CHAPTER 8 
Through me you go into a city of weeping; through me you go into eternal pain; through me you go amongst the lost people.
—DANTE ALIGHIERI, Inferno
Norman Yatooma’s sense of justice for the underdog was strong. He was a Christian family man from Detroit, Michigan, with four daughters at home, just like Thom. He believed in standing up for the disenfranchised and victimized. And he spoke from experience.
On the day Yatooma was elected student body president as a college junior at Taylor University in Indiana, he called his father to tell him the good news. His father didn’t answer. Several more times they missed each other’s calls, trying to connect. Norman would never hear his father’s voice again. He was murdered the next day in a carjacking, shot in the head two times outside a Detroit convenience store. No one was ever arrested, and the killing remained a mystery. Norman never got closure on his father’s death. Instead, he had to take on the responsibility of protecting his family, which meant assuming the financial burden of supporting his widowed mother and three younger brothers. His father’s death had left the family utterly destitute.
Norman vowed that his father’s death would not be in vain. He helped put his brothers through college, and graduated with a law degree from Indiana University at Bloomington, ultimately starting a law firm of his own, Norman Yatooma and Associates. The firm specialized in litigation practice in franchise, class action, and corporate law. He also started a foundation called the Yatooma Foundation, named in memory of his father, Manuel Yatooma, to support grieving families who had lost one or both parents.
Yatooma cut a handsome figure with his boyish good looks and brash and vigorous personal style. He was driven to seek justice for his clients from his deepest core. When he was approached by gallery owners David and Nancy White, and later Jeff Spinello and Karen Hazlewood, he agreed to take their cases, outraged at what had happened to them at the hands of the Media Arts Group company. He made no bones about how he felt about Thomas Kinkade and his company ruining the lives and finances of hundreds of signature gallery licensees.
Franchising has always had its share of fraud and market saturation lawsuits. It wasn’t unusual that lines were sometimes crossed. But when the Painter of Light, the beloved Christian artist Thomas Kinkade, was accused of fraud it was big news. Norman Yatooma filed his first lawsuit at the Oakland County Circuit Court in Pontiac, Michigan, against Thomas Kinkade, Rick Barnett, and Media Arts Group Inc. in October 2002. At the time 344 signature galleries were in operation, and Yatooma filed his first complaint on behalf of one of them, the Thomas Kinkade Carillon Gallery, alleging fraud and franchise investment law violations. Although the signature gallery program was intended to be a licensed distributor program, and not a franchise, the suit stated that under Michigan franchise investment law, the dealer agreements constituted a franchising sale.
According to Yatooma’s first lawsuit and the many that were to follow, Media Arts had defrauded the signature gallery owners by flooding the market with canvas transfer paintings—paintings intended to be sold through their galleries exclusively—and also forcing them to buy products from Media Arts at inflated prices.
Yatooma was not the only lawyer fighting Media Arts in court over the failing galleries; at the time, there were ten other lawsuits in the country. But Yatooma was to become the most vocal and voracious lawyer to pursue Thomas Kinkade. In his first complaints alone, Yatooma estimated his plaintiffs’ losses to be in the millions: $5.4 million for the owners of the Thomas Kinkade Carillon Gallery, and $2.2 million for another couple, David and Nancy White.
The attorney for Media Arts claimed that hundreds of galleries were doing well across the country, and that those filing lawsuits were the “disgruntled” ones because they owed the company money and didn’t want to pay, or had mismanaged their business. He also claimed that the recession, and not the company’s business practices, was to blame for the downturn in sales.
The Carillon Gallery case went into arbitration, as did many more to follow. Norman Yatooma would end up representing over twenty-five cases. Media Arts continually prevailed, on the company’s argument that the signature gallery owners had signed a contract and that contract was binding, no matter how circumstances had changed. In other words, right or wrong, the gallery owners were out of luck.
Jim Cote, a dealer out of Detroit, filed a suit alleging fraud and sought class action status for other gallery owners who were in the same boat as he was. He was once the chairman of the Signature Dealers Council, a national group representing Kinkade dealers, but when he had his license revoked by Media Arts, he was also let go from his position as chairman. He was vocal about his feelings regarding the company and its practices, calling them “ruthless.”
In addition to the allegations of market saturation, complaints were filed by former gallery owners based on the fact that the Thomas Kinkade University required them to attend a weeklong seminar, which cost $500, and submit a business plan at the time of attendance. Prospective gallery owners were encouraged to use an independent financial services agency, with offices in Monterey, among others, that would put together a business plan for them. The cost of the business plan was $5,000. While the company claimed that prospective gallery owners were free to use any financial consultants, Norman Yatooma said the company made it clear that if they didn’t use the services of the recommended consulting firm, they would have to wait a long time for their dealership. The gallery owners claimed the finance company inflated and distorted the numbers, making them unrealistically favorable to the company, deceiving the owners about the financial reality of what they were getting into.
