San Diego Divorce Report of Contract Catastrophe

September 27, 2010
By Thomas M. Huguenor on September 27, 2010 4:59 AM |

Justia-photo-63 gibberish.jpgA San Diego news article described how the McCourt pre marital contract is more convoluted than ever. The ongoing bifurcated trial (a trial on an issue separated out from the rest of the divorce case) as to the ownership of the LA Dodgers, resulted in the attorney who drafted the contract testifying that he changed the contract after the parties signed the contract. The LA Times also published an article authored by Bill Shaikin and Carla Hall on this topic that was helpful to this blog.

One of your first days in law school, learning about California contractual law, you learn that a "Contract" indicates a "meeting of the minds" resulting in an agreement between two (or more) parties. The contract may be verbal or written. Written is preferred so that the terms of the agreement are specified and ambiguities are eliminated. Many years after law school I am a Jolla divorce attorney who prepares and reads marital contracts on a regular basis.

In a California divorce, property must be identified, characterized, valued and disposed by division between the parties or by a sale to a third person. In the California divorce case of Jamie and Frank McCourt (owners of the LA Dodgers baseball team, six written contracts have been presented to the court to dispose of the ownership of the baseball team. These contracts, all written, signed and notarized, are post marital agreements (also known as "ante nuptial" or "post nuptial") The purpose of a post marital agreement is to make the court rulings as to property (and other issues) very quick and simple, not to mention low cost. However, the problem here is that three contracts provide that the team is Frank's separate property and three contracts provide that the team is community property. How could this have happened?

In an earlier blog on this topic (here) I wrote that the trial was not going well for Frank. This is just my opinion as a California Certified Family Law Specialist. This was after just the first day of the trial. My opinion is now stronger. There are two contracts, signed by both parties. One supports the conclusion that the team is community property. The one that makes the property Frank's separate property was changed by the drafting attorney, after the contract was signed (approved) without notice to either party that the change would be made. No "meeting of the minds" = no contract. I don't see how this will go well for Frank.

The lawyer who drafted the agreement, Mr. Silverstein, was in court this week. He testified as to how the contractual ambiguity occurred. Reportedly he explained that after the contract was signed by the parties, he changed the document in a way so that the characterization of the team was clearly Frank’s separate property and not community property. Reportedly, he testified that after he made the change to the contract, he did not notify the parties. Jamie’s attorney asked the lawyer if this behavior was ethical. Why didn’t he notify the parties of his intent to change the contract? Mr. Silverstein explained that he wasn’t doing anything sinister; he was simply correcting an error. Jamie’s attorney asked him did he get to unilaterally decide which of the two contracts was in error. Silverstein replied “no”.

The San Diego divorce attorneys at the Law Office of Thomas M. Huguenor prepare marital agreements and resolve divorce disputes.