Art Law Report Header-1

Lawsuit Seeking to Stop Deaccessioning of Paintings at Valparaiso is Dismissed

Posted by Nicholas O'Donnell on December 4, 2023 at 4:05 PM

A trial court in Indiana recently dismissed a lawsuit challenging the proposed sale of three works of art by Valparaiso University: Rust Red Hills by Georgia O’Keefe, Mountain Landscape by Frederic Edwin Church, and The Silver Veil and the Golden Gate by Childe Hassam. This controversy highlights many of the issues surrounding the deaccession of art by American museums. In ruling that the former director of the Brauer Museum of Art at Valparaiso and the museum’s key benefactor both lacked standing to sue the university over the planned sale, the decision tracked other recent results about non-profit oversight, highlighting just how critical the engagement of a state’s Attorney General is.

Whatever the merits of this rule on standing are, however, the university seems to be violating a condition of the 1953 agreement it made to obtain these works of art, yet nine months on the Attorney General has not exercised his undisputed prerogative to stop it. Non-profit governance is hard in a world of finite charitable resources. But universities caught in the arms race of new dorms and laboratories would do well to consider the core mission and what makes it possible. The chance to sit with a painting by Hassam, Church, or O’Keefe was well recognized by the original benefactor Percy Sloan, and this university agreed to abide by that condition. It should keep its word. Selling art to plug budget holes is like eating the seed corn; it robs the future.

I spoke with the New York Times when the dispute first broke in March, an article which summarizes the background nicely. As part of a five-year revenue plan for its campus needs, Valparaiso president José Padilla proposed reallocating “resources that are not core or critical to our educational mission and strategic plan.” Among those “resources” were several works of art at the Brauer, the proceeds of whose sale the university intended to use for the renovation of two freshman dormitories.

Those works of art have an interesting history, however. In 1945, Percy Sloan put into a Trust what he called his Collection of American Paintings assembled by his father Junius Sloan and cared for by his mother Sara Sloan, which included the Church painting. Sloan directed that the collection “be built especially to meet the cultural as well as professional needs of the whole student body of a large and worthy educational institution. . . .”                The Trustee is empowered to loan the collection out as well, “[t]o encourage a spread of interest in art.”

The Trust goes on to say (emphasis added in bold):

I direct that the Collection and its Endowment Fund by given to such institution on condition that it collaborate with my Trustee in this project by providing galleries acceptable to him, of such number and size as will accommodate the collection as it should be constituted, adequately lighted and otherwise equipped for this special purpose. . . .

The purpose of all this was addressed at length in the Trust itself, which also tracked related language in Sloan’s Will:

But relatively few colleges have a collection of paintings of any sort, hence no galleries wherein students may pass pleasant and profitable spare time with many artists, and through study of their creations awaken to the realization that visual beauty abounds everywhere, and finds its most effective expression through art, not literature, for art portrays beauty while literature can only describe it. Thus a new interest enters their lives, a serious interest in esthétics and in the quest for beauty, which, with the development of more understanding vision, will prove a limitless source of happiness.

In 1953, the then-Trustee made a gift of the entire collection to Valparaiso (including the Church, as noted above). Among the provisions of this agreement was that the university “has complied with or will comply with all the terms and conditions precedent to the vesting of the gift aforeseaid” and, with respect to the collection specifically, to hold the collection “under the uses, trusts and conditions in said will, said trust agreement, and in this agreement specified.”

This is clearly the imposition of a condition, in the terms of the very agreement by which the university took the collection and its endowment (which was later used to buy the O’Keefe and the Hassam paintings). Selling the collection for money to be spent on dorms is inconsistent with this condition. The Trust is very explicit about the important of using the art not only for access by students, but actual interaction and education. Turning the art into money is antithetical to the purpose for which Sloan put it into the Trust and under conditions that Valparaiso accepted it; the university lacks the legal authority to sell this art.

