Sterling v. Sterling Part 2: What Does Shelly Sterling Have To Prove To Win?

Kirby Lee-USA TODAY Sports

Let's continue our series regarding the Sterlings and their impending probate trial.

Hello, this is TwistNHook from SBN's Cal site, California Golden Blogs, back again for another potentially thrilling installment of the Sterling v. Sterling Series.  Last time out, we looked at the basics of Trust law, including what exactly a Trust is what Shelly Sterling wants here.  In this post, I want to get deeper into the weeds on what exactly she needs to do to prove her case and how she will go about doing it.

Before we get into the weeds, here is the TL; DR version of this post: Shelly Sterling has the burden of proof and has to prove that Donald Sterling has mental defects that preclude his ability to properly manage his financial affairs.

I will note that there are other issues in this matter, such as whether it is in the Trust's best interest to sell the Clippers to Steve Ballmer.  However, I do not think the Court will get involved in those issues.  The key issue here is whether Shelly Sterling can unilaterally sell the team without Donald Sterling's OK.

Incapacity

In the previous post, we looked at the specific language in the Trust defining incapacity.  If Shelly Sterling wants to prove that Donald Sterling is mentally incapable of acting as Trustee and should be removed as Trustee, then this is the language that guides her actions.  The language is as follows and can be found in Section 10.24 of the Sterling Trust at page 89 of this PDF:

"Incapacity" and derivations thereof mean incapable of managing an individual's affairs under the criteria set forth in California Probate Code 810 et seq. An individual shall be deemed to be incapacitated if any of the following conditions exist:

(a) the individual's regular attending physician (provided such physician is not related by blood or marriage to any Trustee or beneficiary) examines the individual and certifies in writing that the individual is incapacitated,

(b) two licensed physicians who, as a regular part of their practice are called upon to determine the capacity of others, and neither of whom is related by blood or marriage to any Trustee or beneficiary, examine the individual and certify in writing that the individual is incapacitated or

(c) an order of the Court having jurisdiction over the Trust as to which the individual is serving as a Trustee or as to which the individual is a beneficiary, as the case may be, finds that the individual is incapacitated."

An ESPN story has easy to C+P pull quotes with doctor's evaluation language here.  The language in those doctor's evaluations mirrors this kind of language found in Section 10.24 of the Trust:

One doctor, James E. Spar, who is affiliated with the division of geriatric psychiatry at UCLA, said he believes "Mr. Sterling is at risk of making potentially serious errors of judgment, impulse control and recall in the management of his finances and his trust.''

"In my opinion he is substantially unable to manage his finances and resist fraud and undue influence, and is no longer competent to act as trustee of his trust,'' Spar concluded.

That language relates to (a) and (b) above. Shelly is stating that Donald cannot manage his own financial affairs and is susceptible to undue influence from others. She is basing this off of Doctor's evaluations. Donald Sterling is contesting this. The Judge will thus make a ruling based off of 810 et seq (really Probate Code 811(a)(1)).

Probate Code 810

So, let's get into the weeds on this. First up, Cal Probate Code 810(a), which puts the burden of proof on Shelly to prove her case here. In fact, there is a presumption that Donald has capacity and is fine. She has to rebut that presumption with specific evidence.

(a) For purposes of this part, there shall exist a rebuttable presumption affecting the burden of proof that all persons have the capacity to make decisions and to be responsible for their acts or decisions.

Then, we have Cal Probate Code 810(b) and (c) which note that merely having a mental disorder does not mean you cannot act as Trustee. Shelly will have to show defects in certain mental functioning instead of merely stating that he has a mental disorder.

(b) A person who has a mental or physical disorder may still be capable of contracting, conveying, marrying, making medical decisions, executing wills or trusts, and performing other actions.

(c) A judicial determination that a person is totally without understanding, or is of unsound mind, or suffers from one or more mental deficits so substantial that, under the circumstances, the person should be deemed to lack the legal capacity to perform a specific act, should be based on evidence of a deficit in one or more of the person's mental functions rather than on a diagnosis of a person's mental or physical disorder.

