1028-00001 · Client 1028 · Motions

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — DRAFT — NOT APPROVED FOR FILING

CALDERWOOD & HARKNESS LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 555-7200 Facsimile: (415) 555-7201

C&H Matter No.: 1028-00001

Matter: Estuary Foundation v. The Whitfield-Garner Family Trust, Case No. CGC-22-599481

Court: Superior Court of California, County of San Francisco, Department 302, Hon. Patricia R. Wainwright

Document Title:

DRAFT — PLAINTIFF ESTUARY FOUNDATION'S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

Prepared by: Simone Laroche (Lead Associate) and Jeffrey Park (Working Associate)

Supervising Attorney: Douglas Carmichael (Responsible Partner)

Draft Date: Initial working draft begun circa late 2024; date to be determined upon reactivation

Status: Incomplete working document — not reviewed or approved by Douglas Carmichael or Francesca Morano; not approved for filing

This document is a preliminary working draft prepared for internal use by Calderwood & Harkness LLP attorneys in connection with the above-referenced matter. It reflects the preliminary views of the drafting attorneys only, has not been reviewed or approved by the responsible partner, and is not approved for filing with any court. This document is protected by the attorney-client privilege and the attorney work product doctrine and should not be disclosed to any person outside the firm without the express authorization of Douglas Carmichael.

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO DEPARTMENT 302 HON. PATRICIA R. WAINWRIGHT

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 nonprofit public benefit corporation, will move and hereby does move the Court for an order granting summary judgment, or in the alternative, summary adjudication, in favor of Plaintiff and against Defendant The Whitfield-Garner Family Trust ("Defendant" or "WGFT"), on the following grounds:

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 law.

This Motion is based upon this Notice of Motion, the attached Memorandum of Points and Authorities, the concurrently filed Separate Statement of Undisputed Material Facts, the Declaration of Margot Ellison-Yee filed concurrently herewith, the Declaration of Priya Chattopadhyay filed concurrently herewith, the Declaration of Douglas Carmichael in support of Plaintiff's request for judicial notice filed concurrently herewith, all exhibits attached to the foregoing declarations, and on all records, pleadings, and files in this action, and on such further evidence and argument as the Court may consider at the hearing on this Motion.

[NOTE TO FILE (Laroche/Park): Consider whether to seek summary adjudication on the Cross-Complaint as well. WGFT's Cross-Complaint seeks restitution of $1,700,000 plus 7% per annum interest from April 28, 2022. Under CCP § 437c(f)(1), a party may move for summary adjudication on one or more causes of action or affirmative defenses. We should address the Cross-Complaint in the same motion to avoid a second round of briefing. Discuss with Carmichael.]

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 initiatives throughout Northern California. For fiscal year 2021, EF reported audited annual revenue of $28.3 million and total net assets of $41.6 million, of which $14.2 million was donor-restricted. EF's operations have been subject to annual independent audits by Calloway & Auerbach CPAs, LLP, and EF has consistently maintained the highest standards of fiscal stewardship and transparency in the management of charitable funds.

In June 2018, The Whitfield-Garner Family Trust ("WGFT"), a California irrevocable trust established on March 14, 2003, by the late Herbert R. Whitfield-Garner and the late Dorothy M. Garner, executed a Gift Instrument and Grant Agreement (the "Gift Instrument") providing Five Million Dollars ($5,000,000) to EF for the establishment and operation of the Bay Area Teacher Residency Initiative ("BATRI"). The Gift Instrument reflected the donors' deep commitment to educational advancement and their belief in the power of teacher residency programs to transform the quality of instruction in underserved public school classrooms in the San Francisco Bay Area.

BATRI operated successfully from September 2018 through June 2021. Over the course of three program cohorts, BATRI trained approximately 69 teacher residents, of whom 58 successfully completed the program and were placed in full-time teaching positions in Bay Area public schools. By any measure, the program achieved meaningful and measurable results during the period it was operational.

However, through no fault of EF, BATRI became impracticable when the two public school districts that were essential to the program's operation — the San Francisco Unified School District ("SFUSD") and the Oakland Unified School District ("OUSD") — each independently withdrew from the BATRI partnership. OUSD terminated its partnership in August 2020, citing budget constraints exacerbated by the COVID-19 pandemic. SFUSD declined to renew its partnership agreement in March 2021, citing a district-wide program consolidation. The entire BATRI program model, as described in Exhibit A to the Gift Instrument, depended on active partnerships with public school districts for the placement of teacher residents in public school classrooms. Without any partner district, the program could not function as designed.

As a result of these circumstances, approximately $4,700,000 in total restricted funds — including $1,700,000 from WGFT and $3,000,000 from two other donors — remain restricted to a program that can no longer operate. Of the two other donors, the Cascabel Education Fund (which contributed $2,000,000 restricted to BATRI in 2019) and the Newhall-Sievert Foundation (which contributed $1,000,000 restricted to BATRI in 2020) have each consented to the reallocation of their restricted funds to EF's broader educational mission. WGFT is the sole party that objects to reallocation and instead demands the return of its $1,700,000 contribution.

EF now seeks a judicial declaration that it may redirect all $4,700,000 in restricted BATRI funds to its broader educational mission — teacher development, school partnerships, and community-based learning initiatives in Northern California — consistent with the donors' general charitable intent to support education. This is precisely the type of relief that the cy pres and equitable deviation doctrines were designed to provide.

This case presents a straightforward application of California's longstanding equitable doctrines governing restricted charitable gifts. The specific charitable purpose (the operation of BATRI as described in the Gift Instrument) has become impracticable due to the withdrawal of essential third-party partners. The general charitable intent of the donors — to support educational advancement in Northern California — is manifest from the face of the Gift Instrument, the history of the Whitfield-Garner family's educational philanthropy, and the nature of the BATRI program itself. Under California Probate Code Sections 15409 and 15403, the Court has full authority to modify the restriction on the charitable gift and to direct the application of the funds to a charitable purpose that reasonably approximates the original purpose.

WGFT's reliance on the reversion clause in Section 7.2 of the Gift Instrument is unavailing. That provision, which permits the "Grantor" to demand return of "unexpended Grant Funds" if "the Program is discontinued prior to the expiration of the Grant Period," was drafted to address voluntary discontinuation by EF, not impracticability caused by circumstances entirely beyond EF's control. To interpret Section 7.2 as creating an automatic reversion upon impracticability would defeat the very purpose of the cy pres doctrine, which exists precisely for situations where the original charitable purpose can no longer be achieved. California's strong public policy favoring the preservation of charitable gifts cannot be circumvented by boilerplate reversion language that was never intended to address the circumstances at hand.

For the reasons set forth below, EF respectfully submits that there is no triable issue of material fact and that EF is entitled to summary judgment as a matter of law.

B. Statement of Facts

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 Revenue Code, with Employer Identification Number 94-3127856. (EF IRS Determination Letter, attached as Exhibit C to the Ellison-Yee Declaration.) EF's headquarters are located at 1440 Embarcadero Way, Suite 300, San Francisco, California 94107.

EF's mission is to advance equitable access to quality education through teacher development, school partnerships, and community-based learning initiatives in Northern California. For fiscal year 2021, EF reported audited annual revenue of approximately $28.3 million and total net assets of approximately $41.6 million, of which approximately $14.2 million was donor-restricted. (Declaration of Priya Chattopadhyay ["Chattopadhyay Decl."] ¶ 4; Calloway & Auerbach CPAs, LLP audit report for FY 2021, attached as Exhibit I to the Chattopadhyay Declaration.) EF's financial statements have been audited annually by the independent accounting firm of Calloway & Auerbach CPAs, LLP.

Margot Ellison-Yee has served as Executive Director of EF since 2017. Dr. Kenneth Oguike currently serves as Chair of EF's Board of Directors. Priya Chattopadhyay serves as EF's General Counsel and has been responsible for the administration and oversight of EF's grant agreements, including the Gift Instrument at issue in this action. (Ellison-Yee Decl. ¶¶ 3–5; Chattopadhyay Decl. ¶ 2.)

The Whitfield-Garner Family Trust. Defendant WGFT is a California irrevocable trust established on March 14, 2003, by Herbert R. Whitfield-Garner and Dorothy M. Garner (the "Original Settlors"). (Gift Instrument, attached as Exhibit A to the Chattopadhyay Declaration, at p. 1; WGFT Answer ¶ 1, attached as Exhibit N to the Declaration of Douglas Carmichael ["Carmichael Decl."].) Both Original Settlors are now deceased — Dorothy M. Garner passed away in 2016, and Herbert R. Whitfield-Garner passed away in 2019. (WGFT Answer ¶ 3.)

The current Trustee of WGFT is Roland Whitfield-Garner, a son of the Original Settlors. Adrienne Garner-Bosch, a daughter of the Original Settlors, serves as Co-Trustee. Nathaniel Whitfield-Garner, another son of the Original Settlors, serves in a non-trustee advisory capacity. (WGFT Answer ¶ 4.) The Trust's estimated corpus is approximately $62 million in diversified assets, including significant ongoing charitable commitments to educational and cultural institutions. (Ellison-Yee Decl. ¶ 8.) WGFT is represented in this action by Victoria Huang of Pratchett, Huang & Solano LLP.

Other Donors. Two additional donors contributed restricted funds to the BATRI program. The Cascabel Education Fund contributed $2,000,000 restricted to BATRI in 2019. The Newhall-Sievert Foundation contributed $1,000,000 restricted to BATRI in 2020. Both donors have provided written consent to the reallocation of their restricted funds to EF's broader educational mission. (Chattopadhyay Decl. ¶¶ 15–16; written consents from Cascabel Education Fund and Newhall-Sievert Foundation, attached as Exhibits L and M to the Chattopadhyay Declaration.) Neither the Cascabel Education Fund nor the Newhall-Sievert Foundation is a party to this action.

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 Million Dollars ($5,000,000) from WGFT to EF, to be disbursed in four tranches over the five-year Grant Period running from 2018 through 2023. (Gift Instrument, § 2.1.)

The disbursement schedule was set forth in Section 2.2 of the Gift Instrument as follows:

• Tranche 1 (upon execution, June 2018): $1,500,000

• Tranche 2 (July 2019): $1,250,000

• Tranche 3 (July 2020): $1,250,000

• Tranche 4 (July 2021): $1,000,000

Tranches 1 through 3 were disbursed by WGFT to EF as scheduled, totaling $4,000,000 in disbursed funds. Tranche 4, in the amount of $1,000,000, was never disbursed by WGFT due to the suspension and subsequent wind-down of BATRI operations, and those funds remain held by WGFT in the Trust's own accounts. (Chattopadhyay Decl. ¶¶ 7–8; EF financial records, attached as Exhibit H to the Chattopadhyay Declaration.)

