Lawyers for Attorney General Mike McGrath and the Friends of the Bair Museum asked the court to rule that the trustee, U.S. Bank, and its board of advisers had breached Alberta Bair’s trust and violated their fiduciary duties. They asked the court to remove the trustee and board from the museum and its collection and provide sufficient trust assets to permanently support the museum and its collection, which would be run by an independent, charitable entity.
However, attorneys for the trustee and its board of advisers requested that the court uphold the July 2006 decision by District Judge G. Todd Baugh of Billings. Baugh found that the board of advisers had acted reasonably in closing the Bair museum under the provisions of the trust document signed by Alberta Bair in 1990.
He and his wife had two unmarried daughters. Alberta, the last surviving one who died in 1993 at age 97, and her sister Marguerite, who died in 1976, amassed what has been called an eclectic collection of fine art, American Indian artifacts and European antique furniture. The collection had been on display in the 26-room home turned into a museum.
In 1990, Alberta Bair established a trust and provided that the museum was to remain open, but five years after her death, the trustee board of advisers could close it if it decided the museum “ceased to serve the purposes thereof so as to make it inadvisable to continue the museum for public and educational purposes.”
That is just what happened. The board of advisers closed the museum temporarily in February 2003 and permanently in 2005, citing low attendance. The board later approved permanently loaning artwork from the home, including original paintings by Charles M. Russell and other Western artists valued at $6.7 million, to the Yellowstone Art Museum in Billings.
However, the Martinsdale museum was reopened the past two summers drawing 4,000 visitors this year.
Bair’s trust fund, which now has assets totaling $60 million that generate $3 million in interest annually, also funds other educational, cultural and charitable causes in Montana.
Before a nearly packed house, including many people from the Martinsdale area and Billings, attorneys laid out their respective arguments to the Supreme Court.
“Here’s the deal,” said Cliff Edwards of Billings, lawyer for the Friends of the Bair Museum. “This case is about a museum that is a national and an international museum that happens to be located in Martinsdale. Four of these five board members live in Billings and have decided the YAM - the Yellowstone Art Museum - is a better place for these paintings.”
Assistant Attorney General Anthony Johnstone said, “The purpose of the trust was that the museum was supposed to continue to operate unless it ceased to serve its purpose.”
“It did not cease to serve its purpose,” he said. “The board never actually determined that it ceased to serve its purposes.”
Roberta Anner-Hughes, another attorney for the Friends of the Bair Museum, said the museum had “the potential of being a world-class museum” before the board closed it and stripped it of its treasures.
However, attorney Carey Matovich of Billings, representing the board of advisers, said the board decided to shut the museum for several reasons.
“They built the museum, but no one came,” Matovich said. “Attendance continued to drop.”
At the same time, she said, the value of the art collection housed there had escalated. Trustees feared the paintings could be stolen or burned in a fire, with the nearest law enforcement and firefighters 30 to 40 miles away.
“It’s a lightning bolt away from destruction,” she said.
Moreover, the “frugal businesswoman in Alberta Bair” recognized that her trust could not anticipate everything in the future so she gave the trustees the authority to make changes five years after her death, Matovich said.
John Crist, a Billings attorney for U.S. Bank, said, “What really matters is what Alberta said in the trust agreement.”
If Bair had intended the museum to be the primary purpose of her trust agreement, why was the museum the only part of the trust agreement she provided for that could be terminated, Crist asked.
The court took the case under advisement.
Trust agreement excerpt
Here is the some of the key wording in Alberta Bair’s 1990 trust agreement:
“If, at any time following the fifth anniversary of grantor’s (Alberta Bair’s) death, the board of advisors, acting in its sole judgment and discretion, shall determine that the said Charles M. Bair Family Museum has ceased to serve the purposes thereof so as to make it inadvisable to continue the museum for public and educational purposes, then and in any such event the board of advisers is thereupon authorized and empowered to sell, transfer, relocate the museum or otherwise dispose of all the property then held as part of the Charles M. Bair Family Museum.”
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