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In the Matter of FISK UNIVERSITY
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Court of Appeals No. M2010-02615-COA-R3-CV
RESPONSE IN OPPOSITION TO THE APPLICATION OF THE TENNESSEE ATTORNEY GENERAL FOR PERMISSION TO APPEAL
John P. Branham, BPR No. 2552 Stacey A. Garrett, BPR No. 16105 C. David Briley, BPRNo. 18559 C. Michael Norton, BPR No. 3786 BONE McALLESTER NORTON PLLC 511 Union Street, Suite 1600 Nashville, Tennessee 37219 (615) 238-6300 (615) 238-6301 (Fax) Attorneys for Fisk University
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TABLE OF CONTENTS
TABLE OF AUTHORITIES INTRO DU CTI ON
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I. THE TWO GENERAL
FACTORS CITED BY THE ATTORNEY IN SUPPORT OF HIS APPLICATION
DO NOT CONFORM TO RULE 11.1',
THE ATTORNEY GENERAL'S REGARDING THE CRYSTAL FACTUAL CONTENTIONS BRIDGES AGREEMENT
THE SELECTION OF FISK TO DISPLAY THE COLLECTION W AS A SIGNIFICANT PART OF O'KEEFFE'S INTENT THE ATTORNEY GENERAL'S CONCERN ABOUT MONETIZATION IS MISGUIDE:D ARKA.NSAS IS IN THE SOUTH THE ATTORNEY GENERAL'S CLAIM THAT THE: COLLECTION WILL SOON LEAVE TENNESSEE Is
000 " ,
THE ATTORNEY GENERAL'S CLAIM THAT THE CRYSTAL BRIDGES AGREEMENT CHANGES Too MANY PROVISIONS OF O'KEEFFE'S CONDITIONS TO BE VALID IS WITHOUT MERIT THE ATTORNEY GENERAL'S ARGUMENT THAT TIlE $30 MILLION CANNOT BE USED FOR FISK'S GENERAL PURPOSE IS AN INCORRECT STATEMENT OF NEW YORK LAW THE CRYSTAL BRIDGES AGREEMENT EFFECTUATES O'KEEFE'S PURPOSES AND INTENT As NEARLY As POSSIBLE
THE ATTORNEY GENERAL'S ARGUMENT THAT THIS CASE WILL CHILL CI-IARlTABLE GIVING IS
-11 , ~
CONCLUSION Signature Page,
TABLE OF AUTHORITIES CASES
Board of Trustees of Museum of American Indian, Heye Foundation v. Board of Tmstees of Huntington Free Library and Reading Room 197 AD.2d 64,610 N.Y.S.2d 488 (1994) 22 First Nat. Bank & Trust Co. v. Brimmer 504 P.2d 1367 (Wyo. 1973) In re Board of Trustees of Huntington Free Library and Reading Room 771 N.Y.S.2d 69 (N.Y. App. Div. 2004) In re C&J?er's Estate 415 N.Y.S.2d 550 (N.Y. App. Div. 1979); aff'd, 409 N.E.2d 941 (N.Y. Ct. App. 1980) In re Estate ofOtluner 710 N.Y.S.2d 848 (Sur. 2000) In re Estate ofOtluner 815 N.Y.S.2d 444 (N.Y. Sur. 2006) In re Goehringer's Will 329 N.Y.S.2d 516 (Sur. 1972) In re Heckscher's Trust 131 N.Y.S.2d 191 (N.Y. Sup. 1954) In re Neher's Will 18 N.E.2d 625 (N.Y. Ct. App. 1939) Matter of Hummel 805 N.Y.S.2d 236 (N.Y. Sup. 2005) Matter of Kraetzer1s Will 462 N.Y.S.2d 1009,1013 (N.Y. Sur. 1983) Matter of Wilson 451 N.y'S.2d 891 (N.Y. App. Div. 1982), affd 452 N.E.2d 1228 (N.Y. Ct. App. 1983) Smithers v. St. Luke's Roosevelt Hospital Center 723 N.Y.S.2d 426 (N.Y. App. Div. 2001) Tennessee Division of the United Daughters of the Confederacy v. Vanderbilt University 174 S.W.3d 98 (Tenn. Ct. App. 2005)
STATUTES .T.C.A. §35-13-114 T.C.A. §35-15-413 10 10
OTHER MATERIALS McGovern & Kurtz, Wills, Trusts and Estates, (4th ed. 2010)
The Attorney General has filed an application for Appellate Procedure Rule 11 review by this Court in which he fails to cite the operative language of Rule 11. The reason for his omission is clear. Rule 11 provides in relevant part for review by this Court to "secure
settlement of important questions of law or secure settlement of questions of public interest." As
the Attorney General concedes, the substantive issues in this case are governed by New York law. A decision of this Court cannot settle New York law. Nor can it settle questions of public interest governed by New York law. No Rule 11 factor is present here. Moreover, even if a decision of this Court could settle New York law, the Attorney General's accusation that the lower courts have "substituijed] their judgment in contravention of
a donor's explicit instructions "(App, 1) amounts to nothing more than a complaint that the
courts below rejected his factual contention that the Crystal Bridges Agreement would defeat O'Keeffe's intent. The courts rejected his contention based upon the factual record. For the simple fact is O'Keeffe intended for the Collection to be displayed by Fisk. Fisk is the only recipient of Stieglitz art that is not a museum, and the record reflects that O'Keeffe's choice of Fisk was deliberate and significant. App. 5. The Crystal Bridges Agreement is the only option that allows O'Keeffe's intent to be realized, by keeping Fisk alive to display the Collection. Under the Attorney General's proposals, by contrast, the cost of displaying the Collection would be defrayed until such time as Fisk fails, at which point the Attorney General could play a role in awarding the collection to a new recipient. In considering O'Keeffe's intent that Fisk display the Collection, what is at stake here is the difference between half of the time and never again.
