WAILUKU - A March trial in 2nd Circuit Court is scheduled to determine the fate of the $70 million-plus estate of Laurence Dorcy, one of Maui's richest men, who died in June.
Dorcy called himself the Baron, like Manfred von Richthofen, the Red Baron aviator of World War I.
With his wealth, he partially bankrolled a replica pirate ship, the Hawaiian Chieftain, as reported in legal documents, that was built in Lahaina in the 1980s, and had many other expensive hobbies.
Laurence Dorcy, known as “the Baron,” (left) sits on the Hawaiian Chieftan, a replica pirate ship he partially bankrolled, while Petro Hoy stands next to him. Hoy, now under federal indictment for charges arising from an alleged mortgage scam, is alleged to have posed as rancher-banker Henry Rice to help friend Hans Kanuha gain favor with Dorcy. According to attorney Michael Rudy, the photo is believed to have been taken in February, about four months before Dorcy lapsed into a coma.
Dorcy died at age 76. His estate - inherited wealth - is being disputed between a slew of charities, who thought they were to get almost all the assets; and Hans Kanuha, a Maui resident who under a later will filed shortly before Dorcy's final illness would get everything.
In court documents, the heirs under the "first will," including the Salvation Army, are claiming undue influence in Dorcy's dotage by Kanuha and a friend of his, Petro Hoy, who is now under federal indictment alleging a mortgage scam aimed at Native Hawaiians.
In an affidavit and an interview last week, Kahuha counters that Dorcy loved him so much he tried to adopt him, although Family Court Judge Keith Tanaka later overturned the adoption "because there was a lot of misrepresentation as to how that adoption was granted in the first place," he said in explaining his decision.
In an affidavit filed when the adoption was contested, Kanuha, a Baldwin High School graduate, claims that the court was misled by schemers who portrayed him as "a con man, scam artist, a financial predator who has lied, cheated and exerted undue influence on Laurence H. Dorcy, who was erroneously perceived by the court to be mentally deficient, a feeble-minded old man who was unable to handle his financial affairs since 2008."
That's a good summary of what Kanuha's foes do say about him. From his point of view, Kanuha is the victim of two conspiracies - one by "hangers-on" trying to get at Dorcy's money, and another by associates of his friend Hoy, trying to get Kanuha's Kula real estate.
For the present, following a hearing last month before 2nd Circuit Judge Shackley Raffetto, Dorcy's longtime trust adviser, Jeffrey Peterson, has been appointed personal representative of the estate, over the objections of Kanuha's lawyers, Glenn Kosaka and William Crockett. (The state Department of the Attorney General also has filed to take a supervisory role to see that the trust assets, as potential gifts to charity, are protected.)
Michael Rudy, representing the groups challenging the "second will," says in objections filed to Kanuha's application to be personal representative in the probate, that when there is evidence of elder abuse, the burden of proof falls on the party that stands to gain by having gained undue influence - Kanuha and Kosaka, who would become lawyer for Dorcy's Hawaii trust.
Such trust and inheritance cases are among the most difficult to conduct, Rudy said, because one important party is dead. But because Dorcy had a wide acquaintance in Hawaii and California, there are plenty of people available to testify about his comings and goings, and how he behaved in the last year of his life, he said.
In fact, Dorcy was such a character that there are plenty of people ready to sit down and talk about his doings going back for decades, though none would speak for attribution. Some statements given in interviews, however, are also substantially repeated in statements included in Rudy's objections filed in court. Other statements given in interviews match Rudy's allegations.
According to information from such sources, Dorcy was the great-grandson of James J. Hill, founder of the Great Northern Railway, and, on his mother's side, a descendant of Ben Holladay, who founded the Pony Express. Under his grandfather's 1917 trust, Dorcy, his sister and a half sister and a half brother had equal beneficial life interests in the income from the Hill inheritance, but couldn't touch the assets.
That amounted to several million dollars a year for Dorcy, but according to the objections filed by Rudy, he was often living hand to mouth. He collected and restored old automobiles and railroad cars and had homes in Kula and California.
Most of his money derived from the Hill fortune in railroads, timber and banking, and was centered in Minnesota, where Peterson was for 35 years the bank trust officer who oversaw the 1917 trust.
