A California judge has ruled that the girlfriend of former Clippers owner Donald Sterling must pay back the $2.6 million given to her in gifts from Sterling in a surprising ruling that defines these gifts as community property even though the couple was separated and moving toward divorce. Judge Richard Fruin Jr. awarded Shelly Sterling most of the nearly $3 million she had sought. I have previously discussed how the case highlights the often troubling line of what constitutes prostitution and what constitutes a gifts. [Notably both Sterling and Stiviano deny having a sexual relationship] If Sterling had given V. Stiviano money directly for sex, it would be illegal. Instead, he gave her millions in gifts as part of a relationship. Regardless of where to draw that particular line, Fruin said that the line on community property is drawn to include the house, luxury cars and expensive gifts given to Stiviano as she served as the companion of the octogenarian Sterling.
The decision is obviously sweet justice for Shelly Sterling, particularly after tape conversations showing Stiviano laying the groundwork for claiming that these are gifts, including one conversation played in court where she tells Sterling “The truth is that everything that I have, you’ve given me from your heart without me begging or asking or throwing myself all over you.” Very creepy. Stiviano also claimed that, while Sterling paid for most of the luxury duplex, she contributed an unknown amount of small bills that she kept in a dresser drawer.
In just over two years, Sterling gave her a Ferrari, a Bentley and a Range Rover, and paid the lion’s share of a $1.8 million duplex. Anyone looking at (or listening to) Sterling might conclude that Stiviano still got the worst end of the deal. However, I am still unclear as how this line is drawn. Clearly, both Sterlings gave gifts to various people during this period. However, the size of the gifts appear the determinative factor.
In the meantime, Stiviano has insisted that their relationship was not romantic and that Sterling was more of a “father figure.” Sterling also insisted that they never had sex.
Mrs. Sterling initially sought about $3.6 million but secured $2.8 million, based on evidence at trial and Stiviano’s own admissions.
Clearly, given the $2 billion sale of the Clippers, this was not about the money for Mrs. Sterling.
No dividend. And, I say “most” unique” just to bust your balls. I’m like Joe Frazier, when I see a cut I just keep comin’ @ it!
Nick – I see myself more like Marcino.
http://www.courts.ca.gov/1039.htm
More detail on what is community property and how the courts in Calif treat it during a divorce.
Paul C
You understand wrongly. 🙂
http://www.nolo.com/legal-encyclopedia/separate-community-property-during-marriage-29921.html
She owns HALF of everything (including debts) that were acquired during the marriage. If he gave away things/assets that were acquired without her consent or knowledge, then she is entitled to recover those assets in a divorce….or to recover the value of those assets if not the actual items.
Does this mean that wives everywhere can reclaim gambling debts, tips to strippers, and the cost of boats, while husbands can recoup their losses from shopping sprees?
I think community property laws are wonderful because of the protections they give both parties, but I am curious how strictly they apply, as in the above examples.
Also, technically, every octogenarian millionaire who either marries or takes for a mistress a twenty year old is engaging in prostitution. Gifts in exchange for sex is the hallmark of the courtesan, who I suppose legally would be considered a prostitute with a client list of 1. Women have dated and even married men they did not love for no other reason than financial or material support since the dawn of our species, which makes such a narrowly defined law troubling.
It is also my understanding that Mr Sterling may be suffering from the onset of dementia. I do not know if his racist rants were caused by the dementia, if dementia removed his barriers to saying what he really thought, or if the allegations of mental incapacity are just a ploy in a messy divorce. I will say that people who suffer from Alzheimers can say the most horrid things, totally out of character. When plaques begin to form, their brain misfires and they can have a complete personality change, saying words they heard once in their life like they have Tourrette’s. I despised Mr Sterling’s racist opinions, but part of me wanted to know if it was dementia talking or if he was really just a terrible person. This also raises the issue of mental capacity in giving away millions of dollars to a courtesan. Although it sounds like she was the latest in a long string of mistresses, so this was very much in character for him.
Death does tear open any wounds a family has and nastiness ensues. The number one issue that breaks up a marriage is money, and that continues regarding a death, as well. Sports team owners are some of the most egotistical, slimy people walking this earth. Jerry Jones is the Donald Sterling of the NFL. Of course, I am a part owner of the Packers, the most unique professional sports franchise in the world. My share was a Christmas gift.
Nick 1) does your share pay a dividend? 2) it is unique not most unique. 😉
The absence of a few million dollars here, in this case, would not leave the other spouse impoverished, by any means.
Joint Tenancy is JOINT. The dollar amount doesn’t matter.
As for families fighting over money – whether an inheritance or a divorce. Jerks gets married and have families too.
DBQ
The absence of a few million dollars here, in this case, would not leave the other spouse impoverished, by any means. While it may do so in other situations, I don’t think that the loss of the three million dollars, in this particular situation, would leave Mrs. Sterling destitute or bankrupt.
The ruling makes sense. While a small part of their filthy rich fortune, $2.8 million is a lot of money on an absolute basis. I don’t think you’d want to set precedent whereby a spouse can give someone $2.8 million without the other spouse being involved. And given the giftee was involved in humiliating the Sterling’s and forcing them to sell their team, Mrs Sterling’s pursuit of this is understandable.
Rcocean – they were going to be forced to sell the team anyway and they made a profit on the sale.
DBQ – NOTHING brings out the worst in people like a death in the family, one person in charge of the finances, and differing opinions on what everyone should get. I’ve seen multiple executors and successor trustees abuse the trust the deceased placed in them, and I’ve seen heirs fight and families break up over money.