Would it be better if Fisk could display the Collection full-time? Yes. But that is not the world in which cy pres operates. The doctrine is applied when compliance is impracticable and the best available real-world solution for realizing a donor's intent and dispositional design must be found. The Crystal Bridges Agreement provides for Fisk to remain open and display the
Collection intact half-time rather than not at all, for the Collection to remain under court supervision, and for years of uncertainty to finally give way to a positive, long-term solution. Since the inception of this case, nothing remotely comparable to the Crystal Bridges Agreement has emerged. It is the very definition of as near as possible.
This litigation has been pending for six years. During that time, the courts of this state have been misused. It is well known that Fisk is in a vulnerable economic position, and litigants have attempted to exploit it. A well-funded New Mexico museum was improvidently granted standing and backed Fisk into a coercive "settlement agreement" under which the museum would extract the Collection's most celebrated work at a fire-sale price .. Fortunately, the lower courts corrected that error. Now, with the only constructive solution to have emerged in six
years of litigation finally having been approved by the lower courts, the Attorney General, well aware that Fisk's back remains to the wall, attempts to prolong this litigation months or years further by filing an Rule 11 application in which he is unable even to cite or quote the operative language of Rule 11, because no Rule 11 factor is actually present. Since the beginning of this
case, no one has disagreed with the conclusion that Fisk is an extraordinary university, providing quality educational services to many generations of students and serving Nashville, the South
and the United States in the best educational tradition.'
The Attorney General dismisses the loss
of this extraordinary university as "regrettable" and nothing more? The Attorney General's bid to extend the litigation should be rejected.
It is long
past time to end the sad spectacle of litigants using the courts of this state to obtain leverage with which to bludgeon Fisk. The Application of the Tennessee Attorney General For Permission to Appeal (the "Application" or "App.") should be promptly denied.
For purposes of this Opposition, Fisk will accept the facts set forth by the Attorney General. Certain capitalized references refer to the following: Attorney General The Attorney General and Reporter of the State of Tennessee, who intervened as a party to this matter. The Alfred Stieglitz Collection of 10 1 works of art, 97 of which came from the Stieglitz Estate and four came from O'Keeffe personally The Crystal Bridges Museum of American Art located in Arkansas The proposed Joint Ownership Agreement between Fisk and Crystal Bridges The decision issued by the Court of Appeals on November 29, 2011. Fisk University, an historically black university and the oldest university in Nashville Famous painter Georgia O'Keeffe, who was the donor of the Collection acting as the executrix of her late husband, Alfred Stieglitz, and on her own behalf
Crystal Bridges Agreement -
TR. pp. 76-87.
"Fisk now regrettably confronts serious financial difficulties.. " App.2.