The Gift Instrument contained two provisions of particular relevance to this action:

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 detail. As set forth in Exhibit A, BATRI was designed as a teacher residency program in which aspiring teachers would be placed in partner school classrooms in SFUSD and OUSD for a full academic year, receiving intensive mentoring and hands-on classroom experience under the supervision of experienced cooperating teachers. (Gift Instrument, Exhibit A.) The entire program model was predicated on the existence of active, ongoing partnerships with public school districts willing to host teacher residents in their schools and to provide cooperating teachers as mentors. Without such partnerships, the program as described in Exhibit A could not function.

The Gift Instrument's preamble and recitals also reflected the donors' broader commitment to educational advancement. The recitals acknowledged EF's mission of advancing equitable access to quality education and the donors' belief that teacher residency programs represent a powerful model for improving teaching quality in underserved communities. (Gift Instrument, Recitals, at p. 1.)

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 program was structured as a full-year residency, with each resident embedded in a partner school classroom alongside an experienced cooperating teacher. Residents received stipends funded in part by the WGFT grant, along with coursework and professional development provided by EF. (Ellison-Yee Decl. ¶¶ 10–12; BATRI program records, attached as Exhibit D to the Ellison-Yee Declaration.)

June 2019: Successful Completion of First Cohort. The first BATRI cohort completed the residency in June 2019. Of the 24 residents who began the program, 22 successfully completed all requirements and were placed in full-time teaching positions in Bay Area public schools. The program was functioning exactly as intended by both EF and the WGFT donors. (Ellison-Yee Decl. ¶ 13; BATRI program records, Exhibit D.)

September 2019: Second Cohort Begins. In September 2019, BATRI enrolled its second cohort of 30 teacher residents across partner schools in SFUSD and OUSD. This represented a significant expansion reflecting the success of the first cohort and the strong demand for the program from both districts. (Ellison-Yee Decl. ¶ 14.)

March 2020: COVID-19 Pandemic Disrupts Operations. In March 2020, the COVID-19 pandemic caused a sudden and widespread disruption to all in-person educational activities across California. In-person teacher placements were suspended across all BATRI partner schools as both SFUSD and OUSD transitioned to remote learning. While EF worked to adapt the program to the new reality, the pandemic fundamentally altered the landscape for in-person teacher residency placements. (Ellison-Yee Decl. ¶ 15.)

August 2020: OUSD Terminates Partnership. In August 2020, OUSD formally notified EF that it was terminating its partnership with BATRI, effective immediately. OUSD cited severe budget constraints exacerbated by the COVID-19 pandemic as the basis for its decision. (OUSD termination correspondence, attached as Exhibit E to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 16.) The loss of OUSD eliminated approximately half of BATRI's placement sites and was the first major blow to the viability of the program model as described in Exhibit A to the Gift Instrument.

September 2020: Reduced Third Cohort. Despite the loss of OUSD, EF made good-faith efforts to continue BATRI operations. In September 2020, EF enrolled a third cohort of 15 teacher residents, reduced in size from the prior year, and placed them exclusively in SFUSD schools. EF worked closely with SFUSD administrators to maintain the remaining placement sites and to ensure the quality of the residency experience for the third cohort. (Ellison-Yee Decl. ¶ 17.)

March 2021: SFUSD Declines to Renew. In March 2021, SFUSD notified EF that it would not renew the BATRI partnership agreement for the 2021-2022 academic year. SFUSD cited a district-wide program consolidation as the basis for its decision. (SFUSD non-renewal correspondence, attached as Exhibit F to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 18.) This decision eliminated the last remaining partner district and rendered it impossible to continue BATRI operations as contemplated by the Gift Instrument.

June 2021: Third Cohort Graduates. The third and final BATRI cohort graduated in June 2021. Of the 15 residents enrolled, 12 successfully completed all program requirements. (Ellison-Yee Decl. ¶ 19; BATRI program records, Exhibit D.)

December 31, 2021: EF Board Formally Winds Down BATRI. On December 31, 2021, the EF Board of Directors formally voted to wind down BATRI operations. The Board resolution documented the Board's finding that the program had become impracticable due to the loss of all partner school districts and that continued operation of BATRI as described in Exhibit A to the Gift Instrument was no longer possible. (EF Board Resolution dated December 31, 2021, attached as Exhibit G to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 20.) The Board's decision was made only after exhausting all reasonable efforts to continue the program, including exploring potential partnerships with other school districts in the Bay Area, none of which proved feasible within the timeframe of the Grant Period.

It is critical to note that EF did not voluntarily abandon BATRI for strategic, financial, or operational reasons of its own choosing. The program became impracticable because both public school districts that were essential partners in the program model — the only districts with which BATRI had operating partnerships — independently decided to withdraw. These were sovereign decisions by public educational agencies, entirely beyond EF's control or influence. EF faithfully operated BATRI for three full cohort years, expended $3,300,000 in program funds, trained 69 teacher residents (58 of whom completed the program), and made every reasonable effort to sustain the program before ultimately concluding that continued operation was impossible.

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, curriculum development, program evaluation, and administrative overhead attributable to BATRI operations. All expenditures were consistent with the purposes set forth in Exhibit A to the Gift Instrument. (Chattopadhyay Decl. ¶¶ 9–11; EF financial records, Exhibit H; Calloway & Auerbach CPAs, LLP audit reports, Exhibit I.)

• Unexpended disbursed WGFT funds: $700,000 ($4,000,000 disbursed minus $3,300,000 expended)

• Undisbursed Tranche 4 (held by WGFT): $1,000,000

• Total WGFT funds in dispute: $1,700,000 ($700,000 unexpended disbursed + $1,000,000 undisbursed)

In addition to the WGFT grant, the following restricted BATRI funds are held by EF from other donors:

• Cascabel Education Fund contribution (2019): $2,000,000

• Newhall-Sievert Foundation contribution (2020): $1,000,000

• Total restricted funds from other donors: $3,000,000

Both the Cascabel Education Fund and the Newhall-Sievert Foundation have provided written consent to the reallocation of their restricted funds to EF's broader educational mission. (Chattopadhyay Decl. ¶¶ 15–16; written consents, Exhibits L and M.)

The total restricted BATRI funds in dispute across all donors is $4,700,000 ($1,700,000 from WGFT + $2,000,000 from Cascabel + $1,000,000 from Newhall-Sievert).

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 "unexpended Grant Funds" — which WGFT characterized as including both the $700,000 in unexpended disbursed funds and the $1,000,000 Tranche 4 that was never disbursed. (WGFT Demand Letter dated January 28, 2022, attached as Exhibit J to the Carmichael Declaration.)

On March 3, 2022, Calderwood & Harkness LLP, through Douglas Carmichael on behalf of EF, responded to the demand letter. The response asserted that the doctrines of cy pres and equitable deviation applied to the restricted BATRI funds, that EF intended to seek judicial guidance on the proper disposition of the funds, and that EF respectfully declined to return the funds pending judicial resolution. (Calderwood & Harkness LLP Response Letter dated March 3, 2022, attached as Exhibit K to the Carmichael Declaration.)

On April 15, 2022, counsel for EF and WGFT conducted a final pre-suit meet-and-confer telephone conference. The parties were unable to reach a resolution of the dispute. (Carmichael Decl. ¶ 7.)

On April 25, 2022, EF filed this action for declaratory relief. Three days later, on April 28, 2022, the ninety-day demand period under Section 7.2 of the Gift Instrument expired without EF having returned any funds.

On June 10, 2022, WGFT filed its Answer to the Complaint and simultaneously filed a Cross-Complaint against EF, seeking restitution of $1,700,000 plus interest at seven percent (7%) per annum from April 28, 2022, the date the ninety-day demand period expired. Calculated at the claimed rate, the interest accruing on the Cross-Complaint amounts to approximately $119,000 per year. (WGFT Answer and Cross-Complaint, attached as Exhibit N to the Carmichael Declaration.)

On July 22, 2022, EF filed its Answer to the Cross-Complaint, denying all material allegations and asserting affirmative defenses based on cy pres, equitable deviation, impracticability, and the inapplicability of the claimed interest rate. (EF Answer to Cross-Complaint, attached as Exhibit O to the Carmichael Declaration.)

On September 2, 2022, the parties participated in a mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services. The mediation did not result in a settlement.

On September 16, 2022, the parties entered into a Stipulation and Order Staying All Proceedings in this action. The stay has remained in effect since that date. The parties have filed ten joint status reports through March 14, 2025, with the next status report due June 13, 2025. (Carmichael Decl. ¶¶ 8–10.)

C. Legal Standard for Summary Judgment

Under California Code of Civil Procedure Section 437c, subdivision (c), a motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Aguilar v. Tarrant Holdings (2001) 25 Cal.4th 826, 843.) The purpose of the summary judgment procedure is to "penetrate the pleadings and ascertain, by means of affidavits and other evidence, whether triable issues of fact exist." (Id. at p. 843.)

The burden-shifting framework for summary judgment motions in California is well established. The moving party bears the initial burden of making a prima facie showing that there are no triable issues of material fact. (Id. at p. 850.) A plaintiff moving for summary judgment on its own claim must present evidence that would require a reasonable trier of fact to find in the plaintiff's favor on each element of the cause of action. (Id. at p. 851.) Once the moving party has met this burden, the burden shifts to the opposing party to show, by admissible evidence, that a triable issue of one or more material facts exists. (Code Civ. Proc., § 437c, subd. (p)(1).) The opposing party "may not rely upon the mere allegations or denials of its pleadings" but "shall set forth the specific facts showing that a triable issue of material fact exists." (Ibid.)

Actions for declaratory relief are particularly well-suited for resolution by summary judgment where the material facts are undisputed and the dispute concerns the legal interpretation of written instruments. (Osseous Technologies of Am., Inc. v. DiscoveryyOrtho Partners LLC (2010) 191 Cal.App.4th 357, 364 ["Where the facts are undisputed and only legal issues are presented, those legal issues are appropriately resolved on summary judgment"]; see also Kirkwood v. California State Auto. Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 59.) The interpretation of a written instrument is a question of law for the court when the language is not ambiguous. (Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1126.)

Here, the material facts underlying EF's claim for declaratory relief are essentially undisputed. The terms of the Gift Instrument, the disbursement history, the timeline of BATRI's operations, the circumstances of the program's wind-down, and the financial summary are all documented in written records and are not subject to genuine dispute. The central questions before the Court are questions of law: whether the cy pres and equitable deviation doctrines authorize the Court to modify the restriction in the Gift Instrument, whether the reversion clause in Section 7.2 precludes such modification, and whether EF may lawfully redirect the restricted BATRI funds to its broader educational mission. These are precisely the type of legal questions that are suitable for resolution on summary judgment.

