WAILUKU - Lawyers contesting the $70 million will and trust of Laurence "Baron" Dorcy have asked the court to pay their fees from the estate, pending a probable trial next year.
That trial could determine whether his estate (which could total as much as $80 million) will go to a bevy of friends, relatives and charities, as Dorcy called for in a 2006 will; or whether the entire fortune will pass to Hans Kanuha, according to a will that was revised in January.
Supporting documents filed in court last week provide many more allegations about how the "first will" group believes that Kanuha and his friend Petro Hoy gained undue influence over a sick man and got him to rewrite his will and his trust.
The filings also allege that, in March of this year, Kanuha took an obviously sick and mentally confused Dorcy into an unheated spa for an all-night party. The following day, Dorcy, whimpering on his bed, was eventually - after hours of pleading by one of his former employees - taken to the hospital. There he was put into intensive care, lost consciousness and died in June.
According to the claim by attorney Michael Rudy, when he tried to depose Hoy, Hoy invoked his Fifth Amendment right to not incriminate himself, then walked out of the proceedings.
Rudy also said Wailuku attorney Glenn Kosaka, who represented Dorcy in an attempted adoption of Kanuha, and who is now representing the trust that Kanuha claims to control, also invoked his Fifth Amendment rights at his deposition.
Kosaka said Tuesday that he had not seen the filing but would respond after he had.
Dozens of statements taken from Dorcy's relatives, employees and friends, some of them before he died, raise key questions:
* Did Dorcy believe that Kanuha was a "poor orphan" who had "had a hard life" and needed help? In an interview with The Maui News, Kanuha said he is not an orphan
* Did Dorcy meet a man he believed to be rancher and banker Henry Rice, and when? Was this "Henry Rice" really Kanuha's friend Petro Hoy?
* Why did Kanuha borrow $800,000 from Dorcy to buy the land under Morihara Store, then a few months later transfer the deed to a trust of Ko Hawaii Pae Aina? After Dorcy's death, Hoy and his wife, Leatrice - known as "L" to Dorcy and his employees - were indicted by the United States in an alleged mortgage scam aimed at Native Hawaiians.
The mortgage scam case has not yet been tried.
The court documents filed last week also explain how Dorcy's longtime trust representative, Jeffrey Peterson, became suspicious that the "second will" - the one leaving all to Kanuha - might have been the result of improper influence or elder abuse, and sought legal advice to protect the trust assets.
According to Rudy's request, state law allows a nominated fiduciary who defends a will in "good faith" to claim reimbursement for legal expenses, even if the challenge to the later will is denied.
The rest of the petition seeks to describe why Peterson had reason to doubt the circumstances of the second will and the amended trust, events that occurred in January, along with Dorcy's signature on a durable power of attorney to Kanuha that Kanuha and Kosaka used to try to prevent Dorcy's family from visiting him in the Maui Memorial Medical Center ICU in March.
Peterson is based in Minnesota, the source of Dorcy's inherited wealth. For years, Dorcy had designated a number of charities in his will, and during his final illness, several Hawaii lawyers filed competing claims for guardianship and conservatorship, including Kosaka on behalf of Kanuha; and Wailuku attorney Isaac Hall for the beneficiaries of the "first will."
Sworn statements collected for those requests show that people who knew Dorcy had been growing more and more concerned about how he was faring under the watch of caregiver Gale Kuaea, Hoy's first wife and the cousin of his current wife, Leatrice.
A statement by John Nippolt, who describes himself as a friend of Dorcy's for 30 years, and who was also named as a beneficiary in the first will, says he was concerned about Dorcy's mental and physical state, but when Kuaea told him she received her nursing degree from the Johns Hopkins School of Medicine, that "put (his) fears for the Baron's care to rest."
In fact, attorney Rudy alleges that Kuaea never received any medical training and that her only prior work experience was at McDonald's and as a dancer with Leatrice in a touring hula show that Petro Hoy took throughout Spain for six years before coming to Maui.
A statement by Elsa Hoffsten, who said she was a housekeeper for Dorcy for about five years until Leatrice fired her in December 2010, says she met a man Dorcy called "Henry Rice" but who she identified as Petro Hoy, after seeing a videotape of Hoy.
