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The Honolulu Advertiser
Posted on: Wednesday, May 21, 2008

FAMILY DISPUTE
Cassiday trust battle goes to court

By Jim Dooley
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

A lawsuit pits Benjamin Cassiday III, son of Barbara Cassiday, above, against her ex-husband over disagreements about the family trust.

RICHARD AMBO | The Honolulu Advertiser

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Dying of cancer, attorney Benjamin Cassiday III is spending the final days of his life pursuing court claims that his father and uncle exploited family trust funds for their personal benefit.

The wrenching family drama is being played out in a fourth-floor courtroom at Circuit Court, baring inner secrets of an influential and well-to-do kama'aina family that traces its history in Hawai'i back to 1811, when British sea captain Alexander Adams arrived here from Scotland.

Much of the family wealth is derived from development of Niu Valley and Hawai'i Loa Ridge real estate in East Honolulu, originally given to Adams after he served in the navy of King Kamehameha I.

Millions of dollars poured into the family coffers when homeowners in Niu Valley were given the chance to buy their properties in fee in the 1970s and '80s.

Much of the testimony in the case centers on events that occurred more than 30 years ago, when trustees of a family trust, Paul Cassiday and Benjamin Cassiday Jr., entered into a commercial real estate development venture in Southern California.

The allegations of Benjamin Cassiday III also depend in large part on his assertion that his grandmother, Charlotte Harriet Lucas Cassiday, was so mentally and physically infirm when her sons entered into that investment deal that she could not have understood it or approved of it.

Her approval was necessary because she founded the family trust, and money from the trust was used by her sons to help finance the development of an industrial subdivision in San Diego.

Both elder Cassidays deny any wrongdoing.

Paul Cassiday, 79, served for 20 years as a trustee of the much larger Campbell Estate and is now retired. Cassiday Jr., 85, is a retired U.S. Air Force brigadier general.

Cassiday III, 57, attended the opening days of the court hearing last week but has since been confined to bed, said his mother, Barbara Cassiday. She said last week she expects her son will die in the very near future.

His wife, Maile Burgundy Cassiday, has taken his place in the courtroom. She declined comment on the proceedings, but said last night that her husband is now in The Queen's Medical Center in critical condition.

Cassiday III has been a lawyer in Hawai'i since the 1970s, perhaps best known for representing former state House Speaker Daniel Kihano on federal corruption charges. He also represented his second cousin, auto dealer and land developer James Pflueger, in civil and criminal cases related to environmental damage caused by a Kaua'i real estate development.

Cassiday III and his mother are on one side of the latest legal dispute. His sister has sided with her father and uncle.

Barbara Cassiday testified in the case Friday, saying that by 1979, her mother-in-law was so enfeebled that she could not hold a pen or speak in complete sentences.

But that testimony was disputed by a former nurse of Charlotte Cassiday. And under cross-examination from Cassiday Jr.'s lawyer, former Attorney General Margery Bronster, Barbara Cassiday acknowledged a history of alcoholism and said she twice completed three-month detoxification and rehabilitation programs in 1979.

She and her husband began divorce proceedings that same year, a long-running legal dispute that ended with a Hawai'i Supreme Court decision in 1986. On the witness stand, Cassiday denied any bitterness toward her former husband.

Paul Cassiday testified at length in the case last week, saying that his mother was fully informed of, and approved, expenditure of family trust funds in connection with the San Diego venture.

He acknowledged that at times he acted as both trustee of the family trust fund and borrower of money from the fund, but said all decisions were approved by his mother and by legal advisers.

And he said the trust was made whole for all money owed to it.

Cassiday III last year sued his father over title to the home the younger man lives in on Kalaniana'ole Highway, alleging that the father had reneged on a promise to convey title to the son.

That case was decided late last year in favor of Benjamin Cassiday Jr.

The non-jury trial is being held before Circuit Judge Bert Ayabe.

Ayabe said in court yesterday that after testimony is concluded tomorrow, he will issue a ruling by next week on whether the two elder Cassidays are liable for damages in the case.

If he finds that there is liability, a second phase of the case would begin to determine the amount of financial damages.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.