The Harvard-trained PhD economist who drew up all these business plans for the signature gallery owners was finally called to testify before the arbitration panel. According to Yatooma, he broke down in the witness chair and admitted that he had to submit his business plans to the group at Thomas Kinkade University, so the group could adjust them before making the final recommendation to the new gallery owners. Media Arts categorically denied knowingly and purposefully influencing the economist to alter contracts in the company’s favor. Nonetheless, the accountant’s testimony ultimately ended up breaking the case for Yatooma.
More details emerged about the nature of the contract the gallery owners were asked to sign. There was a licensed signature gallery contract that was taken home for review. According to Yatooma, however, the additional retail sales policy contract was over a hundred pages long, and the prospective owners, after signing, were not allowed to take it home or keep a copy. That contract stipulated that gallery owners had to burn their entire inventory if the contract was ever terminated, and that selling the artwork at a discount was grounds for termination. Meanwhile, the artwork was being offered at a discount on QVC. Due to their contracts with Media Arts Group, the gallery owners couldn’t even sell their inventory at a loss. Collectors, and even friends and family who had bought the artwork, later came back and confronted the owners, having seen what looked like the same artwork on television for half the price.
Yatooma also raised allegations about concerns regarding mismanagement and poor company strategy in terms of opening too many signature galleries in the same markets. In Detroit alone, in 2003 there were four left, two others already having closed.
The final and most important complaint of the gallery owners was the misuse of the Christian faith that factored so heavily in the Thomas Kinkade University training sessions. Signature gallery owners widely felt that their faith had been exploited, from meetings beginning with “Let us pray,” to Media Arts representing itself as a Christian company operating with Christian values. They stated in interviews that they had been encouraged to let their guard down, and place their trust in the company based on their common faith. Gallery owners believed they were dealing with a company that embraced business ethics and guidelines different from secular-based companies and more like their own. The owners said they trusted that, based on assertions made at the university, and statements in subsequent meetings with Thomas Kinkade, they were in this endeavor all together, for a higher purpose.
Yatooma could make this claim because a vast video record of the training sessions and seminars at Thomas Kinkade University existed. It was the reason Yatooma was able to push for a judgment against Rick Barnett personally. There he was, on camera, speaking to prospective gallery owners for hundreds of hours, holding up the Bible and making promises. Rick finally received a personal judgment against him by the arbitration panel, based on the testimony of the economist and many hours of videotapes.
In all of his years running Thomas Kinkade University, no one questioned Rick’s judgment or his actions. For one, he kept himself so insulated in Monterey in his own offices with his own staff, operating like a separate company altogether, that no one was much aware of any of the details of what he was doing there. Thom trusted Rick explicitly, and Rick’s was always the last word. No one saw it coming: that Rick would be personally named in the lawsuit. Least of all Rick.
I personally knew Rick as a good man. I don’t believe he ever wanted to harm anyone. He was brilliant at his job. He was also a Christian man with a family he was devoted to, and whenever I interacted with him he conducted himself with class and sincerity. I’ve often thought that perhaps he got in over his head in a company of five hundred employees; a company making billions in overall sales. Maybe he got caught up in the race and didn’t see the warning signs, like so many others who didn’t see them. I know he always wanted to do right by Thom; he deeply believed in Thom’s work and never questioned its value. Perhaps, like all of us, he got swept away by the wave of the company’s success that just kept on rolling.
In interviews, Norman Yatooma didn’t mince words with the press over his opinions. He said, “Fraud is a terrible thing. It is horrifying when it is done in the name of God. The bottom line is, Kinkade has used God for profit.”
For Thom, the public shame of the lawsuits, the negative statements being made in the press about him, and the depositions in which his character was called into question by the plaintiffs’ lawyers were devastating. He had led his life with the desire to do good for people with his art. He had believed his sales were an indication of God’s blessing for his work, and his own contribution to God’s plan to spread his message in the world. He thought the galleries being opened were based on demand and market value, trusting fully in his team to run Thomas Kinkade University in his name and for his higher purpose. He saw his monetary success as a validation from God for his works and his function as a messenger. Whatever benefits he reaped, he felt they were deserved because they were given to him by God. Thom truly believed what he said. And he saw no contradiction between his enjoyment of the fruits of his labor and his purpose. To him, they were one and the same.