That is only part of the question, however. The thornier issue is: who can do anything about it. As longtime readers of the Art Law Report will recall, this prompts the question of standing. Generally, the maker of a charitable gift relinquishes all control over the fate of the gift once given. Equally so, however, conveyances like gifts can be made subject to a condition. If explicit enough, the condition can retain rights in the giver (or her heirs) to enforce the condition. The default rule is that a state’s Attorney General has oversight over charitable enterprises and thus standing to enforce any perceived condition.

Lawsuits therefore have focused on the specific circumstances. When the benefactors of the Rose Art Museum sued Brandeis over a decade ago to stop its planned liquidation of that marvelous collection, they argued that they had donated the art subject to an enforceable condition. The lawsuit settled before the question was answered. When my clients sued the Berkshire Museum to stop the sale of its artwork including the iconic Shuffleton's Barbershop by Norman Rockwell, we asserted standing as members and other plaintiffs who were relatives of Norman Rockwell argued that his gift contained a condition. The Superior Court denied both groups standing.

In the Berkshire Museum case, the Attorney General of Massachusetts initially aligned with the plaintiffs to seek an injunction against the sale. On the motion of the Attorney General, the Massachusetts Appeals Court halted the sale. Later, when the Attorney General withdrew her objection, a Single Justice of the Supreme Judicial Court held that her oversight was the key criterion, and allowed the sale to go ahead. As (soon-to-retire) Justice David Lowy wrote, “There is no question that [our clients] care deeply about the Museum and the future of art and culture in the Berkshires. Indeed, the art displayed in the Berkshire Museum enriches the lives of the entire community, and the Museum is a reservoir of cultural nourishment for all who visit. The Museum's charitable purpose of aiding in the study of art, natural science and cultural history must be protected. The Attorney General is that protector. She is the attorney for the people, including those who now oppose the sale.” While my clients and I disagreed with the outcome, the Justice framed the stakes eloquently.

The dispute in Indiana has taken a similar turn. Richard Brauer, the longtime director for whom the museum is named, sued to stop the sale. Brauer was joined by retired law professor emeritus Philipp Brockington. The court dismissed the lawsuit, holding they could not enforce any conditions of Sloan’s gift because neither Brauer nor Brockington were “settlers, beneficiaries, personal representatives, or any other person having an interest in the administrative of trust as a matter of law.” As in the Berkshire case, the court noted that Indiana Attorney General Todd Rokita, alone, would have standing to intervene.

As in many of these cases, however, this merely begs the question: what is the Attorney General doing? This case broke publicly in March, presumably sooner among the parties. As noted above, the sale is violative of the conditions the university agreed to accept so that it could have this marvelous art—for the benefit of its students, by the way. This is to say nothing of why the sale is simply a terrible idea, in violation of all standards of museum ethics, to the detriment of the very intended beneficiaries of Sloan’s generosity: students. One hopes that the Indiana Attorney General will heed the words of Justice Lowy and act as the protector his office is assigned to be before it is too late.

Finally, it bears noting that this legal battle was only necessary because since the Berkshire Museum case, it has been clear that the industry ethics and sanctions that forbid deaccessioning art for operational funds are simply not enough to stop the practice.

Topics: Rose Art Museum, Supreme Judicial Court, Deaccessioning, New York Times, Brandeis University, Berkshire Museum, Frederic Edwin Church, Attorney General, Mountain Landscape, The Silver Veil and the Golden Gate, Georgia O'Keefe, Childe Hassam, Rust Red Hills, Breuer Museum of Art, Percy Sloan, Junius Sloan, Sara Sloan, Justice David Lowy, Todd Rokita, José Padilla

Sullivan logo

About the Blog

The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities. It is authored by Nicholas M. O'Donnell, partner in our Art & Museum Law Practice.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

Meet the Editor

Subscribe to Blog

Recent Posts

Posts by Topic

see all