Woman Says Millionaire Considered Her a Wife : Palimony: Testimony begins in the $5-million lawsuit against the estate of Henry T. Mudd. The jury hears of an extravagant lifestyle.

TIMES STAFF WRITER

Displaying a ring encrusted with sparkling diamonds, Eleanor (Lorraine) Oliver testified Friday that she was a wife in all but name to Henry T. Mudd, even though she willingly shared the reedy multimillionaire with six other mistresses.

"He told me I could consider myself his wife and I could consider him my husband," Oliver, 41, said in the first day of testimony in the woman's $5-million palimony suit against Mudd's estate. "I loved Henry and cared for Henry a great deal."

A Superior Court jury of five men and seven women listened raptly as the woman described the extravagant lifestyle Mudd lavished on her during their 13-year relationship. His gifts included jewelry such as the diamond ring, furs, foreign travel and a $600,000 house he bought for her in Studio City. It all came to an end in 1990 after Mudd married and their relationship ended. She was later forced out of her house.

Oliver's testimony highlighted the first afternoon of a trial that promises to give an in-depth look at lifestyles layered with money, power and sex.

"It's fun to see how the other half lives," said one onlooker who declined to give her name but said she had been hired to sing at some of Mudd's annual Christmas parties. "It's like reading a good book."

The "good book" is based on the 13-year relationship that Oliver had with Mudd, a prominent philanthropist who gained fame in 1955 by co-founding Harvey Mudd College, one of six Claremont Colleges, in his father's name.

Oliver claims that she and Mudd had a verbal contract in which she agreed to be available for companionship 24 hours a day. In return, Oliver contends, Mudd agreed to set up a trust naming Oliver as the beneficiary, providing her with financial support the rest of her life and allowing her to live rent-free in a four-bedroom house he bought for her in Studio City.

He reneged on that contract, she contends, when he revoked the trusts shortly before he died in 1990 of complications of leukemia at age 77. Executors of his estate subsequently filed a detainer and successfully forced Oliver out of the house this summer.

The executors--Mudd's widow Vanessa, his accountant Seymour Bond, and First Interstate Bank--deny Oliver's contract ever existed.

If it did exist, they contend, it would be unenforceable because they say Mudd was paying Oliver primarily for sexual services. Attorneys for the Mudd estate also argue that if a contract existed, it would have been conditional on Oliver remaining Mudd's friend until his death.

Instead, the defense claims, Oliver ended the relationship before Mudd's death and brought the lawsuit that is now pending against the estate.

Attorneys for both sides declined to comment on the case Friday because of a gag order imposed by Superior Court Judge Florence T. Pickard. But both sides had the opportunity during opening statements and initial testimony to sketch their widely divergent versions of the relationship.

Evoking warm images of a couple who enjoyed conversing about everything from the workday to world affairs, attorney Marvin Mitchelson said that Oliver and Mudd's relationship involved far more than sex. It was based on companionship, he said.

Mudd met Oliver in 1973 and was a friend to her during her marriage, which was filled with ups and downs, Mitchelson said. Mudd and Oliver became romantically involved in 1977.

Oliver's marriage, meanwhile, continued to falter, primarily because of her husband's problem with cocaine, Mitchelson said.

"It got to the point where he was even trying to sell it from his home," he said.

When Oliver and her husband separated in 1985, Mudd gave Oliver the ring and said, "This is a wedding ring. Consider yourself married to me," Mitchelson said.

Mudd also paid Oliver about $8,400 a month for expenses, including clothing and beauty supplies, Mitchelson said. In addition, Mudd went on to draft a trust for Oliver that would support her the rest of her life as well as buying her a $600,000 hillside house with a pool. Oliver paid $8,000 toward the cost, Mitchelson said.

During the same time, Mitchelson said, Mudd had similar relationships with six other women. In 1990, he decided to marry one of the other women.

Soon thereafter, Oliver heard that Mudd had met with her ex-husband. But when she asked Mudd about it, he denied the meeting, saying that if she did not believe him, maybe "we should get a divorce," Mitchelson said. Their relationship ended shortly afterward.

A vastly different account of the relationship was sketched by Jamie Broder, the attorney for the executors of Mudd's estate.

Broder said Mudd and Oliver met in 1973 when Oliver was working as a stripper in a Hollywood nightclub. In 1976, Broder said, Oliver and her husband borrowed $10,000 from Mudd to start up a T-shirt business that failed.

Unable to pay back the money, Oliver agreed to make good her debt by having sex with Mudd, Broder said. Oliver called the allegation a lie.

Oliver became one of several mistresses, Broder said. Mudd would generally see them twice a week each, once for lunch and once for dinner.

"For a while, there was even a schedule," Broder told the jury.

He gave the women money for business ventures, college tuition and luxury items. He took them away to Europe and the Orient, showering them with cars and furs, she said.

Each of them, she pointed out, has a diamond ring of the type she said Oliver chooses to call a wedding ring.

Mudd also set up trusts that would pay income to each woman and trusts that would let the women live in houses rent-free. Upon each woman's death, the money and property was to revert to the college.

Mudd reserved the right to revoke the trusts for any reason or "no reason at all," Broder said.

In addition, "he made it clear to each woman that she would only get her trust if she was his friend when he died," Broder said.

But when Mudd decided to marry, he and Oliver had problems. Despite assurances that nothing would change, Oliver began to worry about what her relationship would be, Broder said.

She hired Mitchelson, demanded settlement and threatened to file a lawsuit, Broder said.

"Henry was extremely surprised, shocked, taken aback by Lorraine's actions," Broder said.

Mudd stopped providing financial support and revoked the trusts.

"She was not a friend to Henry Mudd in the last six months of his life . . . when he needed his friends the most," Broder said.

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