In the Matter of Fred L. Maxwell, deceased
No. 25CA0323
Colorado Court of Appeals
March 5, 2026
SUMMARY
March 5, 2026
2026COA10
No. 25CA0323, In the Matter of Fred L. Maxwell, deceased — Real Property — Restraints on Alienation; Wills and Trusts — Charitable Gifts — Reformation — Release or Modification of Restriction on Management, Investment, or Purpose — Cy Pres
A division of the court of appeals holds that, although the donee of a charitable gift of real property is not entitled to declarations that restrictions on alienation and use of that property are void, it is entitled to reformation of 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. In so holding, the division applies various principles of real property and trusts and estates law, some for the first time in a published opinion by a Colorado appellate court.
Court of Appeals No. 25CA0323
Larimer County District Court No. 24PR30498
Honorable Sarah B. Cure, Judge
In the Matter of Fred L. Maxwell, deceased.
Colorado State University Research Foundation, d/b/a CSU STRATA,
Appellant.
ORDER AFFIRMED IN PART AND REVERSED IN PART,
AND CASE REMANDED WITH DIRECTIONS
Division I
Opinion by JUDGE J. JONES
Lum and Meirink, JJ., concur
Announced March 5, 2026
Otten, Johnson, Robinson, Neff & Ragonetti, P.C., Thomas J. Ragonetti,
Andrew L.W. Peters, Noah R. Grolnick, Denver, Colorado, for Appellant
Philip J. Weiser, Attorney General, Michael D. McMaster, Assistant Solicitor
General, Denver, Colorado, for Amicus Curiae Board of Governors of the
Colorado State University System
¶ 2 In 2024, CSU STRATA petitioned the Larimer County District Court to declare the sale and use restrictions void or, alternatively, to reform the Will to allow a sale of the property with the proceeds to go toward CSU’s agricultural research efforts. Further in the alternative, CSU STRATA sought declarations that, consistent with the use restriction, Maxwell Ranch may be encumbered by a conservation easement and can be leased for wind energy production purposes. The district court denied CSU STRATA’s petition in all respects.
I. Background
¶ 4 As relevant to this case, Maxwell’s Will provided that, upon his death,
¶ 5 The next paragraph of the Will provided as follows:
And in connection with the experimental work which I require to be done by the Colorado Agricultural Research Foundation, its successors and assigns, it is my will that my said lands shall be used 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. It is understood, however, that the particular purposes in this paragraph set forth are not in the way of limitation, but merely as a suggestion, and that said ranch properties which shall become vested in Colorado Agricultural Research Foundation, its successors and assigns, may be used for such other experimental purposes as said Foundation may deem advisable.
¶ 7 In 2007, CSU STRATA filed a declaratory judgment action in Larimer County District Court seeking a declaration that allowing Maxwell Ranch to be leased for the purpose of allowing a company to “construct[] facilities and windmills or turbines on the Ranch to convert wind energy into electrical energy” would be consistent with the Will’s use restriction. CSU STRATA alleged that the purposes of the anticipated lease included determining the feasibility of wind energy conversion, undertaking meteorological studies, and using the facilities for educational and research purposes. The district court granted the requested declaratory relief. But that lease was never entered into.
1. a declaration that the Will’s sale restriction is void as an unreasonable restraint on alienation;
2. a declaration that the Will’s use restriction is void as an unreasonable restraint on alienation;
3. in the alternative to claims 1 and 2, reformation of the Will under either the doctrine of equitable deviation or the doctrine of cy pres (as codified in part at
4. a declaration that, notwithstanding the sale and use restrictions, CSU STRATA may encumber Maxwell Ranch with a conservation easement, and that such use of the property isn’t inconsistent with the Will’s restrictions; and
5. a declaration that a wind energy production lease is consistent with the purposes for which Maxwell devised Maxwell Ranch to CSU STRATA and that CSU STRATA may grant a wind energy production lease on the property.
