Highlights of AG's argument to block Berkshire Museum art sale

Legal briefs make plain how the Attorney General's Office views the Berkshire Museum art sale. Its lawyers oppose it eight ways from Sunday. Though the office lost big Tuesday in Berkshire Superior Court, it could seek to be heard in a higher venue, even as hours tick down to Monday's first sales.

PITTSFIELD — Legal briefs make plain how the Attorney General's Office views the Berkshire Museum art sale.

Its lawyers oppose it eight ways from Sunday.

Though the office lost big Tuesday in Berkshire Superior Court, it could seek to be heard in a higher venue, even as hours tick down to Monday's first sales.

As of late Thursday afternoon, the online docket for the Massachusetts Trial Court did not show any action in the case, two days after Judge John Agostini rejected calls for an injunction halting auctions.

If the office does press on, Assistant Attorney General Courtney M. Aladro and her colleagues would likely craft their argument from elements of the 15-page answer and cross-claim they filed Nov. 2.

Their case, as the state's overseer of public charities and nonprofits, rests on the notion of the "charitable trust." Aladro and her colleagues cite a 1943 case, Wellesley College v. Attorney General, in arguing that the assets of charitable corporations, of which the museum is one, are subject to the purposes for which those assets were given.

That purpose in Pittsfield, the office says time and again in its Nov. 2 brief, is to promote the study of art for the people of Berkshire County.

Trustees of the Berkshire Museum, in short, were obligated to honor their institution's charitable purpose, the office argues.

Since passage of a 1932 law, the purpose has been to oversee "in the city of Pittsfield an institution to aid in promoting for the people of Berkshire County and the general public the study of art, natural science, the culture [and] history of mankind and kindred subjects by means of museums and collections ..."

What follows are highlights of arguments the assistant attorneys general presented — so far unsuccessfully — to a Massachusetts court and how others see those claims.

- WORKS ACQUIRED BEFORE 1932 ARE RESTRICTED: The Attorney General's Office argues that an 1871 act of the Legislature continues to bar removal of gifts to the collection from Pittsfield.

That's because charitable trusts apply, based on the purposes for which the art was given, the office says in its brief. Those restrictions remained in place through the founding of a museum in 1903 as part of the Berkshire Athenaeum, the office argues.

Further, though another act of the Legislature broke the museum away as a separate entity in 1932, that step did not wipe the slate clean, according to the brief. The Legislature doesn't have the power to terminate a charitable trust, lawyers say.

The Attorney General's Office made that plain to the museum even before it was drawn into litigation Oct. 20. It's believed that is why 19 of the original 40 works the museum planned to sell no longer appear on auction schedules. The office says it held 20 conference calls with the museum's lawyers and met in person with its leaders.

WHAT THE JUDGE SAID: Because the works given to the museum before 1932 didn't list donors' intents, they are restricted only by decisions made by the charitable trust that cares for them — in this case, the museum, Agostini writes.

After a long recounting of wording in the 1871 act, the judge concluded that the measure did not intend to place a geographic restriction.

WHAT THE MUSEUM SAYS: William F. Lee, the Boston attorney representing the museum, argued in his Oct. 26 response that because the Pittsfield restriction is not mentioned in the 1932 act, it doesn't exist. He cites case law on that point and argues that, if any limitation existed before, it was lifted in 1932.

- NORMAN ROCKWELL WORKS ALSO RESTRICTED: The term "charitable trusts" roars back in the state's brief when it comes to Rockwell.

The office argues that the artist intended for his work to stay in the museum's permanent collection. It holds that the two paintings the artist donated cannot be sold.

The Attorney General's Office argues that terms of charitable trusts restrict sales. On top of that, the office claims that if either of the artist's donated paintings were to be sold, proceeds can only be used for the good of the permanent collection.

WHAT THE JUDGE SAID: Agostini didn't buy that argument, writing that museums use the term "permanent" while still culling out work that no longer suits their needs. "The evidence of Rockwell's intent to create a restrictive, stand-alone trust ... is insubstantial," the judge writes.

WHAT THE MUSEUM SAYS:The museum presented Agostini with copies of 38 accession slips. The ones for Rockwell's gifts show no restrictions, Lee's response notes. "Plaintiffs seek to conjure a restriction from a letter" from the museum director to Rockwell, he writes, then adds, "Nothing in that letter states that the gift was conditional ..."

- SELLING 40 "PRE-EMINENT" WORKS OF ART TO RAISE MONEY FOR OPERATIONS BREACHES TRUST: Perhaps not surprisingly, the office that is charged in state law with protecting charitable trusts argues that the sales violate the terms under which the museum holds the work.

By pulling monetary value from the work out of its collection, the lawyers argued in their brief, the museum would violate its central purpose as an art museum.

What's more, the office lists adverse effects of such a sale, including lost relationships with museum groups and discouraging future donations.

WHAT THE JUDGE SAID: Agostini dissects the definition of "trust" and rules that the Attorney General's Office's reference to "implied trusts" did not fit the circumstances of the case.

While the judge grants that the gift to a charity "usually creates some kind of charitable trust," he ruled that case law allows a public charity to use a gift "in such manner as those in control of the corporation deem best ..."

WHAT THE MUSEUM SAYS: The museum's "New Vision," Lee writes on the institution's behalf, is consistent with its long-standing mission even as it endorses the sale of works from its collection. Trustees would fail to meet their duty of "maintaining ... an institution," he argues, if they failed to respond to a financial crisis and allowed the museum to go out of business.

- MUSEUM BREACHED "DUTY OF CARE" REQUIREMENTS: This is where lawyers with the Attorney General's Office take aim at the museum's current leaders.

Under state law, people on boards of charitable organizations, the brief says, "must exercise the degree of care that a prudent person ordinarily would use in a like position and act with reasonable intelligence."

Case law adds this definition: Care calls for "complete good faith plus the exercise of reasonable intelligence."

The museum's officers and directors, the office argues, failed to live up to those measures.

They did so, the brief claims, by setting a goal of raising more money than the museum needed; by acting despite the likelihood of losing relationships with other museums; by violating their own collections policy; and by not notifying the AG's office before committing to the Sotheby's sales.

The scale of the deaccession, the office maintains, moved the museum toward an entirely new purpose and puts it in an untenable status in the museum community. Changing its mission in that way, the state's lawyers say, requires the museum to first seek court approval.

WHAT THE JUDGE SAID: Trustees considered several options over two years in a reasonable manner. Reaching for a $40 million deposit in its endowment shows the board's "commitment to the community to keep the Museum operational," the judge writes. On the collections policy, Agostini said no law requires the museum to live up to ethical guidelines. Nothing in the museum's charter, bylaws or articles of incorporation, the judge noted, compels it to use deaccession proceeds only for the good of the collection, as the museum world believes is best.

WHAT THE MUSEUM SAYS: The plaintiffs failed, Lee argues, to show that trustees breached any duty of care. "For nearly two years, the Board engaged in an exhaustive, diligent process to develop and fund a New Vision for the Museum," he writes. They only "reluctantly" decided that selling artworks "was the only way to not only maintain the Museum in the short term, but sustain its existence and mission in the long term."

Larry Parnass can be reached at lparnass@berkshireeagle.com, at @larryparnass on Twitter and 413-496-6214.