Charities make claims against Davidson, Bishop estates
Lou Ann Anderson
January 24, 2010
www.EstateofDenial.com

In covering probate disputes here in Texas and elsewhere, a couple of interesting cases involving charities making claims against estates have recently been in the news.  These aren’t cases like with the Astor, Helmsley or Glassell estates in which charitable organizations were undisputedly included in estate plans.  These appear to be claims not specifically authorized by probate documents, but nonetheless launched against estates.

Here’s what The Washington Post is reporting regarding the estate of Bill Davidson, former owner of the Detroit Pistons:

A New York-based charity that promotes Hebrew language charter schools is suing the estate of the late Detroit Pistons owner Bill Davidson, saying it owes $4.8 million of $5 million Davidson pledged to the charity.

In a lawsuit filed in August in Oakland County (Mich.) Probate Court, Areivim Philanthropic Group said Davidson pledged to give it $5 million when he helped start the charity in 2006. The group claims it only received $200,000 from Davidson, and that his estate is responsible for paying the remaining $4.8 million.

A lawyer for the estate rejected the claim in an October filing saying:

“There was no enforceable promise that William Davidson would provide for payment of any potential donation by his estate should he die before making a donation,” attorney Samuel Damren wrote in a court filing dated Friday. Damren represents the estate’s agents, Jonathan S. Aaron and Eric L. Garber.

Davidson, died at age 86 on March 13, 2009.  He was inducted into the Basketball Hall of Fame in 2008.  Besides being the chairman of Guardian Industries Corp., a glassmaker, he also owned the WNBA’s Detroit Shock and Palace Sports & Entertainment which includes The Palace of Auburn Hills and DTE Energy Music Theatre.

At the Post article’s publication time, no hearings had been set for review of the matter.

In another case, the California Supreme Court recently rejected Newport Beach Chabad Center, a Jewish community center and religious organization’s, appeal against the estate of entertainer and former “Rat Pack” member Joey Bishop.

Brianna Bailey of the Daily Pilot has followed this story and reports:

The center filed several lawsuits and claims against Bishop’s estate, alleging that the entertainer’s advisors and live-in caretaker blocked his final wishes to have part of his estate go toward setting up a charity for special-needs children in Orange County. A longtime resident of Newport Beach, Bishop died Oct. 17, 2007, at his Lido Isle home at the age of 89.

The court declined to hear the case based on technical reasons, and did not address the merits of Chabad’s case, attorney Bob Weinberg, who represents Chabad, said Friday.

“Mr. Bishop was the victim of elder abuse. The lawyers and accountant and the housekeeper got Mr. Bishop’s money despite Mr. Bishop’s repeated statements that he wished the bulk of his estate to go to charities run by Chabad,” Weinberg said. “The court did not ever address nor reject the truth of these contentions.”

This is not the first dispute connected with Bishop’s estate.  Joey Bishop had a companion, Nora Garibotti, who lived with the entertainer during his final eight years.  Two years before his death, The Orange County Register reports that Bishop had decided to leave half of his $7 million estate to Garibotti, 40 percent to Ed Gregory Hookstratten, his former attorney and longtime friend who represented Elvis Presley as well as numerous sports figures, and 10 percent to Myles Hymes, Bishop’s financial planner and business manager.

In 2009, The Register described the initial dispute as:

Garibotti began the litigation by filing suit last May 8, alleging legal malpractice by former Bishop lawyers Hookstratten and James E. McCormick. The attorneys did not “handle, draft and administer” Bishop’s trust in accordance with his intentions, according to her lawsuit.

Garibotti maintains that under the Bishop trust, she was entitled to cash and the multimillion-dollar Newport Beach home where she lived with the comic from 1999 - when Bishop’s wife died - until his death in October 2007 at age 89.

A judge ruled that Hookstratten could not file a countersuit against Garibotti on allegations of financial elder abuse.  The ruling was apparently based on lateness of the filing.  Hookstratten attorney Christopher D. Carico unsuccessfully argued timing of the countersuit saying that he was “not certain that Hookstratten had a viable cause of action for financial elder abuse” until an amendment to the state Welfare and Institutions Code that clarified the financial elder abuse definition was approved by Gov. Arnold Schwarzenegger.

The Register described Hookstratten’s contentions as:

According to the proposed countersuit, Garibotti in July 2007 directed Bishop to write two notes leaving his residence and $60,000 in cash to her at a time when his health was failing and he had severe dementia.

“These handwritten notes were the direct result of undue influence exercised by the caregiver, Garibotti, on the severely demented and incompetent Joey and therefore constitute financial elder abuse,” Carico’s court papers allege.

Garibotti, Hookstratten and Hymes eventually settled their dispute:

Nora Garibotti, Bishop’s former golfing companion, who lived with him in the later years of his life, stands to inherit 70% of Bishop’s residual estate, according to the terms of the settlement, agreed upon Monday in Los Angeles County probate court. The remaining 30% will be divided between Bishop’s agent, Ed “Hook” Hookstratten, who once represented Elvis Presley, and Bishop’s financial advisor, Myles Hymes, according to court documents.

This was reportedly done the week after the Chabad Center lawsuit was filed:

A lawsuit Newport Beach Chabad Center filed last week in Orange County Superior Court claims that Bishop’s attorney, agent, financial advisor and live-in caretaker blocked Bishop’s final wishes to have part of his estate go toward setting up a charity for special-needs children in Orange County.

Chabad’s suit names Hookstratten, Orange County attorney James “Kimo” McCormick, Hymes and Garibotti.

Newport Beach Chabad is seeking damages in excess of $10 million for legal malpractice and breach of fiduciary duty, among other claims, according to court documents.

The lawsuit claims Bishop intended to leave part of his money to Chabad to benefit the charity’s programs for special-needs children, but Hookstratten, Garibotti, Hymes and McCormick took advantage of the Rat Packer’s deteriorating mental faculties to usurp his estate.

Although the Supreme Court’s recent ruling is a setback for Chabad, attorney Bob Weinberg has said that Chabad is still weighing its legal options, but the fight is far from over.  “Chabad is going to continue to fight for the vindication of Joey Bishop’s wishes,” he said.

Both the Davidson and the Bishop cases show what can happen with estates.  The average person with modest assets should take three important lessons from these stories.  First, one need not be worth millions of dollars for similar actions to occur.  Secondly, the best estate planning documents in the world are no inoculation from asset diversion ploys.  They may ultimately stop it from happening, but defending legal attacks is an emotionally and financially exhaustive effort.  And third, these acts happen quietly.  Perpetrators certainly don’t want the exposure.  The media will latch on to high-profile or high-dollar stories, but estates of modest means  - even if they represent a person’s lifelong accumulation of assets - just aren’t considered “big news.”

More people understanding the looming threat posed by abuse of probate venues and instruments (wills, trusts, guardianships and powers of attorney) will greatly aid efforts to restore meaningful property rights.  Visit EstateofDenial.com to learn more about this issue.

Lou Ann Anderson is an advocate working to create awareness regarding the Texas probate system and its surrounding culture.  She is the Online Producer at www.EstateofDenial.com and a Policy Advisor with Americans for Prosperity – Texas Foundation.  Lou Ann may be contacted at info@EstateofDenial.com.