¶ 9 Dr. Ajay Menon, the President and Chief Executive Officer of CSU STRATA, submitted an affidavit to the court in support of the petition. He said that for several decades CSU STRATA had attempted to use Maxwell Ranch consistently with the Will’s use restriction. Since receiving the deeds in 1975, CSU STRATA had used the Maxwell Ranch to (1) establish a commercial cow and calf
¶ 10 Dr. Menon said that performing research in line with the Will’s use restriction remained “ineffective and impracticable . . . due to inherent characteristics of [Maxwell Ranch’s] landscape and ecosystems,” which he then described, and lack of necessary
¶ 11 No one opposed the petition. At a hearing on the petition, the district court considered the history of the Will, Maxwell Ranch’s historical uses, and Dr. Menon’s affidavit. The court denied CSU STRATA’s requests to void the sale restriction and reform the Will, finding that it was “bound . . . by the intent of the testator” and “[i]t is somewhat slightly unbelievable, somewhat disheartening, that . . . with the information that I’ve been provided that the petition claims that selling the ranch and using the proceeds would actually elevate the impact of his original gift.” The court also referred to court records from the 2007 case in which a previous foundation president and the foundation’s legal counsel had indicated “the importance of the alienation restriction in the will.” As for CSU STRATA’s argument that it was impractical or impossible to use the property as Maxwell intended, the court said, “I simply disagree.”
¶ 13 The district court also rejected CSU STRATA’s fourth and fifth claims for relief — which requested declarations that use of the property for a conservation easement and wind energy development was permissible under the Will — but indicated some openness to revisiting those two claims if given “more specific information.”
¶ 14 CSU STRATA’s attorney asked the court to hear more from Dr. Menon, but the court refused, characterizing the petition as nothing more than “complaints” about “management issues” that weren’t
¶ 15 The district court later incorporated its findings at the hearing into a written order denying CSU STRATA’s petition. That order didn’t include any additional findings.
II. Discussion
¶ 16 CSU STRATA contends that the district court erred by denying each of the five claims in its petition. We disagree with CSU STRATA that the district court erred by denying the first two claims for relief. Because the gift of Maxwell Ranch was a charitable gift, the Will’s sale and use restrictions aren’t void. But we agree with CSU STRATA that the court erred by denying its third claim because, based on the undisputed facts, the Will should be reformed to allow the property to be (1) sold free of those restrictions, provided the proceeds are used by CSU STRATA for experimental purposes, consistent with Maxwell’s intent; and (2) encumbered in a way consistent with such purposes. As for claims four and five, we conclude that the record isn’t sufficient to determine whether a conservation easement would be consistent with the use restriction. Therefore, we affirm the district court’s
A. Applicable Law
¶ 17 “A restraint on alienation is, in common vernacular, a limitation on the right to transfer or convey property or a property right.” Teal Trading & Dev., LP v. Champee Springs Ranches Prop. Owners Ass’n, 534 S.W.3d 558, 574 n.5 (Tex. App. 2017) (citing Alienate, Black’s Law Dictionary 80 (8th ed. 2004)), aff’d, 593 S.W.3d 324 (Tex. 2020). Restraints on alienation are typically categorized as either direct or indirect restraints. Restatement (Third) of Prop.: Servitudes §§ 3.4, 3.5 (A.L.I. 2000); accord Lamar Advert. v. Larry & Vickie Nicholls, L.L.C., 2009 WY 96, ¶¶ 12-16, 213 P.3d 641, 644-45. “A direct restraint on alienation is a provision in a deed, will, contract, or other instrument which, by its express terms, or by implication of fact, purports to prohibit or penalize the exercise of the power of alienation.” Spanish Oaks, Inc. v. Hy-Vee, Inc., 655 N.W.2d 390, 399 (Neb. 2003); see also Restatement (Third)
Unlike a direct restraint, an indirect restraint does not place express limitations on the owner’s right to convey the property. An indirect restraint on alienation “arises when an attempt is made to accomplish some purpose other than the restraint of alienability, but with the incidental result that the instrument, if valid, would restrain practical alienability.” Lamar Advert., ¶ 15, 213 P.3d at 644 (quoting Smith v. Osguthorpe, 2002 UT App 361, ¶ 27, 58 P.3d 854, 860).
An otherwise valid servitude is valid even if it indirectly restrains alienation by limiting the use that can be made of property, by reducing the amount realizable by the owner on sale or other transfer of the property, or by otherwise reducing the value of the property. . . . A servitude that lacks a rational justification is invalid.
Id. at ¶ 15, 213 P.3d at 644-45 (quoting Restatement (Third) of Prop.: Servitudes § 3.5(1), (2)).
