Radio Law Talk Segment
Katy Perry and L.A. Archdiocese awarded $5 million in suit over convent
INTRO:
On Nov. 17, a jury found that two nuns that resided at a Los Feliz convent did not have the authority to circumvent the Archdiocese and Vatican in selling that property to Dana Hollister. The jury in the lower court found for the Archdiocese and Katy Perry awarding (collectively) $5 million in attorney fees. Trial will begin in December to determine if the singer and the church should be awarded punitive damages for the malice and oppression/fraud found by the jury in the original trial.
FACTS:
A Los Angeles jury found that Hollister, a restaurant owner, intentionally interfered with Katy Perry’s attempts to purchase a Los Feliz convent from the Archdiocese. Hollister purchased the property from two nuns that formerly resided at the convent on Waverly Drive while the archdiocese was finalizing a $14.5 million deal to sell Perry the property. After two years of litigation, the Superior Court Judge Stephanie Bowick ruled that the nuns did not have the authority to sell the property according to canon law that governs the Catholic Church. The jury awarded the archdiocese $3.47 million in attorney fees and $1.57 million to Perry’s company, Bird Nest LLC. Another trial will proceed in December to determine whether Perry and the archdiocese should be awarded punitive damages as the jury found that Hollister had acted with malice and oppression/fraud.
ISSUES:
- Hollister (purchaser) – legal fees awarded were excessive (will likely appeal); nuns had authority (and Hollister believed that)
- Archdiocese/Perry – purchase was invalid and done as means of thwarting the in-process sale
LAW:
In Los Angeles, the sale of any (church) property for more than $7,500,000 would require permission from the Vatican, according to canon law.
The pope, as the incumbent of the Holy See, is the supreme authority over the entire Catholic Church. However, the Holy See does not own the church property of all Catholic entities subordinate to it. Because the pope has universal jurisdiction over the entire Church, he has eminent domain over church property that belongs to subordinate bodies. This means that although the pope cannot claim ownership of local churches, he has the jurisdiction or power to sell them (Canon 1273).
PUNITIVE DAMAGES
Punitive damages are awarded in addition to actual damages in certain circumstances. Punitive damages are considered punishment and are typically awarded at the court’s discretion when the defendant’s behavior is found to be especially harmful. In the case of tort liability, courts may choose to apply punitive damages. However, they will typically only do so if the plaintiff can prove that the defendant engaged in an intentional tort and/or engaged in wanton and willful misconduct.
In National By-Products Inc. v. Searcy House Moving Co., the Arkansas Supreme Court found that awarding punitive damages requires evidence that the defendant proceeded intentionally with an unlawful action after knowing that the act was likely to cause injury.
With regard to a principal-agent relationship, courts are reluctant to award punitive damages on the principal for the reckless actions of the agent. One exception to this preference is when the principal encourages or causes the agent’s recklessness.
Courts apply punitive damages in about 5% of verdicts. Recently, courts have begun to evaluate the appropriateness of assigning punitive damages in comparison to the amount of compensatory damages assigned. While the Supreme Court has not assigned a particular test to use when courts consider punitive damages, in State Farm v. Campbell (2003),the Court wrote that lower courts should focus on reprehensibility and acceptable punitive-to-compensatory damage ratios.
Punitive damages may be allowed where appropriate in an action for fraud under CC § 3343, but there must be the necessary allegations in the complaint, punitive damages must be listed in the pretrial conference order, the evidence offered must support them, and the verdict should assess compensatory and punitive damages separately to show compensatory damages have been awarded. Sierra Nat. Bank v. Brown, 18 Cal. App. 3d 98, 95 Cal. Rptr. 742 (1st Dist. 1971).
