In Re a Trust Created by Gurney
59 N.Y.S.3d 587, 152 A.D.3d 1122, 2017 NY Slip Op 5902 (2017)
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Rule of Law:
For the cy pres doctrine to apply to a failed charitable gift, the instrument and extrinsic evidence must demonstrate the donor had a general charitable intent to support a cause, rather than a specific intent to benefit a particular institution.
Facts:
- Margaret E. Gurney established a revocable living trust.
- The trust directed that upon her death, 20% of the residuary assets were to be distributed to St. Mary’s Roman Catholic School (the school) in Oneonta, New York, at its specific street address.
- The trust also made gifts to other institutions located exclusively in Oneonta.
- Gurney had fond memories of volunteering at the school and aimed to support institutions in her adoptive hometown.
- In 2011, the school permanently closed and its grounds were sold to an unrelated entity.
- After the school's closure was known, Gurney lacked the mental capacity to amend her trust.
- Gurney died in 2015, making the distribution to the school, as written, impossible.
Procedural Posture:
- The successor trustee of Gurney's trust, petitioner, initiated a proceeding in the Surrogate’s Court of Otsego County.
- Petitioner sought judicial permission to distribute the failed gift to the school among the other two residuary beneficiaries.
- The local parish and diocese (respondents) answered, arguing the cy pres doctrine should be applied to redirect the funds to their educational programs.
- Respondents moved for summary judgment seeking application of cy pres, and petitioner cross-moved for summary judgment to have the gift lapse.
- The Surrogate’s Court granted petitioner's cross motion, declining to apply the cy pres doctrine.
- Respondents, as appellants, appealed the Surrogate's Court order to the Appellate Division of the Supreme Court of New York.
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Issue:
Does the cy pres doctrine apply to redirect a residuary gift in a trust to a now-defunct school when the trust instrument and extrinsic evidence suggest the donor's intent was to benefit a specific local institution rather than the broader cause of religious education?
Opinions:
Majority - Devine, J.
No. The cy pres doctrine does not apply because the evidence fails to establish a general charitable intent. The gift was directed to a specific institution at a specific address, and all of decedent’s gifts were to local Oneonta organizations, indicating an intent to benefit her local community rather than a broader charitable purpose. Extrinsic evidence from the trustee confirmed that Gurney intended to support the specific school where she volunteered, not Roman Catholic education in general. Because the donor's intent was specific to an institution that no longer exists, the gift fails, and the court cannot use cy pres to redirect it.
Dissenting - Lynch, J.
Yes. The cy pres doctrine should apply because the trust reflects a general charitable intent. The fact that Gurney left the bulk of her estate to three charitable institutions demonstrates an overall charitable purpose. The trust contained no qualifying language in the event the school ceased operations. Gurney had a history of supporting both the school and its parent parish, which has continued the school's educational mission through other programs. These factors evidence a general charitable intent sufficient to invoke cy pres and remit for a hearing on how to best accomplish the decedent's general purpose.
Analysis:
This decision emphasizes the high bar for establishing 'general charitable intent' required for the application of the cy pres doctrine. It demonstrates that courts will narrowly construe a donor's intent when a gift is made to a highly specific, local entity, especially when supported by extrinsic evidence of the donor's personal connection to that single institution. The ruling cautions that merely giving to multiple charities is not, by itself, sufficient to prove a broad charitable purpose for any single gift. This precedent makes it more difficult to reform a failed specific gift, increasing the likelihood that such gifts will lapse and be distributed to other residuary beneficiaries.
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