Sunday, August 29, 2010

Donald Bren Dodges a $134 Million Bullet

Forget Mel Gibson and Oksana Grigorieva

Forget the dysfunctional McCourts and their messy divorce headed to court next week.

The Donald Bren Jury reached a verdict for him after only two hours of deliberation.

The jurors hardly got to shake hands, much less get their free meals, or daily allowances of $15 after the first day. The lawsuit against him, seeking child support, was filed in 2003. Pretrial motions may have delayed the trial until a week ago, but the Los Angeles jury was quick in dispensing justice.

Forbes Magazine ranks Donald Bren 16th on the list of the 400 richest Americans. His estimated net worth is a measly $12 billion, give or take a couple hundred million either way.

The 78 year old Bren is the sole owner of the Irvine Company, which has been developing planned communities for decades in the 1/4 of Orange County that it owned. Its land included all of Irvine, and significant parts of Laguna Beach, Newport Beach, Orange, and Tustin. It owns shopping centers (Fashion Island, the Market Place, and the Irvine Spectrum)), golf courses (Pelican Hills), commercial property (in Orange County, West Los Angeles, San Diego, and Silicone Valley), apartment complexes, and yacht marinas.

Donald Bren did not found the Irvine Company, or build it up, but bought into it in 1977 with several partners, and then acquired complete ownership in 1986.

Donald Bren has been a major contributor to education. He has been especially generous to the University of California Irvine, University of California Santa Barbara, and to a lesser extent Chapman University. He has also been very generous to K-12 in Irvine Company communities, but also outside Orange County. He and the Irvine Company have also donated significant acreages of land for conservancy purposes. His charitable contributions are estimated to exceed $1.3 billion.

Unlike the other “Donald,” the poor Donald, the Donald Trump who lives to self-publicize as a marketing tool, one of the primary roles of the PR agents for the Irvine Company and Donald Bren is to keep his name out of the media. He shuns publicity, but will make public appearances. He’s not a recluse or hermit, unlike the late Howard Hughes. He simply wishes to preserve his privacy.

Thus, his decision to take to court a potentially salacious case seeking child support is a dramatic decision for him.

Donald Bren has been married three times, with children from each marriage. His child from his current wife is 7 years old.

In between marriages though, he sired two children by Jennifer McKay Gold, a former model who apparently can arouse lust in men.

Jennifer, on behalf of the two children, Christie Bren, age 22, and David Bren, age 18, filed suit against Donald Bren in 2003 seeking child support for the two. The amount sought was $400,000/month, retroactive to birth. The sum roughly comes to about $134 million – again petty cash or chump change to Donald Bren, but a principle upon which he was willing to spend a small fortune in litigating.

Jennifer’s assumption, and presumably that of her lawyer, was that Bren would pay a sizable stipend to keep his personal matters free from discovery and to avoid a public trial in which some of his personal life would be laid bare for public consumption.

They misunderstood and underestimated the man. This matter became one of business.

He did not become a multi-billionaire by being soft in business.

One columnist reported seeing 13 lawyers representing Donald Bren in the court room during the trial. Rough estimates then are that his weekly legal expenses during the trial exceeded $250,000, which would cover a lot of child support. His total legal expenses over 7 years may have reached the 8 figure mark, certainly far in excess of what she could afford.

The legal problem for the disaffected family is that Jennifer signed 4 contracts from 1984 to the mid 90’s with Bren in which he agreed to pay child support, roughly $9,000 per month and education expenses including college and graduate school to age 25 for the two children, in exchange for which she agreed to drop any legal claims for child support. He paid about $3 million to them from 1988 to December 2002, and up to $9 million in total.

The claim therefore is that he committed fraud in getting Jennifer to agree to the contracts. The allegation is that he agreed to have a lifelong relationship with the children, but in fact failed to do so.

Testimony from the trial is interesting:

He said:

He never loved her;
He never intended a steady relationship;
He never told her he loved her;
Their relationship was “unconventional” and “contractual;
They went months without seeing each other, and that the relationship fizzled out by 1994;
He was shocked by the first pregnancy, and even more surprised the second time. He felt betrayed because "she promised ... she was protected." and
He said she understood from the beginning that his role with the children would only be financial.