D. Argument

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 of the Probate Code — Section 15409 (cy pres) and Section 15403 (equitable deviation) — each of which independently authorizes the modification that EF seeks in this action.

a. California Probate Code Section 15409 — Cy Pres. California Probate Code Section 15409 codifies the ancient doctrine of cy pres for charitable trusts and gifts. The statute provides, in relevant part:

"If property is given in trust to be applied to a particular charitable purpose, and it is or becomes unlawful, impracticable, or impossible to carry out the particular purpose, and if the settlor, or testator, had a general charitable intent, the specific purpose for which the trust property is to be applied may be modified to a charitable purpose that reasonably approximates the original purpose."

(Prob. Code, § 15409, subd. (a).)

The application of the cy pres doctrine requires the court to find three elements: (i) the property is or has become subject to a charitable trust or restricted charitable gift; (ii) the specific charitable purpose for which the property was given has become impracticable, impossible, or unlawful to carry out; and (iii) the settlor or donor had a general charitable intent — that is, an intent to benefit charity generally, as distinct from an intent limited exclusively to the specific purpose that has failed. (See Estate of Mabury (1976) 54 Cal.App.3d 969, 984–985; In re Estate of Loring (1946) 29 Cal.2d 423, 437–438.)

When all three elements are satisfied, the court is empowered to modify the specific purpose of the charitable gift to one that "reasonably approximates" the original purpose, thereby preserving the charitable nature of the gift while adapting it to changed circumstances. The doctrine reflects a deep-rooted public policy in California law favoring the preservation of charitable gifts and the fulfillment of donors' general charitable intentions, even when the specific means chosen by the donor are no longer viable. (See Estate of Tarrant (1951) 38 Cal.2d 42, 46 ["It is the policy of the law to sustain gifts for charitable purposes whenever it is possible to do so"].)

Application to this case. Each element of the cy pres doctrine is satisfied here:

First, the WGFT grant funds are subject to a restricted charitable gift. The Gift Instrument expressly restricts the use of the funds to BATRI and "no other purpose." (Gift Instrument, § 3.1.) EF is a nonprofit public benefit corporation organized for charitable purposes, and the WGFT funds were donated for a charitable purpose — the training of teacher residents to improve educational quality in Bay Area public schools.

Second, the specific charitable purpose — the operation of BATRI "as described in Exhibit A" to the Gift Instrument — has become impracticable. As the undisputed facts demonstrate, BATRI's program model was entirely dependent on active partnerships with public school districts for the placement of teacher residents in partner school classrooms. Both SFUSD and OUSD independently withdrew from the partnership — OUSD in August 2020 and SFUSD in March 2021. Without any partner school district, the program model described in Exhibit A cannot be carried out. This is not a case where the charitable purpose is merely more difficult or more expensive to achieve; it is a case where the specific program vehicle is literally impossible to operate because the essential third-party partners have withdrawn.

Third, the donors had a general charitable intent to support education, as distinct from an intent limited exclusively to BATRI and nothing else. As discussed in greater detail in Section D.3 below, the general charitable intent of the Original Settlors is manifest from the face of the Gift Instrument, the WGFT's history of educational philanthropy, and the nature of BATRI itself as an educational initiative whose ultimate purpose was to improve teaching quality in Northern California schools.

Because all three elements are satisfied, the Court has authority under Section 15409 to modify the restriction in the Gift Instrument to permit the use of the funds for a charitable purpose that reasonably approximates the original purpose — namely, EF's broader educational mission of teacher development, school partnerships, and community-based learning initiatives in Northern California.

b. California Probate Code Section 15403 — Equitable Deviation. California Probate Code Section 15403 provides an alternative and complementary basis for judicial modification of the Gift Instrument restriction. Section 15403 authorizes the court to modify the administrative or distributive terms of a trust or gift instrument under circumstances broader than those required for cy pres. The statute provides, in relevant part:

"On petition by a trustee or beneficiary, the court may modify the administrative or dispositive provisions of the trust or terminate the trust if, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust."

(Prob. Code, § 15409, subd. (a); see also Prob. Code, § 15403 [equitable deviation].)

The equitable deviation doctrine is broader than cy pres in a critical respect: it does not require a finding that the charitable purpose itself has completely failed or become impossible. Rather, it requires only a finding that compliance with the specific terms of the gift instrument has become impracticable or would substantially impair the accomplishment of the charitable purpose. (See Marin Hosp. Dist. v. Rothman (1983) 139 Cal.App.3d 495, 501–502.) This distinction is significant because it allows the court to modify the means by which the charitable purpose is accomplished while preserving the purpose itself.

Application to this case. Even if the Court were to conclude that the general charitable purpose of teacher training and educational advancement has not entirely failed — because, in the abstract, teacher training programs could theoretically be operated through different partnerships or in different formats — compliance with the specific terms of the Gift Instrument has nonetheless become impracticable. The Gift Instrument does not merely restrict the funds to "teacher training" in the abstract; it restricts them to "the Bay Area Teacher Residency Initiative as described in Exhibit A." Exhibit A describes a specific program model that requires placement of teacher residents in partner school classrooms in SFUSD and OUSD. No such placement is possible because both districts have withdrawn from the partnership.

The equitable deviation doctrine permits the Court to modify the means — the specific program vehicle described in Exhibit A — while preserving the end — the advancement of educational quality in Northern California. This is precisely the type of modification that equitable deviation is designed to accomplish. EF proposes to redirect the restricted funds to its broader educational mission, which encompasses teacher development, school partnerships, and community-based learning initiatives — activities that are closely aligned with the original BATRI purpose and that serve the same ultimate goal of improving educational access and quality in Northern California.

c. The Attorney General's Role.

[NOTE TO FILE (Laroche/Park): Under California law, the Attorney General has a statutory role in cy pres proceedings involving charitable trusts and gifts. Probate Code Section 15409, subdivision (b), provides that the Attorney General shall be a party to proceedings under that section. Government Code Section 12598 also grants the Attorney General broad supervisory authority over charitable trusts. We must confirm whether the Attorney General has been served with the Complaint in this action and whether separate notice is required in connection with this summary judgment motion. Review the proof of service on the original Complaint and contact the Charitable Trusts Section of the Attorney General's office to confirm compliance. This is a critical procedural step — the motion may be defective if the AG has not received proper notice. ACTION ITEM: Laroche/Park to research AG notification requirements and confirm compliance before filing.]**

Under California Probate Code Section 15409, subdivision (b), the Attorney General is a necessary party to any proceeding in which the court is asked to apply the cy pres doctrine to modify the terms of a charitable gift. (See also Gov. Code, § 12598 [Attorney General's supervisory authority over charitable trusts].) To the extent the Attorney General has not already been served in this action, EF will ensure that proper notice of this Motion and the underlying proceedings is provided to the Charitable Trusts Section of the Office of the Attorney General prior to the hearing on this Motion. EF anticipates that the Attorney General's position will be consistent with the relief sought here, given that the modification serves to preserve charitable funds for educational purposes and is consistent with the strong public policy favoring the preservation of charitable gifts.

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. The impracticability is complete, is not the result of any act or omission by EF, and cannot be remedied by any reasonable effort on EF's part.

The chain of causation is clear and undisputed:

(a) The BATRI program model, as described in Exhibit A to the Gift Instrument, was predicated on active, ongoing partnerships with public school districts — specifically, SFUSD and OUSD — for the placement of teacher residents in partner school classrooms. This was not an incidental feature of the program; it was the program's fundamental design. Teacher residents could not be trained without classroom placements in partner schools, and classroom placements could not occur without the cooperation of a partnering school district.

(b) In August 2020, OUSD formally terminated its partnership with BATRI, citing budget constraints. This was an independent administrative decision by a public educational agency, entirely beyond EF's control. The termination eliminated approximately half of BATRI's placement sites and substantially impaired the program's operations.

(c) In March 2021, SFUSD notified EF that it would not renew the BATRI partnership agreement for the 2021-2022 academic year, citing a district-wide program consolidation. Like OUSD's decision, this was an independent administrative determination by a sovereign public school district, made for reasons entirely unrelated to EF's performance or conduct. SFUSD's non-renewal eliminated the last remaining partner district.

(d) Without any partner school district willing to host teacher residents, the BATRI program model described in Exhibit A to the Gift Instrument became impossible to carry out. The program could not place residents in classrooms, could not pair residents with cooperating teachers, and could not deliver the supervised, school-based residency experience that was the core of the BATRI model.

(e) EF made good-faith efforts to continue BATRI operations through three full cohort years (September 2018 through June 2021), expending $3,300,000 in program costs and training 69 teacher residents, 58 of whom successfully completed the program. Even after OUSD withdrew, EF reduced the cohort size and continued operations with SFUSD alone. EF did not wind down BATRI until December 31, 2021, after all placement options had been exhausted and the EF Board determined that the program was impracticable.

It is important to distinguish the role of the COVID-19 pandemic in this analysis. While the pandemic initially disrupted BATRI's operations in March 2020 by forcing the suspension of in-person placements, the pandemic alone did not render the program impracticable. EF adapted to the pandemic conditions and continued operations, albeit on a reduced scale. The ultimate cause of BATRI's impracticability was not the pandemic itself, but rather the independent decisions by OUSD and SFUSD to terminate and not renew their partnerships — decisions that may have been influenced by pandemic-related budget pressures but were fundamentally sovereign administrative choices by public school districts acting in their own interests.

Equally important, this is not a case of voluntary abandonment. EF did not choose to abandon BATRI for strategic, financial, or operational reasons of its own choosing. EF did not redirect its resources to other programs, did not lose interest in teacher residency work, and did not fail to meet its obligations under the Gift Instrument. Rather, the program was rendered impossible by the withdrawal of essential third-party partners — public school districts whose participation was a prerequisite to the program's operation and whose decisions were entirely beyond EF's control or influence.

The impracticability here is of precisely the kind contemplated by the cy pres and equitable deviation doctrines. Where a charitable purpose depends on the cooperation of third parties, and those third parties independently withdraw their cooperation for reasons unrelated to the donee's performance, the purpose becomes impracticable through no fault of the donee. To require the donee to return the charitable funds in such circumstances would penalize the donee for faithfully pursuing the charitable purpose and would frustrate the donor's general charitable intent. This is the exact circumstance in which the law intervenes to preserve the charitable gift.

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 trust — or whether the donor had a broader intent to benefit charity, with the specific purpose serving as the means rather than the exclusive end. (In re Estate of Loring, supra, 29 Cal.2d at pp. 437–438.)