- 34.Damages, generally—Exemplary or punitive damages, 2 Cal. Real Est. Digest 3d Fraud and Deceit § 34
MALICE
Malice in fact is defined as that malice, as universally understood, which has its foundations in ill will, and is evidenced by an attempt wrongfully to vex, injure, or annoy another. It denotes ill will or a desire to do harm for the satisfaction of doing it, or some conduct that amounts to the same thing. Mere inadvertence or forgetfulness, or careless blundering, is not evidence of malice
Malice in law is defined as that malice shown by an intent to do a wrongful act, established either by proof or by presumption of law. Malice in law means no more than a wrongful intention to do harm which the law always presumes to accompany a wrongful act, without proof of malice in fact.
Such malice may exist with malice in fact, or it may exist independently of it.
6A Cal. Jur. 3d Assault and Other Wilful Torts § 7
OPPRESSION/FRAUD
Fraud is either actual or constructive. As defined within the provisions relating to consent to contract, “actual fraud” consists in any of the following acts, committed by a party to the contract, or with his or her connivance, with intent to deceive another party thereto, or to induce the party to enter into the contract:
- (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
- (2) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
- (3) the suppression of that which is true, by one having knowledge or belief of the fact;
- (4) a promise made without any intention of performing it; or
- (5) any other act fitted to deceive.
Constructive fraud consists: (1) in any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him or her, by misleading another to his or her prejudice, or to the prejudice of any one claiming under him or her; or (2) in any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud. Constructive fraud exists in cases in which conduct, though not actually fraudulent, should be so treated; that is, where the conduct is a constructive or quasi-fraud having the actual consequences and the legal effects of actual fraud. Thus, in its generic sense, constructive fraud comprises all acts, omissions, and concealments involving a breach of legal or equitable duty, trust, or confidence, and resulting in damages to another. 34A Cal. Jur. 3d Fraud and Deceit § 8
DETAILED FACTS:
A Los Angeles jury found that Hollister, a restaurant owner, intentionally interfered with Katy Perry’s attempts to purchase a Los Feliz convent from the Archdiocese. Hollister purchased the property from two nuns, Sisters Catherine Rose Holzman and Rita Callanan, that formerly resided at the convent on Waverly Drive while the archdiocese was finalizing a $14.5 million deal to sell Perry the property. The nuns are not happy about the way they are being treated. They pooled their money and bought the property decades ago at a discount from a benefactor, and their biggest fear is that if the diocese cashes in on a sale, the sisters’ living expenses will not be covered. The archdiocese insists that’s not the case at all, but sisters Rita and Catherine Rose don’t trust that promise. “We have given many years to this archdiocese and we have served them well,” said Sister Rita, citing a proud Immaculate Heart tradition of dedication to education and nursing. “For the archdiocese to … put us under a bus and run over us, I’m sorry, it was just too much for me.”After two years of litigation, the Superior Court Judge Stephanie Bowick ruled that the nuns did not have the authority to sell the property according to canon law that governs the Catholic Church.
The jury awarded the archdiocese $3.47 million in attorney fees and $1.57 million to Perry’s company, Bird Nest LLC. The second phase of the trial will proceed in December to determine whether Perry and the archdiocese should be awarded punitive damages as the jury found that Hollister had acted with malice and oppression/fraud. Hollister’s attorney has said that he plans on appealing the expenses awarded stating that “there were a bunch of lawyers who exploited this lawsuit to bill a whole bunch of time,” in order to account for excessive fees. Hollister has said that she has been using b ack channels in Rome to appeal to the Vatican and Pope Francis to but the convent for $30 million.
In negotiating the sale with Katy Perry, the spokeswoman for the archdiocese says that closing is contingent upon Perry finding a building to replace the Cardinal Timothy Manning House of Prayer for Priests, a 24-bed structure on the eight-acre property that is used as a retreat.
OTHER FACTS (interesting facts, related facts, trivia, etc.):
- Hollister planned to turn the property into a boutique hotel and Perry planned to live at the property
- Hollister has already moved into the convent
- Reason nuns don’t want property sold to Perry: “Well, I found Katy Perry and I found her videos and … if it’s all right to say, I wasn’t happy with any of it,” Sister Rita Callanan told the Los Angeles Times.
- Katy Perry started her singing career as a gospel singer
