Dodgers Divorce: Judge Gordon Throws Out Postnup

Judge rules in favor of Jamie McCourt in Dodgers ownership struggle








See the Statement of Decision.

The decision denying Frank McCourt's claim to sole ownership of the team is not expected to immediately affect day-to-day operations. He may use other legal strategies to challenge his ex-wife's case.

By Bill Shaikin and Carla Hall

Frank McCourt is not the sole owner of the Dodgers, a judge ruled Tuesday, a decision that keeps the team in legal limbo for what might be several more years.

Los Angeles Superior Court Judge Scott Gordon granted Jamie McCourt's plea to throw out a 2004 marital agreement that would have left her without an ownership share in the Dodgers.

"The court finds that the marital property agreement is not a valid and enforceable agreement," Gordon wrote in his ruling. "The court orders that the marital property agreement is set aside."

The ruling is not expected to have an immediate impact on the day-to-day operations of the team. Frank is expected to employ other legal strategies to dispute his ex-wife's claim to co-ownership of the team.

Frank could decide to appeal Tuesday's ruling. He already has notified the court he wants to use a different legal strategy in another claim to sole ownership of the Dodgers, one based on the concept that he bought the team with a company he established before his marriage to Jamie.

Frank's attorneys have said such a trial could be completed in one day and that all the necessary evidence is in the court record. Jamie's attorneys have said such a trial could require up to 60 days, preceded by months to collect new evidence.

Dennis Wasser, an attorney for Jamie, said he hoped the ruling would enable both sides to settle the case, for what he said would be the good of the Dodgers and the community. "We are very pleased that the marital property agreement has been invalidated. Now that Jamie has prevailed in this case, we hope it will be possible to resolve the matter in a reasonable way going forward."

Major League Baseball Commissioner Bud Selig has declined to comment on the case. The Times reported in September that the possibility of years of legal battles between the McCourts had prompted him to consider intervening on behalf of the Dodgers, but it is uncertain what options he might contemplate.

The McCourts also could use Gordon's ruling to renew settlement talks, with the validity of the 2004 marital agreement no longer a wild card in negotiations.

The sides have been unable to reach a settlement despite several rounds of discussions -- with and without mediators -- over the last year.

In the absence of a settlement, Gordon eventually would determine permanent spousal support. In May, Gordon ordered Frank to pay Jamie $637,159 per month in temporary support, including costs associated with the couple's homes.

The McCourts filed for divorce on Oct. 27, 2009, one week shy of what would have been their 30th anniversary.

In March 2004, two months after baseball owners approved their purchase of the Dodgers, the McCourts each signed a marital property agreement that specified the team belonged solely to Frank and the couple's homes belonged solely to Jamie.

In the initial phase of the divorce case -- and in a trial that lasted 11 days -- the only question before Gordon was whether the agreement was valid.

Frank asked Gordon to enforce the deal, arguing that Jamie was the driving force behind the agreement and that she had gotten exactly what she wanted from it -- that is, to protect the homes from creditors should the Dodgers suffer severe financial losses.

Jamie asked Gordon to overturn the agreement, claiming she never intended to surrender her rights to Dodgers ownership and never would have signed the document had she been explicitly informed of its impact in the event of divorce. She said she should be considered co-owner of the Dodgers.

As the trial approached, lawyers discovered the McCourts had signed six copies of the agreement, three of which listed the Dodgers as Frank's sole property and three that did not.

Larry Silverstein, the Boston lawyer who drew up the agreement, testified that he had botched the wording in the latter three copies and had corrected his mistake by replacing the relevant page in the agreement -- after the McCourts had signed the document, and without informing either of them of the alleged error.

Frank argued that Silverstein had made an unfortunate mistake but corrected it to conform with what Jamie had wanted -- that is, no financial responsibility for the Dodgers.