Ultimately, beneath his desire to spread the love and light of the gospel was his own deep need for love. The love he received from his followers sustained and fueled all his endeavors. The validation by the thousands of fans who would come to see him at his gallery talks fed his spirit and sustained him deep inside. The sudden turn in his admirers from love to hate, from adoration to contempt, was devastating to him.
After the lawsuits had been brewing for several years, Thom invited me to come to the Palace Hotel in August 2005, for us to go back to the Pied Piper Bar and Grill and have a drink and look at his favorite painting. I remembered the first time we had seen it together before the Fine Wine and Cigar Expo, and how animated and excited he was that day. This day was markedly different.
Thom seemed more subdued and thoughtful. He had gained some weight in the last year or so, and had taken to wearing a trimmed beard with his mustache. We had become good friends over the years, doing business together and having much success at it. I was his star pupil in many ways. I had always delivered for Thom and for the company. The licensing contracts exceeded one hundred by this time. They were all sound and achieving $250 million at retail, per year. If the gallery business had taken a major hit, the licenses never stopped producing.
We sat at the long counter, studying the Parrish painting in silence for some time. Somehow I couldn’t help but feel there was more irony than ever in the image now. The pied piper himself, the Painter of Light whom so many had followed blindly, was being taken to court.
I felt for Thom then. And I also felt for the gallery owners. The stories of all the hundreds who had lost their life savings and had to declare bankruptcy were heartbreaking. I was a believer, like everyone else at the time. I remembered how I had even stopped Rick in the hall of his offices in Monterey some years before and asked him if he would let me have a signature gallery of my own. I remember Rick looked at me with an odd expression and said that I didn’t want to do that. I told him I thought it would be perfect. That I could do it in Solvang, which was close to my home in Santa Barbara. I said that I knew the work so well, it would be perfect, and that my wife could run it. Rick smiled at me then, and said I had enough going on with my licensing deals. “Are you saying I can’t have a gallery?” I asked. He looked at me and nodded, affirming that, yes, that was what he was saying. Then he walked off. I don’t know what he was thinking at the time, but in retrospect, I think he might have done me a favor.
Thom didn’t want to hear about bad things, and he didn’t want to talk about them. It was always a challenge to bring up serious issues with Thom because of his inclination to stick his head in the sand. Bringing up bad news entailed the risk of losing him in conversation. He would just change the subject, get off the phone, or leave the meeting.
By then, the lawsuits had become part of the fabric of the new world order that had set in the day Ken was removed as CEO. For years now, the company had been driven, not by mutual vision and passion, but by profit. Now the profit machine was collapsing on itself.
What I saw that day was Thom slipping away from reality.
I knew deep inside he would deal with the lawsuits the way he dealt with everything: by avoiding them. He would slip into his near-manic optimism about life. He would refuse to hear about anything negative. But he would always answer the call of the bottle. He would phone and say, “Eric, let’s go to a dive bar” or “Let’s go up to Tahoe and gamble.” Anything that would involve a copious amount of alcohol, and a copious amount of escape. Perhaps his own deep need to see things as rosy, and to turn a blind eye to problems and ugliness, was the very pied piper’s song that had led his followers down a seductive path of escapism. But ultimately the pied piper’s promise was a fantasy that spelled doom.
I watched Thom with mixed emotions as he looked up at the great painting. He lifted his drink and pointed toward it, his eyes shining.
“They never understood him when he was alive, you know.”
I remained silent, feeling that I just needed to listen to him.
“They thought he was just drawing nice pictures for advertisements. No one took him seriously. But just look at this painting. It’s a work of genius. Who can deny it? Sometimes I think you have to die to be appreciated, Eric. That’s how it goes.”
He looked at me.
“Cezanne, Degas, Renoir, Toulouse-Lautrec, Matisse, all those guys in Montmartre in Paris in the late 1800s—they had it good. What a time to be alive. Everything was about being creative. They were about making their art. About expressing themselves. And they were much crazier than I’ve ever been.” He laughed.
Listening to him talk, I could read between the lines. He wanted to be anywhere but here; he wanted to escape. His vision of the world, which he held on to so tightly, was an idealized version of the past. It was what made people love him and his images so much in the first place.
The day we sat in the dark bar, I couldn’t help but feel that Thom’s light was dimming progressively. It was a strange time, and the incongruity would last for years. The company kept about its business, printing and selling art and licensed products, and Thom kept painting his twelve masterpieces a year, as all the while the lawsuits continued. Thom would drink and paint, and drink some more. I could see that the drinking was slowly altering him. Looking at him that day, I couldn’t help but think that his disease of denial was the company’s disease, too, and that they were somehow on a parallel track.