ARGUMENT 1. THE TWO FACTORS CITED BY THE ATTORNEY GENERAL IN SUPPORT OF HIS APPLICATION DO NOT CONFORM TO RULE 11 The Attorney General argues that two factors support the granting of its Application: (i) the Decision "raises an important question of law" by purportedly failing to enforce a charitable donor's intent and (ii) the Decision "raises an important question of public policy" by purportedly chilling future charitable giving and threatening the loss of the Collection to creditors or to Crystal Bridges. See App. at 17-31. Both arguments are utterly without merit. First, the two Rule 11 factors of relevance here cannot be satisfied, because a decision of this Court cannot settle New York law or issues of public interest resulting from the application thereof. Second, even if a decision of this Court could settle New York law, the Attorney General's argument is entirely dependent upon the premise that the Crystal Bridges Agreement would defeat Q'Keeffe's intent, a factual premise that has been rejected by the courts in light of the factual record indicating that O'Keeffe intended for Fisk, specifically, to display the Collection. Under Appellate Rule 11, this Court considers four factors in determining whether to exercise its discretion to grant permission to appeal: "(i) the need to secure uniformity of decision, (ii) the need to secure settlement of important questions of law, (iii) the need to secure settlement of questions of public interest, and (iv) the need for the exercise of the Supreme Court's supervisory authority." See Tenn. R. App. Pro 11. Omitting any citation of the operative language of Rule 11, the Attorney General misstates factors (ii) and (iii), arguing that the Application should be granted because the Decision raises important questions oflaw and public policy. See App. at 17-31. But that is not the standard; the inquiry concerns the need to "secure settlement" of important questions of law
or public interest.
The reason for the Attorney General's
substantive issues in this case are govemed by New York law.
See Decision at 4. While the
Attorney General attempts to add a Tennessee flavor to the proceedings by superfluously citing Tennessee court decisions, this is simply more obfuscation, as he himself concedes that the substantive issues are governed by New York law. See App. at 19. This Court is not required to approve of the New York law, or to adopt or admire it, but only to apply it to the facts of this case. A decision of this Court cannot settle New York law. Nor can a decision of this Court
"secure settlement of questions of public interest" here. The Attorney General cites material
from outside the record concerning policy statements issued by certain museum associations, see App. at 4, n.l, but the cited statements are political not legal in nature and a decision of this Court would not settle a policy dispute in the art world. This is particularly so where, as here, the outcome is governed by the law of another state, here New York.3
3 Although not relevant here, New York law arid Tennessee law are not in fact identical.
Prior to a law change effective April 12,2007, barely more than two years before this case was decided, Tennessee did not even recognize the doctrine of cy pres as applying to charitable gifts. T.eA §§35-15-413 and 35-13-114. In addition, Tennessee included cy pres as part of the Uniform Trust Act, as adopted in Tennessee in 2004. The 2004 law only applied to trusts, and it was expanded to cover charitable gifts in 2007. New York has not adopted this uniform act. The official comments to the Tennessee Uniform Trust Act, regarding the Tennessee version of cy pres, states that the Tennessee statute essentially does away with the general/specific charitable intent test by presuming that all charitable gifts are made for general charitable purposes. Official Comments, T. C.A. §35-15-413. This is an important test under New York law. Moreover, the statement of the standards in the two laws for the design of the cy pres plan are also different. New York law requires that the remedy be that which will "most effectively accomplish [the gift's] general purposes." Tennessee law provides that cy pres will applied in a manner consistent with the "settlor's charitable purpose." T.C.A, §35-15-413(a)(3). Another example of potential differences between Tennessee and New York is whether or not Tennessee elects to follow the observation in the McGovern and Kurtz treatise that cy pres is used "sparingly," That reference in the treatise is cited twice in the Attorney General's Application, although the only case cited by the authors is a Wyoming case, McGovern & Kurtz, Wills, Trusts and Estates, §9.10 (4th ed. 2010), citing First Nat. Bank & Trust Co. v. Brimmer, 504 P.2d 1367, 1371 (Wyo. 1973). Even a briefreading of New York cy pres cases would reveal that New York cannot be said to apply cy pres sparingly. In fact, New York courts have often observed that unless there is an express reversion clause in the gift document, New York courts "invariably" find the gift to have a general charitable intent and apply the cy pres doctrine. See, e,g., In re Carper's Estate, 415 N.Y.S.2d 550, 553
The Attorney General does not argue that any other factor is present, nor is there any sound basis to so argue." The Application should be denied.
THE ATTORNEY GENERAL'S FACTUAL CONTENTIONS REGARDING THE CRYSTAL BRIDGES AGREEMENT ARE MERITLESS.
Although it is unnecessary to reach the issue, the Application also fails because its central
argument, that this Court should wade into this matter "to convey a clear and unambiguous
message to potential donors of gifts for the public benefit that Tennessee courts will not substitute their judgment in contravention of a donor's explicit intentions," see App. at 1;
depends entirely upon a factual contention-that O'Keeffe's the Crystal Bridges Agreement would defeat
intent-s-that, as the lower courts found, is not consistent with the evidence, which
shows that O'Keeffe intended for Fisk, specifically, t? display the Collection. A.
THE SELECTION OF FISK TO DISPLAY THE COLLECTION WAS A SIGNIFICANT PART OF O'KEEFFE'S INTENT.
