Maglica Palimony Award Tossed Out

A state appeals court Monday overturned a $84-million palimony award to a woman who lived, worked and shared a name with flashlight mogul Anthony Maglica, saying her work in building his business did not entitle her to a share of it.

But the 4th District Court of Appeal in Santa Ana ordered a new trial on the dispute, saying the jury that made the award in 1994 was given erroneous instructions on how to value Claire Maglica’s services.

By ordering the new trial, the appeals court gave Claire Maglica another chance to convince jurors that her former companion promised her a share of Mag Instrument Inc. during the 21 years they lived and worked together. The company, which makes the popular Mag-Lite flashlight, is worth $400 million, her lawyers said.

Peter W. Davis, a lawyer for Anthony Maglica, hailed the court’s decision.

“The jury found there was no promise, no fraud, no misrepresentation, no contract,” Davis said, predicting that a jury in a new trial would reach the same conclusions. He said the most important part of Monday’s ruling was the court’s conclusion that Claire Maglica’s right to be paid the value of her services to the business did not give her a share of the company’s equity.

But Karin Kramer, one of Claire Maglica’s lawyers, said the new trial could reap her client even more than the previous ruling.

“Naturally she’s disappointed. The verdict was handed down four years ago, it’s taken us this long to get this far, but we’re all pleased that the other claim has been revived,” Kramer said.

“It means obviously she won’t collect the $84 million. But it also means she will have the chance to go back and win a bigger judgment.”

An Orange County Superior Court jury had rejected Claire Maglica’s claim of breach of contract four years ago, finding that there had been no express or implied agreement to share the business. She was awarded the $84 million for the reasonable value of her services.

But in the 3-0 ruling handed down Monday and made public Tuesday, the appeals court said Judge Robert Polis had wrongly instructed the 1994 jury that it could measure the value of Maglica’s services by the amount of their benefit to her.

That instruction “allowed the jury to value [Maglica’s] services as having bought her a de facto ownership interest in a business whose owner never agreed to give her an interest,” said the opinion by Presiding Justice David Sills.

The proper measure of damages is the market value of the services that Claire Maglica performed, Sills said.

Lawyer Kramer said a jury could reaffirm or exceed the previous jury’s evaluation of those services. But Davis said she was paid above market value, with a salary that eventually reached $350,000.

Claire and Anthony Maglica shared the same Anaheim Hills home and the same last name for more than 20 years. Working together, they transformed a humble machine shop into the successful maker of the lightweight Mag-Lite flashlights. The flashlights have proven especially popular among police officers.

When the company incorporated in 1974, Anthony Maglica became president and she became secretary, with equal salaries. But all the shares were in his name.

They broke up in 1992 after Claire Maglica found out that Anthony Maglica was trying to transfer stock to his children but not to her.

In ordering a new trial on the contract issue, the court said Judge Polis in 1994 had given the jury erroneous instructions that favored Anthony Maglica: He told jurors that the fact that the couple lived together and represented themselves to others as husband and wife, and that she was his constant companion and confidant, did not mean there was a contract to share the business.

While those facts would not prove the existence of a contract, they could support its existence, along with other evidence, Sills said.

*

Times wire services contributed to this report.