In Re Elizabeth J.K.L. Lucas Charitable Gift
261 P.3d 800, 125 Haw. 351, 2011 Haw. App. LEXIS 700 (2011)
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Rule of Law:
The cy pres doctrine allows a court to modify the terms of a charitable gift when its specific purpose becomes impossible or impracticable, even if the gift contains a 'gift over' provision for an alternative charitable purpose, provided that alternative purpose is also unfeasible.
Facts:
- In December 1976 and December 1982, Elizabeth J.K.L. Lucas (Mrs. Lucas) gifted undivided interests in Niu Valley land to the Hawaiian Humane Society (HHS) through two deeds.
- The deeds stipulated that the land must be used "for the benefit of the public for the operation of an educational preserve for flora and fauna" under HHS's control, or if not so used, it would go to the State of Hawaii "for and as a public park."
- After Mrs. Lucas’s death in 1986, her remaining interest in the land passed to her descendants (the Thompsons), who later transferred their interest to Tiana Partners.
- HHS made several attempts to develop the land consistent with the deed restrictions but concluded that a public educational preserve was physically or economically unfeasible and would disrupt the residential neighborhood.
- The State of Hawai'i Department of Land and Natural Resources (DLNR) also determined the land was unsuitable for a public park, finding only a portion (Parcel 2) suitable for watershed and forest reserve purposes.
- In September 2006, HHS and Tiana Partners signed a Memorandum of Understanding (MOU) for a land exchange: Parcel 2 would go to the State for watershed, and HHS's interest in the remaining parcels would be sold to Tiana Partners for $1,082,850 to create an "Charles and Clorinda Lucas Educational Fund" for HHS programs.
Procedural Posture:
- Elizabeth J.K.L. Lucas granted land to the Hawaiian Humane Society (HHS) in 1976 and 1982, with use restrictions and a gift over provision to the State of Hawaii.
- In 2008, HHS filed a Petition to Approve Land Exchange Free and Clear of Use Restrictions with the Circuit Court of the First Circuit, sitting in Probate (Probate Court), seeking approval for a land transaction and elimination of the use restriction.
- The Attorney General, acting as parens patriae, filed a response stating no objection and affirming the impracticability of the use restriction and consistency with cy pres.
- The State of Hawaii filed a joinder in the Petition.
- Mrs. Lucas's daughter, Laura Thompson, filed a declaration supporting the land exchange.
- The Probate Court denied HHS's Petition in an "Order Denying Petition" on May 18, 2009, ruling that cy pres did not apply because the deeds provided for an alternative use for the State.
- HHS filed a petition for relief from the Probate Court's Order Denying Petition on August 3, 2009.
- The Attorney General and Tiana Partners filed joinders in the petition for relief, and the State filed a memorandum of no opposition, all agreeing the Probate Court misconstrued cy pres.
- The Probate Court entered the "Order Denying Relief" and a "Judgment" on December 21, 2009.
- HHS timely appealed the Probate Court's decisions to the Hawaii Intermediate Court of Appeals.
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Issue:
Does the doctrine of cy pres apply to modify a charitable gift of land when both the primary charitable purpose and the specified alternative charitable purpose, as stated in the deed, are found to be impracticable or impossible to carry out?
Opinions:
Majority - Leonard, J.
Yes, the doctrine of cy pres applies to modify a charitable gift of land when both the primary and alternative charitable purposes specified in the deed are found to be impracticable or impossible to carry out. The court formally adopted the cy pres doctrine for Hawaii, which allows modification of a charitable gift when its original purpose becomes impossible, impracticable, or illegal, provided the settlor had a general charitable intent. The court clarified that the presence of a 'gift over' provision (an alternative charitable distribution) does not preclude cy pres if that alternative purpose is also impracticable. In this case, both Mrs. Lucas’s primary purpose (educational preserve by HHS) and the alternative (public park by the State) were determined to be impracticable due to physical, economic, and neighborhood-impact issues, as confirmed by HHS's studies and DLNR's assessment. The court found Mrs. Lucas exhibited a general charitable intent to benefit the public through education, supported by the deeds' language ("for and as a charitable gift"), the gift over to another charitable purpose, and extrinsic evidence from her daughter. The proposed land exchange and establishment of the "Charles and Clorinda Lucas Educational Fund" closely align with her original educational intent. The court cited Burr v. Brooks and the Restatement (Third) of Trusts § 67, comment b, to support the principle that cy pres can apply when both primary and alternative charitable purposes fail. The Probate Court's reasoning that cy pres was inapplicable simply because an alternative distribution existed was an error, as it failed to consider the impracticability of the alternative.
Analysis:
This case is significant as it formally adopts and applies the cy pres doctrine in Hawaii, providing crucial guidance for charitable trusts facing evolving circumstances. By clarifying that a gift over provision to another charitable purpose does not automatically bar cy pres if the alternative is also impracticable, the court ensures that the overarching charitable intent of a donor can be preserved even when specific conditions fail. This ruling reinforces the judicial preference for upholding charitable donations rather than allowing them to fail entirely, promoting flexibility in trust administration and maximizing public benefit. It highlights the importance of considering both the initial and alternative charitable purposes' feasibility when determining the applicability of cy pres.
