‘Meets Expectations of All Litigants’ : Bitter Feud Over Dairywoman’s Estate Settled

A tentative settlement has been reached in a bitter dispute over the multimillion-dollar estate of Ellen Douglas Whelan, the legendary Oceanside dairywoman and former schoolteacher who died at age 85 more than a year ago and left two conflicting wills.

If approved by all parties, the accord would create a 120-acre sanctuary for migratory birds at Whelan Dairy, which sits on the lush northern banks of the San Luis Rey River and borders Camp Pendleton.

Of Whelan’s remaining assets, $250,000 to $500,000 would be provided to an organization that would operate the bird sanctuary. The balance, including the 203 acres outside the wildfowl preserve, would be divided among four beneficiaries named in one of the rancher’s two wills.

A lawyer with the state attorney general’s office, which entered the will dispute last spring to defend the state’s interest in “charitable gifts” like the proposed Whelan Lake Bird Sanctuary, said he expects the settlement to be ratified within two weeks.

Deputy Atty. Gen. William Abbey said the agreement “will be a success if we can achieve, with satisfaction, one of Miss Whelan’s very strong concerns--the establishment of a preserve for migratory wildfowl.”

Steven Boudreau, an attorney for one of the will’s beneficiaries, longtime dairy employee Juan Gonzalez, also praised the accord as “brilliant in its conception” and “something that, to a certain degree, meets the expectations of all litigants and will additionally be of great benefit to the surrounding community.”

Whelan, a spirited woman known as “Toots” who ran the dairy in northeastern Oceanside almost single-handedly for 50 years, died Dec. 31, 1985, leaving an estate valued then at $6 million to $9 million. (The value is now said to be “significantly” lower, but attorneys said an accurate appraisal is difficult to obtain because of uncertain tax debts and because much of Whelan’s land is in an agricultural preserve and thereby off limits to builders.)

After her death, two vastly different wills surfaced--one drafted in 1975 by her longtime San Diego attorneys, Gray, Cary, Ames & Frye, the other prepared by an attorney for her dairy manager, Ivan Wood, and signed by Whelan in 1981.

In the first will, Whelan directed that nearly all her assets be used to establish a bird sanctuary on her 323-acre property, which includes a lake that has long been frequented by large flocks of Canada geese and other migratory waterfowl.

As friends recall, the birds that rested near her modest ranch house each winter gave Whelan boundless joy. Concerned about their welfare, Whelan spent money freely on sacks of grain scattered daily on the lake’s shore. She feared that their habitat was vanishing as well, so the 1975 will contained detailed instructions directing that a private board of directors be formed to maintain the sanctuary and control hunting, pesticides and other elements that could harm the winged visitors.

In addition, that will left $50,000 for Gonzalez, who lived and raised his seven children at the dairy.

The second will, drafted in 1981, left nothing for the birds. Instead, the dairy was to go to Wood, with the remaining assets to be divided among Wood; Gonzalez; Virginia Barrett Gomez, a former live-in conservator of Whelan, and the Prince of Peace Abbey in Oceanside, a frequent recipient of Whelan’s charity.

Prompted by complaints from some of Whelan’s friends, Abbey, the deputy attorney general, contested the will. Abbey alleged that Wood exerted “undue influence” on Whelan--who suffered from Alzheimer’s disease late in life--in persuading her to sign the new will.

Abbey also charged in court papers that Whelan possessed “a lack of mental capacity” at the time the second will was drawn up, and that the will was not prepared properly.

Wood has declined to be interviewed. But in court documents, he said he was Whelan’s “close friend” and was treated like a grandson by her. Wood moved into a guest house on the ranch in 1980 and began modernizing the dairy, which was losing money at the time, and expanding its herd.

The increase in the herd--there were 1,200 Holsteins on the property at one time--raised the ire of neighbors, who complained about the strong odor of manure. State water quality officials fined the dairy for exceeding the limit on allowable herd size and violating waste discharge regulations.

As evidence in his will contest, Abbey intended to use two letters written by Wood to Gomez and to his attorney, George Atkinson Jr. of Paramount, in March, 1980. The letters, contained in the court file, address the proposed division of Whelan’s assets after her death.

In a March 5 letter to Gomez, Wood wrote that Atkinson suggested that the three meet “with or without Miss Whelan” to prepare another will.

“He (Atkinson) thinks, as do I, that we should move fast or we will all get ‘screwed,’ ” Wood wrote. “I could come down one week this month and spend some time in the Red (guest) House. After I am there awhile, she becomes dependent on me & I could have Atkinson ‘stop by’ to talk. Let me know your thoughts--we have nothing to lose (but his fee) and a lot to gain.”

Despite the letters and statements from numerous friends of Whelan’s that raised doubts about the second will, Abbey said he decided that a settlement--rather than the lengthy, costly and uncertain trial process--was the optimal way to achieve what he believes were the dairywoman’s primary wishes.

“No case is a dead-bang winner for any side,” Abbey said Wednesday. “In this case, we are strong in some areas and not as strong in others. So you go through a careful analysis of what your chances of success are. If we can get something satisfactory without the risk of litigation, then it makes good sense to settle.”

Boudreau said he favored the settlement because “my client would not have done very well under either will. If the settlement goes through, and I have confidence that it will, Mr. Gonzalez and his sons will be richly rewarded for the time and devotion they showed to Miss Whelan.”

Under the tentative accord, 120 acres--including Whelan Lake--will be set aside for the sanctuary. An environmental group will be selected to manage the preserve and given a certain sum for that purpose.

The assets remaining after taxes and fees for the county public administrator who has managed the estate for more than a year will then be distributed to Wood, Gonzalez and the abbey. Boudreau said a tentative division gives the abbey 38% of the remaining assets, with Wood and Gonzalez receiving 31% each. Gomez would receive a separate cash award.

Abbey said it remains unclear what will happen to the 200-odd acres outside the bird sanctuary, in particular whether a dairy will continue to operate. But Boudreau, noting that Whelan Ranch is being hemmed in by residential development in fast-growing Oceanside, speculated that “the politics of the situation indicate the continued operation of a dairy is incompatible with surrounding uses.”

He said attorneys are investigating whether the land can be removed from a Williamson Act agricultural contract, which currently limits its use to farming or ranching.

“I think all the parties believe we have the opportunity up there to create a development that will be very harmonious with the wildlife preserve, like a retirement community or something that would take advantage of the natural setting,” Boudreau said. “But of course, that would be many, many years down the road.”

If the settlement talks break down, Abbey said, he is prepared to go to trial. The trial was set to begin next Tuesday.

Gomez, Wood and Gonzalez could not be reached for comment Wednesday. Aside from Boudreau, their attorneys did not return telephone calls from The Times.