Hoffsten stated that on March 28, two days after Dorcy entered the hospital, she called her friend Kuu'lei Heyers, who knew the real Henry Rice. Heyers called Rice, who told her he had heard of Dorcy but that he had never done business with him or set foot on Dorcy's Kula property - which is not far from Kaonoulu Ranch, of which Rice is president.
This matches the statement of Linda Leilani Dorcy Sanford, Dorcy's cousin and also an heir under the first will.
She stated that Dorcy had talked excitedly to her about how Rice would head a foundation Dorcy was setting up with money he inherited from his grandfather.
"My cousin told me that Henry Rice had no family," she said. "The actual Henry Rice did have a wife and a daughter and grandchildren. This also made me suspicious that my cousin was not actually dealing with Henry Rice."
So she called Rice on Maui from her home on Oahu and introduced herself as Dorcy's cousin. She says he replied, "I am afraid I am not familiar with that gentleman on Maui."
Sanford said Dorcy told her the man he knew as "Henry Rice" was going to legally adopt him and Kanuha. This was about the time Dorcy attempted to adopt Kanuha as his son, a petition granted by Family Court but later withdrawn because of what Judge Keith Tanaka described as misrepresentation.
Kosaka and Kanuha had been the only people present when the adoption was granted; by that time, Dorcy was incapacitated.
Although Hoffsten, the housekeeper, says she was told not to tell anyone that Dorcy was in the hospital, she told Sanford. Sanford decided to visit Dorcy, but first contacted a physician and two lawyers who had worked for him. She related her concerns about potential elder abuse, and they advised her to contact Adult Protective Services.
According to her statements, Sanford called the agency and tried to make plans to meet a social worker at Dorcy's hospital room. When she arrived at the hospital, she was stopped by Kosaka and Kanuha, and engaged with them verbally before eventually gaining access to her cousin.
She said she missed connections with the social worker, and because the next day was a Furlough Friday, she never did manage to meet with him.
After the incident at the hospital, Hoffsten said Kosaka offered her the choice to resign or be fired, for violating Dorcy's supposed request to keep his condition secret from his family. Sanford later confronted Kosaka at Dorcy's Kula estate, where she said Kosaka presented her with what he said was Dorcy's power of attorney and asked, "What are you doing here?"
Sanford said in her sworn statements that she told Kosaka she was concerned because over the past three months, phone conversations with her cousin seemed to indicate a deteriorating condition.
"I said to Hans (Kanuha) and Mr. Kosaka: 'What is all this about my cousin's foundation and Mr. Henry Rice is going to be a partner in the foundation?' " she said. "At the mention of Henry Rice, Mr. Kosaka jumped out of his chair, went ballistic and shouted, 'There is no Henry Rice, there is no Henry Rice.' "
She said Kosaka accused her of lying. "And then Mr. Kosaka mumbled: 'There may have been a Glenn Rice.'"
Kosaka, who noted he had not yet seen the declarations, cautioned Tuesday that "there is another version" to the events.
The attorneys representing "first will" beneficiaries have not yet formally asked the Circuit Court to declare the second will null and void, along with the changes made to Dorcy's Hawaii trust; but they indicate that they will do so.
The changes made in January would give Kanuha control over the trust assets, they say.
Rudy and the other attorneys are asking the court to approve an arrangement by which they would be paid at hourly rates, unless there is an early recovery for the first will beneficiaries.
They claim that since Peterson is likely to be entitled to recovery of expenses, win or lose, it would be cheaper for the estate to pay them hourly, rather than a contingent fee schedule that Peterson entered into, which could result in payments of millions if the lawyers recover assets to the first will beneficiaries.
They also claim the "second will" lawyers are not entitled to payments from the estate, since they are not defending a prior will.
A hearing on the fee request is scheduled for Nov. 23 before Circuit Judge Shackley Raffetto. Raffetto had earlier designated Peterson as temporary representative of the trust.
The Office of Attorney General is also asking the court to grant it a role in protecting potential bequests to public charities.
Rudy says his request would also be subject to review for reasonableness by both the court and the attorney general.
* Harry Eagar can be reached at email@example.com.