United States v. Cerio

Robert Alexander graduated from the United States Coast Guard Academy (the academy) (plaintiff) and served 34 years in the Coast Guard, retiring as a captain. Alexander had a lifelong interest in physics and chemistry. At his death, Alexander’s only living relatives were half-nieces and half-nephews (defendants), and his will gave them each $50,000. Alexander’s will left the rest of his estate, worth over $1 million, to the academy. The will stated that the gift was to be used to create a scholarship trust fund named for Alexander and his older brother, also an academy graduate, with the trust’s annual income going to the academy graduate with the highest grade point average in chemistry and physics. The will did not include a gift over, i.e., an alternate recipient, for this testamentary trust if it failed. The academy petitioned to modify the gift’s terms under the cy pres doctrine. The trust’s annual income would range from $65,000 to $130,000. The academy argued that presenting a gift that large to a single cadet would create an atmosphere of unhealthy competition that would likely undermine the academy’s efforts to build teamwork and a sense of public service and would harm majors other than physics and chemistry. Thus, the academy could not accept the gift under its current terms but wanted to use it to benefit the academy and its cadets in a similar way. Alexander’s relatives opposed the petition, arguing that the trust terms could not be modified and must fail. If the trust gift failed, the money would pass by intestacy to the relatives. The court considered the modification request.