She said:

They were in a loving relationship through 1997;
Bren knew she wasn't using contraceptives; and
Donald promised to maintain a relationship with Christie and David;

Let’s assume that we witnessed a Paul Newman “What we have here is a failure to communicate” moment. I have in my office a plague which says

“You know what you heard

I know what I said

I know what you heard is not what I said”

People in relationships often hear what they want to hear.

Another way to view the communications conundrum is that the law recognizes that men and women often say things in relationships, statements such as “I love you,” or "I'm divorced or separated" that will not give rise to legal liability. Consent is consent.

Jennifer McKay Gold presented no witnesses or documents to support her claims of Bren’s promises.

Christie and David Bren testified that they didn’t lack anything growing up in Beverly Hills. Christie, in her 10 minutes on the stand, said she “never went wanting for food or clothing and never needed or wanted anything she couldn’t get.” At 17 she was given a new Audi. David received a BMW. Christie didn’t think she was” different from anyone else” in her upbringing. David Bren testified that he had everything he needed, but a father.

The absence of a father in their lives made them feel angry, hurt, and abandoned.

Maybe I should have empathy with this argument. My parents divorced before I was born. I never saw my father. Indeed, I never got a phone call, letter, postcard, or any acknowledgment from him. Like millions, I grew up the child of a single mom.

They got to travel, and study, in Europe. For me it was a big deal to take the Key System train across the Bay Bridge to see my grandfather in Oakland. There was a period of time when I went to bed hungry at night.

Obviously my biological father never contributed a cent to my support. The two natural children of Bren received over $9 million from their father. They grew up privileged in Beverly Hills, attended private schools, David’s about to enter Boston University, Christie will attend the New York Film Academy in January, their mother remarried in 2001, providing them a step-father, and they carry the Bren surname (That should be worth something in life). Divorces, single parents, and dysfunctional families are common in Beverly Hills.

Their monthly stipend covered housekeepers, nannies, private tutors, and ski trips.

Upon reconsideration, I do not empathize with them. I pity the spoiled brats, who through their mother sued their father. They are now undoubtedly out of the Bren will, and at age 25 even the financial relationship will end. Both of them should have dropped out of the suit at age 18, but didn’t. They should have apologized profusely and curried his favor.

Her lawyer argued the two children have a right to share in his standard of living. He said the question for the jury was if the Bren children deserved child support reflecting Donald Bren’s “circumstances and station in life.” He also denied that Jennifer Gold was a “gold digger” or “scheming, conniving, loose woman” but rather a mother looking after her children’s rights.

Jennifer, outside of court, said: “It’s not that we are poor; that’s not the point…. I just want {them} to have what is theirs. It is their birthright.”

The common law has never historically given the same rights of child support and inheritance to natural children as to children born in wedlock. Even then, parents can disinherit their family members.

Jennifer’s record is interesting. During the time she was pinning for Donald, in their loving relationship and trusting him, she became engaged thrice, including twice to Steven Hoefflin, a famous plastic surgeon, but married in 2001 Jerome Gold, a former executive with Warner Music.

Jerome was earning $41,000 monthly in deferred compensation from Warner Music and an additional $30,000 from RP Realty Partners. He lost that position in April 2010. He earlier complained to her in March 2009 that she was spending too much – perhaps it was her monthly allocation of $2,500 for clothes and an additional $2,500 monthly for dry cleaning. They separated at that point.

She is now paying an hourly fee of $600.00 to her divorce attorney. Gold now claims to be living off a rapidly depleting home equity loan of $200,000. Does Don MacLean's “American Pie,” especially the line “The Day the Music Died” come to mind?

As for the future of the protagonists:

Donald Bren will go back to the Irvine Company, nurture his legitimate children in the business, and regain his privacy. They have a bright future.

Christie and David will soon be fledgling their way in life with an education.

Their father, after graduating from the University of Washington and serving in the Marines, came home to Orange County and started building homes one at a time. Through drive, expertise, and business acumen, the entrepreneur built a fortune, developing the heartland of Orange County. If Christie and David have inherited his intelligence and drive, they too will do fine in life.

Donald Bren testified at trial “Education is the most important gift a person can make to a child …. It would allow those two children to grow up and be successful in their own right and not rely on anyone else but themselves to become productive and happy human beings.”

That is the essence of the case.

As for the 55 year old Jennifer McKay Gold, she should pray nightly that her investment in plastic surgery pays off.

(Quotes are from the Los Angeles Times and Orange County Register).

No comments: