S E A T T L E, Nov. 19, 2002 -- Kathie O'Keefe, a former lounge singer turned political activist, spent two "happy" decades with another woman's husband and now she's being ordered to pay up.
When her former lover, Jack McCarthy, died 16 months ago at age 78, O'Keefe made a claim against the estate of the wealthy real estate broker.
O'Keefe, 69, wanted a watch and ring he had given her, and the $200,000 she said he promised her.
Not only was O'Keefe turned down, but McCarthy's wife of 30 years, Margaret, turned the tables and sued.
Now, according to a court ruling in favor of Margaret McCarthy, O'Keefe owes $200,000, to her dead lover's family.
"I was really shocked," O'Keefe said on ABCNEWS' Good Morning America. "I thought of it as a nuisance suit and I didn't think they had a chance of actually getting a judgment against me," she said.
McCarthy's wife relied on an obscure 90-year-old Washington law that forced O'Keefe to account for all the gifts and money he'd ever given her — and pay it all back in cash.
Dead Man’s Sins
"It doesn't matter to me if it's $200,000 or $2 million," she said. "I didn't do anything wrong. It was Jack who broke the law and I don't think I should be punished for the sins of a dead man," she said.
George Smith, O'Keefe's lawyer, said the court's ruling now exposes every extra-marital partner in the area to serious financial risk.
"The old law says, and it's still in effect, that one spouse cannot gift community property to an individual without the consent of the other spouse," Smith said. "I think the girlfriend should look at the heading on the check, and if it says, 'the account of Mr. and Mrs.,' she's got problems coming down the road."
The McCarthy estate demanded $400,000, but after the court ruling, both parties reached a settlement.
The McCarthy estate's lawyer, Kurt Olson, said things might have been different for O'Keefe if she had what she claimed McCarthy promised in writing.
"If it were a legitimate claim that she was asking for, if she had some evidence that he had intended to give her the money, then obviously that would heve been very important to the estate," Olson said. "If there was any writing if it had been in any estate planning documents that would have been very relevant but we had nothing except for her word about what a deceased person had said according to her," he said.
The politically active O'Keefe met McCarthy, a real-estate broker, through common Democrat political ties. O'Keefe, who was very involved in local politics, even ran for the Washington state Senate in 1968.
The McCarthys wouldn't comment because the agreement included a confidentiality clause, but O'Keefe says the final agreement states that she must pay $200,000.
O'Keefe said she'll be making monthly payments for the rest of her life. There's a lien on her condo, and much of her small pension now goes to the McCarthy estate.
"If this judgment sticks, it will ruin me financially," O'Keefe said. "I will never own my house. They will take it," she said.
O'Keefe says she and McCarthy had a very full relationship, despite the fact that McCarthy was married to someone else. She says they even traveled together on trips to San Francisco, Ireland and to view the bridges of Madison County in McCarthy's native Iowa. The other woman says she has no regrets about her relationship with McCarthy.
"I never felt guilty ever, because everything was just too right about our relationship," O'Keefe said. "It would be very difficult for me to think of any of it as wrong."
Liz Rocca, a reporter for ABCNEWS affiliate KOMO-TV in Seattle, contributed to this report.