Monterey woman’s philanthropy gets caught in the legal system.
Thursday, September 24, 2009
They were meant to promote literacy and improve children’s lives. But for Sand City Police Chief John Michael Klein, the charitable bequests in his late mother’s estate have brought four years of headaches.
“No good deed goes unpunished,” he says.
Vera Oler’s Survivor’s Trust gives $100,000 each to Klein and his two sons, and splits the balance – about $400,000 – between Salinas City Library, Monterey Public Library’s bookmobile program, and Shelter Outreach Plus, a Marina-based organization supporting the county’s homeless and victims of domestic violence.
Oler died in August 2005, nine years after the passing of her husband, Charles. But years later the library beneficiaries were still waiting for their bequest, according to a March 2009 Superior Court petition filed by Michael Masuda, a Salinas attorney representing Salinas and Monterey.
The delay was apparently due to insufficient trust funds. Three days before his mother’s death, Klein withdrew $450,000 from the trust to pay down mortgage and construction loans on Oler’s Monterey house.
Klein later clarified that the withdrawal should have been considered a loan. “In the last portion of my mother’s life she needed additional funds,” he explains. “I was not gonna let her live out her last years in squalor.”
In September 2006 the court ordered Klein to repay the trust, with interest, within one year, and to refinance the home to pay off the beneficiaries. Masuda’s petition alleges Klein didn’t comply, and demands immediate payments to Salinas and Monterey, along with attorneys’ fees and interest.
But Klein’s lawyer, Gary Gray of Monterey, says the allegation is false: Before the petition was filed, Shelter Outreach Plus and the City of Salinas had already been paid in full, and Klein had signed a deed of trust stipulating the city of Monterey will be paid when the family home sells.
“Unfortunately we have a terrible case of miscommunication,” Gray says. “The allegations that there was something done improperly by Michael Klein are denied; they always have been denied. It’s just a shame this whole thing got started, but it’s over.”
The bequests to Shelter Outreach Plus and Salinas Public Library also ran into complications.
About two years after Oler’s death, SOP’s then-board president, Salinas lawyer Jonathan Romeyn, hired an outside attorney to pressure Klein to hand over the bequest. “He was not releasing the money,” Romeyn says. “He told us that he knew what his mother wanted and he had the right to change the terms of her trust.”
But Klein says he never attempted to keep the money for himself. “My sons and I, we have plenty,’’ he says. “Not to say we couldn’t use it and buy a big beach house in Pebble Beach or something, but that’s not our style.”
In November 2007, Klein gave SOP more than $130,000, Romeyn says.
But the payout to SOP’s attorney didn’t sit well with Klein. “That this left a very bad taste in my mouth is an understatement,” he says. “My parents wanted this money to go to children and their needs, and clearly this did not happen with Shelter Outreach Plus.”
In November 2008, Klein delivered a check for almost $138,000 to the City of Salinas, but didn’t stipulate that it was from his family’s trust. The money was earmarked for Community Partnership for Youth, an organization that provides children with safe alternatives to drugs and gangs. (Klein says he helped get CPY’s Salinas program off the ground, and raised about $50,000 for it by hosting dinners at his home.)
By the time the city figured out the money was intended for Salinas Public Library, more than $82,000 had already gone to CPY. The remaining $55,000 was re-routed to the library.
Masuda confirms the bequest payouts are now almost resolved. Salinas has been paid in full, he says, and Monterey Public Library will get its bookmobile bequest when the Oler family house sells. “It’s just a matter of the logistics,” he says.
Klein, meanwhile, is still miffed over the legal action by the cities of Monterey and Salinas, which he says framed him as a “deadbeat.”
“That was quite upsetting,” he says. “I am not looking for credit nor appreciation; I am looking for tangible results out on the street.”