¶ 18 Generally speaking, “[t]he law does not permit restraints to be imposed upon the alienation of an estate in fee simple.” Cronk v. Shoup, 197 P. 756, 757 (Colo. 1921); see Potter v. Couch, 141 U.S. 296, 318 (1891); see also 3 Thompson on Real Property § 29.02, at 759 (David A. Thomas ed., 3d ed. 2012) (direct restraints on
¶ 19 “The rules against unreasonable restraints on alienation generally aim to keep assets available for commerce by applying different types of limits depending on the nature of the property, the purpose of the restraint, and its potential for harm.” Atl. Richfield Co., ¶ 24 (citing Restatement (Third) of Prop.: Servitudes § 3.4 cmt. a); id. at ¶ 23 (The rules attempt to “avoid fettering real property with future interests dependent upon contingencies unduly remote which isolate the property and exclude it from commerce and
¶ 20 But somewhat different rules apply to charitable gifts, such as the gift at issue in this case.3 While the general rule described above discourages or prohibits direct and indirect restraints on alienation deemed unreasonable, “[a] donor of property for a charitable use may impose such conditions as he may choose, including a restraint on alienation. This right is an exception to the prohibition against restraint on alienation.” Sisters of Mercy of Cedar Rapids v. Lightner, 274 N.W. 86, 92 (Iowa 1937); see 5 Herbert Tiffany, Real Property § 1347, Westlaw (3d ed. database updated Sept. 2025) (“[A]n exception to the general rule [prohibiting
¶ 21 But be that as it may, many jurisdictions, including Colorado, allow a court to relieve the grantee of a charitable gift from a restriction on the gift’s alienation or use in certain circumstances. Indeed, three Colorado statutes deal with bequests containing such restrictions, two of which we apply in this case.5
As noted above,
[i]f a particular charitable purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the institutional fund or the restriction on the use of the institutional fund in a manner consistent with the charitable purposes expressed in the gift instrument.
And
¶ 22 These two statutes codify, in part, the common law cy pres doctrine (explicitly referred to in
A purpose becomes “impracticable” under the cy pres doctrine when it appears that under the circumstances the application of the property to that designated purpose would fail to accomplish the general charitable intention of the testator. Such difficulty need be only a reasonable one and not such as to make the donor’s plan a physical impossibility.
In re Estate of Vallery, 883 P.2d at 28 (citation omitted); accord Dunbar, 461 P.2d at 30; see Restatement (Third) of Trs. § 67 cmt. c.
¶ 23 If a court determines that it has become impractical or wasteful to use the property for the donor’s intended purpose or impossible to achieve that purpose, the usual remedy seems to be to modify the gift instrument to allow for a sale of the property, with the proceeds to be used in accordance with the donor’s general intended charitable purpose: Declaring the restriction void ordinarily isn’t a remedy. See
¶ 24 With these principles in mind, we turn to CSU STRATA’s claims for relief.
B. Analysis
1. The Sale and Use Restrictions Aren’t Void
¶ 25 Whether a property interest violates the rule against unreasonable restraints is a mixed question of law and fact. Atl. Richfield Co., ¶ 22. “‘Where there is a mixed question of law and fact, the reviewing court will give deference to the trial court’s factual findings, absent an abuse of discretion,’ but will independently review questions of law.’” In re Estate of Owens, 2017 COA 53, ¶ 19 (quoting Sheridan Redevelopment Agency v. Knightsbridge Land Co., 166 P.3d 259, 262 (Colo. App. 2007)). “When, as in this case, the controlling facts are undisputed, however, the legal effect of those facts constitutes a question of
¶ 26 The absolute prohibition of the sale of Maxwell Ranch is clearly a direct restraint on alienation. And we conclude, based on the record, that the use restriction is an indirect restraint on alienation because it is of a nature that in all likelihood limits the class of prospective buyers to such an extent that the sale of the property subject to the use restriction would be virtually impossible. Who would buy such a property if it could only be used for the specified research purposes as directed and administered by CSU? Probably no one, especially given CSU STRATA’s undisputed evidence that it hasn’t been able to make such use of the property in an economically viable or educationally productive way for the past fifty years. Cf. Godoy v. Linzner, 327 Cal. Rptr. 3d 323, 333 (Ct. App. 2024) (concluding that a restraint on alienation was unreasonable because it limited a sale of the property to two possible purchasers); Taormina Theosophical Cmty., Inc. v. Silver, 190 Cal. Rptr. 38, 43-44, 44 n.7 (Ct. App. 1983) (a restrictive covenant limiting the sale of property to theosophists older than 50,
¶ 27 But that doesn’t mean the restrictions are void. This is because they are appurtenant to a charitable gift and, as previously discussed, restraints on alienation in charitable gifts are ordinarily enforceable. Therefore, we conclude that the district court didn’t err by denying CSU STRATA’s first two claims for relief. See Est. of Schiola v. Colo. Dep’t of Health Care Pol’y & Fin., 51 P.3d 1080, 1083 (Colo. App. 2002) (we may affirm the lower court on a ground different than that relied on by the lower court).7
2. The Will Should Be Reformed
¶ 28 This leads us to CSU STRATA’s third claim — for reformation of the Will — which meets a different fate.
