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The New Jersey Appellate Division overturned a lower court's ruling in a Lakewood case because the judge ruled from outside the record of evidence.

The case involves an application by Georgian Court University (GCU) to modify the criteria for awarding scholarships from a fund established by Eleanor M. Weisbord.

GCU was founded in 1908 by the Sisters of Mercy, a Roman Catholic female religious organization. In 1924, the college was relocated to its current campus in Lakewood.

Weisbrod graduated from GCU in 1944. Her major was math. At the time she attended, all of the students were female, and most of the students were Catholic and resided on campus.

In 1989, Weisbrod established the scholarship through a gift agreement which provided that the income from the “perpetual” endowment was to be used for “scholarship purposes.” The agreement further stated that the scholarships “shall be made to mathematics majors who are Catholic, full-time students with need” who maintain a GPA of 3.0.

In 1996, Weisbrod created a trust.  She restated that trust several times. The trust provided that at her death a percentage of the trust property would be added to the Scholarship. The trust also stated, “The recipient(s) of the scholarship(s) will be financially needy students of academic excellence in undergraduate school, being a full-time resident student in the field of Mathematics.”

In addition, the trust funded two other scholarships at GCU: one for undergraduate students in the field of education; and one for graduate students in the “field of the recipient’s own selection.”

Weisbrod died in 2008. In the following two years, the scholarship endowment grew from less than $200,000 to over $1.5 million, due in part to additional funding from the trust.

The Fund’s growth continued and by June 2020 was over $4.1 million.

In the meantime, the demographics of GCU students changed. The student population decreased by 16%, and the number of female undergraduate students decreased by 26%. Less than 50% of the students were Roman Catholic and only 22% of undergraduates lived on campus.  Moreover, in 2021 less than 1.5% of the students were full-time, female math majors.

As a result, only a relatively small number of students met the scholarship criteria. From 2010 forward, over $1.3 million of the Fund was not distributed because of the restrictions placed on the awards.

In July 2021, GCU applied to Ocean County Superior Court Chancery Division for permission to modify the scholarship terms in three ways, so that the funds could be awarded to: (1) students of all religious faiths; (2) commuter students; and (3) students pursuing math-based and science-based majors. GCU did not seek to change the terms that the awards be to female students, with financial needs, and having a 3.0 GPA.

In support of their application, GCU submitted on a certification from Weisbrod’s longstanding attorney.  He had prepared her will and trust. Based on his understanding of Weisbrod's intent, he supported GCU's application to modify the criteria for the Scholarship.

GCU gave notice of its application to the New Jersey Attorney General in his common law parens patriae role as protector of the public interest in
charitable gifts and trusts.

The New Jersey Attorney General did not object to the proposed modifications but took the position that the modifications should be awarded on a tiered basis, that is, the original criteria would remain in place, and the modified and expanded criteria would be used only if, in any year, there was remaining income available for additional awards. The University agreed to the Attorney General's condition and submitted a proposed consent order to allow the modifications on a tiered basis.

Ocean County Superior Court Judge Francis Hodgson denied GCU’s application without argument or a hearing. Judge Hodgson simply concluded in a written order that Weisbrod did not intend to allow changes to the scholarship terms.

GCU moved for reconsideration and submitted a certification from its Vice President for Institutional Advancement providing additional information about the scholarship and the student body. The Attorney General raised no objection.

After several hearings, Judge Hodgson ultimately allowed the modification to permit commuter students, as well as residential students, to receive the Scholarship, but denied the modifications to allow awards to students of any religious background and students pursuing math-based and science-based majors.

The judge said that he relied “on unidentified materials he had independently searched for and read,” and determined that Weisbrod had strong beliefs in her Catholic faith and her math training, and therefore he could not waiver on those two requirements.

GCU appealed, contending that Judge Hodgson based his rulings on information outside the record and those findings were not supported by substantial credible evidence.

The Appellate Division agreed, finding that Judge Hodgson had committed errors by not conducting a hearing and by instead making his own findings on Weisbrod’s intent, relying on information outside the record that he apparently looked up but did not identify.

"In making his finding concerning Weisbrod's intent, Judge Hodgson relied on information outside the record, which he had apparently looked up but did not identify. That was an error, and we cannot say that there is substantial credible evidence in the record supporting the judge's findings.

"We therefore vacate Judge Hodgson's orders, and remand for a new hearing. Because the original
judge has already expressed views based on the evidence outside the record, we direct that the new hearing be conducted by a different judge," the Appellate judges concluded.

The matter has not yet returned for a new hearing in the Chancery Division.

Georgian Court University was represented by Attorneys Kathleen N. Fennelly and Melissa M. Bracuti of McElroy, Deutsch, Mulvaney & Carpenter, LLP.

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