The Phantom of Fifth Avenue: The Mysterious Life and Scandalous Death of Heiress Huguette Clark (48 page)

After a delay of several months following Justice Glen’s retirement, the Clark case was transferred to Justice Nora Anderson. She set a trial date for September 17, 2013. All the lawyers publicly claimed that they did not want a costly trial that could eat up Huguette’s assets, but no one wanted to give any ground. Summer vacations were canceled at law firms as the billable hours soared.

In Santa Barbara, the voluble former mayor Sheila Lodge had organized a group, Friends of Bellosguardo, to protest the Clark family’s efforts to block Huguette’s will. Current mayor Helene Schneider had joined her in a press conference to send a message that the city would not quietly stand by. In 2011, Holland and Knight, the firm that Bock had hired to probate the estate, had filed papers creating the foundation. But now in August 2013, officers were named: Sheila Lodge and James Hurley, a Santa Barbara lawyer who had handled California legal matters for Huguette. They promptly demanded a seat at the table in New York in any settlement negotiations or trial.

Just maintaining the twenty-three-acre estate had cost Huguette nearly $1 million per year. The aging plumbing and electrical systems had never been updated. Ample funds would be needed to keep it going as a foundation, much more than Huguette had provided for in her will. The local officials insisted that they could raise the money. Jason Lilien of the Attorney General’s office flew out to Santa Barbara in August to meet with the current and former mayors and tour Bellosguardo. “It had a
Downton Abbey
feel,” he recalls. “It was a home of remarkable taste and character which was exceptionally well-preserved.” After seeing the caretaker’s cottage and Huguette’s separate beach house and stretch of private beach at Bellosguardo, Lilien theorized that if necessary, these properties could be sold, with the cash used to underwrite the foundation. He came away with the strong sense that a settlement could be structured that would save Bellosguardo, pay off the IRS obligations, and still leave enough cash to divide up among the warring parties.

But time was running out. On August 9, Justice Anderson declined
a summary judgment motion that would have allowed Wallace Bock’s lawyers to admit Huguette’s will to probate and avoid a trial. She made it abundantly clear in her decision that she had real concerns about the validity of Huguette’s April 2005 will signing. The justice noted that there were “myriad disputed facts” and spent several pages citing all the conflicting testimony.

Large probate cases almost always settle. Yet this legal behemoth seemed to be moving inexorably toward a jury trial. Finally forced to take a position, the Attorney General’s office filed a document on August 22 in support of Huguette’s will. Jason Lilien and Carl Distefano had decided that they believed that she had not been coerced, and that her will (creating Bellosguardo as a foundation and giving 60 percent of the residue to Hadassah) represented her true wishes. They sided against Huguette’s relatives.

Meanwhile, both sides hired jury consultants in late August to conduct mock trials in front of focus groups. The pricy rehearsals would allow the lawyers to figure out the weak spots in their cases and how best to pounce on their adversaries. Would jurors find the hardworking Hadassah admirable, or greedy? Would Irving Kamsler’s felony conviction as an Internet sex predator destroy his credibility on issues involving Huguette? Did the Clark relatives come across as sympathetic or johnny-come-latelys, interested in Huguette only for her money?

Even though Wallace Bock was no longer an executor of Huguette’s estate, the firm that he had hired, Holland and Knight, had continued to take on the role of defending her 2005 will. “We felt we had an obligation to make sure that her wishes to create the Bellosguardo Foundation were carried out,” said John Dadakis of Holland and Knight. The firm convened three sets of twelve-person focus groups. Participants were given detailed statements presenting both sides of the case. The lawyers needed to vehemently argue the facts both ways; otherwise, the exercise would be a waste of money.

The reactions of these would-be jurors varied so wildly that it seemed impossible to predict a likely verdict. The first focus group upheld the will. The second group wanted to toss it out. The third group was informed that they could uphold Huguette’s will but pick
and choose who would inherit—as a real jury could do. This group voted to back Huguette’s will, as long as Hadassah, Wallace Bock, and Irving Kamsler received absolutely nothing. If that happened, Wanda and Bellosguardo would be the chief beneficiaries.

