Wednesday, April 30, 2008
The New York Times reports that the Montana Supreme Court dismissed the board of the Charles M. Bair Family Museum. According to the court's opinion, Alberta M. Bair caused the creation of the Charles M. Bair Family Trust upon her death in 1993. Her estate funded the trust with assets then worth approximately $23.5 million, including her personal residence which the trust agreement stated should be used to establish the Charles M. Bair Family Museum. The agreement also made the First Trust Company of Montana, since succeeded in interest by U.S. Bank,the sole trustee, but granted the exclusive authority to make charitable distributions from the trust's income to a Board of Advisors. The five-member Board consisted of the president or president's nominee of the First Trust Company of Montana, of the First Bank in Billings, and of the Billings' law firm of Moulton, Bellingham, Long & Mather, P.C., with the other two members to be appointed by the trustee from three local counties.
Under the direction of the Board of Advisors, the Museum opened to the public in 1996 with a collection of unique Native American Art, European furniture and other items, Edward S. Curtis photographs, and various paintings and watercolors by noted artists. The first year saw over 14,000 visitors, but by 2002 the number of annual visitors had declined to slightly over 4,000. The Board therefore decided to at least temporarily close the Museum pending a review of its continuing operations. A group of local residents, the Friends of the Bair, objected to the continuing closure of the museum and when the trustee sought court guidance in 2004 regarding the authority of the Board under the trust agreement, Friends of the Bair successfully intervened in the case that eventually made its way to Montana Supreme Court. The Attorney General also eventually intervened in the case. While the case was pending, the Board decided to permanently close the museum based on its claim that continuing to operate the museum was not feasible.
The Montana Supreme Court, overruling a lower court decision, concluded that the primary purpose of the trust agreement was to establish the museum. It also concluded that the Board breached its fiduciary duty to administer the trust with the care, skill, prudence, and diligence of a prudent person when it failed to pay for significant improvements to the Blair residence recommended by the museum consultants it had hired, when it failed to make funding the museum the first priority for the trust's income, and by deciding to close the museum. The court ordered the trustee, U.S. Bank, to appoint two new Board members for the two Board positions over which it had appointment power, and the three presidents of the institutions named in the trust agreement to appoint nominees as Board members in their place. The court also ordered the new Board to meet within six months of the decision and to take all necessary steps to comply with the trust agreement, as interpreted by the court.