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Sumner Redstone Trial: Judge Dismisses Health Care Lawsuit

UPDATED: A Los Angeles rejected a bid by Sumner Redstone’s long-time companion to declare the media baron mentally incompetent, leaving the man who holds a controlling interesting in CBS and Viacom in charge of decisions about his health care and, by extension, about control of his media empire.

The sudden end to the trial into Redstone’s mental competency came Monday morning, one court day after Judge David J. Cowan watched videotaped testimony in which the corporate titan said he wanted long-time companion Manuela Herzer out of his life.

“Here there is no good cause for further judicial involvement where the court has now heard directly from Redstone that he has lost trust in Herzer, does not want her in his life and instead wants his daughter Shari to look after him if necessary,” Cowan said in his 17-page written ruling, issued just as court convened Monday for the second day of what was expected to be a six-day trial.

“Redstone is presumed to have capacity and Herzer’s expert did not establish that he lacked capacity to change his [health care] agent,” said the judge. “Redstone is free to make his decision for whatever reason, even if for a poorly thought out or erroneous reason. This court has no business interfering with his perogatives.”

The judge said it “would make no sense” to put the magnate’s care in Herzer’s hands, since there is a “lack of trust” between the magnate and her ex-lover and friend of nearly 20 years, Redstone.

Now confirmed as ultimate overseer of her father’s health, Shari Redstone wept openly outside the courtroom.  “I am grateful to the court for putting an end to this long ordeal‎,” she later said in a statement. “I am so happy for my father that he can now live his life in peace, surrounded by his friends and family.”

The lawyer and businesswoman intended to spend the remainder of the day Monday with her father at his Beverly Park home. Shari Redstone, 62, is a member of the board of both Viacom and CBS and one of the trustees for National Amusements, the holding company that holds a controlling stake in both media conglomerates.

Redstone’s lead attorney, Gabrielle Vidal, praised the judge’s swift ruling. Another member of his legal team, Robert N. Klieger, added that,  “Ms. Herzer bet wrong when she assumed that Mr. Redstone’s difficulty communicating would result in her reinstatement in his life and fortune.”

Herzer huddled with family members just down the hall from Shari Redstone. The Argentinian-born socialite looked subdued but declined to make any immediate comment.

The judge’s ruling will not put an end to the dispute.

Redstone’s lawyers said they would file a lawsuit in an attempt to recover $150 million that they say Herzer and another some-time lover, Sydney Holland, received from him over a period of five years. Said Klieger: “Mr. Redstone is looking forward to liberating the $150m in ‘gifts’ to Ms. Herzer and her friend.”

Herzer’s legal team, led by Pierce O’Donnell also filed a lawsuit, seeking to re-establish the companion to her former position as a beneficiary of Redstone’s estate plan. The action, filed immediately after the outcome in the mental competency trial,  seeks $70 million in damages. Herzer had been set to receive $50 million and Redstone’s Beverly Park mansion, valued at $20 million, before he threw her over.

The new Herzer lawsuit appears to contradict claims by O’Donnell at the outset of the dispute that she was interested solely in protecting Redstone and overseeing his care. O’Donnell denied that his client was pursuing her case for financial reasons — noting that she had already received millions from the magnate when the two were still close and therefore did not need any of his fortune, after he was gone.

O’Donnell also pledged to appeal Cowan’s ruling.  “Not giving us our due process right to finish a trial was a serious error,” said O’Donnell. He added: “What happened to Sumner Redstone was not the product of free will.” The lawyer continued to press his contention that Shari Redstone had orchestrated a “spy network” on nurses and staffers who reported to her from inside Redstone’s mansion, conspiring to force Herzer from the home.

Cowan’s threw the case out without ever reaching the question of Redstone’s mental capacity or whether the billionaire had been unduly influenced by those around him. The judge said he was also not judging the credibility or motives of Herzer and Shari Redstone.

Instead, the judge made his ruling based on Redstone’s statement that he hated Herzer and no longer wanted to be around her — despite acknowleding that she was once his “true love.” “Specifically, Herzer cannot be restored as his agent and Redstone is satisfied with the care he is receiving and to be with his family,” Cowan wrote. The judge added: “Whether Redstone ultimately was wrong about what Herzer did or did not do no longer matters. The issue is he has lost his trust in her.”

Cowan said that it was 18 minutes of “compelling” videotaped testimony by Redstone that became the basis of his decision. Although he did not rule on the nonagenarian’s mental function, the judge nonetheless said he found him alert and demonstrating no confusion when asked about his wishes. He noted that Redstone also gave a clear and compelling reason for his lack of trust of Herzer  — he believed she had lied to him and stole his money. “The court can think of no more rational reason to change one’s agent,” Cowan wrote.

The judge said other Herzer arguments did not win him over. He said the ex-girlfriend offered no evidence to back up a suggestion by her lawyers that a speech interpreter used during Redstone’s deposition did not faithfully translate his comments. Cowan also expressed skepticism about the idea that Herzer had brainwashed Redstone, saying he doubted the magnate then would have “acknowledged his vulnerability by admitting he had fallen in love with Herzer.” And the judge doubted claims that Redstone had been coached in his testimony — noting that witnesses commonly spoke more freely to their own attorneys than they did to those for the opposition.

The furor dates to October of last year, when Redstone’s staff and one of his estate lawyers asked Herzer to leave his palatial home, where she had lived and overseen his care. Four days later, Redstone’s attorneys removed her as the magnate’s health care agent and wrote her out of his estate plan.

The judge’s action Monday was quick, but not surprising, given his statements at the end of the first day of the trial, Friday. He said he was  close to throwing Herzer’s case out of court, but gave her lawyers the weekend and last-ditch arguments Monday to try to persuade him to continue the trial. Ultimately, the judge decided that the 92-year-old Redstone should be allowed to say who oversaw his care — rejecting Herzer’s argument that Shari Redstone had led a “vast conspiracy” to have Herzer purged from the magnate’s life.

The case drew a wave of media coverage, fueled by salacious details of Redstone’s deteriorating twilight life in his Beverly Park mansion — where he received round-the-clock care that included regular visits from a much younger female sex companion. The mental competency challenge also attracted the scrutiny of Wall Street and investors, some of whom said they were concerned that the once vibrant executive had been allowed to continue as executive chairman of CBS and Viacom as a time that his decision-making abilities were compromised.

Herzer filed her lawsuit just before Thanksgiving, charging that Redstone’s household staff and one of his estate lawyers conspired to force her out of his home. Four days later, Redstone ejected Herzer as his health care agent — the person who would make decisions about his well being, if he ever became unable to do so. Herzer said that point already had arrived and that Redstone no longer look after himself.

The furor over the claims led Redstone to step down in February as executive chairman of CBS and Viacom.

Redstone’s lawyers countered that Herzer brought the lawsuit out of greed — attempting to prove the mogul was not competent at a time when he removed her from his estate plan. Before the change, the magnate’s ex-girlfriend stood to get $50 million and title to his mansion, valued at $20 million. That bequest would have come on top of $70 million in cash and assets that Herzer, 52, previously received over.

The two sides came close to settling the dispute last month, but the talks collapsed, leading to the trial. Testimony had been scheduled to continue through Thursday, with Herzer’s lawyers due to present an array nurses, household staff, doctors and others. But Judge Cowan said the testimony he heard from Redstone last week persuaded him that the magnate had made a clear decision about what he wanted. He had someone else — daughter Shari — who could oversee his care, if need be.

 

 

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