There is also a trust Dorcy set up, the 1997 trust, which allocated his fortune to a wide range of charities, and to several friends and relatives. Dorcy never married and had no children.
Local charities that would have received money from the estate include the A&B Sugar Museum, the East Maui Animal Refuge, the Hawaii Railroad Society, Honolulu Maritime Museum, the St. Francis Hospice in Honolulu, Straub Clinic & Hospital, USS Missouri Memorial Association and the Army Museum at Fort DeRussy.
Other bequests were made to institutions that his grandfather and great-grandfather had been instrumental in creating, like Glacier National Park; the family mansion in St. Paul, Minn.; physicians who had treated him; several railroad societies, Planned Parenthood; and some Native American schools and organizations.
According to court documents, from 1997 until 2010, Dorcy constantly tinkered with his will, adding codicils sometimes more than once a year, but not straying far beyond his main interests: the Hill family, railroading and antique automobiles, and a few nonprofits.
The bequest to Kanuha was thus a dramatic change in outlook for Dorcy. But, said James Takayesu, who is representing Kosaka, Kanuha was not aware that Dorcy was writing a new will. In fact, according to Kanuha's affidavit, he wasn't even going to be told that he was being adopted. Kosaka, who handled that petition, told Dorcy that under Hawaii law, an adult cannot be adopted without his consent.
But it turns out that Kanuha was aware that Dorcy had thought of adopting him, because he had told Kanuha and his California manager, Ray Castro, that he might adopt them both. Castro told this story in a letter he wrote on behalf of Dorcy, provided by Takayesu.
So far as the record shows, Dorcy never adopted Castro, but when Dorcy died, it was Castro who supplied the "second will." A Maui businessman who had had a deal with Dorcy, says Dorcy told many people he wanted to adopt them. And a former employee said that employees were encouraged by being told, "You're in the will."
The adoption was granted in April, with only Kosaka and Kanuha appearing. Dorcy was then in a Honolulu hospital, unconscious from pneumonia. In Hawaii, a deceased person can adopt an adult, but not a child, if the petition had been started during his lifetime.
The adoption proceedings are stayed pending resolution of probate, but Kanuha said he would still like to become Dorcy's son.
There were dueling petitions for conservatorship in Dorcy's last weeks, and their supporting documents tell widely different stories about Dorcy's physical and mental state, and how and under what circumstances Dorcy was introduced to Hoy.
The first will side contends that Kanuha introduced Hoy as rancher-banker Henry Rice. Several people have said in affidavits and interviews that Dorcy talked constantly about his "new friend" Henry Rice and how they were going to have joint projects using Dorcy's private foundation.
According to Rudy, Kanuha started talking about introducing Rice to Dorcy early in 2010, although Rudy said depositions indicate that all the contacts were by phone and that it appears that "Rice" (really Hoy) did not appear in person to Dorcy until the last month before Dorcy went into the hospital for the last time.
Kanuha said Dorcy and Hoy met just before Christmas, although there is evidence in the first will papers that Kanuha and Hoy were turned away from Dorcy's Father's Day party last year, an event that so angered Dorcy that he posted a letter about it on his refrigerator for all his many guests to see.
Kanuha said Dorcy had seen pictures of Rice in a news story, knew what he looked like and knew Hoy was not Rice.
However, Bunky Gannon, a friend of Dorcy's, provided a statement that on an earlier trip to Hana, Dorcy had kept talking about how he and Rice were going to be business partners. Gannon, who knows Rice, told Dorcy that the man he was describing was not Rice, but according to Gannon, Dorcy was dismissive.
Rudy's opposition to Kanuha's petition to be confirmed as trustee of Dorcy's 1997 trust says Dorcy was led to believe that Rice was involved in international intrigue, and therefore Dorcy had to be blindfolded and driven secretly to meet with Rice.
Apparently, Dorcy complied.
The presence of Rice's name - people who knew both Dorcy and Rice say Rice, who heads Kaonoulu Ranch, never did meet Dorcy - is important, because the first will team alleges that Dorcy was anxious to be accepted by successful kamaaina descendants of successful families - that he was acutely aware that his grandfather and great-grandfather were highly successful and that he, too, wanted to move among people like that and be accepted as their equal, although Dorcy was all his life careless about his personal business and never managed any successful enterprises.
