How John Steinbeck’s Estate Planning Missteps Led to Family Feud and $13 Million Jury Award

Saul Ewing LLP

When celebrated author John Steinbeck died in the late 1960s, he left a considerable literary legacy that included the classic American novels The Grapes of Wrath, East of Eden, and the novella Of Mice and Men.

He also left behind loose ends regarding the rights to his works that would eventually pit members of the next generation of his family against each other in court for in excess of 40 years!

In September, a Los Angeles jury in a federal California court awarded Steinbeck’s stepdaughter more than $13 million—including $5.25 million in compensatory damages and $7.9 million in punitive damages—after finding that the late author’s daughter-in-law purposely sabotaged negotiations to make new film versions of The Grapes of Wrath and East of Eden.

The Pulitzer- and Nobel Prize-winning author died in 1968. He bequeathed the income from some copyrighted work. He also left behind to his third wife, Elaine Anderson Steinbeck. Royalties from other works (which weren’t then eligible for copyright renewal during the author’s lifetime) were left to his two sons from a previous marriage.

Steinbeck’s widow owned those works, pursuant to the terms of Steinbeck’s will, for which Steinbeck had been able to renew the copyrights during his lifetime. But, in accordance with federal copyright law, Steinbeck’s widow and his two sons were all entitled to royalty payments from those works for which the copyrights renewed after the author’s death.

Given the family dynamics, it didn’t take long for the arguing to start over the royalty distributions, culminating in a number of lawsuits. And the messy, multigenerational disputes sound like a plot straight out of one of Steinbeck’s stories. These disputes also highlight the importance of careful estate planning that considers the long-term implications of asset distribution, particularly with royalties, and management for future generations.

The parties entered into a settlement agreement at some point during the lengthy disputes. Under the settlement agreement, which was reached in 1983, the author’s sons, John Steinbeck IV and Thomas Steinbeck, relinquished their rights to “exploit” 16 of Steinbeck’s works that had their copyrights renewed after the author’s death in favor of his third wife, Elaine. In return, the sons received an increased share of the royalty payments and Steinbeck’s widow received a decreased share, according to court documents.

Steinbeck’s sons, John Steinbeck IV and Thomas Steinbeck, died in 1991 and 2016, respectively. Steinbeck’s widow, Elaine Anderson Steinbeck, died in 2003.

Waverly Scott Kaffaga, the daughter of Steinbeck’s widow, Elaine, and the executor of her mother’s estate, filed a lawsuit in 2014 against Thomas Steinbeck, his wife, Gail Knight Steinbeck, and their company, Palladin Group Inc., in which she alleged that they repeatedly interfered with the ability of Elaine Steinbeck’s estate to exploit the works, in direct violation of the 1983 settlement agreement. Kaffaga accused the couple of lying that they had rights to exploit the works and inserting themselves into negotiations between the estate and third parties to exploit the works, according to the complaint. She sought to recover lost profits from alleged film adaptations of Steinbeck’s novels, including East of Eden and The Grapes of Wrath, in addition to punitive damages.

A district court judge ruled before the trial that the defendant's actions were in violation of the 1983 settlement agreement. On September 5, 2017, a jury found that Gail Knight Steinbeck and her company intentionally interfered with Kaffaga’s efforts to negotiate deals to remake film versions of The Grapes of Wrath and East of Eden and awarded Kaffaga $13.15 million ($5.25 million in compensatory damages and $7.9 million in punitive damages).

The next chapter in the dispute will take place in Gail Knight Steinbeck’s reported plans to appeal the award to the Ninth Circuit.

The following estate planning mistakes made by the author and also his widow helped fuel the disputes:

  • Steinbeck may not have fully considered the implications of his actions when he left ownership of certain assets to his third wife at the exclusion of his children from a prior marriage.
  • Steinbeck failed to form a plan for those works which were not renewed for copyright purposes until after his death. His failure to research the effect of federal copyright law on the royalty distribution laid the groundwork for future litigation between the two families.
  • Steinbeck did not consider the use of trusts or other similar vehicles and planning techniques to own or control his works, while still giving his wife and his children royalty and income rights to his work. This might have reduced the direct interaction between the two families, through the appointment of a neutral trustee, while still allowing them to benefit from his work.
  • Steinbeck placed his third wife (who was not the mother of his children) in control over some assets from which his children from a previous marriage also ultimately benefitted by way of royalties. It is no surprise that this was a formula for disaster.
  • His widow, Elaine, named her daughter as executor of her estate. Given the bitter royalty fight that was waged well before Elaine Steinbeck’s death, she would have been better advised to select a neutral executor from outside the family, rather than ultimately pitting her family against Steinbeck’s previous children, which probably only exacerbated the problem.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Saul Ewing LLP | Attorney Advertising

Written by:

Saul Ewing LLP

Saul Ewing LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide