Arbitrator Orders Newspaper Owner to Pay Her Ex-Boyfriend $14.8 Million

Billionaire environmentalist and Santa Barbara newspaper owner Wendy McCaw has suffered a stinging legal defeat at the hands of an arbitrator who awarded her former boyfriend and business associate $14.8 million.

The decision, revealed in documents filed Wednesday in Santa Barbara Superior Court, not only gives nothing to McCaw but also rebukes her with a $100,000 penalty in punitive damages.

“The award of punitive damages against Wendy McCaw is a damning indictment of the way she conducted her business,” said Gregory Parker, the ex-paramour who accused her of trying to ruin him after he broke off their relationship.

In an accompanying statement, Parker’s attorney, Thomas G. Foley Jr., said punitive damages are awarded only if there is “clear and convincing evidence that the defendant has been guilty of oppression, fraud or malice.”

McCaw’s attorney, Sue McCollum, said she hadn’t seen the documents but indicated that her client is likely to appeal the ruling. “If she intended to let [the award go unchallenged], she would have paid it before the numbers were made public.”

For McCaw, the owner of the Santa Barbara News-Press, the arbitrator’s award is just the latest legal setback. She has been battling the California Coastal Commission for years to stop it from opening to the public a stretch of beach beneath her 25-acre bluff-top estate.

After losing in state courts, she has appealed to the U.S. Supreme Court. She has also paid $460,000 in fines.

McCaw is the former wife of telecommunications visionary Craig McCaw, who made billions in the cellular phone industry. Although her holdings have declined in value from their peak worth of up to $4 billion, she remains one of the Central Coast’s premier businesswomen.

She and Parker, a Santa Barbara attorney, met while she was house-hunting. He went to work for her exclusively. In 1997, as her marriage unraveled, Parker and McCaw began dating. Soon they made plans to be married, but the relationship eventually fell apart, Parker said.

After that, he said, she forced him out of her business and mounted a campaign to destroy him financially. She filed a complaint with the State Bar of California that has since been dismissed.

Parker filed suit seeking $11.4 million, in part to compensate him for the work he did that added to McCaw’s net worth.

She contended that Parker was only after her money all along, but he said it was her idea to give him an interest in her assets.

The arbitration hearings were held in April and May before David N. Eagleson, a retired state Supreme Court justice.

The award was made in August but remained confidential until now. The fact that the arbitrator awarded Parker and his attorneys more than they requested, along with punitive damages, was a surprise, they said.

“Mrs. McCaw attempted to excuse her dishonorable actions with sham allegations of misconduct on the part of Mr. Parker,” Foley said.

If McCaw does appeal the ruling, the details of the award, including the arbitrator’s specific findings, will also become public. A hearing is scheduled Nov. 4. Foley said the employment contracts drafted by McCaw’s own lawyers said any arbitration award would be “final, binding and non-appealable.”