Just nine months ago, it looked like the estate of the Stueve family was out of cash. The surviving members of the clan that founded and ran Alta Dena Dairy said their hard-earned fortune had been stolen by a longtime friend and personal attorney they entrusted to manage their wealth.

Today, they’ve been able to recover much of it through court action, allowing trust payments to flow again for the first time in more than a year – and a few relieved family members to clear away mounting debts.

But a contentious legal fight over the rest of the money, which is mostly tied up in real estate, lies ahead.

“The desperation time has ended, but there’s still a long way to go,” said Jackie Arthur, daughter of one of the three Stueve brothers, who founded the Monrovia dairy in the 1940s.

The children and grandchildren of the now-dead Stueve brothers started their legal fight against longtime friend and trustee Raymond Novell last year, after Novell told them there wasn’t enough cash left in their trusts to continue payments. They alleged that he, with the aid of another attorney, J. Wayne Allen, had stolen it through a series of loans to himself, friends and family.

The court battle has produced at least one major win for the family so far. Earlier this year, Novell agreed to a request filed in court to turn over several properties he bought using the Stueves’ money, according to Michael Meyer, the new trustee of the family’s estate. The family was able to sell at least one of the properties and return some liquidity to their estate.

But the Stueves want more. Last month, the family filed an amended complaint against Novell, Allen and several companies they ran, with hundreds of pages of new details about the alleged fraud. The defense has filed challenges to the complaint, which will be heard in a round of hearings next month.

“Novell and Allen were handed about $50 million,” Meyer said. “They’re still about somewhere between $15 million and $25 million short of what was handed to them.”

Novell’s attorney, Hugh Burns, did not return repeated calls for comment. Allen’s attorney, Kyle Kveton, said his client was not guilty of any of the allegations and is eagerly awaiting trial.

“The Stueves received millions upon millions of dollars, contrary to filings that they were left penniless, and they have to try this case in front of a judge or jury,” he said.

Other cases

The conflict, initially covered in the Jan. 17 issue of the Business Journal, is complicated by the fact that Novell grew up with many of the family members. He attended kindergarten with two children of the Stueve brothers and worked at the dairy’s drive-through outlets as a teenager. Later, he became the company’s general counsel.

The family sold the retail side of the business and the Alta Dena name to another company in 1989. The original dairy later ceased operations; in 2001, the family designated Novell to set up 16 trusts to protect the family fortune.

But family members allege Novell and Allen used the money to buy properties for Novell and his family, give loans to companies they ran, and even sold family members’ life insurance policies to investors without telling them.

A major part of the recent complaint, which was filed after accessing new records, is that Allen has been the target of similar lawsuits. The family’s attorneys believe it strengthens their case to show the Stueves were part of a pattern of victims.

The new complaint alleges that Allen has been accused of similarly mishandling trusts in two other lawsuits, including one in which he allegedly placed a couple’s assets into trusts and improperly invested in entities he controlled.

Allen’s attorney, Kveton, said it wasn’t appropriate to include the other cases, which were settled out of court.

“We’re not going to try three separate lawsuits in this case, and I don’t think the court will permit it either,” he said.

The hearings next month on the defense’s challenges to the new complaint are the next big step in the case. A trial date could be set for some point next year, but at this point the case is far away from a conclusion.