Doctor's Evaluations

The ESPN article does note some evidence of deficits in mental functioning:

A third doctor, Meril S. Platzer, said during her examination Sterling was unable to spell the word "world'' backwards in tests with doctors. He was unaware of the season, couldn't recall two objects after three minutes and had difficulty initially drawing a clock.


"The score is below normal for his age and advanced education,'' Platzer said.

The clock test is an extremely common test for people with potential mental deficits. "Please draw 2:15" etc etc.  It appears that three separate doctors provided medical evaluations of Donald Sterling.  Dr. James Spar's letter starts on page 104 of the PDF.  Dr. Meril Platzer's evaluation is on page 102 of the PDF.  Dr. Stephen Read's letter starts on page 122 of the PDF.

These three letters are certifications of their comprehensive evaluations of Donald Sterling.  The results of their evaluations, coupled with some readings from various brain scans of Donald Sterling, point to "mild cognitive impairment."  It sounds as if Donald Sterling is in the early stages of Alzheimer's Disease, but still retains a rather large amount of his faculties.  You could probably talk to Donald Sterling for hours and potentially never realize he has any problems.

However, given the complexity of the Trust and the current, public issues surrounding it, the doctor's believe that even though the impairment is only "mild," it is sufficient to preclude him from properly managing his financial affairs and resisting undue influence.  Remember that this is not some Trust with a residence and $200,000.00 in cash in it.  This Trust is worth billions and has extremely complex assets in it (such as a sports team).  The largest estate plan I've ever worked on was $30 million and it was very complex.  The mind boggles at how complex this Trust must be.

So, even if the cognitive impairment is quote unquote mild, you need a Trustee who is 100% to handle the complexity of this Trust.  That aspect does not go uncommented on by the doctors.  Even if Donald Sterling could act appropriately as the Trustee of some other Trust, that is not the question here.  The question is whether Donald Sterling can act as the Trustee of the Sterling Trust and to the doctor's that is a clear "No."

However, Donald Sterling is contesting these evaluations and so the Court has set a trial.  At that trial, it will be a battle of the experts.  Both Shelly Sterling and Donald Sterling will provide doctors to testify about Donald Sterling's mental state.  Shelly Sterling's doctors will say that Donald doesn't have the mental capacity to act as Trustee.  Donald's doctors will say the exact opposite.  His lawyers are setting the stage for that (from the ESPN article):

Samini disputed that Donald Sterling was mentally incapacitated and said he was confident the court would find that he was wrongfully removed as a trustee when it reviewed the findings.


"He's doing just fine," Samini said of Sterling. "His mental capacity is normal for a person of his age (80)."

Evidence Code 730

To cut through this, the Judge may appoint a medical expert pursuant to California Evidence Code 730, which states:

When it appears to the court, at any time before or during the trial of an action, that expert evidence is or may be required by the court or by any party to the action, the court on its own motion or on motion of any party may appoint one or more experts to investigate, to render a report as may be ordered by the court, and to testify as an expert at the trial of the action relative to the fact or matter as to which the expert evidence is or may be required.

So, the Court may try to find a neutral doctor (or doctors) who can provide their own evaluations.  The 730 Expert will do their evaluation, provide a report to the Court, and provide testimony at trial.  The expedited timeline here is going to be difficult to get in all of that (plus probably a deposition of that medical expert) prior to the Trial.  We'll see.

Probate Code 811

So, let's get even further into the weeds on this one.  California Probate Code 811 provides a fairly exhaustive list in four main categories on the specific mental deficits that the Court wants testimony about.  The first category is the ability to be alert and pay attention:

(1) Alertness and attention, including, but not limited to, the following:
(A) Level of arousal or consciousness.
(B) Orientation to time, place, person, and situation.
(C) Ability to attend and concentrate.