There is no longer any serious dispute that the Crystal Bridges Agreement is the only mechanism that would allow for continued display of the Collection by Fisk; however, the Attorney General posits that the selection of Fisk actually was not an important part of O'Keeffes intent. See App. at 19. That factual contention, which has been rejected by all courts
that have considered it. There is no question that O'Keeffe made a deliberate selection of Fisk in donating the Collection. In the first catalogue for the Stieglitz Collection, O'Keeffe wrote the following:
(N.Y. App. Div. 1979); aff'd, 409 N.E.2d 941 (N.Y. ct. App. 1980) ("When a testator evinces a charitable intent, it will be given effect by application liberal rules of construction" ... fAJ charitable gift should be sustained whenever possible under the 0' pres doctrine in the light of the intention of the testator"); In re Goehringer 's Will, 329 N.Y.S.2d 516,522 (Sur. 1972); In re Estate of Othmer, 710 N.y'S.2d 848,852 (Sur. 2000); Matter of Kraetzer's Will, 462 N.Y.S.2d 1009, 1013 (Sur. 1983); In re Neher's Will, 18 N.E.2d 625 (N.Y. 1939).
Continuedfrom previous page
Ci) is not present, because a decision of this Court cannot bring New York law into uniformity with itself or
any other law. There has been no showing or argument that factor (iv) is present.
This part of the Stieglitz Collection goes to Fisk University with the hope that it may show that there are many ways of seeing and thinking, and possibly, through showing that there are many ways, give some one confidence in his own way, which may be different, whatever its direction. Tr. Exh. 72. O'Keeffe, in her remarks at the opening ceremonies for the Collection in 1949, said: These paintings and sculptures are a gift from Stieglitz. They are for the students. 1 hope you will go back and look at them more than once. Tr. Exh. 205, The Crisis Magazine. Fisk University Dedicates Alfred Stieglitz Collection, March 1950. The Attorney General makes his argument even though there is proof in the record that Fisk did indicate an interest in assisting Fisk financially. Former Fisk President Walter Leonard
testified during his deposition that O'Keeffe gave Fisk a total of$100,000 in 1981 and 1982: To my great surprise, shortly after I visited with Ms. O'Keeffe with my wife [in 1981J we received in the mail a check for $50, 000 and if I recall there was a little note. I hope this will help you in your efforts and then to my even greater surprise, in January of the next year there was a gift from Ms: O'Keeffe in the amount of $50, 000 so I believe the record should show that there was probably $100, 000 from Ms. O'KeejJe. Tr. 60. To this day, that gift remains among the largest individual cash donations Fisk has ever received. Tr. 141-142. Ultimately, as the Appellate Court explained following its review of the record, "[tjhe selection of Fisk was ... unique in that, while five of the six recipients of the entire Stieglitz See Decision at 8. In addition,
collection were museums, Fisk was the only university."
following the gift there were "continuing ejJorts on the part of Ms. 0 'Keeffe to ensure that the Collection had appropriate facilities and was being properly maintained." Id. The Appellate
Court also observed that "at the time of the gift, the South was segregated by race and locating the Collection at Fisk was unique" and contributed to making Fisk a meeting point between the
races "within the then-segregated South:"
See App. at 8 & n.9. Considering these facts, the
Appellate Court held, as the Chancery Court did, and as every party in this litigation previously acknowledged, that the choice of Fisk was a significant part of Q'Keeffe's intent. Even Judge
Clement in dissent, over use of the proceeds from Crystal Bridges., agreed that the majority was correct to find that the choice of Fisk was a significant part of O'Keeffe 's intent, and further stated that "depriving the University of any of the proceeds may result in the University closing its doors, which would be contrary to Ms. 0 'Keeffe's intentions." See Dissent at 3.5 Faced with the clear factual record that refutes his position, the Attorney General retreats to the abstract proposition that "the choice of a recipient is of course the conscious decision of every donor," suggesting that no such conscious choice can ever be significant. See App. at 19.
But this is the classic example of an argument that proves too much. Sometimes the choice of a recipient is important. Here, the record reflects that this is so, and all courts reviewing the matter and even the dissenting judge below have agreed.
THE ATTORNEY GENERAL'S CONCERN ABOUT MONETIZATION IS MISGUIDED!.
