Mystery, Strong Emotions Surround Dally Case

By DARYL KELLEY

June 30, 1996 12 AM PT

TIMES STAFF WRITER

VENTURA — It has been 48 days since Sherri Dally dropped off her sons at school, bought her mom a Mother’s Day gift, then died a grisly death at the hands of a kidnapper.

Friends still struggle against tears when they consider the last years of the Ventura homemaker and mother of two, who ended up stabbed and beaten in a ravine north of town.

They choke back anger when they discuss husband Michael Dally’s past treatment of his slain wife and his outspoken support for longtime lover Diana Haun.

And they try to piece together a clear picture of Haun, the prime suspect in the slaying--a woman often described as shy and soft-spoken who says she likes to joke about being a witch and who acknowledges taking cocaine while involved with Michael Dally.

The unfolding story of these three Ventura County residents--a loving mother, her adulterous husband and his girlfriend--has captured locals’ imaginations like few others in recent years.

And those trying to solve the Sherri Dally murder case are approaching it with a special intensity.

“It is often referred to as a soap opera, but it’s really a tragedy,’ Ventura Police Lt. Carl Handy said. “Sherri Dally is just someone everybody likes. She went out of her way to make a bad marriage work, then she’s taken out and murdered.”

The case’s emotional tug is felt even by veteran detectives who have worked extra shifts for seven weeks to solve it. Six investigators took their families to the Dally funeral on their days off two weeks ago.

“I’ve never seen that happen before,” Handy said.

Sherri Dally was kidnapped from the parking lot of the Ventura Target store May 6. Her body was found three weeks later.

Haun, 35, and Dally, 36, grocery clerks who worked night shifts together until last month, have both professed their innocence.

“I am not guilty. I had nothing to do with it,” Haun said last week in an interview with The Times, insisting that she had been “set up” by the real killer.

She stressed that she had even passed a lie detector test during an early grilling and that Dally had said he passed one, too.

Police have refused comment on the tests.

But they do say they are confident they now have a good circumstantial case against Haun, who they arrested two weeks after Sherri Dally’s abduction, then released for lack of evidence.

“There is a mosaic of circumstantial evidence that entirely surrounds Diana Haun,” one source said last week.

Law enforcement sources say there are two main suspects, and Dally is one of them. They also are looking into the possibility that a third suspect was involved.

At the same time, Diana Haun’s lawyers have tried to fend off a rush to judgment in the case.

“I don’t know why they arrested her,” said Neil Quinn, Haun’s public defender, the day she was released from jail. “But at some point soon, she hopes this cloud of suspicion can be lifted from her head.”

Every twist in the case is headline news.

“I can’t go anywhere in this county without somebody asking about this case,” Handy said. “We just tell them it’s ongoing and we’ll put them away. . . . Everybody’s got some anxiety waiting for the ax to fall.”

If the ax falls on Haun, it will strike a woman most often described as polite, soft-spoken and shy, but who harbors a fascination for the odd and occult and who can flash a sudden, inexplicable anger.

From her days at Hueneme High School through her current job at the deli counter at Vons in Port Hueneme, teachers, friends, co-workers and roommates characterize Haun as naive, even childlike, in her demeanor. But not easily rattled.

“I don’t know if you’d say she was reclusive, but she didn’t seem to interact with the other students like normal high school students would,” recalled teacher John Grenfell.

Indeed, Grenfell said that probably the only reason he could remember Haun at all was because as a high school sophomore in 1977 she was struck a glancing blow on the head by a collapsing basketball backboard.

That trauma, which she vividly recounts to friends, left her in a coma for three days with a bleeding brain and ended in a lawsuit settlement that provides her $1,077 a month until age 65. She still sees a psychologist regularly.

Even as Haun grew older and worked a series of jobs--clerk, waitress, bank teller, vending-machine stocker and postal worker--the world saw a surprisingly consistent image of her.

“She was nice, very quiet-speaking, she talked in very low tones,” said George Pirie, whose son, John, worked with Haun at the post office in the late 1980s and who operated a vending machine company as a side business with her for several years. “She thinks hard. She’s not going to say something outspoken.”

By 1991, Haun was working at Bakers Square, first as a hostess and then a waitress.

