Obermeyer v. Bank of America, N.A.
2004 WL 1381266, 140 S.W.3d 18 (2004)
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Rule of Law:
Under the doctrine of cy pres, when a specific charitable purpose becomes impossible or impracticable to fulfill, a court may redirect the funds to a purpose 'as near as possible' if the donor manifested a general charitable intent, which can be inferred from factors like the absence of a reverter clause and the nature of the gift.
Facts:
- Dr. Joseph Kimbrough, an alumnus and faculty member of Washington University's Dental School, had a history of making gifts to the university.
- In 1955, Dr. Kimbrough amended his trust to provide lifetime income for his niece and nephews.
- The trust directed that upon the death of the last beneficiary, the remaining estate was to be distributed 'free from trust unto Washington University... for the exclusive use and benefit of its Dental Alumni Development Fund.'
- The trust instrument did not include a reverter clause that would redirect the gift if its purpose failed.
- Dr. Kimbrough died in 1963.
- Washington University discontinued the Dental Alumni Development Fund in 1965.
- In 1991, Washington University closed its dental school, although some dental-related education and practice continued within its medical school.
- The last surviving life beneficiary died in 2000, triggering the distribution of the trust assets, valued at approximately $2.8 million.
Procedural Posture:
- Louise Obermeyer and Elizabeth Salmon, Dr. Kimbrough's great, great-nieces, filed an action for declaratory judgment in circuit court against Bank of America, N.A. (the successor trustee) and Washington University.
- The Attorney General was joined as a necessary party to the lawsuit.
- The circuit court held that Dr. Kimbrough had a general charitable intent, applied the doctrine of cy pres, and entered judgment in favor of Washington University.
- Obermeyer and Salmon, as appellants, appealed the circuit court's decision to the Missouri Court of Appeals, Eastern District.
- After the Court of Appeals issued an opinion, the Supreme Court of Missouri granted transfer to hear the case.
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Issue:
Does the doctrine of cy pres apply to an absolute charitable gift whose specific purpose has become impossible, allowing a court to redirect the funds to a similar purpose, when evidence suggests the donor possessed a general charitable intent rather than an intent for the gift to fail?
Opinions:
Majority - Wolff, J.
Yes, the doctrine of cy pres applies to redirect the funds. An absolute gift to a charitable corporation whose specific purpose has failed may be saved by the cy pres doctrine if the donor exhibited a general charitable intent. The court found Dr. Kimbrough's gift was not contingent on the existence of the specific fund but was instead motivated by a broader intent to support dental education at Washington University. The court extended the application of cy pres, typically reserved for charitable trusts, to this absolute gift to a charitable corporation. The court determined Dr. Kimbrough possessed a general charitable intent based on several factors: the gift was of money, not land; the trust lacked a reverter clause for the charitable gift; the gift was to be distributed 'free from trust'; and Dr. Kimbrough's history of making various other unrestricted gifts to the university demonstrated a broad desire to support the institution, not just a single fund. Therefore, the court could reform the gift to support a purpose as near as possible to the original, which was accomplished by funding two dental-related professorships.
Analysis:
This decision is significant for expanding the application of the cy pres doctrine in Missouri from formal charitable trusts to absolute gifts made to charitable corporations. By doing so, the court reinforced the strong public policy preference for preserving charitable bequests rather than allowing them to fail and revert to the donor's heirs. The case also provides a clear analytical framework for determining general versus specific charitable intent, emphasizing factors like the absence of a reverter clause and the donor's overall pattern of giving. This strengthens the ability of courts to adapt charitable gifts to changed circumstances, ensuring the donor's broader philanthropic goals are achieved even when the specific means become obsolete.