The demographics and income levels of jurors are a factor in any trial, but the reactions to Hadassah were so intense that all expectations were reversed. The working assumption was that blue-collar workers would relate to the hardworking nurse, believing that she had been rightly rewarded for her devotion. Instead, the lower-income focus group members distrusted Hadassah based on the absurd quantities of cash and possessions that she had already received.

“To me that was surprising,” says John Graziano, Wanda’s lawyer. “It runs contrary to conventional wisdom.” John Dadakis, of Holland and Knight, added, “We thought the jurors with her similar background would have an affinity for her. But it was the college-educated people who believed our case.” Indeed, the affluent could appreciate the pleasures of disinheriting relatives and rewarding loyal staffers.

John Morken, representing the Clark relatives, had also conducted focus groups out on Long Island, and he claimed that the results were favorable to his cause. He had kept a tight leash on his clients, urging them not to return calls from reporters, but on September 6, 2013, he arranged for me to meet with Ian Devine, Carla Hall, and Karine McCall in his office along with public relations representative Chris Giglio. Our understanding was that the family’s remarks would be embargoed for use until after the case was resolved.

For nearly three hours, Carla, Ian, and Karine poured out their tales of the past few years, finishing each other’s sentences at times as if prepped and interrupting at other moments to add details. Five years ago, they had suspected that something had gone wrong with Tante Huguette’s life, and now they felt vindicated after learning about the $90 million gift tax debacle and the public administrator’s claim that Hadassah, Bock, Kamsler, and the Beth Israel doctors had abused Huguette’s trust. “For me, this isn’t about money, it’s about values,” Ian insisted. “This is a family member, whatever her vulnerability and emotional state, she was taken advantage of big time.”
Karine, who had initially launched the family’s investigation in 2008, added, “It made such a vivid impression, looking into those horrifying charges.”

Carla talked enthusiastically about a small fund the family members had created to fight elder abuse, contributing $90,000 to be used for educational grants. If they won the case, they planned to put in additional funds. “We wanted to rally around something positive,” she said. “We’re self-made, we’re interested philanthropists, we have causes we’re all interested in, but this has bonded us as a family.” With a trial scheduled to start in eleven days, the trio were optimistic about their prospects, but still hoping for a last-minute settlement to avert an ugly public fight.

Media outlets had been clamoring for on-the-record interviews with the Clark family members, and they had scheduled a session with Anemona Hartocollis, the
New York Times
reporter who had been covering the case. But John Morken had second thoughts about being perceived as trying his case in the press, and he canceled the family interview. The reporter went ahead with her story,
THE TWO WILLS OF THE HEIRESS HUGUETTE CLARK
, on September 13, four days before jury selection was scheduled to start.

Any hopes that the family had of being perceived as the protectors of Huguette’s legacy vanished with the article, which painted them as opportunists. “I was very upset,” says Carla, with good reason. Dripping with sarcasm, the opening few graphs presented an unflattering portrayal of Carla, noting that she lived “an easy taxi ride or a meandering walk through Central Park from Mrs. Clark… but she never tried to meet her.” Hartocollis stated that “huge amounts of energy have been spent establishing whether each of the 19 living relatives contesting the second will had ever met or spoken to Mrs. Clark, and if so, when and for how long. The answers are sometimes comical.” The underlying message of the article: these people do not deserve Huguette Clark’s money. If public opinion mattered in this case, the story had just tipped the balance.

There is nothing like a hanging to concentrate the mind. Even as the
Times
story was going to press, settlement talks finally moved into
high gear. After learning about the all-over-the-map responses of the Holland and Knight focus groups, Jason Lilien and Carl Distefano of the Attorney General’s office did not want to chance a trial and the possibility of a winner-take-all verdict for the Clark relatives. So they took the lead in brokering a settlement.