“Diana was like a strange person in that mousy way--that’s what everybody thought. You don’t run into people who are so shy and timid to the point where they’re background, but she was,” said a co-worker at the Oxnard restaurant.

“She would just look at you and she seemed kind of innocent and childlike,” the co-worker said. “She would just smile and it was kind of sweet, so I tried to talk to her.”

But the co-worker was troubled by the naive way Haun once took to “a scary character” who had a history of heavy drug use. “She had some friends,” he said. “They were a bit strange.”

Then over the last two years, while working the night shift behind the deli counter at Vons on Rose Avenue, Haun would bring up the subject of Satanism, sometimes talking about being a witch who practices black and white magic, a worker there recalled.

One co-worker told The Times that she directly asked Haun this year if Haun was a witch. She said Haun replied, without hesitation: “Yes.”

In an interview last week, Haun said that neither she nor Dally believe in occult practices. But it is true, Haun said, that she and another employee would tell stories about Satanism and witchcraft because a co-worker had a relative who was interested in it.

“I told a lot of people at work, just don’t take me seriously, because I joke around a lot.”

There were also times when Haun and Dally would joke about vampires, she said. “We would have vampire jokes and that kind of thing . . . being vampires because you work nights and sleep in the day.”

The couple first met in December, 1993, and began an affair about six or seven months later, once Haun was convinced that Dally did not love his wife and the marriage was irretrievable, Haun said. They lived together for five months last year until Michael Dally returned home to be with his sons, she added.

A Vons colleague who worked with them both said she pities Haun.

“She’s just basically a person with low self-esteem and that’s how she got in this predicament,” the worker said. “He’s just using her. . . . I feel so sorry for her. She was looking for someone to love her and she picked the wrong kind of a man.”

The employee recalled the actions of the couple as they would shop at the Rose Avenue store. “They’re really creechy, really strange people, high-strung, like on drugs,” she said.

Haun told The Times that she was not a regular drug user, but said she did use cocaine “once or twice” during her two-year relationship with Dally. Dally, who has refused comment on any subjects in recent weeks, could not be reached for a response.

Haun was transferred from the Rose Avenue store to an outlet in Port Hueneme the week after Sherri Dally disappeared and just six days before she was arrested. She returned to work a couple of weeks after her release and was met with a barrage of customers asking directions to her like a tourist attraction.

“They all come in and notice that funny grin,” said a co-worker at Haun’s new store.

Haun’s presence has unsettled some co-workers, who say they are afraid of upsetting her. But one worker, described as a lower-level manager, recently confronted Haun and demanded to know who killed Sherri Dally if she didn’t.

Haun instantly named a former colleague, and demanded to know who the manager thought the killer could be.

“Ventura Satanists,” was the response, according to a witness. “[Haun] said, ‘That’s a good idea.’ Like she was going to use that.”

Haun herself says her friends and relatives maintain that Michael Dally set her up, but that she is convinced someone else killed Sherri Dally.

Nor does Haun see herself as particularly vulnerable.

“I’m just a normal, average person,” she said. “I go to work, I went to school, I mind my own business.”

Despite her brain injury in high school, she said her intellect is above average--citing as evidence a B average at Hueneme High, two semesters on the dean’s list at Oxnard College and a high score on a rigorous exam that got her a job at the post office.

Yet, she said: “Memorywise, I guess you could say I don’t have as much RAM as the next person, random access memory.”

And although Haun said Dally told her about one other affair he had in the last nine years of marriage, she said he did not make adultery a common practice.

“No, we’re kind of similar in that area,” Haun said. “He has a lot of female friends and I have a lot of friends who are male, but that doesn’t mean there’s anything going on.”

Haun and Dally are similar in other ways as well. Both are the children of U.S. military men who married Japanese wives and brought them home to Ventura County.

Haun lives with her mother, Kiku, in the same small house across from Parkview School bought decades ago by her father Fred, a Pearl Harbor survivor who died three years ago of cancer. Haun’s nearby $80,000 condo was repossessed last year when she declared bankruptcy.

Her brother and sister still live locally as well. In fact, a personal diary of her sister, Mary Oliver, was seized in a recent police raid and is considered a significant piece of evidence in the case.

“They are just wonderful neighbors,” said William Chaney, the Hauns’ next-door neighbor for 22 years. “[The mother] is always bringing over Japanese food for us.”

