Wednesday, September 22, 2010

Wrapping up seven, getting set for eight.

Perhaps no one had a worse day yesterday than Larry Silverstein. The Boston lawyer, who represented at least one McCourt during the time of the execution of the MPA, admitted under oath to switching out an exhibit to a signed, notarized document. He acknowledged that "it would have been better practice" to inform Frank and Jamie McCourt of the substitution, but he did not feel the ethical need to do so. He didn't meet with his firm's ethics or conflicts committees until well after this had become a problem.

And it's quite a problem. My gut feeling, the basics of which are shared by several close watchers, is that Frank and Jamie absolutely meant to execute the Massachusetts MPA--the one now extraordinarily favorable to Frank. Remember, it was not always so imbalanced. I believe that Frank wanted the upside and Jamie the stability. But, several years later, as the value of the team skyrocketed and the value of high-end real estate plummeted, Jamie's late discovery of the document switch might have given her legal team all it needs.

Their argument is simple: if you have two sets of documents which are completely opposite on a material term, how can you enforce either? Jamie isn't asking Judge Gordon to bless the California MPA. She wants the whole thing tossed, which would put into motion a series of events nearly certain to lead to the sale of the Dodgers.

Frank's counter is pretty simple itself. Jamie admits to not reading either version of the MPA--she had no knowledge of the California Agreement until this year. If she meant to sign the Massachusetts MPA, the argument goes, and she never knew of the discrepancy at the time of execution, shouldn't the court enforce the Agreement she meant to sign? Frank supports this case by trotting out witnesses who can testify to Jamie's knowledge of marital property law and intent to insulate herself from the risks associated with the Dodgers acquisition.

At the end of the day, the lasting question is this: What do you do when two parties signed a document they never read containing Exhibits conflicting as to the most important item in the document? If you believe they meant one thing, is that enough? Or do you have to throw it all out on its face?

Those questions aren't easy to answer, and each party risks a ton by leaving the issues up to Judge Gordon. That's why the parties will meet Friday morning at 9:30 in front of Judge Peter Lichtman in confidential, non-binding mediation. Both sides are expected to present Judge Lichtman with a brief summary of exactly what they would want and need in a settlement. If, to use a term of art introduced to this litigation in Silverstein's testimony yesterday, there is a nexus between the parties' needs and wants, I believe it's entirely possible this thing is resolved shortly.

There's still the matter of today. David Boies, who brought the trial's first true fireworks on his direct examination yesterday, will continue with Larry Silverstein. Should Silverstein be up to the task physically, he will also be cross-examined by Victoria Cook, one of Frank's attorneys. Jamie wants to pin Silverstein and Frank to a story of (at best) grievous error and (at worst) something worse. Frank wants to use Silverstein to show that Jamie really did mean to sign the Massachusetts MPA.

Assuming we get through Silverstein today, the case will be turned over to Frank's attorneys, and we will move on. It has been suggested we might add a bonus morning to this week's proceedings tomorrow, but that's to be seen. For now, before I head to the courthouse, some notebook clearing:

  • Silverstein recalled that, based on computer records, he must have been the one to make the switch. Upon pressure from Boies, the Bingham McCutchen attorney admitted that, in his 33 years of practice, he had never known of a situation in which a lawyer, after the signing and notarization of a document, has removed a schedule without express permission.
  • Judge Gordon had his most active day, interposing more objections of his own yesterday than the balance of the trial. It was clear from the beginning that Silverstein is a key witness in the matter, and Judge Gordon's activity level yesterday confirmed it.
  • Silverstein couldn't recall the existence of any unsigned copies of the draft executed in Massachusetts on March 31, 2004. No one has that document in any form other than an original or a copy of an original.
  • After considerable hedging, Silverstein finally admitted that the difference between the two Exhibit A's is "one of substance." Silverstein, however, contended that when one document has an error and one doesn't, he doesn't believe the one with an error is a final contract.
  • The most dramatic moment of the day? Boies: "Both parties never agreed to a change because you never even TOLD your client, Jamie McCourt!" (emphasis in original, transcribed for your enjoyment) "Whether you were lying or not, your testimony was false!
  • Reynolds Cafferata, another Bingham lawyer, took the stand later in the day. his testimony supported Frank's argument that Jamie knew full well what was going on; that she was the driving force. On cross, Mike Kump worked to impeach Cafferata by noting his ties to Frank and unfamiliarity with Massachusetts law.
Gotta get dressed and out the door. I was told that Twitter was balky yesterday. I sure hope that's not the case today, as it's the quickest way to provide updates.


  1. Won't be there today, so best of luck, Josh. Unfortunately it appears that Twitter is fritzing again, unless the trial hasn't started (9:47AM and counting). Haven't seen a thing from you at all.

  2. There you go. You are up and running on Twitter at 10:02AM.

  3. I don't see anything new on twitter (as 10:35 AM PDT). It looks like maybe Josh has adjusted his time clock here from Central to Pacific time, which is handy for us (everything used to show as 2 hours later than it was). But still nothing on his twitter page as seen on the web ( since yesreday afternoon. ('Wasser, re: changed ExA: "They knew in April, we didn't find out until August 4. You draw your own conclusions."') Same for Molly Knight.

    Is it that those of you who have twitter accounts and get tweets on your phones see new tweets from Josh today?

  4. Is it possible for you to record the sound of this court? I mean, just reading this is pretty darn exciting and interesting. If I can hear the real sound of this, that would be like amazing hahah. OBJECTION! OBJECTION! Especially quote from Boies I wanna hear with his voice on it

    Great coverage overall though, I've been following and wow... just wow.

  5. I know practically nothing about Twitter, but I've found that when there are no new tweets, if you click on the link that says "RSS feeds", right below the photos, you get a different page with more recent tweets.

  6. support the FB page

    Let's get both of 'em out of Dodgertown!

  7. thanks so much, anonymous at 11:47am. i've been dying here not getting any new tweets. the rss feed indeed got me to all the new tweets!

  8. "if you have two sets of documents which are completely opposite on a material term, how can you enforce either?" Actually, this is easy to answer in terms of contract law: you enforce the contract, not the document. The contract is the terms the parties agreed to, not the writing in which those terms are expressed. If, as you and your associates believe, "Frank and Jamie absolutely meant to execute the Massachusetts MPA", then you enforce those terms. In construing a contract, judges seek the intent of the parties. All the contract interpretation rules are simply guides to determining that intent. If the intent is clear, the judge enforces it, regardless of what the writing says. The judge even has the power to change the writing (called "reformation") if it doesn't express the true intent of the parties. That's what Silverstein did, he switched writings to make the contract reflect the parties' true intent. He should've told the parties what he was doing, but it was obviously too embarrassing because it showed he had f***d up. (That explains his vulnerability to Boies' questioning, which was obviously intended to harass and belittle him to destroy his credibility). Nothing you've reported or that I've heard about Silverstein's testimony suggests anything other than that the parties originally intended that the Dodgers be Frank's separate property. Boies only proved that Silverstein's a little sleazy at times, which is hardly a surprise when the witness is a lawyer.

    I'm a commercial litigator and former law professor.