My siblings and I have a pact never to squabble over money. In fact, I would rather my parents spend every last dime enjoying themselves in their golden years than quarrel over money.
Estate planning is crucial, as is selecting your successor trustee, which might not be any of your heirs, to avoid such problems.
I think that this ruling raises some very interesting issues. A gift, by its very nature, is something which is given without strings. It doesn’t appear, from the little that I have just read, that Mr. Sterling’s mental stability, or lack thereof, was alleged to have been the basis for demanding the return of the so-called gifts. No mention of these gifts being offered under duress or given during a period of his life when he could not make such decisions with full mental clarity. In my humble opinion, the value of the gifts is irrelevant. As long as they were made, absent any duress, fraud or mental incapacity, I fail to see how this girlfriend must be ordered to repay the GIFTS. I think a stronger argument could be made demanding the return of the exorbitant gifts based upon, what appears to be, a diminished mental capacity on the part of Mr. Sterling. I also wonder if a defense was offered, by the girlfriend, that Mrs. Sterling did not raise the issue of returning these gifts in a more timely manner, therefore, implicitly acknowledging and agreeing to these distributions. After all, these transactions appear to have occurred over a period of time, when she could’ve raised the issue, perhaps, in a more immediate fashion. If the wife had access to the couple’s financial records, this is an even stronger defense for the girlfriend, as it may be considered that the wife acquiesced to the distributions.
While I don’t condone what the girlfriend did in this situation, I think that an argument, for the return of the items, should’ve been based upon his lack of mental capacity to provide, a relative stranger, with these extravagant gifts.
bam bam – it is my understanding that in a community partner state that one partner speaks for both. Therefore if Mr. Sterling gave the gifts, the community gave them. Unless they could prove duress or sexual favors, I don’t see how the court made the decision, except for diminished capacity.
California is a community property state and as such both parties are presumed to have an equal claim on assets accumulated during the marriage. Supposedly, you can’t just give away all of your assets without the consent and knowledge of the other…… and leave your spouse impoverished.
I often had to send some high net worth clients to attorney counseling when they would arrive my my office with separate assets, acquired before marriage, or inherited assets. Co-mingling those types of things in a general JTWROS account is a bad idea. Tenants in Common as well as a well crafted trust arrangement is much better. It always amazed me that people who were successful, astute in many ways could be so dumb, trusting and naive about their personal finances.
In addition, there was nothing worse (for me as an advisor) to be stuck in the middle of a messy divorce where no one made any decent plans or provisions….. or worse yet….the death of one of the spouses and be in the middle of a hissing cat fight between children of various previous marriages. If this doesn’t jade a person as to how despicable, greedy and evil people can be, nothing will.
DBQ – nothing brings out the best in a family like a death.
Issac … it seemed only fair to me at the time, and still does. We both did nicely in our own rights following that break up. Now and then, like the blind squirrel I find a nut…e.g., get it right. Being pig headed now and then has its virtues 🙂
Paul C…government employees, even when military, when not breaking the law on large gatherings like the GSA guy in Vegas, are on an arbitrary per diem basis for meals and miscellany when traveling. I assure you it is NOT grandiose. In the GSA situation, everyone who attended should have been forced to reimburse the government …. but I’ll admit I doubt they were.
See, it is GSA who sets those per diems and I presume in that case they wanted to suppress the over indulgence by anyway they could. The GSA rule is that no agency may foot the bill for even donuts and coffee if the gathering does not include more non-agency visitors and guests than agency folks. I don’t recall that being the case in Vegas for that session. The rule is valid because the agency people are already on the per diem allowed for the location if away from their own offices.
That said, it is a good thing when craziness is revealed by an IG or a whistle-blower and prosecuted.
Aridog
It’s good to hear your account of a successful parting of the ways.
BTW…I am NOT looking for an “Amen” on the “jerk” remark. 🙂
Makes me very glad I took nothing but my clothes and my machinist’s tools, giving the house (on which the equity had tripled in the years we were married) and everything else in it to the “ex” …and in no small part because our daughter still lived there, plus my “Ex” had been a refugee in 2 wars and didn’t need another shot at being left with nothing. The Judge congratulated us for our stringent application of the state statutes on divorce…shortest degree he ever signed he alleged.
If you have once loved someone why try to break them because you can no longer live with them for one or two serious reasons? That said we weren’t talking about millions, but it was in 6 figures. Result: my “Ex and I are on amenable terms to this day, even if seldom in each other’s company. When she remarried my own father walked her down the aisle, and I attended the wedding too, because she had no one, anywhere in the world, to represent her and my family still liked her.
I figure I was just lucky to be hard headed and prideful and choose not to hurt her or aggrandize myself. Otherwise I can frequently be a jerk.
‘That they never had sex.’ Was that sex sex or Clinton sex?
Old multi millionaire sports team owner guys that cut loose in their 80’s are a hoot. Years ago, Harold Ballard, the owner of the Toronto Maple Leafs, Hamilton Tiger Cats, Maple Leaf Arena, etc drove his kids crazy while he lived his last few years in a luxurious apartment over the hockey rink, complete with lots of girlfriends. He was one for the books. On TV when asked what he thought about women reporters being allowed into the locker rooms after a game to interview the football players of his Hamilton Tiger Cat CFL team, he replied, “You can’t have that, why some of my boys have c*#ks the size of your forearm.” There was no end of legal rangling by his kids to get him to stop squandering their inheritance.
Not unless they were very BIG tips!
Justice Holmes – just going by what the government pays for lunches, I am thinking the tip could be high.
So, if I have this right, in a messy divorce like this you could claw back tips your significant other gave the bikini waxer.