The Attorney General also argues that "there is no evidence in the record to show that the donors of the Collection ... had any intent to allow the Collection to be used as a source of
revenue for Fisk", see App. at 3, and that "the law does no'Zt allow courts to substitute their charitable preferences for those of the donor" see App. at 4. The Attorney General's objection, while understandable in the abstract, collapses when applied to the circumstances here. A concern that Fisk was merely "conver[ting] a restricted charitable gift into cash," see App. at 20, or "converting [the Collection] into nothing more than
It matters not whether O'Keeffe's intent that the Collection be displayed at Fisk is described as part of her "dispositional design," part of her "intent" or one of her "purposes." However characterized, O'Keeffe's selection of Fisk to display the Collection was significant and must be accounted for by any solution.
a source of revenue," see id. at 23, would be valid if the proposal before the Court were for Fisk to cash out by selling the Collection or breaking it apart=-i.e., to give away the charitable gift and thwart the donor's intent of intact display at Fisk, in exchange for cash. "converting a charitable gift into cash". That would be the
But the facts presented here are quite different:
money would not thwart or replace the charitable gift; rather, money is the vital precondition to a continuation of the donor's intent, under the less-than-ideal circumstances in which Fisk finds itself. Even the Attorney General concedes that Fisk needs a massive cash infusion to survive. See App. at 25.6 Because of the money provided under the Crystal Bridges Agreement-and only because of that money-the time, rather than not at all. That is, there is simply no way around the fact that, as the Chancery Court put it, "[wjithout some capital infusion, the viability of Fisk University is in jeopardy," O'Keeffe's and with it, Collection would continue to be displayed at Fisk half of the
intent that the Collection be displayed at Fisk. (See Nov. 3 Order at 21.) Part of
what is needed here to carry out the donor's intent is, in the Chancery Court's words, "money for Fisk, the institution," see id. at 22. There is no question that New York's cy pres doctrine is factspecific and flexible enough to allow the particular relief actually necessary to effectuate the donor's intent under the specific circumstances presented in each case. See In re Heckscher's Trust, 131 N.Y.S.2d 191, 194 (N.Y. Sup. 1954) ("[n]o general rule can be enunciated as to the manner in which the cy pres doctrine will be applied ... upon its own peculiar circumstances"). [e]ach case must necessarily depend
Accordingly, the relief ordered in cy pres cases is quite
In so conceding, the Attorney General argues that "there is no proof" that the $30 million provided under the Agreement will be enough and therefore the impracticability element will not be satisfied. See App. at 25. But record reflects that the $30 million is indeed sufficient to restore Fisk in the near term and is essential to the resolution of its long-term stability, by forming the basis upon which to raise additional funds. Tr. 184. As one of the Attorney General's witnesses, Lee Barfield, said "It take money to make money." Tr.515.
See, e.g., In re Estate of Othmer, 815 N.Y.S.2d 444 (N.Y. Sur. 2006) (allowing use of
charitable funds for purposes not permitted under donor's restrictions, where literal compliance with restrictions was impracticable due to institution's financial condition); Inre Matter of
Wilson, 87 A.D. 2d 98 (3d Dept. 1982), affd 59 N.Y. 2d 461 (1983) (reforming charitable trust to function without involvement of school district after district ceased participation under threat of lawsuit). Indeed, there is nothing improper about the provision of funding in agreements
approved under New York's cy pres doctrine. See In re Board of Trustees of Huntington Free Library and Reading Room, 771 N.Y.S.2d 69 (N.Y. App. Div. 2004) (charitable library's inability to meet its custodial responsibilities for a charitably-donated book collection justified
approval, under the cy pres doctrine, of an agreement under which the collection was transferred in consideration for $2.5 million essential to the library'S continued existence).
O'Keeffe's choice of Fisk to display the Collection was part of her intent. For Fisk to
display the Collection, it must exist. Of course, as explained by the Appellate Court, there is
much more to the Crystal Bridges Agreement than the provision of money and the agreement improves the prospects for effectuating O'Keeffe's intent in numerous ways. 11-13. But the starting point of any solution that realizes O'Keeffe's See Decision at
intent is a mechanism that
keeps Fisk viable. Because the issue is funding, the solution requires funding. C.
ARKANSAS IS IN THE SOUTH.
asserts that the Crystal
eradicates Ms. 0 'Keeffe's requirements that the Collection . . . be used for art education in Nashville and the South." See App. at 23. This assertion is baseless. Although for reasons that
remain unclear, it was necessary to enter evidence at trial apparently directed to the question of how Southern Arkansas is, the Attorney General does now concede that Arkansas is in the South. There also is no dispute that both Fisk and the Crystal Bridges Museum would publicly display 15
the Collection for art education and that multiple provisions of the Crystal Bridges Agreement effectuate that part of O'Keeffe's intent. To the extent the Attorney General intends the above assertion to be anything more than a rhetorical flourish, therefore, the assertion is false. D.
