Wednesday, December 8, 2010

Frank McCourt is not dead yet.

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I'm tempted to drop a Princess Bride quote, and say that Frank is only mostly dead, but even that might too strong. While fans are surely weary of this entire saga--and, really, we're less beating a dead horse than we are a jar of glue on most of this stuff--Frank perseveres. Barring a meeting of the minds on a settlement that could finally put this issue to bed, it looks like we're heading back to court.

At issue will be the characterization of the Los Angeles Dodgers and related entities as either 'community' or 'separate' property. The MPA failed to effectively transmute the Dodgers into Frank's separate property, and, for all intents and purposes, the MPA is in the rear-view mirror. But that doesn't mean Frank's out of options.

Characterization starts with presumptions. In California, property acquired during the marriage is presumed to be community property. This means that a spouse claiming that certain property is her own separate property bears the burden of showing that the property in question should be hers. In baseball terms, think of it this way: a tie goes to the spouse asserting community property status.

But...certain actions can shift the presumption. "This rule can be altered by agreement of the spouses. For example, spouses can indicate their intent with respect to the character of the property initially by specifying the form of title in which it is held, or spouses can later transmute the character of the property as between each other." In re Marriage of Haines, 33 Cal. App. 4th 277, 291 (1995). Indeed, California Evidence Code Section 662 offers the common law presumption: "The owner of legal title to property is presumed to be the owner of full beneficial title. This presumption may only be rebutted by clear and convincing proof."


Sorry about that. I figured it was the best way. Let's move on.


Here's where it gets sticky: case law is mixed about which preference wins out between the family-law-specific community property presumption and the general titling presumption. One of the many reasons the MPA was tried before this alternate theory is that transmutations--affirmative steps taken to transform property from community to separate and vice versa--are stronger than simply titling an asset in one spouse's name. But the MPA is, of course, no more.


The family-law-specific presumption of undue influence has been found to trump the more general titling provision. Judge Gordon found no undue influence as far as the MPA is concerned, but limited his decision to something less than the entire scope of the marriage. I do not believe Jamie's camp would be barred from arguing undue influence as it concerns titling the Dodgers in Frank's name. 


Boiled down, it appears likely that Frank will argue that, by titling the Dodgers in his name alone, the McCourts clearly demonstrated an intent to make the Dodgers his separate property. Jamie will marshal several counter-arguments, most certainly including a lack of intent to separate the property beyond creditor-protection purposes, the use of the property to fund the entire marital lifestyle, and issues like undue influence. 


As you can appreciate, because of the conflicting presumptions, the chain of how this unfolds is very much an "if this, that; if that, this" sort of situation. Each step is dependent on resolution of a technical issue, and we're a ways off from figuring out exactly how this is going to look. For today, the takeaway is that there are very real issues left to be addressed before we can get beyond the divorce and on with the organization's life.
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12 comments:

  1. You are missing half of the law. Property acquired during marriage from seperate property funds is still seperate property. Jamie still gets a part of the increase in value of the seperate property under Pereira or Van Kamp, more under Van Kamp. Read the Judge's decision, he put some jewels in there regarding how Jamie can win a substantial portion of the value under Van Kamp.

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  2. You're absolutely right--there's much more to get to. I try to strike a balance between being appropriately thorough but readably concise. The plan is to get through pieces and then put them together.

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  3. As coroner, I must aver,
    I thoroughly examined her (him),
    and she's (he's) not only merely dead,
    she's (he's) really most sincerely dead.

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  4. Didn't Frank draw something like $5 million per year in salary? The "fair value" of his salary can't be much more than that. Under Van Camp the community's interest would be minimal.

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  5. You're absolutely right--there's much more to get to. I try to strike a balance between being appropriately thorough but readably concise.
    Personal Injury Lawyer

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  6. http://www.latimes.com/sports/baseball/mlb/dodgers/la-sp-mccourt-20110108,0,7883973.story

    "However, Selig could reject any television contract or partnership agreement. After court documents in the divorce trial revealed how the McCourts diverted millions in team revenue each year for personal use, Selig could site grounds that such money should be used to improve the team rather than to pay off an ex-wife, one official said.

    In addition, the officials said, Selig could refuse McCourt the short-term financing available to owners from MLB."

    ... if anyone is minding the shop.

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