By 2005, Norman Yatooma represented over thirty-five dealers from fifteen states. He told the press that some of his clients were suing for damages in the millions of dollars. With over twenty more cases pending, Yatooma was like a bulldog that wouldn’t stop coming.
In the arbitration hearings that took place during that year, Thom was made to answer questions about his personal conduct that were increasingly invasive and humiliating. He was relentlessly grilled by Norman Yatooma, who had a bizarrely uncanny knowledge of Thom’s whereabouts and behavior very few people had been privy to. His character was shredded to pieces and his reputation dragged through the mud. If Thom denied an allegation, Yatooma would continue to press and pull out a detail from the specific event in question, which Thom just couldn’t deny anymore. He was forced to confess over and over again.
Thom was asked whether he remembered attending a Siegfried and Roy show in Las Vegas. He claimed he didn’t really remember going, but Yatooma followed up, asking if Thom remembered standing up in the audience and heckling the performers by yelling, “Codpiece! Codpiece!” until security had to escort him out.
Yatooma’s strategy was to demonstrate the duality of Thomas Kinkade, in order to demonstrate the duality of the company. It was relevant to the argument that the company was selling a Christian opportunity, and thereby taking advantage of people’s trust with the promise of reward and a joint godly purpose. As Yatooma put it, he was “going to bring this self-proclaimed painter of light out of the darkness.”
In the depositions, Thom said he couldn’t remember groping a woman’s breasts at the signing party in South Bend, Indiana. Thom claimed not to remember, until his actual words were quoted back to him and he had to admit again that he had gotten out of hand. When Thom was asked about his ritual territory marking, he explained that he grew up in the great outdoors and peeing outdoors was merely a habit he had developed in his childhood. He denied he had ever urinated in a territorial fashion until the lawyers asked him whether he had not indeed relieved himself on the statue of Winnie-the-Pooh at the entrance of Disneyland, on the way to a meeting with Roy Disney. They asked if he hadn’t said, “This one’s for you, Walt!”
Over and over, Thom was forced to admit to rowdy, drunken, and inappropriate behavior, including the time he unzipped his pants in the velvet-lined elevator of the Bellagio Hotel in Las Vegas and pissed in the corner. The shame was crushing, and Thom couldn’t figure out how the lawyers knew the things they seemed to know.
Unbeknownst to Thom, the lawyers had a powerful advantage: a secret source. They had an informant with a seemingly endless supply of knowledge; anecdotes and details that forced Thom into confession over and over again. That source was Terry Sheppard.
It was Terry whom Norman Yatooma had recruited to aid in the fact finding of the case. Terry spoke to the legal team extensively about his experiences with Thom. Yatooma also questioned other signature gallery dealers, employees of the dealers, other dealers not represented by Yatooma, vendors, QVC employees, salespeople, and associates of Thomas Kinkade. But Terry Sheppard was able to provide some of the most embarrassing details about Thom’s life.
Thom would later publicly declare the allegations that leaked out of the hearings were “ridiculous” and “crazy.” But the information was out, and it went viral. The ensuing shame and humiliation caused by the destruction of his credibility and reputation, and the relentless interrogation of Thom and repudiation of his character, were all too much for him.
Ordinarily, Thom lived in a protective bubble of his own making, in which he preserved his self-image and the image others had of him. It was the image of the world and of himself, as he needed to see it; the same image he replicated in his paintings over and over again. This rosy filter was how he transformed a trailer home into a cozy cottage in his mind and his memory. It was how he created a world, as though by magical invocation, that would forever deny life as it really is: sometimes beautiful and sometimes ugly; harsh and imperfect. Thom was relentlessly positive as a form of self-defense.
The Harley rides, the houses, the money, the toys, the adulation of the fans, the ministry of good, the very idea that God was his art agent were all crutches to keep him from having to look at the underbelly of his own life and behavior, and ultimately to keep him from facing the demon of alcoholism inside. He never wanted to hear any bad news, least of all about himself. Somewhere deep inside, he must have been a terribly insecure person. The reckless abandon with which he threw himself into life, his appetite for it, had a flip side. It made him vulnerable to disappointment and despair. I believe Thom never wanted to feel that despair. I believe drinking was his answer to never having to face the real world, and himself.
In 2005, Thom was asked to become the ambassador of light for the Points of Light Foundation, which was begun by President George Herbert Walker Bush in 1990 to promote the spirit of volunteerism. Thom was only the second person to be asked to become an ambassador, the first having been George H. W. Bush himself. As an ambassador of light, Thom traveled nationwide to raise awareness and money for the Points of Light Foundation and the Volunteer Center National Network, serving over 360 Points of Light volunteer centers across America.
