Dream Home Turned to Nightmare

In 2018, pop singer Katy Perry was featured on ‘American Idol’ as a judge. For the last three years, however, she has had to appear in court in front of an actual judge, over the purchase of her dream home.

In May of 2020, Carl Westcott, the founder of 1-800-Flowers, bought a mansion in Montecito that he was looking to flip for a profit. Maria Shriver initially offered to buy the home for $13 million, which he countered for $13.5 million. According to his real estate agent, Cristal Clarke, Westcott quickly rescinded his offer, as the pair agreed he could likely get more for the home.

So, in July, Perry agreed to buy the eight-bedroom, 11-bath property for $15 million, in all cash with no contingencies. Clarke indicated that Westcott encouraged her to “please proceed” with the sale, and allegedly told her to keep Shriver’s $13.5 million offer on the back burner in case things with Perry fell through.

But as the real estate market continued to heat up during the pandemic, Westcott notified Perry’s business manager, Bernie Gudvi, on July 23 that he no longer wanted to sell the home. Perry refused to let him out of the deal, though, so in August of 2020, Westcott sued Gudvi, and the trial began in later September.

Attorneys for Westcott claimed that his contract with Perry should be rescinded, or undone, because he lacked the mental capacity to enter into a contract.

While involving slightly less valuable property, in 2018, a similar situation played out in Wisconsin. Here, a person sold two parcels of land to another party for prices that were significantly below fair market value. Two weeks later the seller was placed under guardianship due to dementia.

The seller’s guardian subsequently brought an action to rescind the transactions, based on mental incapacity of the seller. The jury determined that the seller was mentally incompetent, and the judge ordered that the land returned to the seller and the purchase money returned to the buyer. The case was upheld by the Court of Appeals.

As for Westcott, however, Judge Joseph Lipner held last month that he was of sound mind when he agreed to sell the property to Perry. “Wescott (sic) presented no persuasive evidence that he lacked capacity to enter into a real estate contract,” Lipner ruled.

Perry’s attorney, Eric Rowen, told People magazine, “Today’s proposed decision is clear – the judge found that Mr. Westcott could not prove anything other than he was of perfectly sound mind when he engaged in complex negotiations over several weeks with multiple parties to transact a lucrative sale of the property that netted him a substantial profit. The evidence shows that Mr. Westcott breached the contract for no other reason than he had changed his mind.”

Westcott’s attorneys hired Dr. Gary Small, a psychiatrist, who was the only witness to testify that the entrepreneur was incapacitated due to Huntington’s Disease in July 2020, despite never actually meeting him. Lipner held that, “Wescott’s (sic) primary trial evidence on lack of capacity was the analysis and testimony of his retained expert, which the Court did not find credible or persuasive,” and that Small “gave no logical, much less persuasive, reason” to believe Westcott was mentally unfit to enter into a contract.

In a snarky response to the decision, Carl’s son, Chart Westcott, told People, “While we do not agree with Judge Lipner’s ruling and wish he had spelled our father’s name correctly in his ruling, we accept it.”

Perry is engaged to movie star Orlando Bloom, and thanks to Lipner’s decision, it looks like the pair may get a Hollywood ending in their dream home.

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Reg P. Wydeven

Elder Law and Estate Planning Attorney at McCarty Law LLP
Hoping to follow in his father’s footsteps from a young age, Reg’s practice primarily consists of advising individuals on estate planning, estate settlement and elder law matters. As Reg represents clients in matters like guardianship proceedings and long-term care admissions, he feels grateful to be able to offer families thorough legal help in their time of need.

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