On March 5, 2026, in In the Matter of Fred L. Maxwell, deceased, No. 25CA0323, a division of the Colorado Court of Appeals addressed the extent to which restrictions on the sale and use of a charitable gift of real property can be modified under the cy pres doctrine as articulated in section 15-1-1106(c), C.R.S. (2025). The division held that CSU STRATA, the donee of 9,733 acres of ranchland, could not void the sale and use restrictions on its real property, but under the cy pres doctrine it was allowed to reform the will devising the property so that it could either (1) sell the property free of sale and use restrictions with the proceeds to be used consistent with the donor’s intent, or (2) encumber the property consistent with the donor’s intent.
Through his last will and testament, executed in 1945 (“Will”), Fred L. Maxwell conveyed 9,733 acres of ranchland, the Maxwell Ranch, to the Colorado Agricultural Research Foundation, now known as CSU STRATA.
The Will imposed both use and alienation restrictions on the ranch. The ranch was to be used “exclusively for experimental purposes in connection with the Colorado State College of Agricultural and Mechanic Arts [now Colorado State University],” specifically “for a study of the nutritive value of mountain meadows and grasses and include experimentation with means of renovating and improving meadows and pastures, and a study of animal nutrition and diseases under range conditions, and also to be set up a practical course in range and ranch management, including experimental work in breeding livestock.” The text of the Will acknowledged, however, that these purposes were “not in the way of limitation, but merely as a suggestion” and permitted the ranch to “be used for such other experimental purposes as said Foundation may deem advisable.” In addition, the Will provided “the real estate shall never be alienated, sold, or disposed of by said beneficiary or its successors or assigns.”
In 2024, CSU STRATA petitioned the Larimer County District Court to void both the sale and the use restrictions in the Will. In the alternative, CSU STRATA sought reformation of the Will such that it could sell the land and use the proceeds for research related to the use restriction. CSU STRATA also sought a declaration that a lease for wind energy production was consistent with the use restriction. The district court denied CSU’s petition in its entirety.
On appeal, the division affirmed in part and reversed in part. First, the division held that the donee of a charitable gift of real property is not entitled to a declaration that restrictions on alienation and use of that property are void, because, as an exception to the general rule prohibiting unreasonable restraints on alienation, restraints on alienation in charitable gifts are generally enforceable. Second, applying the cy pres doctrine as articulated in section 15-1-1106(c), C.R.S. (2025), which allows a court to modify a restriction contained in a gift instrument if the restriction has become unlawful, impracticable, impossible to achieve, or wasteful, the division held a donee may reform the will under which the gift was made to allow the property to be sold, with the proceeds to go toward activities consistent with the donor’s purpose in making the gift or encumbered in a way consistent with that purpose.
The division’s analysis made three key determinations.
First, the division held that restraints on alienation in charitable gifts—whether direct, as in the sale restriction, or indirect, as in the use restriction—are enforceable, as an exception to the general rule prohibiting unreasonable restraints on alienation. As a result, the division determined that there were no grounds upon which to void those restrictions.
Second, the division reviewed the record de novo and found that the undisputed evidence presented by CSU STRATA showed that it had tried for decades to support agricultural and ranch management programming on the Maxwell Ranch, but that the organization had concluded that continuing to do so had become practically and financially unfeasible. Based on an affidavit to this effect from the president and CEO of CSU STRATA, the division determined that the Maxwell Ranch restrictions had become impracticable under sections 15-1-1106(c) and 15-5-413(1)(c)) (concerning cy pres as applied to charitable gifts). Consequently, CSU STRATA could sell the property free of the sale and use restrictions contained within the Will, with any resulting proceeds used to fund CSU’s experimental research operations at other locations. The division also determined that CSU STRATA could encumber the land consistent with Maxwell’s intent that the ranch be used for experimental research, although the court noted that there was not enough evidence in the record for it to declare that a conservation easement would be consistent with that intent.
Third, the division determined that CSU STRATA was entitled to declaratory judgment that a wind energy production lease would further the donor’s intent that the ranch be used for experimental research, based on a prior 2007 court determination to that effect.
The division remanded the case to the district court with instructions to effectuate its holding. The decision was authored by Judge Jones with Judges Lum and Meirink concurring.
Read the full opinion here.
For questions about this legal alert, please contact a member of the Davis Graham Appellate Group.