¶ 29 This claim turns on application of the cy pres doctrine. “The exercise of the cy pres doctrine involves a large measure of discretion.” In re Estate of Vallery, 883 P.2d at 29; see Fisher v. Minshall, 78 P.2d 363, 364 (Colo. 1938).
¶ 30 As noted, CSU STRATA asked the district court to reform the Will to allow CSU STRATA to sell Maxwell Ranch free of the sale and use restrictions, with the net proceeds of any such sale or lease to be used by CSU STRATA to fund experimental research “consistent with the educational and research missions of the University,” or to allow it to encumber the ranch subject to the same limitation. It asserted that this would “effectuate Maxwell’s intent.” On appeal, CSU STRATA contends that “[a]llowing the proceeds from a sale or encumbrance to flow toward [agricultural] research would further Maxwell’s testamentary aims.” We agree with CSU STRATA that it has demonstrated that continued attempts to use Maxwell Ranch in
¶ 31 Dr. Menon’s affidavit, which, again, isn’t controverted, establishes the following:
- CSU has tried for several decades to put Maxwell Ranch to various uses consistent with Maxwell’s intent.
- These efforts have proved unsuccessful for several legitimate reasons.
- Under current circumstances, and those reasonably foreseeable, continuing to attempt to use Maxwell Ranch for the purposes of experimental agricultural research would be largely unworkable and financially unfeasible.
- Other locations that CSU uses for such research are suitable for such research.
¶ 32 The district court’s rejection of this claim was based on its hope that CSU STRATA could come up with some viable, economical use of the property. But no record evidence supports the district court’s assertion that CSU STRATA can use Maxwell
¶ 33 It therefore follows that the Will should be reformed (or “modified,”
3. The Claim for a Declaration that a Conservation Easement Would Be Consistent with the Use Restriction Fails
¶ 34 As noted, the district court determined that CSU STRATA hadn’t provided enough information for the court to make an
4. CSU STRATA Is Entitled to a Declaration that Leasing Maxwell Ranch for Wind Energy Production Purposes Would Be Consistent with the Use Restriction (Subject to an Important Caveat)
¶ 35 The district court also denied CSU STRATA’s request for declaratory relief on its fifth claim based on a lack of information. But unlike a conservation easement, it is readily apparent to us that leasing the ranch for wind energy production purposes would be consistent with the use restriction — if any such lease also required CSU to use such development for experimental research purposes.
¶ 36 In 2007, the Larimer County District Court granted declaratory relief to CSU STRATA on virtually the same claim. The differences between that claim and CSU STRATA’s fifth claim in this case are (1) the 2007 claim sought a declaration as to a particular
¶ 37 In our view, a wind energy production lease containing the same terms as the lease at issue in 2007 would be consistent with Maxwell’s intent that the ranch be used for “experimental purposes.” Therefore, CSU STRATA is entitled to a declaration that it may enter into a wind energy production lease (or leases) encumbering Maxwell Ranch so long as any such lease expressly provides that CSU will use the facilities constructed pursuant to the lease for experimental research.
III. Disposition
¶ 38 We affirm the district court’s order on CSU STRATA’s first, second, and fourth claims. We reverse the district court’s order on CSU STRATA’s third and fifth claims and remand the case with instructions to reform the Will and grant CSU STRATA declaratory relief consistent with this opinion.
JUDGE LUM and JUDGE MEIRINK concur.