June 9, 2014 By Paul Wallin

Over the past several weeks, critics have voiced their opinions against Sterling’s prejudiced remarks. Now that Sterling has agreed to the sale of the team, millions of Americans can take a sigh of relief. However, lost in all of the drama is the fact that Donald Sterling’s wife, Shelly Sterling, could have changed the fate of the LA Clippers.

While NBA owners were looking to vote to have Donald Sterling removed from ownership, Shelly Sterling may have had a legal right to keep the team. Had things occurred differently, Shelly Sterling could have attained ownership under California’s community property laws, leaving ownership in the Sterling family.

California’s Community Property Rule

Blake Griffin LA Clippers

The general rule under California Family Code Section 7601 is that all property acquired by either spouse during a marriage is considered “community property.” Under Family Code Section 7702, separate property of a married person is defined as:

  • All property owned by the person prior to the marriage;
  • All property acquired by the person during the marriage as a gift, inheritance, devise, or descent; and
  • The rents and profits of these separate properties.

In 1955, Donald and Shelly Sterling married. Sterling acquired the Clippers in 1981.3Therefore, the Clippers would be considered community property under California Family Code Section 760. If the NBA were forced to remove Donald Sterling as owner of the team, Shelly Sterling would also have lost the team.

However, one exception could have kept the team in Shelly’s hands.

What Happens to Community Property During a Divorce?

Because community property in a marriage belongs to each spouse equally, California courts will divide it between each spouse during a divorce. In a legal separation, any property acquired during the marriage will be divided evenly.

When divorcing parties cannot come to an agreement on how their property will be divided, the court will use one of the following methods to come to a solution:

  • In-kind Division;
  • Asset Distribution/Cash Out Division;
  • Sale and Division of Proceeds; and
  • Deferred Partition by Conversion to Tenancy in Common.

In an interview with CNN, Donald Sterling said that Shelly would be divorcing him. At one point, she allegedly signed the divorce papers and was preparing to fight the NBA for ownership of the Clippers.4 Based on California’s Family Code, Shelly could have retained part ownership if she was able to finalize the divorce quickly.

According to NBA commissioner Adam Silver, Donald Sterling violated Article 13(d) of the NBA ownership constitution. When he made racist remarks, he failed to meet his obligation to avoid unethical conduct.5 As a result, he could legally have had his ownership of the team terminated if three-quarters of the NBA’s owners voted him out.

However, Shelly had nothing to do with her husband’s statements and could have fought for ownership of the team after divorcing Donald.

Fortunately, both Sterlings recently agreed to sell the team to former Microsoft CEO Steve Ballmer for $2 billion, putting an end to what could have been a very messy legal situation.6

Wallin & Klarich Wants to Hear Your Opinion

If a divorce could have resulted in Shelly Sterling’s ownership of the Clippers, the NBA may not have had the right to vote her out. Do you think this situation is fair? Does Shelly Sterling deserve to be the Clippers’ owner? Should she use divorce as a threat to take over ownership of the team? What do you think would have happened to the team if Shelly Sterling had attained ownership?

Wallin & Klarich would like to know your opinion on this issue. Please share your thoughts by leaving a comment below.

Information retrieved from:

1. http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=00001-01000&file=760-761

2. http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fam&group=00001-01000&file=770-772

3. http://www.forbes.com/profile/donald-sterling/

4. http://www.thewire.com/business/2014/05/could-a-sterling-divorce-allow-shelly-sterling-to-keep-the-clippers/371019/

5. http://sportsillustrated.cnn.com/nba/news/20140515/nba-ownership-los-angeles-clippers-donald-sterling-shelly-sterling/

6. http://www.usatoday.com/story/sports/nba/clippers/2014/06/04/donald-sterling-sale-shelly-los-angeles-steve-ballmer/9980295/

Image retrieved from:

Author: Keith Allison; Source: http://commons.wikimedia.org/wiki/File:Blake_Griffin_Clippers.jpg

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