California courts have consistently held that a general charitable intent should be found wherever possible, and that the law strongly favors the construction that preserves a charitable gift over the construction that results in its reversion to private ownership. (Estate of Tarrant, supra, 38 Cal.2d at p. 46; In re Estate of Loring, supra, 29 Cal.2d at p. 438 ["a general charitable intent is implied from a gift to charity where there is nothing in the instrument, when considered in the light of the surrounding circumstances, indicating a contrary intent"].)

Here, the general charitable intent of the Original Settlors — Herbert R. Whitfield-Garner and Dorothy M. Garner — is manifest from multiple independent sources of evidence:

The Gift Instrument itself. The Gift Instrument's title, preamble, and recitals demonstrate a commitment to educational advancement that transcends the specific vehicle of BATRI. The very title of the document — referencing a "Gift Instrument and Grant Agreement" — reflects the donative, charitable character of the transaction. The recitals acknowledge EF's mission of "advancing equitable access to quality education" and the donors' belief in the power of teacher residency programs to improve teaching quality in underserved communities. The donors chose BATRI not as an end in itself, but as a promising means of advancing a broader educational goal. (Gift Instrument, Recitals, at p. 1.)

The WGFT's history of educational philanthropy. The Whitfield-Garner Family Trust has an established track record of charitable giving to educational institutions and causes. The Trust's estimated $62 million corpus includes "significant charitable commitments" to educational and cultural organizations. The BATRI grant was one expression of a broader pattern of educational philanthropy that evidences a general charitable intent to support education — not a one-time, narrowly targeted gift to a specific program and nothing else. (Ellison-Yee Decl. ¶ 8.)

The nature of BATRI as an educational initiative. BATRI itself was fundamentally an educational initiative — a teacher residency program whose ultimate purpose was to improve the quality of instruction in Northern California public schools. The program's specific methodology (placing teacher residents in partner school classrooms) was a means to an educational end. The donors' intent in funding BATRI was not to fund a particular program structure for its own sake, but to support an educational purpose. The general charitable intent (education) is distinct from the specific program vehicle (BATRI); the cy pres doctrine permits the court to preserve the former while modifying the latter.

The deaths of the Original Settlors. Both Original Settlors are deceased — Dorothy M. Garner passed away in 2016, two years before the Gift Instrument was executed, and Herbert R. Whitfield-Garner passed away in 2019, during the early years of BATRI's operation. The fact that the donors are deceased and cannot be consulted weighs in favor of finding a general charitable intent and applying cy pres, because the alternative — returning the funds to the Trust — would serve the private interests of the Trust's current beneficiaries rather than the charitable intent of the deceased donors. (See Restatement (Third) of Trusts § 67, cmt. b [cy pres is particularly appropriate where the donor is deceased and cannot redirect the gift].)

[NOTE TO FILE (Laroche/Park): Research whether the deaths of the Original Settlors affect the enforceability of the reversion clause or the determination of "general charitable intent." The settlors' intent at the time of the gift is the relevant inquiry, and their deaths may weigh in favor of cy pres because the donors cannot be consulted. Also consider the fact that Dorothy M. Garner was already deceased when the Gift Instrument was executed — the instrument was presumably executed by the trustees (or by Herbert alone, as surviving settlor) on behalf of the Trust. Clarify the chain of authority for execution of the Gift Instrument.]

The donors' expressed intentions. Margot Ellison-Yee, EF's Executive Director, can testify to the conversations she had with Herbert R. Whitfield-Garner during the period leading up to the execution of the Gift Instrument and during the first year of BATRI's operations. Those conversations reflected Mr. Whitfield-Garner's deep personal commitment to educational equity and his broad vision for how his family's philanthropic resources could make a lasting impact on the quality of education in the Bay Area. Mr. Whitfield-Garner expressed his intent that the gift would serve a broader educational purpose, and he viewed BATRI as the vehicle through which that purpose would be achieved. (Ellison-Yee Decl. ¶ 21.)

Taken together, this evidence overwhelmingly demonstrates that the Original Settlors had a general charitable intent to support educational advancement, and that the specific BATRI program was the chosen means — not the exclusive end — of that intent. The law's strong presumption in favor of general charitable intent is fully warranted on this record.

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 fails.

a. The Reversion Clause Is Not a Condition Subsequent That Defeats the Court's Equitable Authority. WGFT's position rests on the premise that Section 7.2 constitutes an express contractual provision that takes precedence over equitable doctrines. According to WGFT, because the parties specifically contemplated the possibility that the program might be "Discontinued prior to the expiration of the Grant Period" and agreed that "unexpended Grant Funds shall, at the election of Grantor, be returned to Grantor within ninety (90) days of written demand," this contractual allocation of rights forecloses any judicial modification.

This argument fundamentally misapprehends the nature and scope of the Court's equitable authority over charitable gifts. The doctrines of cy pres and equitable deviation are not mere default rules that apply only in the absence of contractual provisions to the contrary. They are equitable doctrines rooted in the public interest in preserving charitable gifts, and they operate on charitable gifts regardless of the specific terms of the gift instrument. (See Restatement (Third) of Trusts § 67, cmt. a ["The cy pres doctrine is an equitable rule of construction that operates to carry out the donor's charitable intent even where the specific terms of the gift instrument might otherwise direct a different result"].)

California courts have recognized that the cy pres and equitable deviation doctrines exist precisely to override the literal terms of charitable gift instruments when compliance with those terms has become impracticable. If a reversion clause could automatically defeat the Court's cy pres authority, the doctrine would be a nullity in every case where the donor had the foresight to include a reversion provision — which is to say, in virtually every well-drafted charitable gift instrument. This cannot be the law.

Moreover, Section 7.2 was drafted to address a specific contingency: the voluntary discontinuation of the BATRI program by EF prior to the expiration of the Grant Period. The language "in the event the Program is discontinued" contemplates a deliberate decision by EF to stop operating the program — for example, a decision to redirect resources to other initiatives, or a strategic determination that BATRI was no longer a priority. The clause was not drafted to address — and should not be construed to apply to — a situation where the program became impracticable due to the withdrawal of essential third-party partners entirely beyond EF's control.

To interpret Section 7.2 as creating an automatic reversion upon impracticability would lead to absurd results. Under such an interpretation, if EF were to receive a $5 million restricted grant for a program that required government approval, and the government subsequently revoked that approval for reasons unrelated to EF, the funds would automatically revert to the donor — even though the donor's general charitable intent to support the charitable purpose remained manifest, and even though the funds could be readily applied to a closely related charitable purpose. This is precisely the type of forfeiture that the cy pres doctrine was designed to prevent.

The strong public policy favoring the preservation of charitable gifts underlies the Court's equitable authority and cannot be circumvented by boilerplate reversion language that was never intended to address the circumstances at hand. (See Estate of Tarrant, supra, 38 Cal.2d at p. 46; In re Estate of Loring, supra, 29 Cal.2d at pp. 437–438.)

b. Even If Section 7.2 Applies, the Court Retains Discretion to Modify. Even if the Court were to conclude that Section 7.2 is triggered by EF's Board resolution winding down BATRI, the Court retains its equitable discretion to decline enforcement of the reversion clause where enforcement would frustrate the donor's general charitable intent.

The phrase "at the election of Grantor" in Section 7.2 is also significant. The "Grantor" under the Gift Instrument is the Whitfield-Garner Family Trust, and the gift was made pursuant to the charitable purposes established by the Original Settlors, Herbert R. Whitfield-Garner and Dorothy M. Garner. Both Original Settlors are now deceased — Dorothy passed away in 2016, before the Gift Instrument was even executed, and Herbert passed away in 2019. The current trustees, Roland Whitfield-Garner and Adrienne Garner-Bosch, are exercising the reversion right derivatively, on behalf of the Trust, without the ability to consult the Original Settlors whose general charitable intent is the critical inquiry.

The deaths of the Original Settlors weigh heavily in the cy pres analysis. Where the donors are deceased and cannot be consulted, the Court's equitable authority to preserve the charitable gift and to carry out the donors' general charitable intent is at its strongest. The alternative — returning the funds to the Trust for distribution to private beneficiaries — would serve the financial interests of the current Trust beneficiaries at the expense of the deceased donors' charitable purposes. This result is antithetical to the policies underlying the cy pres doctrine.

[NOTE TO FILE (Laroche/Park): Research whether the deaths of the Original Settlors affect the enforceability of the reversion clause. If the "election" right in Section 7.2 was personal to the Grantor, do the successor trustees have standing to exercise it? Even if they do, the deaths of the settlors strengthen the argument for cy pres because the donors cannot redirect the gift themselves. Review Restatement (Third) of Trusts § 67 and California case law on the significance of donor death in the cy pres analysis.]

c. The Reversion Clause, If Enforced, Would Apply Only to $700,000 in Unexpended Disbursed Funds. In the alternative, even if the Court were to enforce Section 7.2 notwithstanding the foregoing arguments, the reversion clause would apply at most to $700,000 in unexpended disbursed funds — not to the $1,700,000 demanded by WGFT.

The arithmetic is straightforward. Section 7.2 provides for the return of "any unexpended Grant Funds." The term "Grant Funds" as used in the Gift Instrument refers to the funds disbursed by WGFT to EF under the grant. Of the total $5,000,000 committed under the Gift Instrument, WGFT disbursed only $4,000,000 (Tranches 1 through 3). Tranche 4, in the amount of $1,000,000, was never disbursed by WGFT to EF and remains in the Trust's own accounts.

Tranche 4 was never transferred to EF and therefore never became "Grant Funds" in EF's possession that could be "unexpended" and subject to reversion. WGFT simply retained Tranche 4 when it declined to make the scheduled disbursement in July 2021. The funds remained in the Trust's accounts at all times and are not properly the subject of a demand for "return" because they were never given to EF in the first place. WGFT cannot demand the "return" of funds it never disbursed.

Of the $4,000,000 in Grant Funds that were actually disbursed to EF, $3,300,000 was expended on BATRI program costs — teacher stipends, partner school coordination, curriculum development, and administrative overhead — all in accordance with the purposes set forth in the Gift Instrument and Exhibit A. Only $700,000 remains unexpended.

Therefore, even under the most favorable reading of Section 7.2 from WGFT's perspective, the maximum amount subject to reversion is $700,000. WGFT's demand for $1,700,000 — which includes $1,000,000 that WGFT never disbursed — is unsupported by the language of the Gift Instrument.

EF emphasizes that this is an alternative argument. EF's primary position is that Section 7.2 does not preclude equitable modification and that the Court should apply the cy pres or equitable deviation doctrine to permit EF to redirect all restricted BATRI funds — including the $700,000 in unexpended disbursed WGFT funds — to EF's broader educational mission. However, if the Court declines to apply cy pres or equitable deviation, EF submits that the maximum reversion would be limited to $700,000.