Jamie argued that Silverstein's blunder, whether innocent or intentional, resulted in two versions of the agreement with materially opposite terms. If one version said Frank owned the Dodgers and the other version did not, she contended, there never could have been an agreement in the first place.

bill.shaikin@latimes.com

carla.hall@latimes.com

Copyright © 2010, Los Angeles Times

Mediation for the McCourts

Mediation scheduled in McCourt divorce case

By GREG RISLING (AP) – 4 days ago

LOS ANGELES — Divorce lawyers for Frank and Jamie McCourt are planning to go into mediation as soon as Friday over who owns the Los Angeles Dodgers, The Associated Press has learned.

A person familiar with the case who requested anonymity because he was not authorized to speak publicly about settlement discussions told the AP late Tuesday that the two sides would meet in a downtown Los Angeles courtroom on Friday.

The mediation talks were first reported by Yahoo! Sports.

Jamie McCourt contends that she deserves a part of the team, while Frank McCourt argues that he is the team's sole owner. Earlier this week, she testified that she didn't read a postnuptial marital agreement which gave her estranged husband sole possession of the Dodgers.

An attorney who represented the couple and drafted the agreement said he replaced an addendum that excluded the Dodgers from Frank McCourt's separate property with wording that included the team and didn't notify Jamie McCourt about the switch.

Larry Silverstein, who is expected to resume his testimony Wednesday, said he made a "drafting error" when he prepared the agreement that didn't include the Dodgers, the stadium and the surrounding land, worth hundreds of millions of dollars from Frank McCourt's side of the ledger.

When Silverstein gave the documents to the McCourts to sign in March 2004, three had the team as Frank McCourt's separate property, and three others didn't. Jamie McCourt ended up signing all six; Frank McCourt signed three at the couple's Massachusetts home and the remaining three a couple of weeks later while he was in California.

The agreement is at the center of the dispute between the McCourts and could decide who owns the Dodgers. Superior Court Judge Scott Gordon must decide whether the pact is valid. He also could order the sale of the team.

Silverstein said the original plan was to have three copies of the agreement, one each for Frank and Jamie McCourt and one for himself. However, he decided at the last minute before the couple signed them to produce three other copies out of an abundance of caution.

"I was simply trying to have a set of protective documents," he said.

Silverstein said he doesn't recall switching the versions Frank McCourt signed in California that excluded the Dodgers with wording that did include the team, but believes he did so shortly thereafter after he looked at company records.

It wasn't until a few months ago, after forensic analysts were hired by both sides to examine the six copies, that it was determined Silverstein made the changes.

Jamie McCourt's attorney David Boies asked Silverstein if he thought it was OK to switch a legal document after it had been signed and notarized.

"In certain circumstances, yes," Silverstein replied.

Boies asked his fellow litigator, who has practiced law for more than 30 years, if he ever recalled a situation where an attorney had removed part of a legal document and replaced it with something else without the written permission of both parties.

"Express permission or implicit permission, no," Silverstein added.

Silverstein said he didn't tell Jamie McCourt about replacing the addendum that gave her husband the Dodgers. On Monday, she testified she never read the agreement, nor did anyone tell her, namely Silverstein, that she would be giving up her purported ownership stake in the team.

However, another attorney who worked at the same firm as Silverstein said he was directed by Jamie McCourt to come up with the marital agreement during a meeting at Dodger Stadium shortly after the team was bought in February 2004 for about $430 million.

Reynolds Cafferata said in conversations he had with Jamie McCourt, she asked him questions about California's community property provision and told him it was a family practice to keep assets separate.

"She said 'We do things differently. I own the houses, Frank owns the businesses,'" said Cafferata, who added Jamie McCourt wanted a draft agreement created quickly. "She was interested in having this done immediately."

Gordon on Tuesday excused several witnesses from testifying at the trial, including Major League Baseball general counsel Thomas Ostertag. The trial could end early next week. Gordon then has 90 days to make a ruling.

Copyright © 2010 The Associated Press. All rights reserved.

What is a Post-Nuptial Agreement?

