In October 1974, Alice C. Tyler established a revocable trust to hold certain of her assets. The trust held over 100 works by artist Suzanne Regan Pascal (the Pascal collection) and provided that, upon Tyler’s death, the Pascal collection shall be transferred to a museum for exhibition. After Tyler’s death in 1993, pursuant to the terms of the trust and a written agreement, the trust transferred the Pascal collection to the Corcoran Art Gallery. Based on the Tyler trust’s requirements, as conditions of receiving the Pascal collection, Corcoran agreed to establish a permanent gallery known as the “Alice and John Tyler Gallery.” Under the agreement, Corcoran received $1 million in cash “to assist with the cost of securing and otherwise maintaining” the Pascal collection in its permanent gallery at Corcoran.

Corcoran honored the terms of the agreement with the Tyler trust for 20 years. After struggling financially for over a decade, Corcoran entered into an art transfer agreement with the National Gallery of Art. Under the transfer agreement, Corcoran agreed to “transfer and deliver into the custody, care and possession” of the National Gallery the collection of “art works owned or controlled by the Corcoran.”

Corcoran’s art works would “be held by [the National Gallery] for the benefit of Corcoran.” On October 16, 2014 the Tyler trust notified Corcoran that, due to Corcoran’s noncompliance with the Pascal agreement’s conditions, the “Trustees wish to terminate all the rights of [Corcoran] in the [Pascal collection].” The Tyler trust demanded the return of both the Pascal collection and the $1 million cash gift. After receipt of this termination notice, Corcoran did not contest it failed to comply with the Pascal agreement or the Tyler trust’s right to terminate the Pascal agreement. The Tyler trust sued to recover the artwork and the cash gift. Is the trust entitled to recover the art? The cash gift? Neither? How should the court rule?