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

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — DRAFT — NOT APPROVED FOR FILING
CALDERWOOD & HARKNESS LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 555-7200 Facsimile: (415) 555-7201
C&H Matter No.: 1028-00001
Matter: Estuary Foundation v. The Whitfield-Garner Family Trust, Case No. CGC-22-599481
Court: Superior Court of California, County of San Francisco, Department 302, Hon. Patricia R. Wainwright
Document Title:
DRAFT — PLAINTIFF ESTUARY FOUNDATION'S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION
Prepared by: Simone Laroche (Lead Associate) and Jeffrey Park (Working Associate)
Supervising Attorney: Douglas Carmichael (Responsible Partner)
Draft Date: Initial working draft begun circa late 2024; date to be determined upon reactivation
Status: Incomplete working document — not reviewed or approved by Douglas Carmichael or Francesca Morano; not approved for filing
This document is a preliminary working draft prepared for internal use by Calderwood & Harkness LLP attorneys in connection with the above-referenced matter. It reflects the preliminary views of the drafting attorneys only, has not been reviewed or approved by the responsible partner, and is not approved for filing with any court. This document is protected by the attorney-client privilege and the attorney work product doctrine and should not be disclosed to any person outside the firm without the express authorization of Douglas Carmichael.
SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO DEPARTMENT 302 HON. PATRICIA R. WAINWRIGHT
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 nonprofit public benefit corporation, will move and hereby does move the Court for an order granting summary judgment, or in the alternative, summary adjudication, in favor of Plaintiff and against Defendant The Whitfield-Garner Family Trust ("Defendant" or "WGFT"), on the following grounds:
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 law.
This Motion is based upon this Notice of Motion, the attached Memorandum of Points and Authorities, the concurrently filed Separate Statement of Undisputed Material Facts, the Declaration of Margot Ellison-Yee filed concurrently herewith, the Declaration of Priya Chattopadhyay filed concurrently herewith, the Declaration of Douglas Carmichael in support of Plaintiff's request for judicial notice filed concurrently herewith, all exhibits attached to the foregoing declarations, and on all records, pleadings, and files in this action, and on such further evidence and argument as the Court may consider at the hearing on this Motion.
[NOTE TO FILE (Laroche/Park): Consider whether to seek summary adjudication on the Cross-Complaint as well. WGFT's Cross-Complaint seeks restitution of $1,700,000 plus 7% per annum interest from April 28, 2022. Under CCP § 437c(f)(1), a party may move for summary adjudication on one or more causes of action or affirmative defenses. We should address the Cross-Complaint in the same motion to avoid a second round of briefing. Discuss with Carmichael.]
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 initiatives throughout Northern California. For fiscal year 2021, EF reported audited annual revenue of $28.3 million and total net assets of $41.6 million, of which $14.2 million was donor-restricted. EF's operations have been subject to annual independent audits by Calloway & Auerbach CPAs, LLP, and EF has consistently maintained the highest standards of fiscal stewardship and transparency in the management of charitable funds.
In June 2018, The Whitfield-Garner Family Trust ("WGFT"), a California irrevocable trust established on March 14, 2003, by the late Herbert R. Whitfield-Garner and the late Dorothy M. Garner, executed a Gift Instrument and Grant Agreement (the "Gift Instrument") providing Five Million Dollars ($5,000,000) to EF for the establishment and operation of the Bay Area Teacher Residency Initiative ("BATRI"). The Gift Instrument reflected the donors' deep commitment to educational advancement and their belief in the power of teacher residency programs to transform the quality of instruction in underserved public school classrooms in the San Francisco Bay Area.
BATRI operated successfully from September 2018 through June 2021. Over the course of three program cohorts, BATRI trained approximately 69 teacher residents, of whom 58 successfully completed the program and were placed in full-time teaching positions in Bay Area public schools. By any measure, the program achieved meaningful and measurable results during the period it was operational.
However, through no fault of EF, BATRI became impracticable when the two public school districts that were essential to the program's operation — the San Francisco Unified School District ("SFUSD") and the Oakland Unified School District ("OUSD") — each independently withdrew from the BATRI partnership. OUSD terminated its partnership in August 2020, citing budget constraints exacerbated by the COVID-19 pandemic. SFUSD declined to renew its partnership agreement in March 2021, citing a district-wide program consolidation. The entire BATRI program model, as described in Exhibit A to the Gift Instrument, depended on active partnerships with public school districts for the placement of teacher residents in public school classrooms. Without any partner district, the program could not function as designed.
As a result of these circumstances, approximately $4,700,000 in total restricted funds — including $1,700,000 from WGFT and $3,000,000 from two other donors — remain restricted to a program that can no longer operate. Of the two other donors, the Cascabel Education Fund (which contributed $2,000,000 restricted to BATRI in 2019) and the Newhall-Sievert Foundation (which contributed $1,000,000 restricted to BATRI in 2020) have each consented to the reallocation of their restricted funds to EF's broader educational mission. WGFT is the sole party that objects to reallocation and instead demands the return of its $1,700,000 contribution.
EF now seeks a judicial declaration that it may redirect all $4,700,000 in restricted BATRI funds to its broader educational mission — teacher development, school partnerships, and community-based learning initiatives in Northern California — consistent with the donors' general charitable intent to support education. This is precisely the type of relief that the cy pres and equitable deviation doctrines were designed to provide.
This case presents a straightforward application of California's longstanding equitable doctrines governing restricted charitable gifts. The specific charitable purpose (the operation of BATRI as described in the Gift Instrument) has become impracticable due to the withdrawal of essential third-party partners. The general charitable intent of the donors — to support educational advancement in Northern California — is manifest from the face of the Gift Instrument, the history of the Whitfield-Garner family's educational philanthropy, and the nature of the BATRI program itself. Under California Probate Code Sections 15409 and 15403, the Court has full authority to modify the restriction on the charitable gift and to direct the application of the funds to a charitable purpose that reasonably approximates the original purpose.
WGFT's reliance on the reversion clause in Section 7.2 of the Gift Instrument is unavailing. That provision, which permits the "Grantor" to demand return of "unexpended Grant Funds" if "the Program is discontinued prior to the expiration of the Grant Period," was drafted to address voluntary discontinuation by EF, not impracticability caused by circumstances entirely beyond EF's control. To interpret Section 7.2 as creating an automatic reversion upon impracticability would defeat the very purpose of the cy pres doctrine, which exists precisely for situations where the original charitable purpose can no longer be achieved. California's strong public policy favoring the preservation of charitable gifts cannot be circumvented by boilerplate reversion language that was never intended to address the circumstances at hand.
For the reasons set forth below, EF respectfully submits that there is no triable issue of material fact and that EF is entitled to summary judgment as a matter of law.
B. Statement of Facts
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 Revenue Code, with Employer Identification Number 94-3127856. (EF IRS Determination Letter, attached as Exhibit C to the Ellison-Yee Declaration.) EF's headquarters are located at 1440 Embarcadero Way, Suite 300, San Francisco, California 94107.
EF's mission is to advance equitable access to quality education through teacher development, school partnerships, and community-based learning initiatives in Northern California. For fiscal year 2021, EF reported audited annual revenue of approximately $28.3 million and total net assets of approximately $41.6 million, of which approximately $14.2 million was donor-restricted. (Declaration of Priya Chattopadhyay ["Chattopadhyay Decl."] ¶ 4; Calloway & Auerbach CPAs, LLP audit report for FY 2021, attached as Exhibit I to the Chattopadhyay Declaration.) EF's financial statements have been audited annually by the independent accounting firm of Calloway & Auerbach CPAs, LLP.
Margot Ellison-Yee has served as Executive Director of EF since 2017. Dr. Kenneth Oguike currently serves as Chair of EF's Board of Directors. Priya Chattopadhyay serves as EF's General Counsel and has been responsible for the administration and oversight of EF's grant agreements, including the Gift Instrument at issue in this action. (Ellison-Yee Decl. ¶¶ 3–5; Chattopadhyay Decl. ¶ 2.)
The Whitfield-Garner Family Trust. Defendant WGFT is a California irrevocable trust established on March 14, 2003, by Herbert R. Whitfield-Garner and Dorothy M. Garner (the "Original Settlors"). (Gift Instrument, attached as Exhibit A to the Chattopadhyay Declaration, at p. 1; WGFT Answer ¶ 1, attached as Exhibit N to the Declaration of Douglas Carmichael ["Carmichael Decl."].) Both Original Settlors are now deceased — Dorothy M. Garner passed away in 2016, and Herbert R. Whitfield-Garner passed away in 2019. (WGFT Answer ¶ 3.)
The current Trustee of WGFT is Roland Whitfield-Garner, a son of the Original Settlors. Adrienne Garner-Bosch, a daughter of the Original Settlors, serves as Co-Trustee. Nathaniel Whitfield-Garner, another son of the Original Settlors, serves in a non-trustee advisory capacity. (WGFT Answer ¶ 4.) The Trust's estimated corpus is approximately $62 million in diversified assets, including significant ongoing charitable commitments to educational and cultural institutions. (Ellison-Yee Decl. ¶ 8.) WGFT is represented in this action by Victoria Huang of Pratchett, Huang & Solano LLP.
Other Donors. Two additional donors contributed restricted funds to the BATRI program. The Cascabel Education Fund contributed $2,000,000 restricted to BATRI in 2019. The Newhall-Sievert Foundation contributed $1,000,000 restricted to BATRI in 2020. Both donors have provided written consent to the reallocation of their restricted funds to EF's broader educational mission. (Chattopadhyay Decl. ¶¶ 15–16; written consents from Cascabel Education Fund and Newhall-Sievert Foundation, attached as Exhibits L and M to the Chattopadhyay Declaration.) Neither the Cascabel Education Fund nor the Newhall-Sievert Foundation is a party to this action.
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 Million Dollars ($5,000,000) from WGFT to EF, to be disbursed in four tranches over the five-year Grant Period running from 2018 through 2023. (Gift Instrument, § 2.1.)
The disbursement schedule was set forth in Section 2.2 of the Gift Instrument as follows:
• Tranche 1 (upon execution, June 2018): $1,500,000
• Tranche 2 (July 2019): $1,250,000
• Tranche 3 (July 2020): $1,250,000
• Tranche 4 (July 2021): $1,000,000
Tranches 1 through 3 were disbursed by WGFT to EF as scheduled, totaling $4,000,000 in disbursed funds. Tranche 4, in the amount of $1,000,000, was never disbursed by WGFT due to the suspension and subsequent wind-down of BATRI operations, and those funds remain held by WGFT in the Trust's own accounts. (Chattopadhyay Decl. ¶¶ 7–8; EF financial records, attached as Exhibit H to the Chattopadhyay Declaration.)
The Gift Instrument contained two provisions of particular relevance to this action:
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 detail. As set forth in Exhibit A, BATRI was designed as a teacher residency program in which aspiring teachers would be placed in partner school classrooms in SFUSD and OUSD for a full academic year, receiving intensive mentoring and hands-on classroom experience under the supervision of experienced cooperating teachers. (Gift Instrument, Exhibit A.) The entire program model was predicated on the existence of active, ongoing partnerships with public school districts willing to host teacher residents in their schools and to provide cooperating teachers as mentors. Without such partnerships, the program as described in Exhibit A could not function.
