INTHE CHANCERY COURT FOR DAVIDSON COUNTY, TENNESSEE. "ATNASHVILLE, In the Mater of, ) ) FISK UNIVERSITY, ) No. 05-2994.1I1 ) Petitioner. ) ) ) PRE-TRIAL BRIEF OF INTERVENOR ATTORNEY GENERAL AND REPORTER FOR THE STATE OF TENNESSEE ‘The Attomey General and Reporter for the State of Tennessee, as Intervenor in this proceeding, hereby submits this Pe-Tial brief with respect to Fisk University’s Second Amended Petition for Cy Pres Relief INTRODUCTION ‘A court must exerise cy pres powers “sparingly” because “a settlor must have assurance that his solemn arrangements and instrctions will not be subject to the whim or suggested expediency of others afer his death."* Here Fisk University is invoking cy pres law not “sparingly” but rather to convert Georgia O'Keeffe’s spectacular public git oF the Stieglitz Collection into its own private fund support the general operation of the school, The Tennessee Court of Appeals, however, has carefully defined the charitable intent of Ms. O'Keeffe and Aled Stieglitz in making this gif: "TW, MeGover & S. Kon, Will, Trusts and Exar § 9.7, 21370 (24 ed. 200) (sussing NY law) 1[The charitable intent motivating the gifts... was {© make the Collection ‘available to the public in Nashville and the South forthe benefit of those who did not have access to comparable collections to promote the general study of ar. ‘Considering the facts inthe record, we have concluded that the clear intent for giving the Collection tothe University was to enable the public ~ in Nashville and ‘the South —to have the opportunity to study the Collection in order to promote the general study of ar.” ‘This charitable intent, defined by the Court of Appeals and now the law of the ease, does not include the conversion of the Stieglitz Collection into a financial asset, This omission was not accidental; Ms, O'Keeffe specifically prohibited such action by imposing the “no sale” clause in 1949 and took no other action through her death in 1986 to support the university. In short, the result urged by Fisk in this case would be a frustration of Ms. O'Keeffe’s clear intent and an abuse of ey pres law. It would undermine future charitable giving inthis state. It should not be allowed to occur. ‘The Attomey General expects the trial to show the following. First, because Ms (O'Keeffe never intended thatthe Stieglitz Collection be used to support Fisk financially, Fisk cannot show that its Financial issues constitute a legal basis under New York cy pres law to void the prohibition on selling the Collection. Second, Fisk cannot satisfy the cy pres requirement of impossibility oF impracticability. Third, Fisk eannot show that the proposed relief the sale of a hhalf-interest in the Collection to the Crystal Bridges Museum in northwest Arkansas — would satisfy the demanding requirement under cy pres law that any relief “most closely approximate” ‘Ms, O'Keeffe’s charitable intent. Intertwined with these issues isthe fat that Fisk cannot show hhow the proceeds of the sale would resolve the underlying financial problems on which Fisk ‘bases its petition. * 0 'Kesfe Foundation. Fisk Univeriy, 312 $W.3d 1 17-18 (Tean. Ct App, 2008), p.ca dened (2010),Fisk is a worthy institution deserving of support. But that support cannot come in a ‘manner that is contrary to law and so abusive of donor intent that it would undermine charitable siving inthis state. Fisk’s petition should be denied. ARGUMENT This case hasbeen remanded to this Court “to determine what ey pres relief if any, the University may be entitled to receive based on the unique facts of this case.”* The Court of ‘Appeals clearly sated tat it made no determination tat cy pres relief was available to Fisk and that any such determination would be “premature.” Rather, the Court of Appeals said that such a decision “must be held in abeyance unless and until” this Chancery Court finds that literal compliance withthe conditions imposed by Ms. O'Keeffe is “impossible or impracticable” under [New York law and that any cy pres relie“mostclosoly approximates Ms. O'Keeffe’s charitable intent” Accordingly, this ease comes before this Court with no presumption that Fisk is entitled toany relief, |A. Because Ms, O'Keefe Had No Charitable Intent To Benefit Fisk Unive Financially, Fisk Cannot Sell The Stieglitz Collection