Contract analysis

I. NOTICE OF MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on a date and at a time to be determined by the Court, in Department 302 of the Superior Court of the State of California, County of San Francisco, located at 400 McAllister Street, San Francisco, California 94102, before the Honorable Patricia R. Wainwright, Plaintiff Estuary Foundation ("Plaintiff" or "EF"), a California nonpr

1. There is no triable issue of material fact as to Plaintiff's sole cause of action for declaratory relief, and Plaintiff is entitled to judgment as a matter of law on that cause of action.

2. Plaintiff is entitled to a judicial declaration that it may lawfully redirect approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted grant funds originally designated for the Bay Area Teacher Residency Initiative ("BATRI") to Plaintiff's broader educational mission of teacher development, school partnerships, and community-based learning initiatives in Northern California.

3. The specific charitable purpose designated in the Gift Instrument and Grant Agreement dated June 15, 2018, between The Whitfield-Garner Family Trust and Estuary Foundation (the "Gift Instrument"), has become impracticable within the meaning of California Probate Code Sections 15409 and 15403, thereby authorizing this Court to modify the restriction on the charitable gift.

4. The Court should apply the doctrine of equitable deviation, as codified in California Probate Code Section 15403, to modify the restriction in Section 3.1 of the Gift Instrument to permit use of the funds for Plaintiff's general educational mission, which closely approximates the original charitable purpose.

5. In the alternative, the Court should apply the cy pres doctrine, as codified in California Probate Code Section 15409, to direct application of the restricted funds to a charitable purpose that reasonably approximates the donors' original purpose of supporting educational advancement in Northern California.

6. The reversion clause in Section 7.2 of the Gift Instrument does not preclude judicial modification where the donor's general charitable intent to support education is evident from the face of the instrument and surrounding circumstances, and where the impracticability was caused by circumstances beyond the donee's control.

7. Defendant's Cross-Complaint for restitution of One Million Seven Hundred Thousand Dollars ($1,700,000) plus interest at seven percent (7%) per annum from April 28, 2022, should be denied as a matter of law. This Motion is made pursuant to California Code of Civil Procedure Section 437c on the grounds that there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of

II. MEMORANDUM OF POINTS AND AUTHORITIES A. Introduction Estuary Foundation ("EF") is a California nonprofit public benefit corporation organized in 2009 and headquartered at 1440 Embarcadero Way, Suite 300, San Francisco, California 94107. Since its founding, EF has been dedicated to advancing equitable access to quality education through teacher development, school partnerships, and community-based learning initiat

1. The Parties Estuary Foundation. Plaintiff Estuary Foundation is a California nonprofit public benefit corporation, incorporated on April 11, 2009, under the laws of the State of California. (Declaration of Margot Ellison-Yee ["Ellison-Yee Decl."] ¶ 2; EF Articles of Incorporation, attached as Exhibit B to the Ellison-Yee Declaration.) EF holds federal tax-exempt status under Section 501(c)(3) of the Internal Reven

2. The Gift Instrument and Grant Agreement On June 15, 2018, WGFT and EF executed the document titled "Gift Instrument and Grant Agreement Between the Whitfield-Garner Family Trust and Estuary Foundation for the Bay Area Teacher Residency Initiative" (the "Gift Instrument"). (Chattopadhyay Decl. ¶ 6; Gift Instrument, Exhibit A to the Chattopadhyay Declaration.) The Gift Instrument provided for a total grant of Five M

Section 3.1 (Restriction on Use of Funds). Section 3.1 of the Gift Instrument provides: "The Grant Funds shall be used solely and exclusively for the establishment, operation, and support of the Bay Area Teacher Residency Initiative as described in Exhibit A, and for no other purpose." (Gift Instrument, § 3.1.)

Section 7.2 (Reversion Clause). Section 7.2 of the Gift Instrument provides: "In the event the Program is discontinued prior to the expiration of the Grant Period, any unexpended Grant Funds shall, at the election of Grantor, be returned to Grantor within ninety (90) days of written demand." (Gift Instrument, § 7.2.) The Gift Instrument also incorporated Exhibit A, which described the BATRI program in substantial det

3. The BATRI Program: Launch, Success, and Impracticability The BATRI program operated successfully for three academic years before becoming impracticable due to the withdrawal of both partner school districts. The timeline of events is as follows: September 2018: Launch of BATRI. BATRI launched in September 2018 with an inaugural cohort of 24 teacher residents placed across six partner schools in SFUSD and OUSD. The

4. Financial Summary The financial history of the WGFT grant and the BATRI program is fully documented in EF's audited financial records and is not subject to genuine dispute: • Total WGFT grant committed: $5,000,000 • Total WGFT funds disbursed (Tranches 1–3): $4,000,000 • Total BATRI program expenditures (2018–2021): $3,300,000 These expenditures included teacher resident stipends, partner school coordination costs

5. Pre-Litigation Demand and Dispute On January 28, 2022, WGFT, through its counsel Victoria Huang of Pratchett, Huang & Solano LLP, sent a demand letter to EF demanding the return of $1,700,000 within ninety (90) days pursuant to Section 7.2 of the Gift Instrument. The demand letter asserted that BATRI had been "Discontinued" within the meaning of Section 7.2 and that EF was contractually obligated to return all "un

1. The Court Has Authority to Modify the Gift Instrument Restriction Under California's Cy Pres and Equitable Deviation Doctrines California law provides the courts with broad equitable authority to modify the terms of charitable gifts and trusts when the specific purposes designated by the donor have become impracticable, impossible, or illegal to fulfill. This authority is codified in two complementary provisions o

2. The Specific Charitable Purpose — Operation of BATRI — Has Become Impracticable The undisputed material facts establish that the specific charitable purpose for which the WGFT grant funds were restricted — the operation of the Bay Area Teacher Residency Initiative "as described in Exhibit A" to the Gift Instrument — has become impracticable within the meaning of California Probate Code Sections 15409 and 15403. Th

3. The Donors' General Charitable Intent Is Manifest A finding of general charitable intent is a prerequisite to the application of the cy pres doctrine under California Probate Code Section 15409. (Estate of Mabury, supra, 54 Cal.App.3d at pp. 984–985.) The question is whether the donor's intent was limited exclusively to the specific purpose that has failed — in which case, the gift reverts to the donor's estate or

4. Section 7.2's Reversion Clause Does Not Preclude Judicial Modification WGFT's principal defense to EF's claim for declaratory relief is that Section 7.2 of the Gift Instrument — the reversion clause — creates an express, bargained-for contractual remedy that supersedes the Court's equitable authority to modify the restriction under cy pres or equitable deviation. For the reasons set forth below, this argument fail

5. The Court Should Declare That EF May Redirect All $4,700,000 in Restricted Funds to Its Broader Educational Mission EF seeks a declaration covering all $4,700,000 in restricted BATRI funds — not merely the $1,700,000 attributable to the WGFT grant. While WGFT is the only party that objects to reallocation, EF requires judicial approval to redirect all restricted BATRI funds i