The issues a judge will consider in the ongoing fight over the Los Angeles Clippers were simplified dramatically on Monday – focusing on whether embattled owner Donald Sterling’s estranged wife was proper in removing him from a decision-making position in the family trust that controls the team.
Shelly Sterling took that step after two doctors concluded that Donald Sterling had dementia – and at the same time negotiated a $2 billion sale of the Clippers to former Microsoft executive Steve Ballmer.
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Donald Sterling, despite publicly backing a sale at one point, is trying to block the deal negotiated by his wife.
Monday’s developments, which came after an hour-plus closed-door meeting of lawyers for Donald Sterling, Shelly Sterling and Ballmer, altered the course of a four-day trial scheduled to begin July 7 that could determine the fate of the proposed sale.
It means there’ll be no battle of experts over the mental capacity of Donald Sterling, the 80-year-old team owner fighting to hang on two months after a recording surfaced of him telling his girlfriend not to bring African Americans to Clippers games. That despite the fact one of Donald Sterling’s lawyers, Bobby Samini, said just before a court hearing Monday that a renowned neurologist had examined the 80-year-old and concluded he had no mental issues that would prevent him from managing his own affairs.
But, as has been the case repeatedly with the Sterlings, Monday’s developments may have simplified part of the fight over the team – but determining what ultimately happens will be anything but simple.
Here’s why: Even if the judge concludes Shelly Sterling was proper in removing Donald Sterling from decision-making authority over the Sterling Family Trust, his lawyers plan to open a second front in their effort to scuttle the deal. On June 9, Donald Sterling signed a letter revoking the Sterling Family Trust, effectively dissolving it. Even if a judge blesses the process Shelly Sterling used to take control of the trust, Donald Sterling’s lawyers plan to argue that the court has no role in determining the fate of the team since the trust no longer exists.
That despite the argument that the sale deal was signed May 29 and Donald Sterling didn’t file the revocation of the trust until June 9.
"Our position is Shelly did not have the authority to sign for the trust and bind the trust," Samini said outside court after the hearing concluded.
Shelly Sterling’s attorneys are just as determined to argue that the sale agreement is a contract and that it must be concluded because it was signed before the trust was dissolved.
"What it really comes down to at the end of the day is fulfilling your obligations," said Pierce O’Donnell, one of Shelly Sterling’s lawyers.
Hanging over it is a July 15 date to complete the sale outlined in the agreement Shelly Sterling and Ballmer both signed.
Ballmer’s purchase agreement requires either that Donald Sterling consent to the sale or that Shelly Sterling obtain "a final and non-appealable order" from a judge giving her the sole authority to close the deal.
Neither Donald Sterling nor Shelly Sterling was in court Monday, but more than a dozen attorneys were.
The Sterlings bought the Clippers in 1981 for $12.5 million.
The team, which was not competitive for much of their ownership, has surged in recent years with stars like Blake Griffin and Chris Paul.
Then came the disclosure of the tape of Sterling talking to a female friend, V. Stiviano, and expressing dismay that she had posted a photo on a social media website that showed her with NBA legend Magic Johnson.
In one exchange on the recording, which was made last September, Sterling told Stiviano to say away from Clippers games — "don’t bring black people, and don’t come."
Those remarks, first reported by the celebrity gossip website TMZ, ignited a firestorm that led NBA commissioner Adam Silver to ban Donald Sterling from the league for life, fine him $2.5 million and launch the process of wresting control of the team from him and forcing its sale.
The team’s coach, Doc Rivers, publicly questioned whether he would stay on the job if Donald Sterling continued to own the team.
In the meantime, Shelly Sterling stepped in and negotiated the sale to Ballmer, averting – for now, at least – an effort by Silver to have the other NBA owners force Donald Sterling out.
Donald Sterling, who at one point signed a letter that seemed to support a sale, is fighting to derail the deal that Shelly Sterling negotiated.
She had Donald Sterling examined by two doctors in May, and both concluded that he was suffering from dementia based on a series of tests designed to determine whether he could recall basic facts, such as the date and the season, remember a specific series of words and connect a series of letters and numbers in order.
The rules governing the Sterling Family Trust outlined several scenarios under with either Donald Sterling or Shelly Sterling could be removed as a trustee. One of those scenarios is that two licensed doctors who normally determine competency examined one of them and concluded that he or she lacked the ability to make sound decisions.
Los Angeles Superior Court Judge Michael Levanas had indicated at an earlier hearing that he might only need to determine whether the rules of the trust were followed by Shelly Sterling – and never consider the question as to whether Donald Sterling is too incapacitated to remain one of two people with the power to make decisions for the Sterling Family Trust.
Sterling’s lawyers fought to expand the scope of the hearing – even suggesting they were ready to bring an expert into court who would testify that Donald Sterling might have "mild cognitive impairment" but no malady serious enough to justify his removal from the trust.
And for a time, it looked like they might get just that.
Judge Levanas suggested that he was not going to grant a motion to postpone the hearing until that expert returns from a trip to Europe in late July – but that he might essentially conduct the rest of the trial and then bring everyone back to court later to take testimony from that doctor.
That would have been a major victory for Donald Sterling.
But the judge asked all the lawyers to meet privately and agree on the issues that would be taken up at the trial. They all stepped into a meeting room, emerging about an hour and 15 minutes later.
And then they told the judge, essentially, that they’d mutually agreed to limit the hearing to the question of whether Shelly Sterling followed the trust’s rules and – if she did – whether the court had any role in determining what should happen to the team, given Donald Sterling’s move to dissolve the trust.
Donald Sterling’s lawyers consented to a hearing with a narrow scope. Shelly Sterling’s lawyers consented to the validity of Donald Sterling’s revocation of the trust.
And now both sides get four days in court to argue before Judge Levanas.
Donald Sterling’s lawyers plan to argue that Shelly Sterling didn’t follow the rules of the trust – that she tricked her estranged husband into seeing the doctors, for example, and that those physicians’ letters outlining their opinions didn’t meet the requirement in the trust’s governing language that they had to "certify" their findings.
And if they lose on that front, they plan to argue Judge Levanas has no role in determining what happens with the trust’s assets – specifically, the Clippers – now that it’s been dissolved.