Dodgers Divorce and Scrivener’s Error

The fate of the Los Angeles Dodgers baseball team hangs in the balance. At stake is whether the team is owned solely by real estate magnate, Frank McCourt, or jointly by him and his former wife, Jamie. The parties are in the midst of a trial in the case, taking a break later this week for a stab at mediation to resolve it. Pivotal to the case is the effect of some garbled clerical lawyering that occurred when the parties in 2004 signed a post-nuptial agreement.

The prominent Boston lawyer, Larry Silverstein, represented both parties in preparing the 2004 agreement. The parties owned extensive personal residential property and commercial business enterprises; they’d suffered some harrowing experiences when the asset collections weren’t segregated—business creditors threatened foreclosure on the family residence. To prevent recurrence, Silverstein drafted the spousal agreement to allocate title to these, all residential property to Jamie, and all commercial to Frank.

As the AP reports, details were spelled out both in the text of the agreement and using an exhibit listing assets and showing which belonged to whom. Silverstein initially proposed that the parties sign and have notarized a total of three original duplicates of the deal, to be held by each of the parties and by him. Late in the process, just before signing, Silverstein elected to double the number to six—out of what he called an “abundance of caution” to have a “set of protective documents.” The parties both signed all six.  

But exhibits were garbled in the process. It appears that Silverstein had handwritten on a draft of the principal exhibit, listing entitlement to assets, some form of the word “exclusive.” His assistant typed that into the exhibit when preparing the six sets in a way suggesting that one commercial business enterprise, the Dodgers, wasn’t allocated solely to Frank, but was to be shared.  Silverstein noticed this as an error at the last minute and intended to correct it; though he and his staff managed to correct that exhibit for the first three sets of signed contracts, the uncorrected version remained in the second set of three.

Six years later, amid the divorce implicating the contract, the value of the Dodgers had skyrocketed, while the value of the residential property, thanks to the financial crisis, plummeted. Jamie wants a share of the Dodgers; Frank refuses. Is the outcome controlled by the signed, notarized, writing, despite the conflicting exhibit, or not?

Frank says the case is simple and controlled by the agreement, allocating the Dodgers (and other commercial property) to him and the residences to her.  Jamie highlights the garbled exhibits to challenge that simple assertion.  Her argument is: there were two opposite versions of the contract, it’s infeasible to enforce them both, there’s no basis to choose which to enforce, and Silverstein didn’t check with either McCourt as he undertook steps correcting the garbled process. 

The case thus boils down to an assertion of scrivener’s error by Frank, which Silverstein himself acknowledged during testimony this week; it’s difficult for Jamie to refute that testimony.  The standard remedy for scrivener’s error is to reform the imperfect instruments and enforce them as reformed.  That means enforcing the property agreement allocating the Dodgers exclusively to Frank. 

The case doesn’t seem any more complicated than that, despite the stakes for the Dodgers and efforts by Jamie’s lawyer, the creative David Boies, to make it interesting.  Jamie hazarded other potential predicates of excuse during her trial testimony, like not having read the contracts, but that’s not a valid excuse from contractual obligation.  Off the table by her own testimony on cross-examination this week are recognized grounds like duress or coercion.  Jamie floats a claim of unconscionability, but given a plausible and reasonable rationale for the deal as written, that seems a dead end.

That simplicity and Silverstein’s testimony this week may explain why the parties are heading to mediation on Friday.  Maybe Frank will offer some cash to settle the dispute and Jamie will accept it, bowing gracefully out of the claim to ownership of the Dodgers.  That would be prudent here to get the parties passed their private dispute and let the Dodgers community return to focusing on the business and game of baseball not the business and disputes of contract law.   

NB: Despite the case not being that interesting as a legal matter, the case is made very interesting by the insightful and detailed coverage by University of Minnesota law student, Josh Fisher, who has maintained a blog dedicated to the fight: Dodger Divorce.

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3 Responses

  1. Ken Rhodes says:

    I learned an important lesson from my business partner, who told me when we were both young, “The purpose of a contract isn’t to sue somebody. It’s to help you remember what your agreed on when you agreed on it.”

    Poor Frank and Jamie. They can’t remember what they agreed on (at least one of them can’t), and their memory aid has been garbled up by their lawyer. There is surely one lesson in this: You don’t type up multiple copies and sign each one; you have one original, sign it, and make as many Xerox copies as you need.

  2. Also, Jamie is a law school graduate; you’d think she’d be embarrassed by some of her arguments.

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