Although my office doesn't draft post-nups, I do get frequently asked questions on this topic.

I found a wonderful article on-line which can address some of these concerns.

A Mid-Marriage Change in the Rules May Make Sense
By Abigail TraffordTuesday, May 27, 2008;

A friend telephones me with the news: She and her husband are back together. Both are academics, and they've had a rocky few years. She came to Washington to pursue a dream of working on health-care policy. He was left in his university town. Her one-year fellowship turned into a five-year sabbatical. A commuter marriage, she said. Abandonment, he said. They were inching toward the edge of the divorce cliff.

Now they are starting over. They've settled their arguments over money. They've divided up some of their assets. They are maintaining two households but agree to try to spend no more than 10 days apart in a month. They are about to celebrate their 40th wedding anniversary. "Deep down we really do love each other," she says. "If you once loved in a passionate way, you can reclaim that."

The news is the tool this 60-something couple used to reclaim their marriage: the post-nuptial agreement.

The post-nup is a contract signed during marriage to manage financial affairs and divide income and assets in the event of death or divorce. Unheard of 25 years ago, this mid-marriage document is gaining a foothold in American matrimonial culture. It was even featured on the television program "Boston Legal." In a recent survey of members of the American Academy of Matrimonial Lawyers, 49 percent said they had seen an increase in post-nuptial agreements in the past five years.

Like its better-known cousin, the prenuptial agreement, the post-nup is responding to two demographic trends: the overall aging of the population and the increasingly common pattern of marriage, divorce and remarriage along with its complicated legacy of children from different relationships.

One purpose of the post-nup is estate planning. "That is a perfectly good reason to do it," says Jeff Atkinson, principal author of "The American Bar Association Guide to Marriage, Divorce & Families" (Random House, 2006). It is a way to direct retirement benefits to children of a previous marriage, or to an adult child with special needs. Or to make sure a beloved summer cabin stays in the family by making it separate from the couple's community property.
For my friends, the post-nup removed money as an issue in their marriage and allowed them to focus on their relationship.

To be sure, many couples fight about money -- one is a spendthrift, the other a saver. He buys a new car without consulting her. She resents the money going to college tuition for his children. And in late-life marriages, what's fair when one spouse earns more money than the other? A post-nup can give couples predictability and a sense of security about their financial future.
But using a post-nup to heal a troubled marriage is controversial.

"There are cases where that's advisable," says Gregg Herman, a family law attorney in Milwaukee. "But I only recommend it where there is an equal desire to stay married and work on the marriage." These are committed couples with "soft" problems of incompatibility, from struggling with retirement issues to coping with boredom. "Counseling and joint therapy are critical to these people," Herman says.

The post-nup is not recommended for couples who are confronting the "hard" problems: physical or mental abuse, infidelity, substance abuse. Nor for people who are really planning to break up and want to use the post-nup as a Trojan horse settlement in any future divorce battle.
Partners are rarely in the same place in a troubled relationship, and one spouse is often more committed to the marriage. The temptation is to use the post-nup as leverage to change behavior. For example, if one has a drinking problem or has had an affair but wants to preserve the marriage, the other makes staying together conditional on signing an agreement that says in effect: If you slip up again, you give up your rights -- you have to pay me a lot of money in support and I get the house, too! This kind of post-nup is really an ultimatum. Money becomes the glue of the marriage. As Herman says: "Money is rarely a good bond for keeping people together. People stay together because they love each other, not because of financial reasons."
States vary in how they view the legality of post-nup agreements. Spouses must fully disclose their income, assets and debts. They should each have legal representation -- and plenty of time to think about the terms so that neither is pressured to sign. And most important, the agreement has to be fair to both. Post-nups are held to a very high standard of fairness in financial matters, lawyers say, perhaps an even higher standard than are pre-nups.
These agreements are not about love. They can help couples deal with financial issues. But by itself, a post-nup cannot save a marriage.