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In Re the Reed Foundation, Inc., Petitioner-Respondent v. Franklin D. Roosevelt Four Freedoms Park

May 2, 2013

IN RE THE REED FOUNDATION, INC., PETITIONER-RESPONDENT,
v.
FRANKLIN D. ROOSEVELT FOUR FREEDOMS PARK, LLC, RESPONDENT-APPELLANT.



The opinion of the court was delivered by: Acosta, J., J.

Matter of Reed Found., Inc. v Franklin D. Roosevelt Four Freedoms Park, LLC

Decided on May 2, 2013

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Peter Tom,J.P. Rolando T. Acosta David B. Saxe Helen E. Freedman Paul G. Feinman, JJ. Index 653482/12

Respondent appeals from the order of the Supreme Court, New York County (Charles E. Ramos, J.), entered November 14, 2012, which declared that they breached its contractual obligations to petitioner to complete an agreed engraving at the Franklin D. Roosevelt Four Freedoms Park, and directed specific performance of the obligation. Sidley Austin LLP, New York (James D. Zirin, James D. Arden and Michael D. Mann of counsel), for appellant. Simpson Thacher & Bartlett LLP, New York (Michael J. Garvey and Devin F. Ryan of counsel), for respondent. ACOSTA, J.

Can aesthetic considerations trump a carefully considered and crafted contractual provision dictating the specific location of an inscription on a work of art? We hold that they cannot.

This case revolves around the Franklin D. Roosevelt Four Freedoms Park (the Park), which commemorates FDR's famous "Four Freedoms" speech [*fn1]. The Park is located on four acres of land at the southern tip of Roosevelt Island. It was designed in the 1970s by the distinguished architect, the late Louis I. Kahn. For over 30 years, efforts to develop the Park had been unsuccessful. Interest in the park was renewed in 2005 when Reed and Jane Gregory Rubin, the current officers of petitioner The Reed Foundation (the Foundation), funded an exhibit about the history of the long dormant project entitled "Coming to Light."

At the Rubins' urging, the Franklin & Eleanor Roosevelt Institute formed the Franklin D. Roosevelt Four Freedoms Park, LLC (the LLC) and undertook to raise the funds necessary to complete the Park. In March 2010, the Foundation contracted to give the LLC a $2.5 million grant. In exchange for the grant, the LLC contractually agreed to carving Recognition Text (i.e., text recognizing the Rubin's and the Foundation's grant) at a specific location near a bust FDR of which was to be housed in the park. The Foundation was among the very first donors to make a grant in connection with this project, at a time when there remained considerable doubt as to whether the LLC could raise the funds necessary to complete the project. The Foundation's grant enabled the LLC to qualify for essential public funding from New York State and New York City, after which the LLC was able to raise the necessary funds to complete the Park. It was only after the necessary funds were raised and the Park essentially completed that the LLC reneged on its obligation to engrave the recognition text at the specified location, citing aesthetic concerns.

The Foundation's grant is governed by a series of interrelated agreements, including a Grant Agreement, entered into by the Foundation, the LLC and The Franklin & Eleanor Roosevelt Institute, which is the sole member of the LLC, and a Recognition Agreement, executed by the Foundation and the LLC.

The agreements detail the LLC's obligation to engrave specific text recognizing the Foundation and its founders (the Threshold Recognition Text) on a 12-foot by 12-foot granite wall, which is part of a structure in the Park called the "Threshold" (or the Niche) that houses a bronze bust of FDR. It was to read, "IN HONOR OF VERA D. RUBIN AND SAMUEL RUBIN. THE REED FOUNDATION." As depicted in the photographs, the placement of the Threshold Recognition Text was to be low to the ground, in small font less than two inches high along the bottom of a solid 12 foot by 12 foot granite wall on the west-facing side of the Threshold. On June 21, 2012, the Foundation consented to a request by the LLC that the lettering for the Threshold Recognition Text be changed from black to a muted gray.

The Grant Agreement provides that the Foundation's grant will fund construction of the Park, including "the carving of, and/or other display of, the Threshold Recognition Text." Under the Grant Agreement, the LLC agreed to "construct the Recognition in accordance with the terms, conditions and specifications set forth in the Recognition Agreement." The Grant Agreement, in Section 7, "Termination/Survival," gives the Foundation alone the right in its sole discretion, to terminate the Grant Agreement by written notice of termination to the Institute and the LLC, (1) "if any aspect of the Project materially changes or it becomes impracticable to comply with requirements of Sections 1 and 2 of the Recognition Agreement" or (2) "a Default (as defined in the Recognition Agreement) occurs."

The Recognition Agreement sets forth the "terms, conditions and specifications for the construction, placement and design of the Recognition and the use of [the Foundation's funds] with respect to the [Park]" and specifies the precise location and wording of the "Threshold Recognition Text," as well as requirements for the carving and maintenance of the inscription. Section 6 of the Recognition Agreement defines "default" to mean, among other things, "if any aspect of construction of the . . . Park materially changes or it becomes impracticable to comply with requirements of Sections 1-4 of this Recognition ...


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