Wife of Dodgers Owner McCourt Says Postnuptial Agreement Isn't Valid

The postnuptial agreement that Frank McCourt says makes the Los Angeles Dodgers his sole property isn’t legally valid, a lawyer for his estranged wife said at the end of a divorce trial over ownership of the team.

Jamie McCourt, 56, was never advised about the rights she had and was giving up under California law with the 2004 marital property agreement signed by the couple after Frank McCourt, 57, bought the Dodgers, Dennis Wasser, an attorney for Jamie McCourt said today in Los Angeles Superior Court.

“It is undisputed there was no full disclosure of all material facts,” Wasser said in his closing argument. This “prevented Jamie McCourt from protecting her interests and seeking separate counsel.”

The lawyers who advised the McCourts on the agreement testified during the trial that they weren’t experts on California family law and they couldn’t have advised Jamie McCourt on what the agreement meant under the state’s laws, Wasser said.

California Superior Court Judge Scott M. Gordon will rule on the validity of the postnuptial after the non-jury trial. The judge, after closing arguments finished today, gave both sides two weeks to submit proposed statements of decision. Gordon said he would then issue a tentative ruling and hold a hearing to consider objections.

Boston to California

The couple, which moved to California from Boston after buying the Major League Baseball team, failed to reach a settlement during a mediation hearing Sept. 24. Their lawyers have said through a court spokesman that they may seek mediation again at a later date.

Frank McCourt claims his wife sought the 2004 agreement because she wanted to shield assets in her name from liabilities he assumed to buy the Dodgers.

Sorrell Trope, an attorney for Frank McCourt, said in his closing statement that the McCourts couldn’t have crafted an agreement that would have protected the assets in Jamie McCourt’s name against her husband’s business creditors under California community property law and at same time preserved her claims to his assets under Massachusetts equitable distribution law in a divorce.

“It would have been a fraud on creditors” to have a division of property that would treat the separate assets differently for creditor protection than for marital dissolution, Trope said. “You can’t have it both ways.”

‘Shocking’ Error

Wasser questioned the credibility of the Boston lawyer for the McCourts, Larry Silverstein, who testified that he explained the postnuptial agreement to them when they signed it on March 31, 2004. Wasser said Silverstein has hardly any recollection of a “shocking” error he made in preparing the agreement.

Silverstein included contradictory exhibits to different copies of the agreement, one that included the Dodgers as Frank McCourt’s separate property and one that excluded the team from his separate assets. Silverstein hasn’t been able to recall in detail how he created the two inconsistent versions and how he fixed them to resolve the inconsistency, Wasser said.

“Does he have a bad memory, your honor, or is he making up the story as he goes along?” Wasser said. “But he remembers explaining the marital property agreement to Jamie McCourt in half an hour. It’s not credible.”

No Contract

Wasser said that, because two versions of the postnuptial agreement were signed that contradict each other on a key point, “there was no meeting of the minds” and the judge should rule that the couple never entered into a contract.

Frank McCourt received an unfair advantage with the postnuptial agreement because he received 85 percent of the couple’s assets, which under California law requires him to prove that his wife was not under “undue influence” when she agreed to it, according to Wasser.

Frank McCourt can’t prove the absence of undue influence because the lawyers who helped the couple were representing only his interests, Wasser said. The same Boston lawyer who advised on the marital agreement represented Frank McCourt, and not Jamie McCourt, in the Dodgers acquisition and his firm has done other work for the team since then, Wasser said.

“Frank had a lawyer and Jamie did not,” Wasser said. “She was lulled into believing she had her own lawyer.”

Trope said Jamie McCourt wasn’t credible when she testified during the trial that she didn’t understand the agreement. Jamie McCourt was a practicing family law attorney before she started to work for her husband’s real estate development company and she has a business degree from the Massachusetts Institute of Technology.

Fired by Husband

Jamie McCourt filed for divorce Oct. 27, six days after her husband fired her as chief executive officer of the baseball team. Frank McCourt accused her of insubordination and of “inappropriate behavior with regard to a direct subordinate.”

Lawyers for Jamie McCourt said last year that her relationship with that employee started after the marriage had fallen apart. The McCourts had been married for 30 years.

The $421 million acquisition of the Dodgers from Fox Entertainment Group Inc. closed on Feb. 13, 2004. The team is now worth about $727 million, according to Forbes. Jamie McCourt testified this month that it was “preposterous” that she knowingly would have given up her rights to the Dodgers in a divorce.

The case is McCourt v. McCourt, BD514309, Los Angeles County Superior Court (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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