When Jerry Tuccio gave 42 acres of land to the Connecticut Yankee Council of the Boy Scouts of America in 1972, he provided in the deed that if the scouts ever failed to use the property for scouting purposes, the parcel “shall be conveyed by the Grantee to the Town of Ridgefield.”
In 2002, Tuccio executed a document entitled “Release of Restriction” purporting to release the gift over to the Town and filed an amended deed providing that if the scouts sold the property, the proceeds should be placed in the scouts’ endowment in memory of Tuccio’s mother. In 2009, the scouts filed a “quiet title” action seeking judicial confirmation that the waiver of the restriction, which was purportedly executed pursuant to the Connecticut Uniform Management of Institutional Funds Act, was valid. A trial court in Connecticut has held that the donor had no right to waive or remove the restriction. (Connecticut Yankee Council v. Town of Ridgefield, Superior Ct. of CT, Danbury, No. DBDCV085004429S, 6/15/10.)
The Court first concluded that Tuccio transferred his entire interest in the property with the 1972 deed, without the right of reverter (i.e. the right to have title to the property revert to him) if the property were not used for scouting purposes. He “became a stranger in the chain of title and may not thereafter alter the ownership interest regarding a property he no longer retains any rights or interest in,” the Court said.
The scouts argued that Tuccio’s intent was most important, and that the 2002 deed waiving the restriction showed his true intent. But the Court said it was required to consider the donor’s intent as expressed in the gift instrument at the time of the conveyance. It found that the donor’s intent was “unambiguous in its directive that [the scouts] must convey the property to the [Town] upon the happening of a specified condition.”
The scouts then argued that the waiver should be permitted under the Connecticut version of the Uniform Management of Institutional Funds Act, which provides that “with the written consent of the donor, the governing board may release, in whole or in part, a restriction imposed by the applicable gift instrument on the use or investment of an institutional fund.” The Town, joined by the state’s Attorney General, opposed. The Court concluded that the scouts’ argument “overlooks three critical aspects of the original deed.”
“First,” the Court said, the deed “unambiguously defined the parameters of the gift and the applicable restrictions.” It said that UMIFA steps in only where the restrictions have not been clearly spelled out.
“Secondly, there is no indication that the use requirement in the deed cannot be fulfilled. If the court finds that a restriction is obsolete, unworkable, inappropriate or impracticable, it may by order release the restriction, in whole or in part…. Such is not the case in this instance.”
Finally, “and most significantly,” the Court said that “CUMIFA, consistent with the common law, does not permit a donor to change the beneficiary of the gift itself, absent an express reservation of that right by the donor. The purpose of the release of restriction language in the statute is meant to permit a release of the limitations that imperil efficient administration of an institutional fund. There has been no showing that the administration of the property for park and recreational purposes has been so imperiled…. To permit this change by the grantor almost thirty years after the grant was executed would be inconsistent with both the common law and CUMIFA.”
The Court ruled that the 2002 deed was null and void.
YOU NEED TO KNOW
The first two reasons advanced by the Court for saying that UMIFA does not apply to this case do not appear persuasive. If a donor gave money to a college specifically to be used for scholarships, but the college wanted to use it for a new building, there does not seem to be much question but that the original donor could authorize the change in use. A court, acting when the original donor is not available, might be able to act only if the restriction is “obsolete, inappropriate or impracticable,” but the obsolete criteria do not apply to a waiver by the donor personally under the statute.
The difference in this case is the third reason applied by the Court. The donor here was trying to change the ultimate beneficiary of the gift, not just the use by the sole original beneficiary. Since the donor did not retain the power to change the beneficiary, the Court said he could not do so now, at least not without the consent of the contingent beneficiary.