Sterling v. Sterling 9: The 4th Day Of Hanukah!

Thearon W. Henderson

The first week is over. What happened today?

Hello, this is TwistNHook from SBN's Cal site, California Golden Blogs. We've been taking a ponder at the impending Sterling trial for the last few weeks. This is part 9 and here are the other first parts:

Part 1:  The Basics

Part 2:  Mental Capacity And The Law

Part 3:  Shelly Sterling's Filings

Part 4:  June 23 Trial Setting Conference

Part 5:  June 30 Trial Setting Conference

Part 6:  Day 1 of the Trial

Part 7:  Day 2 of the Trial

Part 8:  Day 3 of the Trial

OK, so here we are.  The 4th Day of Trial.  This trial was not supposed to last more than 4 days, but it's seemingly endless.  If you remember, at the June 30 pre-trial conference, the Judge set two issues for the trial:

*Did Shelly Sterling properly comply with the terms of the Sterling Family Trust in having Donald removed as a co-trustee, or was Donald defrauded by Shelly and/or two doctors who examined him and found him to be mentally incapacitated?

*After Donald exercised his right to revoke the trust agreement on June 9, did Shelly have the legal right to go ahead with the sale of the Clippers to billionaire former Microsoft CEO Steve Ballmer?

The first issue is very fact intensive, while the second issue is very legally-focused.  So, we've had a week of testimony and we're really only touching on one of the issues.  It's not clear to me how the Judge wants the parties to approach the second topic.  Shelly Sterling's witness list included proposed testimony from a well respected Trust attorney, so we may see them.  Not sure.

But the reality is that the testimony we are seeing here is focused on the first issue.  The overall picture is whether or not Shelly Sterling appropriately removed DTS.  The Judge is not necessarily needing to find any facts about the NBA's ban of DTS or or what DTS thought about the sale before it happened or the terms of the sale itself.  He could, if he so desired.  That stuff is not as relevant, though.  DTS could have been 100% against the deal from day zero and if he is not the Trustee, then he has no control over the matter.  Certainly, anybody who isn't DTS will look at the 2 bil sale and say it is in the best interest of the Trust.

Shelly Sterling

Today, in particular, seemed packed with mostly irrelevant seeming testimony.  There was some key testimony, like this bit that notes DTS was aware of the examinations, which was in dispute:

I want to note that there is nowhere in the Trust that requires the Trustee to be aware he is being examined.  DTS has some amount of mental capacity, but many times the Trustee wholly lacks capacity.  They think its 1952 and you are their long dead mother.  If there was a requirement that they have awareness of the meaning of the examination, it would defeat the purpose of the provision itself.  How can you remove somebody for lack of capacity if the lack of capacity itself precludes you from alerting them to the potential removal?  A modern Buddhist koan up there with "Can one drag and drop a file folder into itself?" and "What is the sound of one hand selfie-ing?"

So, I think the thread of questioning about what DTS did and did not know is not wholly relevant here.  It is more relevant than the extensive discussion about the NBA ban and the sale discussions that was most of Shelly's testimony.

I think that Shelly Sterling's attorneys want to cover all bases.  They want to paint DTS as untrustworthy.  They want to show all the hard work that has gone into the sale.  They want to show that they got the best deal they could.  They don't want to leave anything out.  I understand the thought process, but I don't know if there is much reason to talk about the NBA stuff in more detail.  In one sense, it doesn't matter.

She did have some testimony about what might happen if the Trust is revoked:

OK, so that's something.  However, the second issue, like I said, is technical in nature.  The question is not what happens to this Trust in specific when it gets revoked, it is what happens to Trusts in general.  Whether this Trust has 0 million in liabilities or $500 million in liabilities does not matter.  What would matter is whether the revocation of a Trust leads to the "immediate cessation" of all Trust activities or whether the Trustee still has the power and authority to finalize Trust matters (including the completion of a legally binding sales contract)?

So, Shelly spoke a lot about the NBA issues and touched a bit more on the doctors situation coupled with the revocation.  If the two issues above are the only issues the Judge cares about, he might not find there to be too much of interest so far.

DTS' attorneys are trying to create some sort of weird conspiracy theory.  They wanted to call Shelly's attorney as a witness.

They went into that more on cross, but first they had to show up.

They were apparently late.  They talked about the thought process behind trying to remove DTS as Trustee.

They are trying to paint it as some sort of nefarious plot, but I'm not sure if people are buying it.  With DTS' erratic testimony (both on TV and in the Court), it seems appropriate to be concerned about his mental health and fitness as a Trustee.  Then, they went even deeper into the conspiracy theory of it.

Sounds like it got intense.

But Shelly fought back.

Can I say how unbelievably normal it is for lawyers to talk to doctors.  I've been involved with these medical evaluations before and I've spoken directly with doctors before.  It's not part of some weird conspiracy theory.

Then, they talked more about the NBA inside baseball (basketball?).

Not sure how relevant any of that is.  It sounds as if Shelly Sterling was the only witness to testify today.  She has a lot of intrigue to provide to the world and it is all very interesting in a sense.  But if we are focused solely on the two issues the Judge outlined, then it was a seemingly wasted day.

That was the extent of the testimony that Shelly Sterling wanted to put on.  She had two doctors, Donald, and herself testify.  We learned a lot about the behind the scenes stuff of that time period lo those many one month ago.  We learned a very little about the medical evaluations.  The Judge says we have 1.5 more days of trial.

Then, closing will be a week after that.

The delay is partially (mostly?) due to one of DTS' attorneys.

These people have so many attorneys, I'm sure that he could have found other attorneys out there to take Blecher's place.  This may be a bad faith delay tactic or a good faith vacation.  It does not matter, really.  There was concern about the July 15 deadline, but it never seemed that relevant to me.  Additionally, the contract apparently allows for postponements on these sort of things

It will be nice to get a break from writing one of these posts every night.  We're in the home stretch, guys!  Two Mondays from now, we'll see what DTS' team has up its sleeve.  How will they prove that Shelly's secret conspiracy plan to reveal DTS' private health information ruined everything?  We'll find out then!  What are your thoughts?  Leave them in the comments and GO BEARS!

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