In Ventura, south of the Buenaventura Mall, Michael Dally’s parents, Lawrence and Yaeko, are held in similar high regard.

The senior Dallys live down the street from their son. The elaborate Japanese gardens in their front and back yards are showcases of care.

One of Dally’s two siblings, a sister, also lives only a couple blocks away.

But friends say that, unlike Haun, Dally is estranged from some members of his family because of the way he treated his wife for years and because of his behavior after she disappeared.

Within a week of her disappearance, he had filed for legal separation and custody of their two sons, Devon, 8, and Max, 6, citing irreconcilable differences.

And while he publicly vouched for Haun’s integrity and innocence and exulted when she was released from jail, he described Sherri Dally--twice his prom date at Ventura High School and his wife since 1982--as “just your average homemaker . . . just your average mom.”

“She’s a beautiful and wonderful person,” he said of Haun. Of his wife, he said, “I wish they’d just find Sherri so her family can go on. Her mother’s a mess.”

Once a search party of friends--minus Michael Dally--found Sherri Dally’s skeletal remains June 1, her husband expressed little emotion, even smiling and joking at her funeral two weeks later.

“His behavior is real inappropriate,” Lt. Handy said. “He’s not the bereaved husband. He doesn’t give the appearance of caring about Sherri. It’s hard to see how anybody could not care for Sherri Dally.”

Several of Sherri Dally’s closest friends can hardly control their emotions when they speak of Michael Dally.

“I’ve never felt this kind of anger,” said Kristin Olson, whose children had been cared for by Sherri since 1989, when Sherri quit work at Vons and opened a day-care center in her home to be near her first son.

“You don’t have a lot of friends in your lifetime like I did with Sherri. We’d talk at least a couple of times a day,” Olson said. “Nobody deserves what Sherri got. Some people live their lives so stuff like that can happen, but Sherri was so benign.”

For years, Olson would socialize with the Dallys, going to the beach or the movies. But even then, Michael Dally’s disrespect for his wife showed through, Olson said.

“He was cold,” she said. “Even when there were several of us in a group, I always got the feeling the rest of us were treated with more dignity and respect and Sherri sort of got the leftover.”

Friends told Sherri she should leave Dally, but she persisted.

“She was simple in that she didn’t want a lot, she just wanted her little family,” Olson said. “I think she believed that if she just waited and tried real hard, things would be OK, that he would eventually come back.”

Dally’s casual cockiness has been his trademark throughout the investigation. He laughs when questioned about his role in the case, and once cackled “I’m not a suspect” when asked about police questioning.

Haun says the demeanor of Dally--a Vons employee since he was a 16-year-old box boy--is really a defense mechanism that helped him handle the stress of a management job he once held.

“He said that developed from when he was working as a manager at Vons,” she said. “He would get bleeding ulcers because of the pressures. And one way of dealing with it is to put on this outside thing so that people wouldn’t pressure him.”

However, John Avila, Dally’s best friend through elementary and high school, said his old pal changed from a polite well-mannered boy into an adult who tried to make himself stand out by doing wild things that Avila wanted no part of.

One incident during that period led to Dally’s arrest, court records show. He was arrested in 1990 in downtown Ventura for illegal possession of a knife.

“I would characterize him as overconfident,” said Avila, whose friendship with Dally cooled in recent years. “He was someone who always wanted to stand out in a crowd, like he thinks he’s just a little bit different.”

Avila, who achieved minor celebrity in the case when he was fired by Target for helping lead the search for Sherri’s body, seethed when Dally refused to join the search.

When Dally approached him at the funeral, Avila said he just looked away.

“I couldn’t bring myself to shake hands with him.”

Despite the intense public interest in the case, police won’t even suggest when charges might be filed if, in fact, they eventually build the kind of solid case they say they think they have.

But, acknowledging the public’s impatience with catching those responsible for Dally’s death, Ventura Police Chief Richard Thomas took the unusual step Friday of issuing a statement to reassure the community that his department will solve the case.

“Justice will ultimately be served,” Thomas said. “When that time comes, the community will understand what has taken place. . . .”

There are plenty of Ventura residents, however, who remember the high-profile 1993 slaying of Ventura High School football star Jesse Strobel, whose killer police said they identified almost immediately, but who has never been charged with a crime.

