Originally published Feb. 20, 2012
Frail and childlike, 89-year-old Lola DiStefano fingered a yellow legal paper and glanced back and forth at her lawyers as she struggled to remember what she owned.
There was the Victor Cafe, the family's famed South Philadelphia restaurant, where aspiring opera singers perform arias between waiting on tables. And there was a parking lot she had bought from the city.
"I paid cash for it, I did," DiStefano said with a smile. She had bought two houses for her son Gregory, but she wasn't sure what had happened to them. "I bought the house that Gregory is living in, and I bought the first house that he was living in," she said. "I don't think I own either one of them anymore. But how I don't own them, I don't know."
The documents she signed that day 2 1/2 years ago gave control of the cafe to a lawyer she'd known only a few weeks. A videographer recorded the proceedings in an effort to ward off potential legal challenges.
But rather than averting a bitter courtroom battle, the taping had the opposite effect.
Within weeks, one of DiStefano's six children sued to overturn the documents, including a power of attorney given to a lawyer outside the family, laying bare a scathing family feud.
Patricia DiStefano accused her siblings of bleeding money from their mother and the restaurant. She also alleged her siblings had pressured their mother to sell and had convinced her that Patricia planned to put her permanently in a nursing home.
Lola DiStefano's lawyers in turn accused Patricia DiStefano, 65, of sweeping into Philadelphia after a long stay in California and plotting to take control of the family legacy.
And then the dispute deepened.
A judge overturned the trust and a power of attorney, ruling on the basis of her wavering and contradictory statements on the videotape that Lola DiStefano, the family matriarch, likely had been subjected to undue influence by her lawyer, Daniel Glennon, and one of her daughters, Pamela Packard, who runs a catering business with her husband.
Glennon and another lawyer who drafted the documents, Richard Torpey, returned $35,000 in legal fees after the finding by Orphans' Court Judge John Herron.
The story of the litigation battle over the Victor Cafe offers a classic example of how deep family rivalries can explode after years of dormancy when adult children of an aging parent vie for control of a valuable asset.
It is also a cautionary tale about the costs, both emotional and financial, that pile up when families struggle over the assets and affections of a parent in a period of decline.
During the legal proceedings, many of the material facts were disputed. No one, it seems, came out unscathed.
"Probably the only thing that [the lawyer for the other side] and I can agree on is that Lola was the victim and is the victim," Cozen O'Connor lawyer F. Warren Jacoby said in a statement before Herron on Oct. 20, 2009, appearing on behalf of Lola DiStefano.
Jacoby was disqualified from participating after Herron found that he was effectively on both sides of the case: His earlier representation of Philadelphia-area developer Brian J. O'Neill, who had explored helping Gregory DiStefano buy the restaurant, presented him with a conflict of interest.
"I won't say it absolutely tore [the family apart]; maybe it was just a painful thing that we went through," Gregory DiStefano, the youngest sibling, said of the case. He had lined up with his brothers and sisters against Patricia DiStefano. "We all make mistakes and this was a big one. I'm sure my sister is kicking herself right now."
Legal experts say once a family fractures over a disputed legacy such as the Victor Cafe, it is difficult if not impossible to keep the fight from intensifying. Suspicions flourish and decades-old resentments color family relationships. The law, moreover, gives aging parents nearly total authority to include or disinherit offspring. These decisions are frequently challenged, but the legal bar is high and so are the costs.
"There is no foolproof way of avoiding this," said Bruce Rosenfield, chair of the tax and wealth-management practice at Center City's Schnader, Harrison, Segal & Lewis firm, and an expert on estate planning. "In America, people can sue for anything, and they do."
However, disputes can sometimes be headed off, Rosenfield said, if parents include children in their estate planning and openly share information. That can tamp down suspicions and jealousies, or, alternatively, expose potential rifts in a way that can create the opportunity for compromise.
In the restaurant world, where setting and atmosphere are nearly as important as food, the Victor Cafe occupies a distinctive niche. For years, it was the hub of a vibrant, blue-collar opera culture in South Philadelphia, in which opera was appreciated like pop music.
The business was founded in 1920 by Lola DiStefano's father-in-law, John, and his wife, Rose, as an RCA Victor franchise that sold phonographs. The store evolved into a neighborhood gathering spot for music lovers who came to hear their favorite recordings.
The DiStefanos later added food and wine. At first, it was the patrons who sang, but in the 1970s, the cafe began hiring singing waitstaff. Today, the servers typically are voice students at Temple University, Westminster Choir College, the University of the Arts, and other local institutions. But the place has always had a sprinkling of stardust, too.
Mario Lanza, the fabled South Philadelphia tenor, sang at the cafe, as did Enrico Ernest DiGiuseppe, who performed at the Metropolitan Opera and the Academy of Music.
The restaurant has also drawn stars such as Luciano Pavarotti, who dined and sang there when he was in town for a program at the Academy of Music. Other celebrity visitors included Sylvester Stallone, who used the restaurant as a backdrop for the final Rocky film.
