A high-profile divorce trial that could decide the ownership of the Los Angeles Dodgers is expected to highlight attorneys on both coasts who once advised the couple, Frank and Jamie McCourt, regarding a contentious marital property agreement.
Jamie McCourt claims that the couple’s trusts and estates attorney, Lawrence Silverstein, a partner in the Boston office of Bingham McCutchen, drafted two conflicting versions of the agreement when the couple signed it in 2004, according to her trial brief filed on Aug. 23. Silverstein also had a conflict of interest because he represented both parties, she alleges — meaning that the document, which gives Frank McCourt ownership of the Dodgers, is invalid.
Frank McCourt, in his own trial brief filed the same day, defends the validity of the agreement. He argues that his wife, a former family law attorney, pushed for the agreement so that creditors of her husband’s businesses would not go after their multiple homes, including a $50 million place in Cape Cod and two Malibu beach houses purchased for about $47 million.
Los Angeles County, Calif., Superior Court Judge Scott Gordon has ordered Frank McCourt to pay his wife more than $225,000 in temporary monthly spousal support. A bench trial on the validity of the agreement begins on Monday.
“It’s unusual to have a dispute involving as much money as this does,” said Stephen Susman, a partner at Susman Godfrey who is lead counsel for Frank McCourt. There will be four other attorneys from his Houston-based firm in court, he said, along with Frank McCourt’s divorce lawyer, Sorrell Trope, of Los Angeles-based Trope and Trope. “This is a trial over an agreement. It’s really a breach of contract case, which is why I’m in the case. It’s about a breach of contract.”
Susman said the trial is expected to last for 11 days spread over a month’s time.
Jamie McCourt’s lead lawyer, David Boies, founder and chairman of Boies, Schiller & Flexner, did not return a call for comment. Her divorce lawyer is Dennis Wasser of Wasser, Cooperman & Carter in Los Angeles.
THE MCCOURT MARRIAGE
Frank and Jamie McCourt got married in 1979. Jamie McCourt, a graduate of the University of Maryland School of Law, practiced law in Boston while raising the couple’s four boys. Her trial brief describes her law practice as a “general practice” involving “uncontested and non-complex divorces,” while her husband’s brief says that she specialized in family law for many years.
Frank’s family business, The McCourt Co., owned a 24-acre parcel of land in the Boston area that was developed into parking lots. It was during this time that Silverstein began representing the couple in business and personal legal issues.
In 2004, the McCourts moved to California following their purchase of the Dodgers.
When the McCourts asked whether they needed to make changes to their assets before moving to California, Silverstein consulted with Reynolds Cafferata, a former partner at Bingham’s Los Angeles office, according to Jamie McCourt’s trial brief. The Bingham team advised the couple to draft a marital property agreement, which they did in 2004.
Jamie McCourt claims she was surprised when Leah Bishop, a partner in the Los Angeles office of Loeb & Loeb who later was retained to handle the couple’s estate matters, told her for the first time in 2008 that she had given up her claim to the Dodgers in the agreement. During a meeting with Bishop, Jamie McCourt said that her husband told Bishop, “That’s not what it was supposed to be,” and Jamie McCourt replied, “If I’m going to be your life partner, I’m going to be your business partner.”
After Bishop changed the agreement to make the Dodgers community property, Frank McCourt refused to sign the new version, according to Jamie McCourt.
“Jamie and Frank always told each other — and Jamie always believed — that everything they had belonged to both of them, including after they moved to California,” she claims in her trial brief. “Frank now seeks to tear that apart by attempting to enforce his version of the MPA, which should not be allowed by a court of equity.”
Bishop did not return a call for comment, but in a Nov. 2 declaration seconded Jamie McCourt’s claims. “I did not understand until later that Jamie and Frank did not comprehend the true import or significance of the Marital Property Agreement,” she said.
When she told them during the 2008 meeting that Jamie McCourt had given up her claim for the Dodgers, “Frank expressed surprise and he told me ‘that’s not what it was supposed to be.’ Frank was very matter of fact when he said this. It clearly appeared to me that he was hearing what I told them for the first time.”
She added that Frank McCourt reiterated that all their marital assets should be community property. Since August 2009, she said, she has represented only Jamie McCourt.
Jamie McCourt has introduced evidence that Silverstein altered the agreement after discovering that different copies conflicted with one another.
Frank McCourt and Jamie McCourt agree that there were six copies of the document, according to their briefs. Jamie McCourt signed all six in Massachusetts, while Frank McCourt signed three in Massachusetts and three in California.
According to Jamie McCourt, in three of the six copies, described as the “California version,” an Exhibit A excluded the Dodgers from her husband’s separate property. Silverstein, without Jamie McCourt’s knowledge, later altered those copies, her brief says.
Her brief also questions Silverstein’s expertise, noting that he “never practiced family law” and “did not understand either the relevant Massachusetts or California law in connection with that agreement.” She should have been told to retain independent legal counsel, it says. In fact, Silverstein deleted language in the original agreement that would have advised her to retain separate counsel, according to her brief. Instead, Bingham represented both McCourts relative to the agreement — a clear conflict of interest, she alleges.
“The Bingham firm ethically was required to disclose to Jamie in detail and in writing the monumental inherent conflict of interest arising from its purported joint representation in connection with the preparation of the agreement,” she wrote in her brief. “It failed to do so.”
In his own trial brief, Frank McCourt says that his wife was the “driving force” behind drafting the agreement because she wanted to protect the couple’s homes, especially because the Dodgers at the time of the purchase had annual losses of about $50 million.
“She did so knowing full well that such an agreement would eliminate any right she might have to Frank’s business assets upon divorce,” his brief says. He adds that attorneys at Bingham told her about California’s community property laws when they signed the agreement. They also “repeatedly advised” Jamie McCourt to retain separate counsel, to which she responded: “We don’t need any more lawyers.”
He disputes the details of the conversation that took place with Bishop, claiming that his wife announced for the first time she wanted to change the division of assets because “if we’re going to be life partners, we’re going to be business partners.” In reality, she had just begun to realize the celebrity and financial cachet of being tied to the Dodgers; in the meantime, the housing market had plummeted, he said in his brief.
As for the differing copies of the agreement, Frank McCourt insists that he, his wife and Silverstein did not review the California version because they assumed it was the same as the Massachusetts version. He said that the exclusion of the Dodgers from his personal property was due to an error Silverstein had made but quickly corrected.
A call to Silverstein was not returned. In an Oct. 27 declaration, Silverstein said he had advised the couple to be represented by separate counsel but they told him they didn’t want to. Neither showed “signs of duress, pressure or undue influence” when signing the agreement in 2004, he said.
Bingham issued the following written statement:
“Bingham clearly addressed the issue of independent counsel. The marital property agreement in question stated this both in its text and put in bold letters at the top of the first page: ‘This marital property agreement affects important property rights. You should seek independent legal counsel before signing this agreement.’ Jamie McCourt, who is herself a lawyer and practiced family law for many years, declined to do so. Each time Bingham suggested to the McCourts that they have separate counsel, her response was that they did not need any more lawyers. Professor Charles Wolfram, the foremost ethics expert in the United States, has opined and will testify that Bingham fully discharged its ethical responsibilities with the respect to joint representation. We look forward to the court reviewing all the facts and reaching its decision after a fair hearing.”
Cafferata, now a partner at Los Angeles-based Rodriguez, Horii, Choi & Cafferata, did not return calls for comment.
Amanda Bronstad can be contacted at firstname.lastname@example.org.