“People are going to assume certain things based upon the fact that there’s been no filing,” said one law enforcement source. “But I think most of those assumptions would be inaccurate.”

The circumstantial nature of the Dally case--the lack of a single overwhelming piece of evidence such as an eyewitness to the killing--has caused some of the delay by forcing investigators to be especially thorough in their evidence gathering.

Another factor is probably the decision by Dist. Atty. Michael D. Bradbury to try the murder case himself. A meticulous lawyer, it would be Bradbury’s first time in trial since he successfully prosecuted a serial rapist almost a decade ago. And associates say he will not file charges until evidence is rock solid.

Then there are Haun’s own actions, which indicate she may be more help to investigators outside of County Jail than inside it.

Investigators say they noticed scratches on Haun’s face when they first met her. But sources say she gave up very little under long hours of questioning before and after her arrest on May 18.

Out of jail, she has spoken with Dally frequently by telephone. And last week, in her interview with The Times, she not only professed her innocence, but also provided details about her two-year love affair with Dally and the husband’s unflattering vision of his wife.

“He mentioned her as a nanny or baby-sitter, and roommate. He said that he never really thought he loved her,” Haun said.

Haun also said she has no idea why police seem so confident they can make a case against her. She said the result of her lie detector test is one indication of that.

Police also have confirmed that her normal handwriting does not match a signature on receipts for a blue-green car rented in Haun’s name May 5 and returned on May 7.

Witnesses say that on the morning of May 6 they saw Sherri Dally get into the back seat of a blue-green car that had blocked her from backing out of a parking stall at the Ventura Target store. She was never seen alive again.

Days later, police seized the bloodstained Nissan Altima. DNA tests are being run on blood samples taken from the car to see if there are matches to Sherri Dally and to any of the suspects.

Haun said she lost her driver’s license, credit cards and some checks before the car was rented, so someone else must have used them in the transaction.

Some of Haun’s statements, however, are contrary to the recollection of witnesses in the case.

Haun told The Times that she did not buy a short blond wig from an Oxnard shop two days before Sherri Dally’s parking-lot abduction by a short, blond woman.

But shopkeepers say they are certain she did make the purchase on May 4 with a personal check after showing her driver’s license.

“I saw her on TV when they were releasing her from jail and I said that was her, no doubt,” Sandra Acevedo, a clerk at Oxnard Discount Wigs on Saviers Road, told The Times. A second clerk also identified Haun as the customer.

Acevedo said she remembered the customer as Haun precisely because of the unusual things she said. The clerk said the customer said she wanted to buy a blond wig to “look completely different and play a trick on someone.”

She also said the woman she believes to be Haun turned down a $19.99 model in favor of one that cost $89.90 because she wanted it to look real. The customer also asked the clerk a question she had never heard in more than 20 years of selling wigs, Acevedo said.

“She said, ‘If you saw me somewhere, would I look like I have authority?’ ” Acevedo said. “[Customers] ask, ‘Do I look younger, older?’ But to ask, ‘Do I look like I have authority?’ That sounds kind of odd.”

Acevedo said she even called over another clerk to field the question about an authoritative look--a question that could have significance in light of one investigative theory that Sherri Dally’s kidnapper may have tried to appear to be someone in authority when approaching her in the Target lot.

Acevedo said she also is convinced the customer was Haun because when she opened her wallet to write a check, two pictures were prominently displayed--and both were of Haun, Dally and Dally’s two sons in a family pose.

“One looked like a Christmas picture,” Acevedo said.

In her interview, Haun acknowledged that she and Dally had taken such a photo last Christmas and that she carried it in her wallet.

Haun also acknowledged that Sherri Dally twice angrily confronted Haun at her work in the Vons parking lot on Rose Avenue, once last fall and once this year.

Although her memory was generally sharp, Haun said she could not recall when the second confrontation took place.

However, a close friend of Sherri Dally had a sharper recall. She said the victim told her that final confrontation occurred only two or three days before Sherri Dally was kidnapped.

“It was just one of those things she said in passing,” the friend said. “I kick myself now for cutting her short when she was telling me about it.”

Times correspondents Paul Elias and Scott Hadly contributed to this story.