Judge sets trial for dispute over Redstone's mental capacity

Sumner Redstone, former executive chairman of Viacom, arrives at the premiere of "The Guilt Trip" in Los Angeles in this file photo dated December 11, 2012. REUTERS/Fred Prouser (Reuters)

By Dan Levine and Lisa Richwine

LOS ANGELES (Reuters) - Media mogul Sumner Redstone's lawyers suffered a defeat in court on Monday as a California judge tentatively ruled that a lawsuit challenging his mental competency could proceed to trial. The decision, by Los Angeles Superior Court Judge David Cowan, dashes an attempt by Redstone's lawyers to put a quick end to the case, which has raised questions about the 92-year-old's role in decision-making at Viacom Inc and CBS Corp.

Redstone controls about 80 percent of the voting stock, though he stepped down as executive chairman at both companies earlier this month. Redstone's former girlfriend, Manuela Herzer, claims the multibillionaire was mentally incompetent when he removed her as his designated healthcare agent in October.

Redstone suffers from a speech impairment but was fully aware of his actions when he replaced Herzer with Viacom Chief Executive Philippe Dauman as the person designated to make decisions about his medical care if he is unable, his lawyers argue.

However, the judge questioned the arrangements under which Dauman directs Redstone's care, and his ruling clears the way for an extensive exchange of documents and interviews by both sides in the runup to trial, scheduled to begin May 6.

Herzer's attorneys are planning to interview Dauman under oath, as well as Shari Redstone, Sumner's daughter, who opposed Dauman replacing her father as Viacom executive chairman earlier this month.

While the judge said he could not make conclusions about Redstone's mental capacity short of trial, he did express concern at the state of Redstone's health, according to a tentative ruling distributed before a hearing on Monday in Los Angeles.

California judges often issue tentative rulings, which are then finalized after a hearing with few major changes.

"The court finds it perplexing that Redstone still puts Philippe Dauman and for that matter Thomas Dooley, the COO of Viacom, ahead of his own daughter as his agent in case of his incapacity," the judge wrote in the ruling.

"It has to be an unusual situation where a parent still at this late date puts his East Coast business colleagues ahead of an adult child, or for that matter adult grandchildren, in terms of his care."

The judge questioned how a CEO in New York, such as Dauman, had the "time or ability" to look after Redstone in California, even with the best intentions.


Redstone's lawyers argue that Herzer is merely seeking financial gain after Redstone's move in October to revoke a part of his estate plan that would have given Herzer a $70 million inheritance.

After the hearing, Redstone's attorneys said in a statement they are "confident" the court will ultimately determine he had the capacity to decide that Herzer "should have no role in his life whatsoever."

The judge noted an opinion provided by Stephen Read, a psychiatrist hired by Herzer, who has examined Redstone. He did not discuss details of Read's report, but said: "Suffice it to say, though not conclusive as to capacity, but those details are difficult to read in describing how this man is hanging on to life."

Read has stated in court filings that he believes Redstone lacked the mental capacity to change his healthcare directive.

Redstone's personal physician, Richard Gold, and psychiatrist James Spar have told the court they believe the mogul was competent to make that decision.

The judge on Monday also highlighted evidence suggesting "an ongoing feud" between Redstone's nurses. One nurse accused another of telling Redstone that Herzer "had lied to and stolen" from him, the judge wrote. That may have led to Herzer's forced ejection from Redstone's house, according to evidence presented by Herzer, cited by the judge.

However, the judge said it is unclear whether the nurse's accusation is merely the creation of a disgruntled employee who is jealous of the lucrative hours worked by his colleague.

Gabrielle Vidal, a lawyer for Redstone, said at Monday's hearing that Redstone's privacy is being "eviscerated" by the legal proceedings, and that Redstone just wanted to live in peace, without litigation.

The judge said it was difficult to understand what Redstone wanted. "Unfortunately I have no declaration from him, I have no evidence from him," the judge said in the hearing.

After the hearing, Herzer attorney Pierce O'Donnell said Redstone was being "preyed upon" by those around him.

"The evidence is clear, and we will prove at trial (that) Sumner Redstone is marooned and a prisoner of his home," O'Donnell said.

Shari Redstone, in a statement, said Herzer had reached a "new low" with an "unfounded" claim that "Shari's devotion to her father is motivated by money or power, not love."

The family has no financial interest in the case, the statement said. Redstone redirected Herzer's inheritance to charity, his lawyers have said in court documents.

Viacom shares rose 1.7 percent to close at $36.85 on the Nasdaq on Monday.

(Editing by Bill Rigby and Matthew Lewis)