As A Matter Of New York Cy Pres Law, ‘As this Court knows, New York courts have developed a three-pronged test for determining whether ey pres relief is available: (1) thatthe git or rust be charitable in nature; (2) thatthe donor must have demonstrated a general, rather than a specific, charitable inten; and (@) that circumstances have changed subsequent to the gift that render literal compliance withthe > 0 Ref Foundation v, Fah Univer, 312 S.W.34 a 18 (emphasis nde) aot 8,20,restriction impossible or impracticable." In light ofthe Tennessee Court of Appeat's decision, only the third prong ofthis analysis is lft to be determined by this Court FFisk’s argument is straight forward, The University asserts that because ofits precarious financial condition, it is unwilling to expend the funds necessary to continue to display the Stieglitz Collection and therefore complying with Ms. O’Keeffe's charitable intent is impracticable, It further states that “itis impossible for Fisk to meet the specie conditions of the gift ofthe art because, without an infusion of cash, ther i very litle likelihood that Fisk will meet its financial obligations."* Accordingly, Fisk's petition seeks permission, contrary to the “no sale” condition on the Stieglitz Collection, to realize $30 million from selling the Collection, so that it can apply those funds tothe general operations of the university in a manner not yet determined?” Even assuming these allegations are true, the eases under New York cy pres law, as discussed below, make clear that any modification of restrictions on a charitable gift due tothe financial distress of the charitable institution is permitted only where the ove a charitable purpose of the gift was fo ensure the continued existence and operation of the charitable institution, Here, the Court of Appeals has found that Ms. O°Keeffe's intent was to display her deceased ushand’s art collection forthe benefit ofthe residents of Nashville and the * pre Bate of Okmer, 815 NY S.2d 44,447 (NY. Sut Ct. 2006; se also O'Keeffe Foundation ¥. Fisk Unverty, 312 SW 3d 16 * Second Amended Peston 25, 7 tits Second Atmended Petition, Fisk alleges hat‘ numberof the conditions related to the maitennce sd iapay ofthe at nthe Cllection ave uated ad tha he agreements withthe Crystal Bridges Museum would Tolow be indy pacts forthe eae ofthe Collection, The Atorney General doesnot objet in rnp othe ‘notification of te msstenance and depay conto. ‘The implementation of hese best pasties, however, es sot eeque tis Couto approve teal of te Collection tothe Crys Bridges Museum,South, particularly those without access to comparable colletions, to promote the study of ar. Only if Ms, O'Keeffe had also intended to support Fisk Snancially with the Stieglitz Collection ‘would the University’s financial difficulties representa frustration of her charitable intent and satisfy the requirement of impossibility, But since Fisk's financial well-being was never Ms. (O'Keeffe’s objective, the University’s financial challenges provide no basis for cypres relief. ‘The holding in Lutheran Hospital of Manhattan v, Goldstein, 46 N.Y.S.24 705 (NY. Sup. Ct. 1944), is clearly on point, The testatrix had died and left funds tothe Lutheran Hospital ‘with the limitation that “the income only [was] to be used by the suid hospital fr free beds for ‘the poor in memory of my husband, Rev. Dr. George U. Wenner."* Several years later, the hospital filed @ petition seeking relief from the “income only” restriction due to the hospital's deteriorating financial condition. Indeed, the court found that without access to the fund's principal, “the hospital may be compelled to close its doors."” Like Fisk, the plaintiff hospital contended that this unfortunate result would defeat the donor's purpose."® ‘The court, however, concluded that “well established and settled law” in New York required that it deny relief to this “worthy and deserving insttution."** The court noted that its duty inthe application of the cy pres doctrine “is to give effect tothe testator's general intent.""™ “The court found tha intent to be stated “in language entirely clear and wholly unambiguous” that conly income from the bequest was to be applied “for fee beds for the poor in memory of her "1a. 20707, td, ae paw 708, ya a709,