Dorcy told some friends that he had met Rice and that he and Rice were going to be business partners, although the nature of the business is vague. According to friends and to Rudy's objections, toward the end of his life Dorcy was saying he was going to do something that would change the world, using his wealth along with Rice's contacts.
Dorcy met Kanuha in 2000 or 2001, when Kanuha was "pumping gas" at Calasa service station in Kula. This is one fact about the relationship that is not disputed, although in his affidavit Kanuha describes himself as "owner." He did not take over until the death of Toby Rogoff, when he acquired the lease, years later.
Dorcy apparently helped Kanuha financially with Calasa and later - this is undisputed - lent him $800,000 to buy Morihara Store, which he still operates.
According to the first will version, Kanuha soon defaulted on that note, although Kanuha claims to have repaid $200,000 by the time of Dorcy's death.
Shortly after signing the note with Dorcy for the store, Kanuha transferred his real estate to Ko Hawaii Pae Aina, which was offering to help Native Hawaiians clear their debts. Takayesu supplied copies of those documents.
One side maintains Kanuha was an officer of Ko Hawaii Pae Aina. Kanuha says he was not and was scammed by the group into putting all his real estate into their hands.
Although Hoy was an officer of Ko Hawaii Pae Aina and along with his wife, Lehua, is under indictment, Kanuha said last week that he never considered he had a dispute with the Hoys. His dispute, he said, is with Mahealani Ventura-Oliver and her husband, John Oliver, also under indictment.
Rudy said it looks like Kanuha took Dorcy's $800,000 and immediately tried to put his assets out of reach if he defaulted on the $10,000-a-month payments to Dorcy, which he did.
After Dorcy's death, Hoy and his wife, and Ventura-Oliver and her husband were charged with mortgage fraud and other federal offenses, but Kanuha was not. The case has not yet been tried.
Late in December, Dorcy fired Ann Pettigrew, who had worked for Dorcy and for his mother as a caregiver, and other attendants, leading to an allegation in court documents that Kanuha and Hoy had maneuvered to isolate and influence a sick man. Dorcy had prostate cancer and cardiac problems and according to friends with no financial interest in his life, was mentally confused by, at least, the last months of 2010.
Pettigrew was replaced as caregiver by Gale Kauea, who had no work experience except at McDonald's and is described by Rudy as Petro Hoy's ex-wife and cousin of his wife, Lehua, who delivered the dismissal letters to Pettigrew and other old employees. Lehua Hoy was presented to Dorcy as Rice's executive assistant.
Kanuha said he observed but had nothing to do with "all the drama" around Dorcy and his help.
In January, Kosaka drew up a power of attorney from Dorcy to Kanuha, although, again, Kanuha said he wasn't told about this.
About the same time, Dorcy got several of his physicians to write letters stating that he was of sound mind, capable of handling his financial affairs. Kanuha said he may have suspected that Pettigrew and the other dismissed helpers would raise claims of undue influence.
One of the doctors later qualified that opinion, simultaneously praising the care he had seen Pettigrew give to Dorcy, in contradiction to claims by the second will team that Pettigrew was neglectful.
Rudy said Dorcy had only a "mini mental evaluation," sufficient to determine whether he knew his name and where he was, but not to determine whether he was capable of managing complex financial matters.
The two trusts are both complicated, with many duties imposed on the trustees, and Rudy said this case is the second-largest, trust-inheritance challenge in the history of Hawaii, second only to the struggle over the estate of heiress Doris Duke.
At the same time that Dorcy was allegedly writing the second will giving all to Kanuha, the first will team asserts, he was also talking with yet another Mainland adviser (the 1917 trust adviser who had replaced Peterson when he retired) about his ideas to change the world, using his 1917 trust money. This is said to indicate that Dorcy was not thinking clearly if he had already decided to give all the money to Kanuha. Rudy's objections allege Dorcy was misled and did not realize that the will he had signed did give his estate to Kanuha.
Dorcy became ill in early April, was taken to Maui Memorial Medical Center, fell into a coma and was transferred to Oahu, where he died some weeks later.
* Harry Eagar can be reached at firstname.lastname@example.org.