UPDATES & ANALYSIS

Legal status of Grant Wood paintings at stake in case to be argued before Iowa Supreme Court Oct. 11 in Iowa City

by Rox Laird | October 9, 2019

The Iowa Supreme Court, sitting at the University of Iowa College of Law Oct. 11, will hear arguments in an appeal that could determine the fate of seven Grant Wood paintings that have been displayed in Coe College’s library for 62 years.

The argument is scheduled for 10:30 a.m. at the Levitt Auditorium on the University of Iowa campus. [Go to On Brief’s Cases in the Pipeline page to read the briefs in the case, In the Matter of the Application of Coe College for Interpretation of Purported Gift Restriction.]

Coe College filed a petition for declaratory judgment in Linn County District Court seeking to reclassify the Wood paintings from restricted assets to unrestricted assets, which would increase the value of the paintings by $1.95 million in Coe’s endowment fund. The District Court, however, ruled that the terms of the original gift prohibit the college from “selling, transferring, or otherwise alienating the paintings.”

Coe appealed and urges the Supreme Court to reverse the lower court.

The Grant Wood paintings, which were originally part of a mural in a Cedar Rapids hotel coffee shop, were initially loaned to Coe College in 1957 by the hotel’s owner, Eugene C. Eppley through Eppley’s charitable foundation. Two decades later, when the foundation was being dissolved, the paintings were made a permanent gift to the college.

At that time, the paintings were classified as unrestricted assets, meaning the college had the option of selling or transferring the works. In 2016, however, Coe’s outside auditors changed their opinion and said the paintings should be classified as permanently restricted assets, which meant they could not be sold without violating the terms of the Eppley gift and which, in turn, reduced the value of the college’s endowment.

Coe argues that the words of the Eppley gift letter should be read to mean the foundation intended the paintings as unrestricted, outright gifts to the college because the letter did not place any restrictions or limits on the gifts.

Should the Court conclude that the paintings were intended as a restricted gift, the college argues it should be allowed to lift the restrictions under a state statute, Iowa Code section 540A.106, or the Uniform Prudent Management of Institutional Funds Act, which permits charitable institutions to remove obsolete or impracticable restriction on a charitable gift. Or, in the alternative, Coe argues that the Court should apply the common law doctrine of cy pres to relieve Coe of restrictions on the paintings.

Attorney General Tom Miller, in a brief filed with the Court, said the District Court ruling was correct and should be upheld. The Grant Wood paintings are rightly classified as restricted gifts, meant to remain the permanent property of Coe College, and that neither the statute nor the doctrine of cy pres relieve Coe of that restriction, the attorney general’s brief said.

Tags: Oral Arguments, Iowa Supreme Court 2019-20