Case Brief Summary & Legal Analysis

3 min read

tl;dr: A trustee sought to redistribute a closed school’s trust gift to two other named beneficiaries. The parish and diocese sought alternative religious uses under cy pres. The court affirmed redistribution because the trust reflected an intent to support the particular local school rather than a general charitable purpose.

Legal Significance: The decision illustrates that a charitable gift’s impossibility does not alone justify cy pres. The instrument, read as a whole, must reveal general charitable intent; geographic focus, a specifically identified institution, and evidence of the donor’s particular attachment may support denying relief.

Case Facts & Court Holding

Key Facts & Case Background

Margaret E. Gurney established a revocable living trust. Petitioner became successor trustee when Gurney could no longer manage her affairs. After payment of debts and gifts, the trust directed percentage distributions to three institutions, including 20% to St. Mary’s Roman Catholic School in Oneonta. The school closed in 2011, and its grounds were sold to an unrelated entity. Gurney died in 2015.

Petitioner sought permission to distribute the school’s share equally between the other two residuary beneficiaries under EPTL 2-1.15. The parish and diocese under whose auspices the school operated sought distribution to the parish’s faith formation ministry and a diocesan scholarship fund under cy pres.

All institutional beneficiaries were in Oneonta. The trust identified the school by its street address, did not mention Gurney’s Catholic faith, and made no gifts to the parish or other Roman Catholic institutions. Petitioner testified that Gurney intended to support institutions in her adoptive hometown, remembered volunteering at the school fondly, and had no interest in Roman Catholic education generally. Surrogate’s Court denied cy pres relief and granted petitioner’s cross motion. The parish and diocese appealed.

Court Holding & Legal Precedent

Issue: Did the trust reveal the general charitable intent necessary to apply cy pres to the closed school’s residuary share?

The court affirmed the order declining cy pres and distributing the school’s share under EPTL 2-1.15. Although closure made strict compliance impossible, the trust and supporting testimony demonstrated an intent to benefit the particular Oneonta school rather than religious education generally, and no available direction could accomplish that intent.

IRAC Legal Analysis

Legal Issue

Did the trust reveal the general charitable intent necessary to apply cy pres to the closed school’s residuary share?

Conclusion

The decision supports denying cy pres when the donor’s intent is confined to a particular institution and no available alternative would accomplish that intent. It leaves open whether a merger or another local parochial school would warrant a different result.

Legal Rule

Cy pres requires a charitable gift, an instrument revealing general charitable intent, and changed circumstances making strict compliance impracticable or impossible (Matter of Lally, 112 A.D.3d 1099, 1100 [2013]; Matter of Wilson, 59 N.Y.2d 461, 472 [1983]; EPTL 8-1.1 [c]). General charitable intent concerns charity generally rather than a particular object or institution (see Matter of Syracuse Univ. [Heffron], 3 N.Y.2d 665, 668 [1958]). The entire instrument must be read using its words’ ordinary and natural meaning (Matter of Lanza, 307 A.D.2d 265, 266 [2003]; Winter v American Parkinsons Disease Assn., 85 N.Y.2d 715, 719 [1995]).

Legal Analysis

Applying Matter of Lally, the majority treated the gift’s charitable character and the impossibility of strict compliance as established. The decisive question was whether Gurney had general charitable intent.

Reading the trust as a whole, the majority found its geographic focus significant: every institutional beneficiary was in Oneonta. Within that context, the school’s specified address indicated support for the school at that location rather than religious education projects generally. The trust’s silence about Gurney’s Catholic faith and its omission of gifts to the parish or other Roman Catholic institutions reinforced that interpretation.

To the extent the language was unclear, petitioner’s deposition testimony supported the same conclusion. Petitioner described Gurney’s attachment to her adoptive hometown and memories of volunteering at the school, while distinguishing those interests from support for Roman Catholic education generally. Petitioner also testified that Gurney regarded her lifetime parish contributions as satisfying her perceived obligation to the parish.

The majority acknowledged that a merger or another parochial school in the Oneonta area might present a different case. On this record, however, it concluded that no judicial direction could accomplish Gurney’s intent, invoking Matter of Aker, 21 A.D.2d 935, 936 [1964]. Distribution under EPTL 2-1.15 was therefore proper.

Separate opinions

Lynch, J., dissenting: Lynch read the entire trust as demonstrating general charitable intent because the bulk of the estate passed to charitable residuary beneficiaries and another charitable institution received a specific bequest. He found neither the school’s address nor the absence of a contingency provision restrictive. He also emphasized Gurney’s financial support for the school and parish and the pastor’s representation that the parish continued the school’s mission through its Faith Formation education program. He would remit for a hearing to determine the distribution that would most effectively accomplish Gurney’s general purpose.

