C.A. Upholds Attorney Fee Order in Corman Family Trust Dispute

Wednesday, November 4, 2015

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C.A. Upholds Attorney Fee Order in Corman Family Trust Dispute

By KENNETH OFGANG, Staff Writer

—AP

In this file photo, producer Roger Corman poses in his Los Angeles office.

The Court of Appeal for this district yesterday affirmed orders allowing filmmaker Roger Corman and his wife to use assets from family trusts to pay their lawyers to defend them from claims by two of their children that they have mismanaged the trusts.

Justice John Segal, in an unpublished opinion for Div. Seven, said the orders by Los Angeles Superior Court Judges Joseph Biderman and Reva Goetz, both now retired, were within the court’s discretion.

The ruling involves “just one small piece of over four years of bitter internecine litigation” within the Corman family, Segal explained. It upholds awards totaling about $1 million, including $110,000 to the guardian ad litem appointed by the court to represent the unborn grandchildren of the filmmaker and his wife, Julie Corman.

Roger M. Corman and Brian Corman claim their parents fired them from the family production company for asking too many questions about the trusts. The value of the trusts has grown to over $100 million, which the parents attributed to Roger W. Corman’s success in the independent film industry and his handling of the trust’s investments.

‘Little Shop of Horrors’

Corman, now 89, directed the original, 1960 version of “Little Shop of Horrors,” along with a slew of films that earned him the nicknames “King of the Bs” and “The Pope of Pop Cinema.” He is credited with launching the careers of a number of directors, including Oscar winners James Cameron, Francis Ford Coppola, Jonathan Demme, Curtis Hanson, Ron Howard, and Martin Scorsese.

In 2008, the brothers say, they began to suspect that money was disappearing from the accounts of three trusts in their names: The Pacific Trust, the Tessa Trust and the MG Trust. The brothers say they and their two sisters are the sole beneficiaries of the three irrevocable trusts, for which their parents served as trustees, although they resigned from the Pacific Trust.

According to Courthouse News Service, which reported on the litigation in 2009, the brothers said someone was transferring money from the trusts to secret accounts in offshore banks. The brothers said they were also worried that Concorde-New Horizons was making illegal financial transactions that could create “serious tax ramifications.”

Son’s Allegations

Roger M. Corman said he asked his parents at least seven times for an accounting of the trust accounts and an explanation of the Concorde finances. In response, he said, his parents cut off trust payments to all four of their children and ignored his requests.

The brothers said their mother became angry and erratic, threatening to leave the family patriarch if he ever talked discussed the trusts without her present.

After that, the brothers said, their mother told their attorney she lacked authority to order complete accountings on the three trusts, a claim the brothers call untrue.

Concorde-New Horizons Controller Gita Jamshidi allegedly fired all four Corman children by email in October 2008, explaining only that Concorde was now a charity. The brothers claim the firings came in retaliation for their questions, and sued for accountings of the three trusts and to have their parents removed or suspended as trustees.

After a 2012 trial, Biderman approved accountings for two of the trusts. As to the Pacific Trust, he approved accountings for some years, but rejected others as incomplete.

He declined to remove or suspend the trustees, saying there was insufficient evidence to justify such action, and that they had only acted to enrich the beneficiaries, costing themselves millions of dollars in the process.

The following month, however, Biderman recused himself.

Belated Discovery

He said he had just discovered that retired Los Angeles Superior Court Judge Victor Person had heard related matters in his capacity as a private judge with ADR Services, Inc. Because Biderman had himself been in negotiations with ADR Services, Biderman said, he would step aside and void all orders from the 2012 trial.

(Biderman remained on the bench another year before retiring to become a private judge, with Judicate West.)

The case was then reassigned to Goetz, who reaffirmed Biderman’s orders and made additional ones, leading to the appeal.

In concluding that the challenged orders were all within the trial judges’ discretion, Segal distinguished Donahue v. Donahue (2010) 182 Cal.App.4th. The court in that case threw out an award of fees, citing, among other things, inadequate explanation by the trial judge as to how the amounts were determined and why duplicative billings were apparently allowed.

Segal called that case “unique,” noting that the Corman brothers did not challenge the reasonableness of the amounts claimed, did not argue that the trustees had retained too many lawyers, did not seek discovery as to the issue, and did not ask for the clarification that had been denied by the trial judge in Donahue.

The justice also rejected the argument that Goetz erred in adopting orders that Biderman had voided. “[W]e presume that the probate court reviewed the extensive documentation submitted by the guardian ad litem and approved the amount requested,” Segal wrote.

Attorneys on appeal were Irving H. Greines, Robin Meadow and Marc J. Poster of Greines, Martin, Stein & Richland, along with Hillel Chodos—who died in May of this year—and Rafael Chodos for the younger Cormans; Howard S. Fisher and Alexander J. Fisher, along with Joseph S. Klapach of Klapach & Klapach and Joel E. Boxer of Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg for the older Cormans; and David Carico, Christopher D. Carico and Golnaz Yazdchi of Carico Johnson Toomey for the guardian ad litem.

The case is Corman v. Corman, B248816.