed education, they had any number of colleges from which to choose. They chose a woman's college because of the explicit and implicit promises that were made by the college.

These students have clearly pleaded the existence of a contract; we have assisted them this far in trying to obtain the benefit of their bargain; and PEC is determined to continue to support their efforts to force this College to honor its commitment to them.

Charitable Trust Case

Basis for Complaint: Randolph-Macon Woman's College is a charitable corporation. By statute in Virginia, the assets of a charitable corporation "are deemed to be held in trust for the public for such purposes as are established by the governing documents of such charitable corporation..." The assets of Randolph-Macon Woman's College, then, are held in trust for the following purposes under its Articles of Incorporation (the corporate charter):

to conduct, maintain and operate a college, or university, or institution, under the name of Randolph-Macon Woman's College, for the higher education and culture, primarily of women, and for their instruction and training in the liberal arts...

We believe that the charitable assets of the college are governed by the Uniform Trust Code (UTC) (effective July 1, 2006 in Virginia), which specifically states that the Trust Code applies to trusts created by statute. Although the College may amend or change the corporate purpose in its Articles of Incorporation, such a change applies only to those assets acquired after the change in the Articles. All assets existing prior to that change in articles are governed by the corporate purposes in existence at the time those assets were donated, unless the College proves that it would impossible, impracticable, unlawful, or wasteful to continue the existing purpose (the Cy Pres doctrine).

College's Defense: The College primarily argued that only the Virginia Attorney General has the authority to enforce the provisions of charitable trusts in Virginia, and that, in any event, the UTC does not apply to the College.

Judge's Ruling: The Court first held "clearly from the pleadings that Randolph-Macon Woman's College is a charitable nonstock corporation doing business in Virginia and their assets would be deemed to be in trust for the public under [Virginia Code §2.2-507.1]." The Court further ruled that the Attorney General has the power to "act on behalf of the public and the assets if he believes they are not being handled properly." But, with respect to the UTC, the Court held that the statutory trust created by Virginia Code §2.2-507.1 does not create a trust that would be governed by the UTC. The Court stated that corporate law - not trust law - applies.

Basis for Appeal: The question of governance of the assets of charitable corporations after the enactment of the UTC and Virginia Code §2.2-507.1 are complicated issues that are difficult to summarize. Basically, the Judge's decision turned on one phrase - that the statute creating the trust must require that the trust be "administered in the manner of an express trust" (Virginia Code §55-541.02) and that the statute applicable here lacks such language.

Nevertheless, the trust created by that statute must be administered in some manner. If the Attorney General can step in to enforce the terms of the trust as all parties seem to agree, then what standard should he use to evaluate the purposes for which the trustees have used the assets? We believe that the Virginia General Assembly provided those terms when it enacted the UTC. With complete knowledge of the language of existing statutes then on the books, the General Assembly modified Section 55-541.02 to include "trusts created by statute."

Moreover, if the UTC does not provide the standards that must be applied to the use of the college's assets, then those standards must be governed by the common law existing prior to the enactment of the UTC. The doctrine of Cy Pres exists at common law as the mechanism by which charities may petition to change their charitable purpose prior to the passage of the UTC.

The Trial Court also failed to render any decision on Count II of the Complaint, as to whether the plaintiffs had standing to enforce the terms of the trust created by Virginia Code §2.2-507.1 under the "special interest exception" for standing to bring actions to enforce charitable trusts.