On a recent weekend evening, the Victor Cafe was packed as waiters rushed from kitchen to tables, stopping from time to time to sing selections from Mozart's Magic Flute, Saint-Saens' Samson and Delilah and other works. Dinner guests sipped wine and listened in rapt attention.
The legal fight over the Victor Cafe began officially on July 17, 2009, when Lola DiStefano revoked the power of attorney she had given her eldest daughter, Patricia, a year and a half earlier. Patricia had come home from California, where she lived with her husband, to help her mother with the restaurant.
But according to Lola DiStefano's legal guardian, Paul Heintz, the dispute likely went back much further, and involved complex family dynamics in which everyone seems to have had a hand in making things worse.
"The story is not that unusual," Heintz said in a report to Herron in 2010 outlining a proposed settlement. "The elderly parent loses his or her memory and ability to run a family business, yet is reluctant to let go. . . . Compounding the problem are fundamental disagreements among the children over the nature of the care of the elderly parent, undocumented or inadequately documented gifts and loans from the parent to various family members, and the tendency of the parent to . . . favor and reward or even manipulate those children who do . . . what the parent wants."
In her testimony, Lola DiStefano at times came across as befuddled or uninformed about the restaurant's business and the legal documents she had signed.
The precipitating event was Patricia's decision in summer 2009 to put her mother in the Watermark, a retirement and assisted-living facility in Philadelphia, while she went to California.
Patricia said her main concern was her mother's safety. She testified that once, while staying in her mother's apartment, Lola DiStefano had started a fire that was climbing the bathroom wall by the time the two women were able to put it out.
Another time, Patricia said, she awoke early one morning to find her mother had left on three gas stove burners. At other times, her mother had fallen or gotten lost, she said.
While Patricia was in California, her sister Pamela Packard retrieved their mother from the Watermark, and then helped her find Daniel Glennon, a boyish, Center City lawyer who had no previous involvement with the DiStefano family.
Within a few weeks, Lola DiStefano not only gave Glennon power of attorney, but also signed legal documents placing her assets in an irrevocable trust. The trust gave Glennon sweeping authority over Lola DiStefano's affairs, including the power to sell the restaurant and to substantially reduce Patricia's role.
"That was the purpose of this whole thing," Glennon testified. "To get the daughter out of the restaurant."
For his efforts, Glennon negotiated a lucrative fee schedule with Lola DiStefano.
According to the terms of the trust, he was to receive 1.5 percent of the first $1 million of the trust's assets and 1 percent of the value above that amount each year for serving as trustee.
He was also entitled to collect a minimum of $20,000 annually in legal fees and would earn a 2 percent commission if the restaurant were sold, which he set out to accomplish shortly after taking over as trustee. Calling the fee arrangement substantial, Herron ruled that the financial benefit to Glennon was a key element in establishing that he had exercised undue influence over Lola DiStefano.
According to sworn testimony, Packard drafted the document revoking Patricia's power of attorney and tried to isolate Lola DiStefano from Patricia as the siblings battled over their mother and the restaurant. At one point, Packard had even urged her mother not to answer the door if Patricia came to visit.
The prospect of the sale of the restaurant figured prominently in Patricia's initial lawsuit to overturn the documents, and in the hearings that followed.
Witnesses called by Patricia's lawyer, including a bank executive and the restaurant's accountant, testified to financial chaos before Patricia came back from California and during the time Gregory ran the restaurant.
Bills went unpaid and sometimes there wasn't enough money to pay employees. According to an interim report Heintz filed to the court after his appointment as Lola DiStefano's guardian, Gregory had also suffered business reversals, including a foreclosure.
Patricia's siblings portrayed her as a manipulator who sought not only to take the restaurant away from their mother, but also to prevent them from having anything to do with it.
"When the music stopped," Jacoby said, "everything seemed to be in Pat's name."
Claudia Rudner, another sibling, testified that Patricia had fired her.
"She said she didn't want any DiStefanos working there anymore. That was her goal," Rudner testified.
Glennon and Torpey, who drafted the power of attorney and trust documents, clearly hoped the videotape would show that Lola DiStefano was capable of making decisions on her own and had not been pressured.
But they were mistaken.
On tape, she comes across as misinformed and confused. One glaring example that Herron focused on was an exchange between Torpey and DiStefano in which Torpey explained that under the terms of the trust, DiStefano was giving up control of her assets.
"And you understand that this is irrevocable . . . and you won't get it back again?" Torpey asks.
DiStefano answers immediately, "No, I won't, but I will get my business back."
Torpey responds only by saying, "Very good, very good."
It was on that basis, and on DiStefano's mistaken belief, established during the hearings, that the power of attorney she had given Glennon could be used only after she had been examined by two psychiatrists, that Herron on Nov. 2, 2009, suspended both documents.
A short time later, the siblings, along with their mother, agreed that Heintz would represent Lola DiStefano in the litigation. Heintz fashioned a settlement in which the restaurant was sold to Gregory. The goal, Heintz said, was to remove the burden and responsibility of the restaurant from Lola DiStefano while ensuring her a steady income stream.
That deal, after years of bitter conflict, is set to close shortly.