THE ATTORNEY GENERAL'S CLAIM THAT THE COLLECTION LEAVE TENNESSEE Is UNSUPPORTABLE!. WILL SOON
The Attorney General offers the fanciful suggestion that "[ojnce the Court's holdingthat Ms.
intended her gift to benefit Fisk financially=becomes
final, then afuture court
will be bound to enforce that intent and allow Fisk to sell its remaining interest once again claims that its financial
survival is at stake," see App. at 28, and the Decision
therefore "creates the very distinct and real likelihood that the entire Collection will leave
Nashville and Tennessee entirely." See App. at 29. The Attorney General further argues that the
Court of Appeals ruled that the Collection can be converted into an expendable asset of Fisk, thereby purportedly making it fair game for creditors in a bankruptcy. See App. at 28. But no court has held that Ms. O'Keeffe intended her gift to benefit Fisk financially, and no court has ruled that the Collection is an expendable asset. Rather, the courts have held that O'Keeffe intended for Fisk to display the Collection, and here, that requires funding, so a solution providing funding is appropriate because it is essential to allow Fisk to display the Collection. How would a decision allow[ing] Fisk to sell its remaining interest in the Collection achieve O'Keeffe's intent that Fisk display the Collection? The Attorney General's professed concern is not based in reality. Even the Chancery Court, which has hardly been quick to approve solutions proposed by Fisk in this matter and has long been attuned to this very concern, rejected the Attorney General's argument following review of the current iteration of the Crystal Bridges Agreement.
THE ATTORNEY GENERAL'S CLAIM THAT THE CRYSTAL BRIDGES AGREEMENT
CHANGES Too MANY PROVISIONS OF O'KEEFFE'S IS WITHOUT MERIT
CONDITIONS TO BE VALID
The Attorney General argues that the changes which would be made with respect to the joint operating agreement between Fisk and Crystal Bridges, are too far removed from
conditions to be within the doctrine of cy pres. This argument is made based on the conclusionary opinions and not an examination of the joint operating
agreement as approved by the Chancery Court. The following summary shows how closely the arrangement O'Keeffe's
will retain the O'Keeffe conditions, but includes a recognition that some of
conditions have become seriously outdated and, in fact, in some cases will result in
permanent damage to the art:
Original O'Keeffe Conditions
Conditions if jointly owned with Crystal Bridges (includes section references to the proposed Joint Operating Agreement)O
The collection shall be known, in perpetuity, as the Alfred Stieglitz Collection. 3(a) No art work included in the Collection may be sold or exchanged. No art work may be added to the Collection. 3(b) Before any exception can be made to the no-sale condition; permission must be obtained from the Chancery Court, with each party will have the right of first refusal of any approved sale by he other party. 13 Collection will be displayed as a unified and distinct grouping of works and the Committee will take into account O'Keeffe's concept that the Collection will be exhibited in the same room or rooms, with no other works of are in the same room or rooms and the walls to be white or a very light color. 6(d) Best and accepted industry practices dictate that
The Collection will be known as the Alfred Stieglitz Collection The art works in the Collection will not be sold or exchanged.
The Collection will be exhibited intact and no other art objects are to be shown n the same room
frequent display of works on paper will ultimately cause in-eversible and sever damage. The Committee will establish guidelines consistent with the best interests of the collection and in accordance with the highest standards and best industry practices. 6(e) No reproductions may be made except for the catalog of Fisk or for the purpose of publicity in future publications regarding the Collection No reproductions may be made without the approval of the artists or successors if hey hold such rights. Otherwise Fisk/Crystal Bridges will have the right to reproduce the Collection consistent with their respective missions ana their legal rights. 9 The works may be loaned only with the express consent of he Conunittee which shall consider the intent of O'Keeffe and in accordance with the best interest of the Collection and best industry practices. 6(g) Will be housed in a safe and secure building and under surveillance at all time when he doors are unlocked. 6(h) Committee will establish guidelines and policies regarding the removal from frames, handling, examination and general treatment of the prints, and the guidelines will be in the best interest of the collection, the preservation of the prints and the highest standards and best industry practices.
No photographs may be loaned. The other art works will not be loaned for any purpose other than a one man exhibition
Collection will be under surveillance at all times when the rooms are not locked Special procedures must be used handling the photographs.
Collection will be under the oversight of an Arts Commission
Collection will be under the oversight of a Collection Committee, made up of the curator of Fisk and the curator of Crystal Bridges, and three additional art professionals (a conservator, a noted scholar on American Modernism and a person with significant experience in the art museum: industry. The three professionals on the Conunittee must be approved by both Fisk and Crystal Bridges. 4-5
ATTORNEY FOR FISK'S
THAT THE IS
CANNOT BE USED AN INCORRECT
OF NEW YORK LAW.