The Gift Instrument's preamble and recitals also reflected the donors' broader commitment to educational advancement. The recitals acknowledged EF's mission of advancing equitable access to quality education and the donors' belief that teacher residency programs represent a powerful model for improving teaching quality in underserved communities. (Gift Instrument, Recitals, at p. 1.)
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 program was structured as a full-year residency, with each resident embedded in a partner school classroom alongside an experienced cooperating teacher. Residents received stipends funded in part by the WGFT grant, along with coursework and professional development provided by EF. (Ellison-Yee Decl. ¶¶ 10–12; BATRI program records, attached as Exhibit D to the Ellison-Yee Declaration.)
June 2019: Successful Completion of First Cohort. The first BATRI cohort completed the residency in June 2019. Of the 24 residents who began the program, 22 successfully completed all requirements and were placed in full-time teaching positions in Bay Area public schools. The program was functioning exactly as intended by both EF and the WGFT donors. (Ellison-Yee Decl. ¶ 13; BATRI program records, Exhibit D.)
September 2019: Second Cohort Begins. In September 2019, BATRI enrolled its second cohort of 30 teacher residents across partner schools in SFUSD and OUSD. This represented a significant expansion reflecting the success of the first cohort and the strong demand for the program from both districts. (Ellison-Yee Decl. ¶ 14.)
March 2020: COVID-19 Pandemic Disrupts Operations. In March 2020, the COVID-19 pandemic caused a sudden and widespread disruption to all in-person educational activities across California. In-person teacher placements were suspended across all BATRI partner schools as both SFUSD and OUSD transitioned to remote learning. While EF worked to adapt the program to the new reality, the pandemic fundamentally altered the landscape for in-person teacher residency placements. (Ellison-Yee Decl. ¶ 15.)
August 2020: OUSD Terminates Partnership. In August 2020, OUSD formally notified EF that it was terminating its partnership with BATRI, effective immediately. OUSD cited severe budget constraints exacerbated by the COVID-19 pandemic as the basis for its decision. (OUSD termination correspondence, attached as Exhibit E to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 16.) The loss of OUSD eliminated approximately half of BATRI's placement sites and was the first major blow to the viability of the program model as described in Exhibit A to the Gift Instrument.
September 2020: Reduced Third Cohort. Despite the loss of OUSD, EF made good-faith efforts to continue BATRI operations. In September 2020, EF enrolled a third cohort of 15 teacher residents, reduced in size from the prior year, and placed them exclusively in SFUSD schools. EF worked closely with SFUSD administrators to maintain the remaining placement sites and to ensure the quality of the residency experience for the third cohort. (Ellison-Yee Decl. ¶ 17.)
March 2021: SFUSD Declines to Renew. In March 2021, SFUSD notified EF that it would not renew the BATRI partnership agreement for the 2021-2022 academic year. SFUSD cited a district-wide program consolidation as the basis for its decision. (SFUSD non-renewal correspondence, attached as Exhibit F to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 18.) This decision eliminated the last remaining partner district and rendered it impossible to continue BATRI operations as contemplated by the Gift Instrument.
June 2021: Third Cohort Graduates. The third and final BATRI cohort graduated in June 2021. Of the 15 residents enrolled, 12 successfully completed all program requirements. (Ellison-Yee Decl. ¶ 19; BATRI program records, Exhibit D.)
December 31, 2021: EF Board Formally Winds Down BATRI. On December 31, 2021, the EF Board of Directors formally voted to wind down BATRI operations. The Board resolution documented the Board's finding that the program had become impracticable due to the loss of all partner school districts and that continued operation of BATRI as described in Exhibit A to the Gift Instrument was no longer possible. (EF Board Resolution dated December 31, 2021, attached as Exhibit G to the Ellison-Yee Declaration; Ellison-Yee Decl. ¶ 20.) The Board's decision was made only after exhausting all reasonable efforts to continue the program, including exploring potential partnerships with other school districts in the Bay Area, none of which proved feasible within the timeframe of the Grant Period.
It is critical to note that EF did not voluntarily abandon BATRI for strategic, financial, or operational reasons of its own choosing. The program became impracticable because both public school districts that were essential partners in the program model — the only districts with which BATRI had operating partnerships — independently decided to withdraw. These were sovereign decisions by public educational agencies, entirely beyond EF's control or influence. EF faithfully operated BATRI for three full cohort years, expended $3,300,000 in program funds, trained 69 teacher residents (58 of whom completed the program), and made every reasonable effort to sustain the program before ultimately concluding that continued operation was impossible.
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, curriculum development, program evaluation, and administrative overhead attributable to BATRI operations. All expenditures were consistent with the purposes set forth in Exhibit A to the Gift Instrument. (Chattopadhyay Decl. ¶¶ 9–11; EF financial records, Exhibit H; Calloway & Auerbach CPAs, LLP audit reports, Exhibit I.)
• Unexpended disbursed WGFT funds: $700,000 ($4,000,000 disbursed minus $3,300,000 expended)
• Undisbursed Tranche 4 (held by WGFT): $1,000,000
• Total WGFT funds in dispute: $1,700,000 ($700,000 unexpended disbursed + $1,000,000 undisbursed)
In addition to the WGFT grant, the following restricted BATRI funds are held by EF from other donors:
• Cascabel Education Fund contribution (2019): $2,000,000
• Newhall-Sievert Foundation contribution (2020): $1,000,000
• Total restricted funds from other donors: $3,000,000
Both the Cascabel Education Fund and the Newhall-Sievert Foundation have provided written consent to the reallocation of their restricted funds to EF's broader educational mission. (Chattopadhyay Decl. ¶¶ 15–16; written consents, Exhibits L and M.)
The total restricted BATRI funds in dispute across all donors is $4,700,000 ($1,700,000 from WGFT + $2,000,000 from Cascabel + $1,000,000 from Newhall-Sievert).
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 "unexpended Grant Funds" — which WGFT characterized as including both the $700,000 in unexpended disbursed funds and the $1,000,000 Tranche 4 that was never disbursed. (WGFT Demand Letter dated January 28, 2022, attached as Exhibit J to the Carmichael Declaration.)
On March 3, 2022, Calderwood & Harkness LLP, through Douglas Carmichael on behalf of EF, responded to the demand letter. The response asserted that the doctrines of cy pres and equitable deviation applied to the restricted BATRI funds, that EF intended to seek judicial guidance on the proper disposition of the funds, and that EF respectfully declined to return the funds pending judicial resolution. (Calderwood & Harkness LLP Response Letter dated March 3, 2022, attached as Exhibit K to the Carmichael Declaration.)
On April 15, 2022, counsel for EF and WGFT conducted a final pre-suit meet-and-confer telephone conference. The parties were unable to reach a resolution of the dispute. (Carmichael Decl. ¶ 7.)
On April 25, 2022, EF filed this action for declaratory relief. Three days later, on April 28, 2022, the ninety-day demand period under Section 7.2 of the Gift Instrument expired without EF having returned any funds.
On June 10, 2022, WGFT filed its Answer to the Complaint and simultaneously filed a Cross-Complaint against EF, seeking restitution of $1,700,000 plus interest at seven percent (7%) per annum from April 28, 2022, the date the ninety-day demand period expired. Calculated at the claimed rate, the interest accruing on the Cross-Complaint amounts to approximately $119,000 per year. (WGFT Answer and Cross-Complaint, attached as Exhibit N to the Carmichael Declaration.)
On July 22, 2022, EF filed its Answer to the Cross-Complaint, denying all material allegations and asserting affirmative defenses based on cy pres, equitable deviation, impracticability, and the inapplicability of the claimed interest rate. (EF Answer to Cross-Complaint, attached as Exhibit O to the Carmichael Declaration.)
On September 2, 2022, the parties participated in a mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services. The mediation did not result in a settlement.
On September 16, 2022, the parties entered into a Stipulation and Order Staying All Proceedings in this action. The stay has remained in effect since that date. The parties have filed ten joint status reports through March 14, 2025, with the next status report due June 13, 2025. (Carmichael Decl. ¶¶ 8–10.)
C. Legal Standard for Summary Judgment
Under California Code of Civil Procedure Section 437c, subdivision (c), a motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Aguilar v. Tarrant Holdings (2001) 25 Cal.4th 826, 843.) The purpose of the summary judgment procedure is to "penetrate the pleadings and ascertain, by means of affidavits and other evidence, whether triable issues of fact exist." (Id. at p. 843.)
The burden-shifting framework for summary judgment motions in California is well established. The moving party bears the initial burden of making a prima facie showing that there are no triable issues of material fact. (Id. at p. 850.) A plaintiff moving for summary judgment on its own claim must present evidence that would require a reasonable trier of fact to find in the plaintiff's favor on each element of the cause of action. (Id. at p. 851.) Once the moving party has met this burden, the burden shifts to the opposing party to show, by admissible evidence, that a triable issue of one or more material facts exists. (Code Civ. Proc., § 437c, subd. (p)(1).) The opposing party "may not rely upon the mere allegations or denials of its pleadings" but "shall set forth the specific facts showing that a triable issue of material fact exists." (Ibid.)
Actions for declaratory relief are particularly well-suited for resolution by summary judgment where the material facts are undisputed and the dispute concerns the legal interpretation of written instruments. (Osseous Technologies of Am., Inc. v. DiscoveryyOrtho Partners LLC (2010) 191 Cal.App.4th 357, 364 ["Where the facts are undisputed and only legal issues are presented, those legal issues are appropriately resolved on summary judgment"]; see also Kirkwood v. California State Auto. Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 59.) The interpretation of a written instrument is a question of law for the court when the language is not ambiguous. (Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1126.)
Here, the material facts underlying EF's claim for declaratory relief are essentially undisputed. The terms of the Gift Instrument, the disbursement history, the timeline of BATRI's operations, the circumstances of the program's wind-down, and the financial summary are all documented in written records and are not subject to genuine dispute. The central questions before the Court are questions of law: whether the cy pres and equitable deviation doctrines authorize the Court to modify the restriction in the Gift Instrument, whether the reversion clause in Section 7.2 precludes such modification, and whether EF may lawfully redirect the restricted BATRI funds to its broader educational mission. These are precisely the type of legal questions that are suitable for resolution on summary judgment.
D. Argument
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 of the Probate Code — Section 15409 (cy pres) and Section 15403 (equitable deviation) — each of which independently authorizes the modification that EF seeks in this action.
a. California Probate Code Section 15409 — Cy Pres. California Probate Code Section 15409 codifies the ancient doctrine of cy pres for charitable trusts and gifts. The statute provides, in relevant part:
"If property is given in trust to be applied to a particular charitable purpose, and it is or becomes unlawful, impracticable, or impossible to carry out the particular purpose, and if the settlor, or testator, had a general charitable intent, the specific purpose for which the trust property is to be applied may be modified to a charitable purpose that reasonably approximates the original purpose."
(Prob. Code, § 15409, subd. (a).)