After a dozen attorneys—representing Hadassah, the Corcoran Gallery, Wallace Bock, and Irving Kamsler—argued with one another in Holland and Knight’s conference room in a Fifty-Second Street office tower, Jason Lilien opted to divide and conquer. On September 11, he called John Morken and asked to meet him at the Bryant Park branch of Le Pain Quotidien, a noisy café right across from the New York Public Library. Lilien sketched out his plan, insisting that Bellosguardo be preserved as a foundation but holding out the offer that there would be enough money left to satisfy the family. Then with Lilien as the negotiator and his colleague Distefano as the expert in the minutiae of estate law, they held separate meetings with the rest of the players. Sensing progress, they convinced Justice Anderson to delay the start of the case for two days.

As is so often the case in settling high-stakes estates, Huguette Clark’s wishes steadily moved from the center of the case to a secondary concern. Even though the Attorney General’s office now supported the validity of her second will—which shut out the Clark relatives in favor of Hadassah and Wanda and the creation of the Bellosguardo Foundation—many provisions that reflected Huguette’s desires had to be abandoned in the quest for a settlement. The legal negotiations now pivoted around the $41 million clawback petition, the financial demands of the disinherited Clark relatives, the debt to the IRS, and the escalating legal fees.

Huguette’s lawyer, Wallace Bock, and her accountant, Irving Kamsler, agreed to give up the $500,000 each they had been promised in Huguette’s will. In exchange, the clawbacks against them were dropped, and the estate agreed not to sue them for matters such as malpractice. Holland and Knight, the law firm that represented Bock, was paid $11.5 million in legal fees by Huguette’s estate.

Hadassah had become terrified of losing the entire $31 million given to her by Huguette. The nurse’s lawyer, Harvey Corn, had
been insisting in negotiations that she get at least $1 million from Huguette’s will, to burnish her reputation. Moreover, for symbolic reasons, Hadassah really wanted Huguette’s antique doll collection. Using the threat of the clawback petition, the Attorney General’s office forced Hadassah to settle. The nurse grudgingly agreed to return the $5 million that she had spent nine years badgering Madame to pay her. Hadassah also abandoned her claim to the dolls. But the nurse was allowed to keep the rest of the $26 million that she had received before Huguette’s death. Her legal bills would be paid for by Huguette’s estate; Harvey Corn and his firm received $1.5 million.

The Corcoran Gallery’s lawyers came in with high expectations, demanding either the
Water Lilies
or a check for $25 million. But they had lost their leverage by claiming eighteen months earlier that Huguette’s will was tainted. The Attorney General’s office gave the museum a take-it-or-leave-it $10 million offer. The Corcoran took it. There was a sweetener: if the painting sells at auction for more than $25 million, the museum will get 50 percent of the additional proceeds.

The financially troubled Corcoran announced, several months after the Clark settlement, that it was merging with the National Gallery of Art and George Washington University. The National Gallery planned to acquire 50 percent of the Corcoran’s collection, with the rest distributed to other museums. The fate of William Andrews Clark’s artworks was uncertain.

Wanda had sent the message through her attorney that what she cared about was abiding by her godmother’s desires and that she wasn’t in this for the money. The Attorney General’s office took Wanda, virtually the only selfless player in this entire drama, at her word. She settled for $3.5 million plus attorneys’ fees. “Given the IRS bills and the legal bills, we were afraid we’d win at trial but there would have been nothing left for her or to support Bellosguardo,” said her lawyer, John Graziano. Wanda herself was sanguine, saying, “I am so relieved that Bellosguardo will be saved.”

The winners in this free-for-all, beyond the lawyers, were the Clark relatives, those blood relations whom Huguette had pointedly cut out of her April 2005 will. Not only did they receive $34.5 million, but John Morken and his firm were awarded $11.5 million in attorneys’
fees. The family planned to divide the money along generational lines: the great-nieces and great-nephews such as Karine McCall and her brother, Paul Albert, would receive $2 million each, and the great-greats such as Carla Hall and Ian Devine would get roughly $1 million each. Since the missing Clark relative, Timothy Gray, had died in the course of the litigation, his share would go to his siblings.