Santa Monica, Calif.-based St. John's Health Center Foundation is suing the estate of Paula Kent Meehan, founder of the Redken hair-care company, for $5 million in donations that Ms. Meehan originally promised in 2007, according to the Los Angeles Times.
Ms. Meehan, who died last year, rescinded her $5 million donation in March 2013 following the removal of several top executives and board members. By May 2013, the hospital was sold to Renton, Wash.-based Providence Health & Services.
The hospital recognized the pledged donation with a tree planted in Ms. Meehan's name, the addition of her name on the donor wall and a story published in the hospital's newsletter, according to the report.
The St. John's foundation, which saw a drop in donations from $30 million in 2010 to $6.6 million in 2013, filed the lawsuit after representatives of Ms. Meehan's estate refused to pay the donation following Ms. Meehan's death. The lawsuit seeks damages from Ms. Meehan's charitable foundation and from executors of her estate for breach of contract, according to the report.
Philanthropic experts are calling the legal move "uncouth" and "unwise," according to the report. Despite that the lawsuit may be "uncouth," the hospital foundation may have legal rights to the money, since Ms. Meehan signed a commitment that her donation would be "legally binding on me and my heirs, executors, administrators, personal representatives and assigns," according to the report.
This case is slightly different than the typical charity lawsuit to enforce a donation, Doug White, director of Columbia University's master's program in fundraising management program, told the Los Angeles Times. These lawsuits more often occur when heirs oppose donations, not when donors revoke their own offers, he said.
More articles on legal and regulatory issues:
5 latest healthcare industry lawsuits
GAO finds invalid addresses, disciplinary problems among providers signed up to bill Medicare
36 recently unsealed False Claims Act cases: 5 takeaways