Court rules against real estate mogul who pressured nuns with ‘bad deal’
Angelus Staff May 3, 2016
L.A. County Superior Court Judge Stephanie Bowick ruled April 13 that the contested sale of the former convent of the Immaculate Heart of Mary religious sisters to urban developer Dana Hollister is invalid. Bowick entered an order May 2 affirming the sisters as the rightful owner of the Waverly Drive property and ordering Hollister to immediately vacate the premises.
The recent decisions uphold a previous statement last summer by L.A. County Superior Court Judge James Chalfant, who called the Hollister transaction a “bad deal” for the sisters, describing it as “improper and invalid.” In a July 2015 deposition, Hollister admitted to taking possession of the eight-acre, villa-style hilltop property in the Los Feliz area of Los Angeles for only $44,000 and a non-recourse promissory note for $9.9 million, with no payment required for three years and no guarantee that the sisters would ever receive any additional payments.
“The Archdiocese [of Los Angeles] took legal action on behalf of all the IHM sisters to protect them from losing possession of their property to Dana Hollister for a tiny fraction of its value,” explained Michael Hennigan, counsel. “The archdiocese will continue to litigate to ensure that the sisters get their property back from Dana Hollister.”
In addition to concerns from the archdiocese, neighbors have expressed deep opposition to the sale after learning that Hollister planned to convert the villa into a boutique hotel.
According to local news reports in Los Angeles Magazine and The Silver Lake News, Hollister previously purchased a Silver Lake convent from the Franciscan Sisters in the 1990s with “no money” and taking seven years to close escrow. Hollister abandoned her plans of converting the 22,000 square foot Mediterranean mansion — now known as the Paramour — into a boutique hotel after opposition from the surrounding community.
In a 2015 letter from Waverly Drive neighbors, including some who have lived in the neighborhood for more than 45 years, residents expressed concerns about the Hollister transaction, stating that “[Hollister’s] use of the former convent on Micheltorena (now called the Paramour) as a commercial party house/recording studio/vacation rental/film location has for years inundated a lovely residential neighborhood with noise, paparazzi and late night traffic.”
In regard to the sale of the Waverly Drive property, Chris Laib, president of the Los Feliz Improvement Association, which represents thousands of residents, said that the neighbors firmly “oppose a code change for a hotel” in the area, which is zoned as a residential neighborhood.
History to the present
The present contentions begin more than a decade ago. In 2005, the Vatican entrusted the Archbishop of Los Angeles to oversee the finances and governance of the Immaculate Heart of Mary Institute, the legal entity formed for the business affairs of the sisters. The Vatican decision is meant to ensure that any decisions made are in the best interests of all five surviving sisters. Because the Institute retains ownership of the Waverly Drive property, the proceeds of any sale are slated for the life-long care of the retired sisters, who currently range in age from their late 70s to their late 80s.
“The Holy See has entrusted the archbishop with governing authority to care for the sisters,” said Sister Cecilia Canales, Vicar for Women Religious for the archdiocese. “I know [Archbishop José H. Gomez] has great concern for the IHM sisters and he will practice great prudence in making decisions on [their] behalf.”
The sisters, who now reside privately or in senior living communities, vacated the property in 2011 because “it became too costly … to maintain and no longer accommodated their physical needs,” according to a recent archdiocesan statement.
In 1993, the sisters agreed that the institute may not sell the Waverly Drive property without the prior written approval of archdiocesan leadership. The sisters were all consulted before the archdiocese finalized a sales agreement and transaction with pop star Katy Perry, who had offered $14.5 million. The Perry offer includes paying for a new home for the Cardinal Manning House of Prayer for Priests, which has long been located on the Waverly premises.
Although the Perry transaction was already in process, Sisters Rita Callanan and Catherine Rose Holzman entered into a separate transaction with Hollister. They did so without informing the archdiocese or their fellow three sisters — Sisters Jean-Marie Dunne, Marie Christine Muñoz Lopez and Marie Victoriano.
The archdiocese contends that transaction with Perry is far superior to the Hollister deal in providing for the future needs of the sisters.
“The Katy Perry offer is a guaranteed offer that would provide the sisters with immediate funds that would be used for their care and well-being,” said Hennigan.
Regardless of any sale of the property, Archbishop Gomez has personally promised the sisters that the archdiocese will continue to care for them for the remainder of their lives.
“We have pledged long-term care and support for all five of the IHM sisters,” Sister Canales said.
According to attorney Hennigan, it is past time to bring the contested proceedings to a conclusion.
“For nearly the past year, legal counsel representing Sisters Callanan and Holzman, and separate counsel for Hollister, have attempted to impede the judicial process related to the property matter with frivolous motions and media tactics, which have only served to increase the legal fees being billed to IHM Institute,” said Hennigan.
“The court has ruled and reaffirmed that the Hollister transaction is invalid and the property should be returned to the sisters. We need to end this,” said Hennigan, who said he will file a motion requesting that the Court hold the lawyers and Hollister accountable for continuing to take advantage of the sisters.
Sister Jean Marie, among the majority of the sisters who favor selling the property to Perry, has been in religious life for more than 60 years. Although she has many fond memories of her years in residence at the villa — feeding the squirrels outside or taking walks at sunrise — she doesn’t feel a sense of loss nor is she overly sentimental at the prospect of selling the property.
“People are more sacred than the ground of the villa,” she said.
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