The Attorney General incorrectly claims that New York law requires that the proceeds of the transaction with Crystal Bridges not be used for Fisk's general purposes. Smithers case as the authority for this argument, he quotes from Smithers: Citing the
"all proceeds of the
sale would be subject to the same restrictions and could not be used for [the donee's] general purposes," To say this language is taken out of context is an understatement. Mrs. Smithers brought suit against the hospital
Smithers is a case about standing.
claiming that the hospital had used certain property given to it by the late Mr. Smithers in violation of the conditions he had placed on the property. One question referred to by the court was whether or not the hospital had sold a certain building and whether or not Mr. Smithers' conditions applied to that building. No party had filed a cy pres proceeding or sought any court approval regarding the use of the building. On appeal of the standing issue, the court described the history of the matter including the role of the Attorney General in the litigation. The position taken by the New York Attorney General was described by the court as follows: . The [Attorney Generaljurged this Court to remand for a hearing on the merits to determine whether or not the building was subject to gift restrictions. If it were, then all proceeds ofthe sale would be subject to the same restrictions and could not be used fOr the Hospital's general purposes. Smithers v. St. Luke's Roosevelt Hospital Center, 723 N.Y.S.2d 426, 430 (N.Y. App. Div. 2001) The quoted language is not only out of context, it does not even come from the ruling in the case but rather from a description of the position of one of the parties to the case on a matter not even concerning cy pres relief.
The Attorney General also cites Hummell for the same proposition, referring to page 249 of that case, but there is nothing on that page which relates to the use of proceeds from the sale of the property, nor does anything else in the case appear to be relevant to this argument made by the Attorney General. The Attorney General then cites material from outside the record," being the Core Professional Standards and Code of Ethics of the American Association of Museums. of Art
Museums and the American Association precedent. organization.
On their face these material are not legal
Fisk does not consider its gallery a. museum and is not a member of either
THE CRYSTAL BRIDGES AND INTENT As NEARLY
AGREEMENT As POSSIBLE.
Cy pres is an exercise in the possible.
It is applied where conditions are not perfect. In
the six years this litigation has been pending, only one solution has emerged that allows for Fisk to continue to display the Collection. The Attorney General has filed brief after brief in which he issue, acting as if the problem was that the
purported not to understand the impracticability
Collection was too expensive to care for, rather than that Fisk was on the brink. On that theory, he proposed multiple solutions that defrayed the cost of the Collection while Fisk was left to fail. These solutions have been rejected by the Courts because they ignore the problem and are not long-term solutions. As the Chancery Court found: The deficiency with the proposals of the Attorney General is that they provide no money for Fisk, the institution. Both of the Attorney General's proposals fail to account for Ms. 'Keeffe 's design that locating the Stieglitz Collection at Fisk University was important in her decision to bring the collection to Nashville.
Matter a/Hummel, 805 N.Y.S.2d 236 (N.Y. Sup. 2005).
8 The Attorney General's expert witness testified on direct examination that he was a member of each organization, but he did not testify as to the contents of these standards and codes, and these materials were not introduced into evidence by the Attorney General. Tr. 598-600. In footnote 1 to his Application, the Attorney General goes a step further and cites the Court to a press release issued by one of these organizations, which is not only outside the record, but after the decision of the Court of Appeals from which his Application is being filed.
Decision at 10. In his Application, the Attorney General acknowledges that Fisk needs significant
amounts of new funding to remain viable.
Yet he continues to push the proposals rejected
below, in effect favoring the closing of Fisk and the awarding of the Collection to another entity. He continues to state that his plan to raise enough money for an endowment which would pay to Fisk a total of $131,000 per year, which Fisk estimated to be the annual direct costs it incurs in operating the gallery, is superior to the Crystal Bridges Agreement. The uncontested proof in
this case is that Fisk is losing $2 million per year (Tr. 220), and the payment of $131 ,000 will not be anywhere close to enough money to keep Fisk open. The Attorney General acknowledges as much. See App. at 25. The result of the Attorney General's plan will be that Fisk will no longer be able to display the Collection. That is not what O'Keeffe intended.
THE ATTORNEY GENERAL'S ARGUMENT THAT CHARITABLE GIVING IS UNSUPPORTABLE
The Attorney General argues that approval of the Crystal Bridges Agreement would chill charitable giving. This argument is based upon little if any record evidence, misstates the law, and most fundamentally, proposals were adopted. As an initial matter, the argument is based on almost pure speculation. The Attorney ignores entirely the effect upon charitable giving if the alternative
General cites two cases, both of which were decided in other contexts and one witness who said he had received quite a few phone calls" inquiring about the issue of binding conditions. On this record, it cannot be determined if this chilling effect even exists, much less the scope and size of any problem.
