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Arbitrator Biased in His Ruling Against Her, Billionaire Says

Newspaper owner claims retired high court justice held a grudge because he felt she wasn't paying his fees promptly.

November 23, 2002|John Johnson | Times Staff Writer

SANTA BARBARA — Billionaire newspaper owner and environmentalist Wendy McCaw is taking on a retired state Supreme Court justice who recently ruled against her in a lawsuit filed by her former fiance.

Private arbitrator David N. Eagleson awarded attorney Gregory Parker $14.8 million, and called McCaw's conduct against him "oppressive, meaning despicable."

Eagleson also accused McCaw of using her newspaper, the Santa Barbara News-Press, to smear Parker's reputation.

Now McCaw has filed an appeal, contending that Eagleson was biased. In legal papers, she said the retired justice kicked her attorney out of meetings and held a grudge against her because he felt she wasn't paying his fees promptly. Arbitrators hear cases when both parties agree and are paid directly by the litigants.

"Mr. Parker wants $15 million for 13 months of employment," said McCaw attorney Sue McCollum. "Mrs. McCaw is only asking the court to protect her contractual right to a fair hearing before three impartial arbitrators."

McCaw didn't become one of America's richest women by being afraid to slug it out with powerful men. And she has often prevailed.

When she divorced cellular phone visionary Craig McCaw a decade ago, she assembled her own legal dream team and won one of the largest divorce settlements in history.

She outmaneuvered Walt Disney Co. Chairman Michael Eisner for her oceanfront estate in the exclusive Hope Ranch neighborhood, then battled state Coastal Commission plans to open the beach below to the public.

Eagleson was the arbitrator in a lawsuit that Parker filed when he was fired by McCaw two years ago after serving as a legal advisor. Parker accused her of reneging on an agreement to pay him millions of dollars in deferred compensation.

Parker met McCaw seven years ago when she was house-hunting in Santa Barbara. After helping her find the historic estate in Hope Ranch, Parker was hired to work exclusively for McCaw.

Over time, the relationship developed from a business partnership into a romantic one. The two vacationed together, including trips to her yacht in the Mediterranean, where they announced plans to marry.

The relationship fell apart in 1999, and McCaw fired Parker a year later. McCaw defended herself against his suit by charging that he took advantage of her after her divorce and that he was only interested in her money.

Justice Eagleson didn't buy that.

"There was no evidence of malice on the part of Parker," he wrote. "All he wanted was for McCaw to honor her contractual obligations and sued to enforce those obligations, as he had the right to do."

Eagleson also said McCaw used her newspaper to try to ruin Parker's reputation in town.

"She and her litigation counsel hired a public relations expert whose function was to place articles in her newspaper complimentary to herself and derogatory of Parker in an effort to create a community animus toward Parker," he ruled.

The idea that she had crossed the line from covering the news to slanting it was an especially raw point for McCaw. She had been fending off similar accusations since she purchased the News-Press from New York Times Co. two years ago.

Critics said the animal lover and vegetarian was using the paper as a lectern, citing editorials supporting a meatless Thanksgiving and opinion columns repeatedly blasting the Coastal Commission.

McCaw has steadfastly denied telling her writers and editors what to put in the paper.

Asked about Eagleson's charge, News-Press Editor Jerry Roberts said he has covered the McCaw story the way he would news about "any other powerful person."

Roberts has only been on the job since June. But he said he has gone back and read previous stories on the controversy.

"My reading of those stories is that that is not an accurate statement," he said of Eagleson's condemnation. Roberts, who had a long and distinguished career in journalism before arriving at the News-Press, said he has felt no pressure from McCaw or her representatives.

In their latest legal filing, McCaw's lawyers ask that Eagleson's award be set aside because "the arbitrator clearly disfavored Mrs. McCaw."

"Before and after my divorce I made the mistake of trusting Greg Parker with everything, financial and personal," McCaw said.

"I've moved forward, but I'm opposing his claim to my assets because I believe what he did is wrong -- legally, ethically and morally."

Efforts to reach Eagleson for comment were unsuccessful. But he filed a declaration in response to McCaw's charges, saying he did nothing wrong.

The document indicates that he was upset by delays in paying his expenses, but he said he had no idea why the delays were occurring and did not blame McCaw for them. "I was not keeping score on who was paying bills, because I did not know," he wrote.

Tom Foley, Parker's attorney, noted that both parties agreed on Eagleson as an arbitrator. "Justice David Eagleson is a man of unquestioned character and integrity," Foley said.

Eagleson is a 1950 graduate of the USC School of Law and worked in private practice until 1970, when he took a seat on the Los Angeles County Superior Court. In 1984, he was appointed to the 2nd District Court of Appeal. Gov. George Deukmejian then named him to the state Supreme Court, on which Eagleson served as an associate justice from 1987 to 1991. He wrote 53 court opinions. He has worked as an arbitrator through the American Arbitration Assn.

Kersten Norlin, a spokeswoman for the group, said its arbitrators are held to the highest standards in terms of reputations for fairness and accomplishment.

Norlin said the number of cases handled annually by the association has more than doubled in the last four years to 218,000.

McCaw's complaint will be heard Dec. 16 by Judge J. William McLafferty.

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