The Opinions

Summary

The cy pres doctrine was held inapplicable to a failed gift because the trust did not show a general charitable intent.
The court found the donor’s intent was specific to a particular local school, not the broader cause of religious education, based on the trust’s language and extrinsic evidence.
The failed gift lapsed and passed to the other residuary beneficiaries.

Full text

Complete unedited opinion text as published by the court

Devine, J.

Petitioner assumed her duties as successor trustee of a revocable living trust established by Margaret E. Gurney (hereinafter decedent) when decedent became unable to manage her affairs. The trust agreement directed that, upon decedent's death, the trust assets be applied toward her debts and gifts to various individuals and organizations. The trustee would then distribute percentages of the residuary trust corpus to three institutions including, as is relevant here, 20% to St. Mary's Roman Catholic School (hereinafter the school).

Decedent died in 2015, after which petitioner found herself unable to make the distribution to the school given that it had been closed in 2011 and its grounds sold to an unrelated entity.1 Petitioner commenced this proceeding seeking permission to distribute the school's share equally between the other two institutions named in the residuary clause (see EPTL 2-1.15). Respondents St. Mary's Roman Catholic Church, New York and Roman Catholic Diocese of Albany, New York (hereinafter collectively referred to as respondents) — the parish and diocese, respectively, under whose auspices the school operated — answered and argued that the school's share should be distributed to the parish's faith formation ministry and a diocesan scholarship fund pursuant to the cy pres doctrine (see EPTL 8-1.1 [c]). Respondents also moved for that relief, with petitioner cross-moving for the relief sought in her petition. Surrogate's Court declined to apply the cy pres doctrine and granted petitioner's cross motion. Respondents now appeal.

We affirm. The gift to the school was "charitable in nature and, for cy pres relief [to be appropriate], it was further necessary that the instrument[] establishing the gift[] revealed a general charitable intent and that circumstances had changed rendering impracticable or impossible strict compliance with the terms of the gift instrument[]" (Matter of Lally,112 A.D.3d 1099, 1100 [2013]; see Matter of Wilson,59 N.Y.2d 461, 472 [1983]). Strict compliance with the terms of the trust agreement was impossible due to the closure of the school. We accordingly turn to whether the evidence evinces a general charitable intent on the part of decedent, defined "as a desire to give to charity generally, rather than merely to give to a particular object or institution" (5-8 New York Civil Practice: EPTL ¶ 8-1.1 [3] [d]; see Matter of Syracuse Univ. [Heffron],3 N.Y.2d 665, 668 [1958]). In answering that question, we will read the trust agreement in its entirety and afford its words "their ordinary and natural meaning" (Matter of Lanza,307 A.D.2d 265, 266 [2003]; see Winter v American Parkinsons Disease Assn.,85 N.Y.2d 715, 719 [1995]).

Turning to that agreement, all of the institutions to which decedent made gifts are in the City of Oneonta, Otsego County, suggesting an intent to limit her largesse to organizations in that area. When viewed in that context, a direction to distribute part of the residuary trust corpus "to the [school at] 5588 State Route 7, Oneonta, New York 13820" indicates a desire to support a school at that location rather than religious education projects in general. This reading is bolstered by the silence of the trust agreement as to decedent's Catholic faith and the absence of gifts to the parish or other Roman Catholic institutions. Moreover, to the extent that the language of the trust agreement is unclear, petitioner gave deposition testimony revealing that decedent was aiming to support institutions in her adoptive hometown and had fond memories of volunteering at the school. Petitioner further stated that decedent, although a regular churchgoer who financially supported the parish, had no interest in Roman Catholic education per se and had "satisfied" what she saw as a duty to give to the parish during her lifetime.2 The case might be different if the school had been merged into, or if there even was, another parochial school in the Oneonta area. As things stand, however, "there is no direction which could be made by the Court which would accomplish [decedent's intent], [and] the legacy cannot be made effective" (Matter of Aker,21 A.D.2d 935, 936 [1964]; see Saltsman v Greene, 136 Misc. 497, 498-499 [1930], affd 231 App Div 781 [1930], affd 256 N.Y. 636 [1931]; cf. Matter of Lally, 112 AD3d at 1101; Matter of Hummel,30 A.D.3d 802, 804 [2006], lv denied 7 N.Y.3d 713 [2006]). Thus, it was proper for Surrogate's Court to decline to apply the cy pres doctrine and distribute the residuary assets pursuant to EPTL 2-1.15.

Respondents' remaining arguments have been considered and lack merit.

MATTER OF GURNEY Case Brief

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