In a closely watched legal case involving former Congressman Elton Gallegly and California Lutheran University (CLU), a Ventura County court has ruled in favor of CLU and President Lori Varlotta on the central issue of whether a charitable trust was created around the establishment of the Elton and Janice Gallegly Center for Public Service and Civic Engagement.
What’s the Case About?
Former Congressman Elton Gallegly, who served Ventura County for over 25 years in the U.S. House of Representatives, has pursued a multimillion-dollar, multi-year lawsuit against California Lutheran University, a small, faith-based institution in Ventura County. The lawsuit alleges that Gallegly’s gift to CLU established a charitable trust requiring the University to:
- Maintain, indefinitely, a replica of his Washington, D.C. office
- Create a fully digitized archive of his congressional papers
- Offer graduate fellowships and a distinguished speaker series in perpetuity
CLU and its then-new president, Dr. Lori Varlotta, disputed the claim, asserting that no legal trust existed and that the University had acted in good faith to support the Center within the limits of available funding.
The Court’s Ruling, Charitable Trust Claim Rejected
Following three years of legal proceedings, a Ventura County bench trial in mid-2024 focused on whether the Galleglys’ gift constituted a charitable trust. In December 2024, the court issued a Statement of Decision rejecting the charitable trust claim, citing:
- Absence of the word “trust” in the key agreements (2013 Deposit Agreement, 2017 Gift Agreement, and 2018 Personal Property Agreement)
- Lack of identified trustee, settlor, or beneficiary as required under California Probate Code §§15200–15212
- Insufficient evidence to meet the “clear and convincing” standard for proving an oral trust
As the Judge concluded: “The testimony and evidence could be construed into a contract. Not so for trust.”
Instead, the court affirmed that a contract exists between CLU and the Galleglys. Under that contract, CLU is obligated to:
- Display the replica of Gallegly’s congressional office for some (yet-to-be-determined) period of time
- Preserve and catalog his papers in an archival collection
- Support fellowships and speaker events as fundraising allows
Dr. Lori Varlotta’s Role
- Dr. Varlotta had no role in drafting or signing the agreements in question. She took office in 2020, well after the agreements were signed (2013 and 2017).
- The court found no evidence that a charitable trust was created or mismanaged under her leadership.
- In fact, it was under Dr. Varlotta’s leadership that Gallegly’s 450+ boxes of papers—left in storage for seven years—were professionally archived, preserved, and made available for research, establishing CLU’s first-ever archival collection.
- Once the archival collection was ready for display, the decision to move the replica office—approved by Varlotta and members of the Cabinet and Board—was made to accommodate the collection in the only suitable space available.
What’s Next?
Trial Schedule: The charitable trust ruling concludes only Phase One. Remaining claims—such as breach of contract and fiduciary duty—are set for jury trial in August 2025.
Judges: The case has now cycled through four judges. Judge Walsh, who oversaw Phase One, retired in early 2025. He was briefly succeeded by Judge Ronda J. McKaig (recused), then Judge Mark S. Borrell (challenged), before the case was reassigned to Judge Maureen M. Houska.
Counsel: CLU and co-defendants Varlotta and Kimball continue to be represented by Matt Burris and Dan Janssen of Quarles & Brady, ensuring consistent legal strategy throughout.
By contrast, the Galleglys are on their fifth legal team.
Their most recent attorneys filed to withdraw in February 2025, citing: “Clients [Galleglys] have breached a material term of the agreement with, or obligation to, the lawyer… and insist on making a claim or defense in litigation that renders it unreasonably difficult for counsel to carry out the representation effectively.”
Key Takeaways
- CLU and Dr. Lori Varlotta prevailed in a key legal argument, protecting the University from being bound by a non-existent charitable trust.
- The court reaffirmed that verbal intentions and informal expectations are not enough to create a legal trust under California law.
- Clear contracts and legal precision are essential when public figures and universities partner on legacy projects.
Final Thought
The Gallegly vs. CLU case offers a cautionary lesson to both nonprofit institutions and public figures: while legacy-driven gifts can benefit all parties, the pros of accepting such gifts must be weighed against the potential cons. If the gift idea is well received, it must be supported by clear, enforceable agreements to avoid costly disputes and reputational harm.
