Judge: No punitive damages in Scaife case
Three Scaife family trustees can’t be hit with punitive damages in a bitter estate fight, a judge has ruled, in a blow to the daughter and son of the late billionaire publisher of the TribuneReview.
Richard Mellon Scaife’s children had sought to add a punitive damages claim to their bid for payment from trustees H. Yale Gutnick, James M. Walton and PNC Bank. Judge Kathleen A. Durkin of the Allegheny County Court of Common Pleas, however, found that the Superior Court in 1982 barred punitive damages in trust mismanagement cases, and wrote in an order that she cannot overrule that precedent.
The petition by daughter Jennie Scaife, 53, of Florida, and son David Scaife, 51, of Shadyside, can continue, but without the limitless exposure of punitive damages. The two want the court to impose an unspecified financial “surcharge” on the trustees to make up for much of the $450 million they allowed the father to withdraw from a family fund over 20 years.
Ms. Scaife’s attorney, William Pietragallo, said Wednesday that the ruling does not affect the primary thrust of the case.
The disputed trust fund was created in 1935 by Mr. Scaife’s mother, Sarah Mellon Scaife. She dedicated it to supporting her son’s welfare, with the balance to go to his children. Mr. Scaife used almost all of the funds to bolster his TribuneReview and Trib Total Media holdings, and there was nothing left upon his 2014 death.
The public should get to see a pair of legal documents at the center of the trust fund fight, the Pittsburgh PostGazette and Philadelphia Inquirer contended in another set of court filings Tuesday.
Mr. Gutnick has sought to file, under seal, a memo to the trustees from attorney Charles Avalli, and meeting notes by attorney E.J. Strassburger. Mr. Gutnick has argued that the documents were attorney-client communications, and should not be made public.
Attorney Frederick N. Frank, representing the Post-Gazette and Inquirer, countered that one of Mr. Gutnick’s central defenses in the case is his reliance on attorney advice when the trustees allowed Mr. Scaife to empty the fund. Because the memo and notes relate to a pillar of Mr. Gutnick’s case, Mr. Frank maintained in a court memorandum, they should not be outside of the presumption of public access to court records.
Mr. Frank added that Mr. Gutnick’s bid to file sealed documents is “nothing more than a ruse to prevent public exposure of his administration of the trust.” Mr. Gutnick retired last year from the role of chairman of Trib Total Media.