JUDGE ELLEN HOBBS LYLE REACHES A DECISION IN THE FISK UNIVERSITY CASE, BUT THE EXTERMINATING ANGEL IS UNLIKELY TO GO AWAY
DATELINE: March 7, 2008, Chicago
Poor Fisk University. Recall that this Nashville-based institution has faced financial difficulties in recent years. The seemingly simple solution would be to sell just two paintings from its valuable Stieglitz Collection of art, which includes works by Georgia O'Keeffe, Picasso, Renoir, and Cezanne, among other notable artists. During the last two years, Fisk has been asking Davidson County Judge Ellen Hobbs Lyle whether it can do just that.
We had hoped that Judge Lyle would put an end the dispute between Fisk and the Georgia O'Keeffe Foundation when she rendered her decision following a trial that began February 19, 2008. As we discovered late last night, that is...
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unlikely. Yesterday, Judge Lyle permanently enjoined Fisk University from selling any of the paintings. She also ordered Fisk to renovate and re-open the Carl Van Vechten Gallery before October 6, or face loss of the entire collection.
In the Fisk story, Judge Lyle was the "invited guest" in Luis Bunuel's Exterminating Angel. Fisk extended the invitation when it asked her whether it could sell two paintings from the collection. On the other hand, the Georgia O'Keeffe Foundation is the uninvited guest who will not leave. It has been arguing that Fisk cannot sell any of the paintings because a sale would ignore the restriction that Georgia O'Keeffe imposed on the collection when she made the gift decades ago: The collection was not to be split up. The O'Keeffe Foundation stands to benefit from that argument. It claims that in the event Fisk violates the terms of the gift, the paintings must be transferred to the O'Keeffe Foundation as Georgia O'Keeffe's successor in interest. In fact, it has argued that it should receive all the paintings now because Fisk University has not displayed the collection for some two years. That, according to the foundation, is also a violation of O'Keeffe's intent. The irony is that should the paintings be returned to the O'Keeffe Foundation, the restrictions/conditions would lapse, with the result that the O'Keefe Foundation could then sell them. While we can only speculate, we suspect the O'Keefe Foundation is only interested in a few of the artworks (Radiator Building—Night New York, in particular), making a sale of some of the works a distinct possibility.
Fisk University has argued that it finds itself caught in a Catch 22. In order to display the paintings, it needs to renovate the Carl Van Vechten Gallery, but that costs money. The most logical way to raise the money would be to sell two of the paintings, but it can't unless Judge Lyle says it can. Judge Lyle has said no to such a request and another that would have resulted in joint custody of the collection with another museum in exchange for a $30 million payment.
Most likely, Fisk University will appeal yesterday's decision, arguing that injunctive relief is not appropriate, that the O'Keeffe Foundation lacks standing, and that the gift was a restricted gift rather than a conditional one. Most likely, the O'Keeffe Foundation will appeal the portion of the decision in which Judge Lyle states,
The Court decides that Fisk has breached the conditions but that the circumstances do not yet justify removing the Collection from Fisk.
With both parties likely to appeal, it would be reasonable to conclude that the decision was Solomonic, but it isn't. By granting injunctive relief, Judge Lyle claims that a future trial in the dispute will be based on contempt of court rather than cy pres, making for a much shorter trial. That aspect of the ruling heavily favors the O'Keeffe Foundation.
As we have written, we disagree with Judge Lyle's prior decision, which is the one that set the stage for yesterday's decision. In our view, O'Keeffe made a restricted gift, not a conditional one. That means that the O'Keeffe Foundation is not entitled to the return of the collection under any circumstance. Hopefully, both appeals will be consolidated and the appeals court will address all of Judge Lyle's decisions to date, including her conditional/restricted determination. As has been the true throughout this dispute, it is risky to make predictions. That means that the parties could be back in Judge Lyle's court in October.
Fisk has been making some progress toward solving its financial problems, according to Jonathan Marx of the Tennessean. Fisk Violated O'Keeffe Wishes But Can Keep Art, Judge Rules, Mar. 6, 2008. Marx writes,
At a hearing in February, university president Hazel O'Leary said the school has been able to keep pace with its fundraising efforts thus far, offering the promise of financial stability, at least in the short-term.
"Fisk's position is that it is receiving an extraordinary infusion of cash," O'Leary said, noting that some of those funds would be used to complete long-delayed renovations on the Van Vechten Gallery, where the Stieglitz Collection has been housed since 1949.
But even if Fisk is able to restore and reopen the gallery before October, there is no guarantee that Fisk will not be back in court in a year or two pleading to sell several paintings because of its overall financial problems. That is when Judge Lyle's decision could come back to bite Fisk.
Judge Lyle's opinion is ostensibly on the merits, but it reflects some irritation with Fisk. The judge points out that Fisk did not disclose the "no-sale" clause when it filed the lawsuit. Nor, according to Judge Lyle, did Fisk update its court papers to indicate that its financial circumstances had improved. At one point in the opinion, Judge Lyle writes,
These two instances indicate to the Court that it will provide needed clarity to all concerned to put the weight of the law, in the form of an injunction, behind the no-sale condition and a court-ordered deadline for Fisk to display the Collection.
In a later portion of her opinion, Judge Lyle adds,
President O'Leary's testimony at trial that Fisk, with the Mellon grant, can afford to and will take care of displaying the Collection, is directly in opposition to her attorney's January 29, 2008 statement to the Court, after the Mellon Grant had been received, that Fisk could not afford to take care of the Collection. That contradiction reveals that Fish has been self-serving with the facts. Nor is this an isolated instance.
The second half of Judge Lyle's opinion is quite technical. As we noted, we think Judge Lyle gets it wrong again, when she says reversion is appropriate if the gift's condition fail, citing Application of Syracuse University, 149 N.E. 2d 671 (N.Y. 1958), as authority. The problem with Syracuse University is the gift in that case was a conditional one, making reversion of the gift the appropriate remedy. We still disagree with Judge Lyle's initial premise. The O'Keeffe gifts looks to us like a restricted rather than conditional gift. Reversion is not the appropriate remedy in such a case.
Judge Lyle decided not to require reversion because a leading treatise indicated that reversion was not necessarily automatic when there is a failure to satisfy the conditions imposed by the donor. Courts, according to the treatise, can balance the equities to avoid undue hardship. That's exactly what Judge Lyle did.
Judge Lyle did insert language in her opinion that could provide her some wiggle room if Fisk fails to comply. She specifically refers the need to take into account the interests of Fisk University students and the Nashville public-at-large when deciding whether reversion of the collection to the O'Keeffe Foundation is an appropriate remedy. Earlier in the opinion, she wrote,
By allowing the Collection to remain displayed at an educational institution in this part of the Country where it can be viewed by students, residents in the area, and visitors, the public interest is served.
Judge Lyle doesn't name the particular educational institution. We can only wonder if Fisk should continue to have trouble whether Judge Lyle might entertain placing the collection with another college or university in the Nashville area, such as Vanderbilt, particularly if the collection is maintained in the Carl Van Vechten Gallery.
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