Keswick to appeal loss of $28 million gift

Talks on sharing bequest break down

November 18, 1999|By Frank D. Roylance | Frank D. Roylance,SUN STAFF

The Keswick Multi-Care Center has emerged empty-handed from talks it had hoped might salvage a share of a $28 million bequest it was unable to accept because of the will's racist conditions.

Settlement negotiations between Keswick and the University of Maryland Medical System broke down Tuesday. Keswick's attorneys said they have no choice but to appeal a Baltimore judge's ruling last week awarding the money to University.

Dr. Jesse C. Coggins' 1962 will promised the money to Keswick if it would build new housing for white patients and name it after him. If Keswick could not accept those terms, the money was to go to University.

University spokeswoman Ellen Beth Levitt said the hospital made "what we felt was a very reasonable and fair offer in light of Judge [Joseph H. H.] Kaplan's opinion. It was unfortunate we were not able to come to an agreement."

"We're not closing the door to further discussions," she added.

Neither side would say how much money Keswick asked for.

Keswick attorney Jack Morkan said: "$28 million is a sufficiently large amount that it should accommodate the needs and requirements of both facilities."

He said appeals could keep the money locked up for two to four years.

"Keswick has been interested in an amicable resolution of the suit since it was filed last spring," Morkan said. But a series of meetings with University -- including one held at the suggestion of Kaplan before he issued his opinion -- led nowhere.

`Not surprised'

Levitt said University officials were "pleased with Judge Kaplan's opinion, and we are not surprised that Keswick is planning to appeal. We will just have to wait and see what the outcome of their appeal is."

If University wins, it would put the windfall to good use, Levitt said.

"We serve patients from throughout Baltimore and the region, many of whom have very serious and complicated health problems," she said. "These additional funds would help us to fulfill our mission even further."

Coggins made his money as the owner of the Laurel Sanitarium, a private psychiatric hospital in Prince George's County. When he died in 1963 at age 88, his estate was worth about $2.3 million.

The tug of war over Coggins' money began after his widow, Helen Alexander Coggins, died at Keswick in 1998. She was the last person receiving monthly income from his estate.

Helen Coggins had been a board member at Keswick after it was integrated in 1967 and lived there for 20 years. Keswick President Ed Nolley said Mrs. Coggins received only $1,500 a month in income from the trust. She allowed the principle to grow, believing it would eventually go to Keswick.

At her death, it had grown to $28.8 million. But when the estate's trustees saw Dr. Coggins' conditions for distribution of the money, they sought the court's help in determining whether Keswick or University should get it.

Welcome windfall

The money would be a welcome windfall for either institution.

At least partly in anticipation of the bequest, Keswick spent nearly $11 million to build and improve the Coggins Building. It even hung a portrait of its benefactor in the lobby.

The building houses 175 patients and has been paid for, Nolley said. The Coggins bequest would be used to make improvements to the building and benefit its patients.

Keswick has an annual budget of about $20 million and an endowment Nolley described as "more than $28 million."

University lost $4.5 million last year on revenues of $514 million. It has no endowment fund but provided $62 million in uncompensated charity care. The Coggins bequest would be nearly three times the size of any previous gift to the hospital.

University's lawyers agree that the racial restriction in Coggins' will is illegal today. And under Maryland law, they say, the court might have been justified in striking it and giving Keswick the money.

But Coggins' will clearly states that if Keswick could not meet his terms, the money should go to University. And when such a "gift-over" is present, University's lawyers argue, the intent of the donor is clear, and the courts are bound to honor it.

Keswick's lawyers want the appeals court to simply strike the offending clause and honor Coggins' apparent desire to aid Keswick.

"It is by no means clear that Dr. Coggins wished Keswick to violate the law," Morkan said. "In 1962, segregation was legally allowable. Most health care facilities in 1962 were segregated."

That became illegal in 1964, after Coggins' death, Morkan said. "There is a long-standing policy under Maryland law that when there are illegal conditions in a will, they are simply not honored."

Under Kaplan's ruling, Nolley said, "we're being penalized for doing the right thing" -- operating an integrated facility. Up to 30 percent of Keswick's nursing home patients and nearly half of its adult day care patients are black.

Morkan said there is no indication Coggins was a racist. Keswick has no plans -- and has not been asked -- to change the building's name or remove his portrait from the lobby.

But a woman who identified herself as Coggins' grandniece said yesterday that Coggins was not a nice man and that he was wrong to restrict his bequest for the use of whites only.

`A hate crime'

"To me, it's a hate crime to deny somebody hospital care" based on their race, said Mildred Carroll Winand, 77, of Stewartstown, Pa.

"I never heard him speak kindly of anyone outside their own sphere -- people of money," Winand said.

Coggins employed blacks in his home and his business, Winand said. But "I never saw or heard him say anything nice about a black person. They had a black cook, named Sylvia. I remember her. My mother liked her. But he never had anything nice to say to her."

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