Once again the Attorney General cites a case out of context when he cites the Heye Foundation'i for the proposition that dispensing with donor's directions will discourage charitable giving. The Heye Foundation was a repository of Indian ali and artifacts. In 1926, it purchased two libraries of materials related to the study of American Indians. Heye later realized that it did not have the resources necessary to maintain the libraries. In 1930, it donated the libraries to Huntington Free Library which complied with the conditions imposed upon on it. When Heye found itself again in financial trouble some years later, it agreed to transfer all of its materials to the Smithsonian Institution. The Smithsonian also wanted to acquire the two libraries from the Huntington Free Heye then attempted to
Library but could not reach a satisfactory arrangement with Huntington.
regain ownership of the libraries for the Smithsonian by suing Huntington under the doctrine of constructive trust. The Court ruled against Heye on the trust theory, but the Court on its own
initiative raised the issue of whether or not cy pres could be used to accomplish the transfer to the Smithsonian. The Court rejected the application of cy pres because it was not impossible or
impracticable for Huntington to continue to perform its duties of maintaining the libraries. The Court also rejected the idea of approving the transfer of ownership from Huntington to the Smithsonian based on the conclusion that the Smithsonian would provide a better, more sophisticated and more convenient facility. It found that courts are not authorized to use cy pres simply because there is a more efficacious way of achieving the dispositional purpose. It was this possible use (or misuse) of cy pres that the Court said was inappropriate, and it was also in this context that the quotation set out in the Attorney General's briefwas written. That is not the situation here."
IOSoard of Trustees of Museum of American Indian, Heye Foundation v, Board of Trustees of Huntington Free Library and Reading Room, 197 A.D.2d 64, 610 N.Y.S.2d 488 (1994). The paragraph quoted in the Attorney General's Application is on page 85, not 82 as stated in his filing.
11 Tennessee Division of the United Daughters of the Confederacy v, Vanderbilt University, 174 S. W.3d 98 (Ct, of App. 2005), is not relevant for a number of reasons: it is not a New York case, it is not a cy pres case, and it involves the argument that the university was entitled to unilaterally change the terms of a contract, without the approval of any court.
In addition, the testimony of a Georgia museum director who has received quite a few phone calls inquiring as to whether or not their donations will be protected when they make them is a little or no probative value. Under New York law there is a simple remedy for any donor seriously concerned about such a problem; he or she can put a reversion clause in the gift which transfers the assets to someone else if the gift conditions are not meet. That will cause any cy pres to fail the charitable/specific intent test, making cy pres unavailable. Also, it ironic that the Attorney General alleges that the Court of Appeals decision will chill charitable giving, when his own expert witness testified that museums do not now accept gifts with no-sale conditions on them. Dr. Eiland said on cross-examination: There are two trends in art now. We don't promise perpetuity, that something will be kept in perpetuity, because we can't define perpetuity. And the second thing that we don't promise is that something will be up on the walls all the time.12 The most fundamental problem with the Attorney General's argument, however, is that he fails to examine his own proposals. If there is anything that would chill charitable giving, it is watching as an institution that had been hand-picked by a charitable donor in a striking and deliberate decision made decades ago is stripped of a charitable gift in its time of vulnerability, so that the gift can be handed off to someone of his choosing. That is what the Attorney General proposed at trial. It is not the solution.
CONCLUSION It was the office of the Attorney General that first submitted the initial proposed Crystal Bridges Agreement to the Chancery Court, and the Attorney General provided the courts with a constructive avenue for resolution of this matter. But now, although the passage of time has only confirmed that the Crystal Bridges Agreement is
the only solution
that would keep Fisk open to
display the Collection, he has reversed course. He claims that O'Keeffe's choice of Fisk was not significant, and he seeks other solutions that allow him to choose where the Collection would go. But the record does not support him; it is clear that the choice of Fisk was important to O'Keeffe. The Attorney General should not be permitted to keep this litigation alive so that he can take more shots at crafting solutions that allow him to award the Collection to entities he selects. No Rule 11 factors are present here. The Application should be denied.
LESTER NORTON PLLC
John P. Br am, PR #2552 Stacey A. Garrett, BPR# 16105 C. David Briley, BPR #18559 C. Michael Norton, BPR# 3786 511 Union Street, Suite 1600 Nashville, TN 37219 (615) 238-6300
Counsel for Fisk University
CERTIFICATE OF SERVICE
I herebycertify that a true and correct copy of the foregoing Brief of Appellant was served by First Class Mail, postage prepaid, upon the following this the 14th day of April, 2012.
Janet M. Kleinfelter Public Interest Division Office of the Attorney General P.O. Box 20207 Nashville, Tennessee 37202 William N. Helou MG Law, PLLC 2525 West End Avenue, Suite 1475 / Nashville, Tennessee 37203 .' /
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