The destiny of what may quantity to $1 billion of property has been settled by a Spokane court docket as the kids of actual property large Harlan Douglass struggle over their potential inheritance.
One of many sons of Harlan Douglass influenced the ailing developer to maneuver property in defiance of his late spouse’s will and diminish the inheritance of his brother, a Spokane decide dominated final month.
The discovering adopted a five-day bench trial final fall throughout which witnesses described a longtime energy dealer in psychological decline, whose allegiances to his three youngsters modified over time. The scenario got here to a head in summer time 2019, as Douglass tried to finalize a property belief created after the demise of his spouse, Maxine, price an estimated tons of of hundreds of thousands of {dollars}. After a lawsuit was filed difficult how the property was being divided, all three youngsters stated they have been alienated from their father.
Spokane County Superior Court docket Decide Raymond Clary, in a call handed down June 5, discovered the testimony of Lancze Douglass — that his father needed management over the property within the belief created after in his spouse’s will — not credible as a result of he stood to realize tons of of hundreds of thousands of {dollars} by influencing his father. That inheritance could be on the expense of his brother, Harley Douglass.
“The scheme was not solely proven by the totality of the proof, however it was clear, convincing, and inescapable,” Clary wrote in his determination.
Clary’s order invalidated a doc transferring to Harlan Douglass 224 Spokane County properties out of a belief created after the 2016 demise of his spouse. That switch would have put the properties in charge of companies owned by Harlan Douglass, Lancze Douglass and Stacey Douglass Boies, doubtlessly growing their shares of the inheritance whereas shutting out Harley Douglass, who was to obtain half possession of the property as a part of Maxine Douglass’ will however would get nothing beneath the brand new plan.
“My mom would roll over in her grave if she knew this was happening,” Harley Douglass stated in testimony final fall.
Steve Hassing, the legal professional representing each Harley and Harlan Douglass, stated the ruling confirmed that Lancze Douglass supposed to “use his father as nothing greater than a vessel” to transform property into his personal identify, and that it might probably stand up to any attraction.
“These findings are quite a few,” Hassing stated of the 41-page order, which additionally awarded Harley Douglass legal professional’s charges for the case. “They’re detailed, and there’s no technique to get round these findings on an attraction.”
Lancze Douglass’ legal professional, Jim McPhee, stated final week his shopper respects the authorized course of, however “adamantly disagreed with the choice.” He plans to file an attraction, and in court docket filings argued that Harley Douglass’ lawsuit was filed after his personal relationship along with his father soured as Lancze Douglass and Stacey Douglass Boies grew to become nearer to him. That included Harlan Douglass giving Stacey Douglass Boies a ship that he’d demanded Harley Douglass return to him in December 2018, in line with court docket data, and a request by Harlan Douglass in writing for Harley Douglass to give up a 49% share in his father’s firm in early 2019.
A particular worth of the Douglass property isn’t listed in court docket paperwork, as a few of the properties had but to be appraised by the point the court docket case commenced. It’s estimated by Clary to vary between $500 million and $1 billion, although that features property in 5 states. Solely the properties the household owns in Spokane County are topic to Clary’s discovering.
Clary’s determination leaves in place a division of the inheritance that was included in Maxine Douglass’ will, finalized in 2008. She and Harlan Douglass every owned half of their property, and on her demise, the need states that her property needs to be positioned in a belief. When Harlan Douglass dies, the belief is to be given to the couple’s three youngsters, in line with the need, with Harley Douglass receiving half, Stacey Douglass Boies receiving 40% and Lancze Douglass receiving 10%. Harlan Douglass has his personal will, which has been sealed till his demise.
Harlan Douglass’ legal professional, Deanna Malcolm, labored with him in summer time 2019 because the deeds have been ready and testified that his psychological well-being and reminiscence have been in decline. She described an incident that summer time when she’d informed Harlan Douglass to go to an workplace about 15 to twenty ft away, and that Harlan Douglass grew to become misplaced on the way in which.
“We each simply cried,” Malcolm stated. “He was actually scared, and so was I at that time. I had by no means seen him get misplaced within the workplace earlier than.”
Lancze Douglass and Stacey Douglass Boies testified that he was sharp that summer time after they visited him in California, and will perceive enterprise discussions.
In August, Lancze Douglass, Harlan Douglass, Hamilton and Malcolm met in Spokane. Hamilton was informed he was the particular trustee within the will, and Lancze Douglass stated his dad needed the belief properties moved to Harlan Douglass’ particular person possession. A 3rd deed had been drawn up to try this, and Hamilton signed it.
Nearly instantly, in line with court docket testimony, Malcolm and Hamilton grew suspicious. Harley Douglass discovered of the brand new deed by way of an nameless telephone name, and on Aug. 29, Hassing filed a lawsuit on Harley Douglass’ behalf in search of to nullify the deed and alleged fraud.
Hassing additionally represents Harlan Douglass, which meant he needed to telephone the daddy in California to hunt permission for Harley Douglass to sue Lancze Douglass and Hamilton because the trustee.
“I couldn’t file a lawsuit that takes $200 million of property away from him, with out his OK, as a result of he’s my shopper,” Hassing stated. “At that time, his thoughts was such that he didn’t bear in mind being at that assembly.”
Harlan Douglass was not deposed and didn’t testify within the trial due to his psychological state, Hassing stated.
Lancze Douglass, in court docket testimony final fall, stated that after his brother filed the lawsuit, his father “grew to become remoted from everyone.” He argued that the plan to separate up the belief properties into companies would save his father cash in taxes and “equalize the distribution of the household wealth to offset the earlier allocations to Harley and extra pretty allocate his property amongst his youngsters.”
“We weren’t capable of speak to him to have him drive the ship, as it might, to maintain it going ahead,” Lancze Douglass stated beneath questioning.
His sister later stated she tried to go to her dad in California and was saved exterior for an hour and a half by safety earlier than being allowed to see him.
Lancze Douglass additionally stated he wasn’t upset that his portion of the inheritance from the belief was simply 10%, in comparison with his brother’s 50% and his sister’s 40%.
“I used to be grateful to get something out of it as a result of I used to be at all times raised that we weren’t going to get something, and that if we have been ever going to quantity to something or accumulate something on this life, we needed to earn it ourselves and never be ready for mother and daddy to present us cash,” Lancze Douglass testified.
The testimony of Lancze Douglass, that his father needed the switch, was not credible “each due to his curiosity within the deed and due to his demeanor at trial and actions following the … deed reveal that the deed was a part of his plan to realize $200 million {dollars}, plus or minus,” Clary wrote.
Clary discovered that Harlan Douglass was “senior and frail of thoughts” when he signed the deed that transferred 224 Spokane County properties from the belief. Clary additionally discovered that Harlan Douglass took no precise steps to deal with the properties as his personal, fairly than within the belief, indicating he didn’t need the switch.
Harlan Douglass has additionally been the goal of theft. His former private assistant, Bryan J. Reilly, pleaded responsible in Could 2019 to stealing jewellery, watches and tons of of hundreds of {dollars} in money from the developer. He was sentenced to 2 days in jail.