The application of the cy pres doctrine requires the court to find three elements: (i) the property is or has become subject to a charitable trust or restricted charitable gift; (ii) the specific charitable purpose for which the property was given has become impracticable, impossible, or unlawful to carry out; and (iii) the settlor or donor had a general charitable intent — that is, an intent to benefit charity generally, as distinct from an intent limited exclusively to the specific purpose that has failed. (See Estate of Mabury (1976) 54 Cal.App.3d 969, 984–985; In re Estate of Loring (1946) 29 Cal.2d 423, 437–438.)
When all three elements are satisfied, the court is empowered to modify the specific purpose of the charitable gift to one that "reasonably approximates" the original purpose, thereby preserving the charitable nature of the gift while adapting it to changed circumstances. The doctrine reflects a deep-rooted public policy in California law favoring the preservation of charitable gifts and the fulfillment of donors' general charitable intentions, even when the specific means chosen by the donor are no longer viable. (See Estate of Tarrant (1951) 38 Cal.2d 42, 46 ["It is the policy of the law to sustain gifts for charitable purposes whenever it is possible to do so"].)
Application to this case. Each element of the cy pres doctrine is satisfied here:
First, the WGFT grant funds are subject to a restricted charitable gift. The Gift Instrument expressly restricts the use of the funds to BATRI and "no other purpose." (Gift Instrument, § 3.1.) EF is a nonprofit public benefit corporation organized for charitable purposes, and the WGFT funds were donated for a charitable purpose — the training of teacher residents to improve educational quality in Bay Area public schools.
Second, the specific charitable purpose — the operation of BATRI "as described in Exhibit A" to the Gift Instrument — has become impracticable. As the undisputed facts demonstrate, BATRI's program model was entirely dependent on active partnerships with public school districts for the placement of teacher residents in partner school classrooms. Both SFUSD and OUSD independently withdrew from the partnership — OUSD in August 2020 and SFUSD in March 2021. Without any partner school district, the program model described in Exhibit A cannot be carried out. This is not a case where the charitable purpose is merely more difficult or more expensive to achieve; it is a case where the specific program vehicle is literally impossible to operate because the essential third-party partners have withdrawn.
Third, the donors had a general charitable intent to support education, as distinct from an intent limited exclusively to BATRI and nothing else. As discussed in greater detail in Section D.3 below, the general charitable intent of the Original Settlors is manifest from the face of the Gift Instrument, the WGFT's history of educational philanthropy, and the nature of BATRI itself as an educational initiative whose ultimate purpose was to improve teaching quality in Northern California schools.
Because all three elements are satisfied, the Court has authority under Section 15409 to modify the restriction in the Gift Instrument to permit the use of the funds for a charitable purpose that reasonably approximates the original purpose — namely, EF's broader educational mission of teacher development, school partnerships, and community-based learning initiatives in Northern California.
b. California Probate Code Section 15403 — Equitable Deviation. California Probate Code Section 15403 provides an alternative and complementary basis for judicial modification of the Gift Instrument restriction. Section 15403 authorizes the court to modify the administrative or distributive terms of a trust or gift instrument under circumstances broader than those required for cy pres. The statute provides, in relevant part:
"On petition by a trustee or beneficiary, the court may modify the administrative or dispositive provisions of the trust or terminate the trust if, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust."
(Prob. Code, § 15409, subd. (a); see also Prob. Code, § 15403 [equitable deviation].)
The equitable deviation doctrine is broader than cy pres in a critical respect: it does not require a finding that the charitable purpose itself has completely failed or become impossible. Rather, it requires only a finding that compliance with the specific terms of the gift instrument has become impracticable or would substantially impair the accomplishment of the charitable purpose. (See Marin Hosp. Dist. v. Rothman (1983) 139 Cal.App.3d 495, 501–502.) This distinction is significant because it allows the court to modify the means by which the charitable purpose is accomplished while preserving the purpose itself.
Application to this case. Even if the Court were to conclude that the general charitable purpose of teacher training and educational advancement has not entirely failed — because, in the abstract, teacher training programs could theoretically be operated through different partnerships or in different formats — compliance with the specific terms of the Gift Instrument has nonetheless become impracticable. The Gift Instrument does not merely restrict the funds to "teacher training" in the abstract; it restricts them to "the Bay Area Teacher Residency Initiative as described in Exhibit A." Exhibit A describes a specific program model that requires placement of teacher residents in partner school classrooms in SFUSD and OUSD. No such placement is possible because both districts have withdrawn from the partnership.
The equitable deviation doctrine permits the Court to modify the means — the specific program vehicle described in Exhibit A — while preserving the end — the advancement of educational quality in Northern California. This is precisely the type of modification that equitable deviation is designed to accomplish. EF proposes to redirect the restricted funds to its broader educational mission, which encompasses teacher development, school partnerships, and community-based learning initiatives — activities that are closely aligned with the original BATRI purpose and that serve the same ultimate goal of improving educational access and quality in Northern California.
c. The Attorney General's Role.
[NOTE TO FILE (Laroche/Park): Under California law, the Attorney General has a statutory role in cy pres proceedings involving charitable trusts and gifts. Probate Code Section 15409, subdivision (b), provides that the Attorney General shall be a party to proceedings under that section. Government Code Section 12598 also grants the Attorney General broad supervisory authority over charitable trusts. We must confirm whether the Attorney General has been served with the Complaint in this action and whether separate notice is required in connection with this summary judgment motion. Review the proof of service on the original Complaint and contact the Charitable Trusts Section of the Attorney General's office to confirm compliance. This is a critical procedural step — the motion may be defective if the AG has not received proper notice. ACTION ITEM: Laroche/Park to research AG notification requirements and confirm compliance before filing.]**
Under California Probate Code Section 15409, subdivision (b), the Attorney General is a necessary party to any proceeding in which the court is asked to apply the cy pres doctrine to modify the terms of a charitable gift. (See also Gov. Code, § 12598 [Attorney General's supervisory authority over charitable trusts].) To the extent the Attorney General has not already been served in this action, EF will ensure that proper notice of this Motion and the underlying proceedings is provided to the Charitable Trusts Section of the Office of the Attorney General prior to the hearing on this Motion. EF anticipates that the Attorney General's position will be consistent with the relief sought here, given that the modification serves to preserve charitable funds for educational purposes and is consistent with the strong public policy favoring the preservation of charitable gifts.
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. The impracticability is complete, is not the result of any act or omission by EF, and cannot be remedied by any reasonable effort on EF's part.
The chain of causation is clear and undisputed:
(a) The BATRI program model, as described in Exhibit A to the Gift Instrument, was predicated on active, ongoing partnerships with public school districts — specifically, SFUSD and OUSD — for the placement of teacher residents in partner school classrooms. This was not an incidental feature of the program; it was the program's fundamental design. Teacher residents could not be trained without classroom placements in partner schools, and classroom placements could not occur without the cooperation of a partnering school district.
(b) In August 2020, OUSD formally terminated its partnership with BATRI, citing budget constraints. This was an independent administrative decision by a public educational agency, entirely beyond EF's control. The termination eliminated approximately half of BATRI's placement sites and substantially impaired the program's operations.
(c) In March 2021, SFUSD notified EF that it would not renew the BATRI partnership agreement for the 2021-2022 academic year, citing a district-wide program consolidation. Like OUSD's decision, this was an independent administrative determination by a sovereign public school district, made for reasons entirely unrelated to EF's performance or conduct. SFUSD's non-renewal eliminated the last remaining partner district.
(d) Without any partner school district willing to host teacher residents, the BATRI program model described in Exhibit A to the Gift Instrument became impossible to carry out. The program could not place residents in classrooms, could not pair residents with cooperating teachers, and could not deliver the supervised, school-based residency experience that was the core of the BATRI model.
(e) EF made good-faith efforts to continue BATRI operations through three full cohort years (September 2018 through June 2021), expending $3,300,000 in program costs and training 69 teacher residents, 58 of whom successfully completed the program. Even after OUSD withdrew, EF reduced the cohort size and continued operations with SFUSD alone. EF did not wind down BATRI until December 31, 2021, after all placement options had been exhausted and the EF Board determined that the program was impracticable.
It is important to distinguish the role of the COVID-19 pandemic in this analysis. While the pandemic initially disrupted BATRI's operations in March 2020 by forcing the suspension of in-person placements, the pandemic alone did not render the program impracticable. EF adapted to the pandemic conditions and continued operations, albeit on a reduced scale. The ultimate cause of BATRI's impracticability was not the pandemic itself, but rather the independent decisions by OUSD and SFUSD to terminate and not renew their partnerships — decisions that may have been influenced by pandemic-related budget pressures but were fundamentally sovereign administrative choices by public school districts acting in their own interests.
Equally important, this is not a case of voluntary abandonment. EF did not choose to abandon BATRI for strategic, financial, or operational reasons of its own choosing. EF did not redirect its resources to other programs, did not lose interest in teacher residency work, and did not fail to meet its obligations under the Gift Instrument. Rather, the program was rendered impossible by the withdrawal of essential third-party partners — public school districts whose participation was a prerequisite to the program's operation and whose decisions were entirely beyond EF's control or influence.
The impracticability here is of precisely the kind contemplated by the cy pres and equitable deviation doctrines. Where a charitable purpose depends on the cooperation of third parties, and those third parties independently withdraw their cooperation for reasons unrelated to the donee's performance, the purpose becomes impracticable through no fault of the donee. To require the donee to return the charitable funds in such circumstances would penalize the donee for faithfully pursuing the charitable purpose and would frustrate the donor's general charitable intent. This is the exact circumstance in which the law intervenes to preserve the charitable gift.
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 trust — or whether the donor had a broader intent to benefit charity, with the specific purpose serving as the means rather than the exclusive end. (In re Estate of Loring, supra, 29 Cal.2d at pp. 437–438.)