You'll note above that the ESPN story said he did not know what season it was. That relates to Cal Probate Code 811(1)(B), which is orientation to time and situation. I've often asked elderly clients what day it is or who the President is. If they say "It's 1952 and President Eisenhower will take us to the moon any day now!" that is certainly a sign.

The second section of Cal Probate Code 811 relates to information recall:

(2) Information processing, including, but not limited to, the following:
(A) Short- and long-term memory, including immediate recall.
(B) Ability to understand or communicate with others, either verbally or otherwise.
(C) Recognition of familiar objects and familiar persons.
(D) Ability to understand and appreciate quantities.
(E) Ability to reason using abstract concepts.
(F) Ability to plan, organize, and carry out actions in one's own rational self-interest.
(G) Ability to reason logically.

You'll note in the ESPN article, one of the doctors said that he could not remember two objects after three minutes. I've had some clients ask me my name over and over and over again. Obviously (2)(F) is important, because if you cannot carry out actions in your own rational self-interest, you could be susceptible to undue influence of others. I've had cases where over a million dollars worth of assets are transferred out of a person's estate because of the undue influence of another family member, it's extremely sad.

The third section relates to disorganized thought processes:

(3) Thought processes. Deficits in these functions may be demonstrated by the presence of the following:
(A) Severely disorganized thinking.
(B) Hallucinations.
(C) Delusions.
(D) Uncontrollable, repetitive, or intrusive thoughts.

Donald seems delusional to me, but that may not be due to mental health deficits. He does not seem to understand what has happened to him, but that may just be him as a person and what happens to people after they live as a billionaire elite 1%er for decades.

The last section of deficits relates to mood:

(4) Ability to modulate mood and affect. Deficits in this ability may be demonstrated by the presence of a pervasive and persistent or recurrent state of euphoria, anger, anxiety, fear, panic, depression, hopelessness or despair, helplessness, apathy or indifference, that is inappropriate in degree to the individual's circumstances.

Tough to get a bead on this one. Frankly, he seems all over the map. One day he is suing. The next he isn't. The next he is. Unclear whether this relates to his mood, though.

So, those are the four areas of evidence that the parties will provide to the Judge:
1. Alertness and attention
2. Information processing
3. Thought processes
4. Ability to module mood

Finally, Cal Probate 811(b) notes that there must be a connection between the deficits and "substantial impairment" to understand the consequences of his actions.

(b) A deficit in the mental functions listed above may be considered only if the deficit, by itself or in combination with one or more other mental function deficits, significantly impairs the person's ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.

Conclusion

As noted before, Shelly will want doctors to testify that will say Donald has specific deficits in his mental processing (as outlined in these four areas) that substantially preclude him from understanding the consequences of his actions. This is more than just "He said something racist, but he does not get it," because that could relate to his own personal prejudice and lack of self-awareness.

Donald will bring in doctors to battle Shelly's doctors and say that he is great and has no mental deficits at all.  The Court may just ignore all of that and appoint their own doctor(s) to do evaluation(s) of Donald Sterling.  The doctors have to provide expert testimony about the mental defects and then tie those to specific actions as Trustee that would be substantially impaired by the deficits.  Merely proving that Donald Sterling has Alzheimer's Disease is insufficient, they have to show that it impairs his ability to act as Trustee under the Sterling Family Trust.

In the next post, I want to take a look at the 157 page PDF with the filed documents in this matter.  Don't worry, you won't have to read all 157 pages.  I'll do that and break it down for you exactly what was filed, including what Shelly Sterling wants in specific.  I know that I can find the documents at the LA County Court website, but I do not want to pay for it, so perhaps some good Samaritan will.  Or, failing that, perhaps ESPN or TMZ will put the documents out there for the world to see.  If anybody knows of a link to the responsive documents, feel free to send it along.

Plus, feel free to provide all comments, questions, and thoughts in the comments section.  Thanks and GO BEARS!

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