No money left in endowment sought by heirs of Little Rock's Pike-Fletcher-Terry House, according to court filing

Little Rock’s Pike-Fletcher-Terry House on East Seventh Street, Oct. 20, 2021. (Arkansas Democrat-Gazette/Staton Breidenthal)

No money remains in an endowment to fund a decorative arts museum in Little Rock's Pike-Fletcher-Terry House, according to a filing in Pulaski County Circuit Court.

"The Foundation used all funds raised for the decorative arts museum and has continued to fund the decorative arts collection," wrote John E. Tull III, an attorney for the Arkansas Museum of Fine Arts and its Foundation.

[DOCUMENT: Motion to dismiss »]

The endowment contained $1.6 million in the 1980s, with most of that money coming from the estate of former Gov. Winthrop Rockefeller.

The endowment is at the center of a legal battle over who will pay to restore the 1840 Pike-Fletcher-Terry House -- one of Little Rock's oldest and most-storied homes.

The two-story Greek Revival mansion at 411 E. Seventh St. housed the Arkansas Arts Center's Decorative Arts Museum from 1985 until 2004, when it became the Arts Center's Terry House Community Gallery, according to the Encyclopedia of Arkansas.

The house is now vacant and deteriorating from neglect, according to court filings.

In 1964, Adolphine Fletcher Terry and Mary Fletcher Drennan deeded the house to the city "for the use and benefit of the Arkansas Arts Center and its successors."

The Arts Center is now the Arkansas Museum of Fine Arts.

[DOCUMENT: Brief in support of motion to dismiss »]

Six heirs of Terry and Fletcher sued the city of Little Rock, the museum and its Foundation because the house isn't being used in accordance with the deed and has been allowed to deteriorate to the point that it needs more than $1 million worth of work.

The heirs say they will take the property back, but only if it's accompanied by the endowment so there will be sufficient funds to restore it. They want the house to be used by the public.

The endowment was set up in 1984. The initial $1 million for the endowment came from the estate of former Gov. Rockefeller, according to court filings.

In his motion to dismiss the amended complaint, Tull writes that the endowment was for a decorative arts museum.

[DOCUMENT: Plaintiff's response to motion to dismiss »]

"The Heirs acknowledge the fundraising was to provide funding for a 'Decorative Arts Museum,' not for upkeep of the Terry House (Amend. Compl. ¶ 35), but they use a sleight of hand to try to expand the purposes of the fundraising," wrote Tull. "The Heirs are fully aware the donations were to create a decorative arts museum; maintenance of the Terry House was an obligation of the City of Little Rock."

The fundraiser and endowment were for maintenance and operation of the Pike-Fletcher-Terry House, wrote Richard H. Mays, attorney for the plaintiffs.

To bolster his argument, Mays cites several documents, including an Oct. 1, 1984, letter from Marion Burton, a co-trustee of the Winthrop Rockefeller Charitable Trust, to Robert Shults, who was an attorney for the museum and Foundation.

The $1 million from the Rockefeller Trust was to be used for "the purpose of endowing the operation of the Pike-Fletcher-Terry House," wrote Burton. The letter is included as an exhibit with the amended complaint filed Nov. 11.

In a 1985 filing with the Internal Revenue Service, a museum attorney wrote that the fundraising drive was to raise money for "daily operations of the House," according to the amended complaint.

In court documents, the heirs say the endowment funds were "restricted," meaning they could only be used for the Pike-Fletcher-Terry House. They want an accounting of where the endowment money went. The museum's attorneys say the heirs have no legal standing to call for an accounting of money they didn't donate and have no legal right to.

"As explained to the Heirs before they filed their original complaint, all funds were spent on the decorative arts museum -- including for a curator, support staff, operation of the museum, and maintenance of the Terry House," wrote Tull in his motion to dismiss. "The Heirs, however, omitted this information from their complaint."

In addition to wanting attorneys fees, in the amended complaint, the plaintiffs are seeking an accounting of rental income generated by the Pike-Fletcher-Terry House.

The museum has no contractual obligation to repair or maintain the house, according to an Oct. 27 news release from Victoria Ramirez, executive director of the museum.

Court filings indicate the museum foundation board plans to pay the utility bills until the end of June but otherwise won't invest any money in the building.

On Monday, Mays filed a response to Tull's motion to dismiss an amended complaint in the case.

The museum had a contractual obligation to keep the Pike-Fletcher-Terry House maintained in good condition, in accordance with the 1964 deed, wrote Mays.

"The Arts Center assumed control of the Property, raised funds from private parties and various governmental and charitable entities to remodel the House to suit its purposes, created and raised money for an Endowment, and operated the Property for more than twenty years, proudly claiming it as a part of the Arts Center's/Foundation's assets," wrote Mays. "It is now too late for the Arts Center or the Foundation to disavow their responsibilities regarding the Property."

The Foundation wasn't entitled to spend the endowment money for any other purpose than the Pike-Fletcher-Terry House, wrote Mays.

"If the Foundation is holding money in an endowment for that purpose, it should go with the Property," he wrote. "If it has expended money from the Endowment for purposes other than those authorized by the documents used for funding the Endowment, the Foundation should restore it.

"In any event, as the Foundation no longer has any interest in the Property, as it has said, it should not be allowed to keep any of the endowment funds."

Plaintiffs in the lawsuit are Susan Terry Borne, Elizabeth Terry Foti, Mary Catherine Drennan, Leonard John Drennan III, Margaret Yatsevitch and Michael Yatsevitch.

The Pike-Fletcher-Terry House was built in 1840 for Albert Pike, who became a general in the Confederate Army, established a national reputation as an attorney and was one of the founders of the national Masonic fraternal organization, according to the lawsuit.

Later, the house was occupied by the family of Capt. John Gould Fletcher, a member of the Capitol Guards during the Civil War who became mayor of Little Rock and Pulaski County sheriff, according to the court filing. His son, John Gould Fletcher Jr., won the Pulitzer Prize for poetry in 1939.

More recently, Congressman David D. Terry and his family lived in the house.

His wife, Alolphine Fletcher Terry, was instrumental in forming the Women's Emergency Committee to Open Our Schools, which opposed former Gov. Orval Faubus' resistance to the desegregation of Little Rock Central High School in 1958, Mays wrote in a news release. The work led to the recall of three segregationist members of the School Board and the reopening of the Little Rock schools, according to the lawsuit.

The Women's Emergency Committee met in the Pike-Fletcher-Terry House, and members' names are etched on windows of the room where the meetings took place.