Sunday, February 3, 2008

Cy Pres - Iowa case

In the current issue of Probate & Property, Prof. Gerry Beyer reports on a cy pres case, Kolb v. City of Storm Lake, 736 N.W.2d 546 (Iowa 2007). 

Henry and Martha Kolb entered into an agreement with the city of Storm Lake, Iowa, to establish a garden and a fountain in memory of a grandson who died in a hunting accident.  The Kolbs funded a trust to provide money for maintenance of the garden and foundation.  Many years later, after both donors had died, the city began an economic development project that required the use of the garden's site.  The city and the trustee of the trust, one of the Kolbs' sons, began discussing moving the garden, but before they reached agreement the trustee/son decided to oppose the move.  The city continued to move ahead with the development project and destroyed the fountain and garden.  The city then requested a modification of the trust in order to move the garden to a nearby site.  The district court refused to permit the modification, stating that the trust's purpose had not become "impracticable, Impossible or unlawful to fulfill" except by the city's own action.  The appellate court reversed and allowed the modification under the doctrine of cy pres.  Although the city created the conditions that made continuing to maintain the garden in the same place impossible, the city was responding to "natural and unavoidable" changes in economic and societal needs.  The court concluded that the Kolbs' primary purposes were to create a perpetual memorial to their grandson and to benefit the city.  The location was important to them, but had no particular significance other than being a nice setting.  The court hinted that if the location had particular significance then location would have been a stronger factor.

The court's opinion provides a detailed look at the doctrine of cy pres in Iowa.


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