Meanwhile, business continued to be down, and to offset the decline in revenue and to drum up sales, Thom was sent by the company on national tours of signature galleries, promoting himself and the art and doing damage control, like a politician trying to compensate for a disgraceful scandal. On these tours, he would visit as many as three cities a day, talking to people and selling loads of paintings as he went. It was a good way to keep himself occupied, help him forget about the depositions, and connect with the myriad fans he still had. Even with the ongoing bad press generated by the lawsuits, Thom was much beloved by many, and the road trips helped him to remember his fan base and bask in the adulation of those who remained loyal.
Thom would stand behind his podium with the Painter of Light seal and talk straight from the heart, all of his sentiments pouring out of him like the redeeming wine of communion. He would talk about the paintings and his childhood and the need for simpler times; the scripture, the calling, and his love for his wife. It was as though there was a Jekyll and Hyde duality, slowly creating an ever-widening fissure in his personality. He could tap into that good part of himself whenever he stepped before his fans, in whose eyes he was once again validated as the great man and painter he so earnestly wanted to be. Then he would be incapacitated by the muckraking depositions and the ugly image in the mirror that were thrown up to him over and over again in the hearings, and later in the press. The depositions painted that other side of him; the side he was unconscious of, the one he didn’t want to know. But it was the drunken Mr. Hyde who slowly began to take over.
Yatooma focused on the unfair exploitation of faith and religion in signing up the new gallery owners. “Thomas Kinkade University is where my clients drank the Kinkade Kool-Aid,” Norman Yatooma told the press. “Thomas Kinkade had a revival-like atmosphere. They would close in prayer and join together in worship. Everybody would leave with their head spinning—now sign on the dotted line,” he said. “They thought they were going to make money by sharing the light.”
Yatooma eventually won the case of Jeff Spinello and Karen Hazelwood, which Media Arts appealed all the way to the US Supreme Court. But the court refused to hear the case and sent it back down to the lower courts. And this is where Yatooma finally claimed victory.
On February 24, 2006, Jeff Spinello and Karen Hazlewood were awarded a total of $3 million in damages sustained and interest accrued, in the course of opening and operating their two signature galleries in Virginia. The case Yatooma made on their behalf was that they had both based their decision to invest in a signature gallery on the reputation of the Painter of Light. The themes of light and religion had been emphasized throughout the weeklong seminar at Thomas Kinkade University. They had been told Media Arts was different from other companies, in that it did business in keeping with a faith-based mission. They were told Media Arts would support them in spreading the light, and that their business was blessed. Jeff Spinello said that in hindsight it was all a scam. Spinello and Hazlewood had lost everything. Having invested their life savings in the construction of numerous signature galleries and vast quantities of Thomas Kinkade’s art, they were left financially destroyed at the end.
A three-member panel of the American Arbitration Association finally ruled against the Thomas Kinkade Company, finding that it had created “an environment of religiosity” and “failed to disclose material information” that might have kept Spinello and Hazlewood from investing.
By March 2006, a week after losing the arbitration, the Thomas Kinkade Company filed a countersuit against Norman Yatooma’s firm, alleging it had illegally eavesdropped on the arbitration hearings by improperly transmitting a live feed over the Internet to a witness in the case. In fact, Yatooma’s associate Joseph Ejbeh had the court reporter provide a live feed to Terry Sheppard, who was providing Ejbeh with impeachment material during his examinations of company employees. Terry Sheppard, the witness, was also named as a defendant in the lawsuit, which sought damages in the millions. The plaintiffs in the case for the Thomas Kinkade Company included Rick Barnett and Ken Raasch.
Yatooma called the lawsuit by the Thomas Kinkade Company “asinine.” He argued that under the law, the live feed itself was not illegal. The court agreed that no law was violated, since there is no expectation of privacy in a judicial proceeding and therefore there can be no illegal eavesdropping. However, Ejbeh was sanctioned by the arbitration panel for initially denying his use of the live feed, before Yatooma corrected his misstatement before the panel. Ejbeh explained he was only trying to protect Terry Sheppard. The Thomas Kinkade Company’s claim of illegal wiretapping was dismissed in the Michigan court.
Although Thom had initially been named in Yatooma’s claim seeking millions, along with Rick Barnett and the Thomas Kinkade Company, he was not found personally liable. Thom just couldn’t be tied to any of the decisions that were made. He couldn’t be personally linked to the fraud misrepresentations. Thom was in his studio, painting most of the time. He went to the offices as little as possible, and was quite ignorant of the day-to-day operations. Thom was ultimately exonerated.
But the damage was done to his reputation and his sense of himself.