California courts have consistently held that a general charitable intent should be found wherever possible, and that the law strongly favors the construction that preserves a charitable gift over the construction that results in its reversion to private ownership. (Estate of Tarrant, supra, 38 Cal.2d at p. 46; In re Estate of Loring, supra, 29 Cal.2d at p. 438 ["a general charitable intent is implied from a gift to charity where there is nothing in the instrument, when considered in the light of the surrounding circumstances, indicating a contrary intent"].)
Here, the general charitable intent of the Original Settlors — Herbert R. Whitfield-Garner and Dorothy M. Garner — is manifest from multiple independent sources of evidence:
The Gift Instrument itself. The Gift Instrument's title, preamble, and recitals demonstrate a commitment to educational advancement that transcends the specific vehicle of BATRI. The very title of the document — referencing a "Gift Instrument and Grant Agreement" — reflects the donative, charitable character of the transaction. The recitals acknowledge EF's mission of "advancing equitable access to quality education" and the donors' belief in the power of teacher residency programs to improve teaching quality in underserved communities. The donors chose BATRI not as an end in itself, but as a promising means of advancing a broader educational goal. (Gift Instrument, Recitals, at p. 1.)
The WGFT's history of educational philanthropy. The Whitfield-Garner Family Trust has an established track record of charitable giving to educational institutions and causes. The Trust's estimated $62 million corpus includes "significant charitable commitments" to educational and cultural organizations. The BATRI grant was one expression of a broader pattern of educational philanthropy that evidences a general charitable intent to support education — not a one-time, narrowly targeted gift to a specific program and nothing else. (Ellison-Yee Decl. ¶ 8.)
The nature of BATRI as an educational initiative. BATRI itself was fundamentally an educational initiative — a teacher residency program whose ultimate purpose was to improve the quality of instruction in Northern California public schools. The program's specific methodology (placing teacher residents in partner school classrooms) was a means to an educational end. The donors' intent in funding BATRI was not to fund a particular program structure for its own sake, but to support an educational purpose. The general charitable intent (education) is distinct from the specific program vehicle (BATRI); the cy pres doctrine permits the court to preserve the former while modifying the latter.
The deaths of the Original Settlors. Both Original Settlors are deceased — Dorothy M. Garner passed away in 2016, two years before the Gift Instrument was executed, and Herbert R. Whitfield-Garner passed away in 2019, during the early years of BATRI's operation. The fact that the donors are deceased and cannot be consulted weighs in favor of finding a general charitable intent and applying cy pres, because the alternative — returning the funds to the Trust — would serve the private interests of the Trust's current beneficiaries rather than the charitable intent of the deceased donors. (See Restatement (Third) of Trusts § 67, cmt. b [cy pres is particularly appropriate where the donor is deceased and cannot redirect the gift].)
[NOTE TO FILE (Laroche/Park): Research whether the deaths of the Original Settlors affect the enforceability of the reversion clause or the determination of "general charitable intent." The settlors' intent at the time of the gift is the relevant inquiry, and their deaths may weigh in favor of cy pres because the donors cannot be consulted. Also consider the fact that Dorothy M. Garner was already deceased when the Gift Instrument was executed — the instrument was presumably executed by the trustees (or by Herbert alone, as surviving settlor) on behalf of the Trust. Clarify the chain of authority for execution of the Gift Instrument.]
The donors' expressed intentions. Margot Ellison-Yee, EF's Executive Director, can testify to the conversations she had with Herbert R. Whitfield-Garner during the period leading up to the execution of the Gift Instrument and during the first year of BATRI's operations. Those conversations reflected Mr. Whitfield-Garner's deep personal commitment to educational equity and his broad vision for how his family's philanthropic resources could make a lasting impact on the quality of education in the Bay Area. Mr. Whitfield-Garner expressed his intent that the gift would serve a broader educational purpose, and he viewed BATRI as the vehicle through which that purpose would be achieved. (Ellison-Yee Decl. ¶ 21.)
Taken together, this evidence overwhelmingly demonstrates that the Original Settlors had a general charitable intent to support educational advancement, and that the specific BATRI program was the chosen means — not the exclusive end — of that intent. The law's strong presumption in favor of general charitable intent is fully warranted on this record.
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 fails.
a. The Reversion Clause Is Not a Condition Subsequent That Defeats the Court's Equitable Authority. WGFT's position rests on the premise that Section 7.2 constitutes an express contractual provision that takes precedence over equitable doctrines. According to WGFT, because the parties specifically contemplated the possibility that the program might be "Discontinued prior to the expiration of the Grant Period" and agreed that "unexpended Grant Funds shall, at the election of Grantor, be returned to Grantor within ninety (90) days of written demand," this contractual allocation of rights forecloses any judicial modification.
This argument fundamentally misapprehends the nature and scope of the Court's equitable authority over charitable gifts. The doctrines of cy pres and equitable deviation are not mere default rules that apply only in the absence of contractual provisions to the contrary. They are equitable doctrines rooted in the public interest in preserving charitable gifts, and they operate on charitable gifts regardless of the specific terms of the gift instrument. (See Restatement (Third) of Trusts § 67, cmt. a ["The cy pres doctrine is an equitable rule of construction that operates to carry out the donor's charitable intent even where the specific terms of the gift instrument might otherwise direct a different result"].)
California courts have recognized that the cy pres and equitable deviation doctrines exist precisely to override the literal terms of charitable gift instruments when compliance with those terms has become impracticable. If a reversion clause could automatically defeat the Court's cy pres authority, the doctrine would be a nullity in every case where the donor had the foresight to include a reversion provision — which is to say, in virtually every well-drafted charitable gift instrument. This cannot be the law.
Moreover, Section 7.2 was drafted to address a specific contingency: the voluntary discontinuation of the BATRI program by EF prior to the expiration of the Grant Period. The language "in the event the Program is discontinued" contemplates a deliberate decision by EF to stop operating the program — for example, a decision to redirect resources to other initiatives, or a strategic determination that BATRI was no longer a priority. The clause was not drafted to address — and should not be construed to apply to — a situation where the program became impracticable due to the withdrawal of essential third-party partners entirely beyond EF's control.
To interpret Section 7.2 as creating an automatic reversion upon impracticability would lead to absurd results. Under such an interpretation, if EF were to receive a $5 million restricted grant for a program that required government approval, and the government subsequently revoked that approval for reasons unrelated to EF, the funds would automatically revert to the donor — even though the donor's general charitable intent to support the charitable purpose remained manifest, and even though the funds could be readily applied to a closely related charitable purpose. This is precisely the type of forfeiture that the cy pres doctrine was designed to prevent.
The strong public policy favoring the preservation of charitable gifts underlies the Court's equitable authority and cannot be circumvented by boilerplate reversion language that was never intended to address the circumstances at hand. (See Estate of Tarrant, supra, 38 Cal.2d at p. 46; In re Estate of Loring, supra, 29 Cal.2d at pp. 437–438.)
b. Even If Section 7.2 Applies, the Court Retains Discretion to Modify. Even if the Court were to conclude that Section 7.2 is triggered by EF's Board resolution winding down BATRI, the Court retains its equitable discretion to decline enforcement of the reversion clause where enforcement would frustrate the donor's general charitable intent.
The phrase "at the election of Grantor" in Section 7.2 is also significant. The "Grantor" under the Gift Instrument is the Whitfield-Garner Family Trust, and the gift was made pursuant to the charitable purposes established by the Original Settlors, Herbert R. Whitfield-Garner and Dorothy M. Garner. Both Original Settlors are now deceased — Dorothy passed away in 2016, before the Gift Instrument was even executed, and Herbert passed away in 2019. The current trustees, Roland Whitfield-Garner and Adrienne Garner-Bosch, are exercising the reversion right derivatively, on behalf of the Trust, without the ability to consult the Original Settlors whose general charitable intent is the critical inquiry.
The deaths of the Original Settlors weigh heavily in the cy pres analysis. Where the donors are deceased and cannot be consulted, the Court's equitable authority to preserve the charitable gift and to carry out the donors' general charitable intent is at its strongest. The alternative — returning the funds to the Trust for distribution to private beneficiaries — would serve the financial interests of the current Trust beneficiaries at the expense of the deceased donors' charitable purposes. This result is antithetical to the policies underlying the cy pres doctrine.
[NOTE TO FILE (Laroche/Park): Research whether the deaths of the Original Settlors affect the enforceability of the reversion clause. If the "election" right in Section 7.2 was personal to the Grantor, do the successor trustees have standing to exercise it? Even if they do, the deaths of the settlors strengthen the argument for cy pres because the donors cannot redirect the gift themselves. Review Restatement (Third) of Trusts § 67 and California case law on the significance of donor death in the cy pres analysis.]
c. The Reversion Clause, If Enforced, Would Apply Only to $700,000 in Unexpended Disbursed Funds. In the alternative, even if the Court were to enforce Section 7.2 notwithstanding the foregoing arguments, the reversion clause would apply at most to $700,000 in unexpended disbursed funds — not to the $1,700,000 demanded by WGFT.
The arithmetic is straightforward. Section 7.2 provides for the return of "any unexpended Grant Funds." The term "Grant Funds" as used in the Gift Instrument refers to the funds disbursed by WGFT to EF under the grant. Of the total $5,000,000 committed under the Gift Instrument, WGFT disbursed only $4,000,000 (Tranches 1 through 3). Tranche 4, in the amount of $1,000,000, was never disbursed by WGFT to EF and remains in the Trust's own accounts.
Tranche 4 was never transferred to EF and therefore never became "Grant Funds" in EF's possession that could be "unexpended" and subject to reversion. WGFT simply retained Tranche 4 when it declined to make the scheduled disbursement in July 2021. The funds remained in the Trust's accounts at all times and are not properly the subject of a demand for "return" because they were never given to EF in the first place. WGFT cannot demand the "return" of funds it never disbursed.
Of the $4,000,000 in Grant Funds that were actually disbursed to EF, $3,300,000 was expended on BATRI program costs — teacher stipends, partner school coordination, curriculum development, and administrative overhead — all in accordance with the purposes set forth in the Gift Instrument and Exhibit A. Only $700,000 remains unexpended.
Therefore, even under the most favorable reading of Section 7.2 from WGFT's perspective, the maximum amount subject to reversion is $700,000. WGFT's demand for $1,700,000 — which includes $1,000,000 that WGFT never disbursed — is unsupported by the language of the Gift Instrument.
EF emphasizes that this is an alternative argument. EF's primary position is that Section 7.2 does not preclude equitable modification and that the Court should apply the cy pres or equitable deviation doctrine to permit EF to redirect all restricted BATRI funds — including the $700,000 in unexpended disbursed WGFT funds — to EF's broader educational mission. However, if the Court declines to apply cy pres or equitable deviation, EF submits that the maximum reversion would be limited to $700,000.
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

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