Carole C. Cooke persuaded the Massachusetts Appeals Court to uphold summary judgment blocking the sale of substantially all of a charitable organization's primary real estate assets.
The Appeals Court ruled that the organization's president and treasurer lacked the authority to bind the entity to a $30 million sale of its property consisting of a church sanctuary, a parish meeting hall, a large apartment complex, offices, and parking spaces located on Beacon Hill in Boston near the Massachusetts State House.
"We conclude that the authority to make such a divesting asset/property sale contract in the case of [the charitable organization] was beyond the power of the charitable corporate board to delegate to two of its officers," the court wrote. "The contract was void."
In 2004, the organization's then president and treasurer had signed a purchase and sale agreement to sell its valuable real estate holdings. The sale was never completed, and the purchaser filed a lawsuit to recover damages for alleged breach of contract.
A Massachusetts Superior Court judge granted the organization's motion for summary judgment on the basis that the purchase and sale agreement was not enforceable because the president and treasurer lacked actual or apparent authority to act on the charity's behalf in the transaction.
"We are pleased on behalf of our client that the Appeals Court upheld longstanding law that the sale of virtually all of a charity's property cannot be delegated to corporate officers," Cooke said. "And, as the court observed, even if such a power could be delegated, a board of trustees must specifically authorize corporate officers to make such a transaction, and no such authority was present in this case."
Nicholas B. Carter worked with Ms. Cooke on the case.