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Judges Considering If Real Estate Was Transaction Or A Gift

By Patrick Sullivan - September 4, 2013

A three-judge panel of the Maryland Court of Special Appeals (COSA) heard arguments for and against an appeal brought by the family of a donor who had bequeathed property to Johns Hopkins University (JHU) and who say the university is not following the donor’s original intent in regard to development plans.

A summary judgment was issued in favor of the university in November 2012. The judges did not issue a new ruling, and no ruling is expected until between three weeks and three months from now.

The 138-acre property, Belward Farm in Montgomery County, Md., was donated to the university in 1989. JHU, based in Baltimore, Md., paid $5 million for the farm, and fair market value for the property at the time was estimated at $54 million. The difference was considered a gift. The owner, Elizabeth Banks, lived on the farm until her death in 2005. The plaintiffs in this case are Banks’ family, with her nephew John Timothy (Tim) Newell as lead plaintiff and spokesman.

Terms of the gift stipulated that most of the land be used for academic or research purposes, limited to 1.4 million square feet. Plaintiffs contend that the University plans to develop more than 4.5 million square feet for commercial use, a violation of Banks’ original intent.

The hearing, lasting less than an hour, “went very well,” said Newell. “There were three justices, a well-balanced panel, that asked pointed questions to both sides. I wish we had had more time, but all we’re asking is to get our day in court.” Representatives from Johns Hopkins could not be reached for comment.

Newell said the appeal is to overturn the summary judgment so the case can go to trial. “We’re not trying to take anything away from Johns Hopkins University. We’re only asking that they honor the original intent,” said Newell. “It’s an undisputable fact that Hopkins would not own Belward Farm if not for the generosity of our family, especially my aunt, and she would not have given the farm without restrictions.” Newell added that his aunt sought to preserve the farm, and felt the best way to do so would be to give it to the university.

A summary judgment issued in September 2012 held that the transfer of the farm was an arms-length real estate transaction rather than a gift, and therefore the university’s planned use for the land was valid. A trial had been scheduled to begin in November 2012 but both sides filed for summary judgment. The plaintiffs filed an appeal in November 2012.

“That the court would side with Hopkins’ midnight hour, Hail Mary argument suggesting my aunt’s charitable donation was nothing more than a simple real estate transaction is an insult to the generosity of my family, ignores the history and facts of this case, and threatens the rights of donors everywhere,” said Newell when the summary judgment was handed down last year.

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