Friday, October 1, 2010

Where we're at on October 1.

By October 15, lawyers representing Frank and Jamie McCourt will submit what amount to proposed orders to Judge Gordon. These documents, while not supposed to be additional arguments, will lay out the facts and law each side will use to support its proposal. Judge Gordon will review the submissions and use them as the basis for a written ruling he is expected to issue before the holiday season.

Jamie McCourt's lawyers will lay out, in no uncertain terms, the nearly-unbelievable sequence of events surrounding the contested Exhibit A to the MPA. How, she will argue, can the court justify upholding a document with two materially different signed, notarized copies? How can the court justify upholding a document Jamie signed with counsel that was arguably inadequate--at best? How can the court justify upholding a document in a context the couple hardly considered when it was executed--if they considered it at all?

Many of Jamie's strongest arguments rely on events that occurred after all six copies of the agreement had been signed. The "switcheroo," as her attorneys describe it, should not only be regarded as fraudulent at the time--she was neither asked for permission nor informed of the switch--but it should also speak to Jamie's lack of independent, effective representation. How, she argues, can the court justify upholding an agreement drafted by a lawyer so seemingly beholden to Frank?

The way I see it, Jamie's case relies principally on raising doubts as to the basic fairness of the creation and execution of the MPA. By displaying the dizzyingly confused history of the document, she contends that it must be disregarded on its face. I think her lawyers have an easier job here than Frank's; her argument is dramatic, sympathetic, and media-friendly.

Frank's case is simpler, but perhaps more difficult to win. As I laid out last weekend, I think his version of the facts is much closer to the truth. I think Jamie McCourt should really not be allowed to walk away from an agreement she asked for, one she appears to have the training, background, and intelligence to fully understand. I think that, whether she contemplated divorce or not, she surely benefited from the protections of the agreement, and is now seeking to avoid its consequences. I think Frank's basically right, but he's going to have a hell of a time giving Judge Gordon enough reasons to agree.

Though this might seem odd, judges often love to be told what they can and cannot do. Many judges specifically ask the lawyers in front of them to explain why the judge is empowered to rule in their favor. Lawyers are tasked with offering statutory, case law, and public policy reasons the court can rely on. Judge Gordon said during the trial that he sees the court's job in this litigation to decide how the contested Exhibit A's fit in with the whole of the agreement, that it will be the court's challenge to do so. It is here that, no matter the accuracy of the totality of the facts, Frank will run into his most difficult hurdles.

Has Frank given Judge Gordon enough to disregard the chicanery that went into the creation, execution, modification, and handling of the MPA? Frank's lawyers say yes. Look at what Jamie wanted, they say. Don't worry a ton about what happened after April 14, 2004; Jamie wanted what she signed on March 31, and she shouldn't be allowed to get out of it just because it didn't turn out as she expected. "If Jamie McCourt, Esq., is not bound by her MPA, no one ever can be," her lawyers argue.

And I think they're right. But I don't know if they have enough to allow Judge Gordon to publicly agree.



    I've been practicing 35 yrs. and it's a little galling to have some kid who has not taken the bar, no less passed the bar, pontificate as to what judges are likely to do.

    Bottom line -- Whatever the "truth" as Frank or Josh know it, if there has been no apparent meeting of the minds and the writing signed by the parties does not reflect the clear understanding of the parties, show me a judge who is going to uphold the questioned writing.

    One other thought -- Despite all the talk about Silverstein's "malpractice" consider that if there was no meeting of the minds, the agreement he drafted is relevant. To put it another way, if the parties never came to an agreement, the theoretical defects in the document he prepared are not cause of either party's injury. No harm, no foul.

  2. Huh?

    I think it is obvious we have no "meeting of the minds" going on here. So, is the document Silverstein drafted relevant because of this lack of "meeting of the minds" or does the judge throw the documents out because there is no "meeting of the minds."

    For the non-lawyers out there, meeting of the minds simply means "when two parties to an agreement (contract) both have the same understanding of the terms of the agreement. Such mutual comprehension is essential to a valid contract. It is provable by the express provisions of a written contract, without reference to any statements or hidden thoughts outside the writing. There would not be a meeting of the minds if Bill Buyer said, "I'll buy all your stock," and he meant shares in a corporation, and Sam Seller said, "I'll sell all my stock to you," and meant his cattle."

    Easy peasy - right?

  3. I disagree that there was *no* meeting of the minds. They always wanted their property walled off separately. I guess that whether they were ok with the consequences of that division is a different question. but Jamie's a lawyer...shouldn't she have known??

  4. Josh--isn't is obvious that the MPA was a way to protect both Jamie and Frank from Frank's high risk ventures? Where was Frank going to live if the Dodgers and his other ventures went south? I assume it was in the houses he and Jamie had bought and spent lavishly to furnish--perhaps selling one or two to cover expenses. This was an agreement to try to protect shared resources.
    All of these resources were marital resources.

  5. Josh,

    I think you are missing a couple points as you seemed focus on contract law. Jamie did ask for the agreement, but as MPA to helped them deal with the risk of taking on $430 million in loans by buying the Dodgers. If the MPA was contested in US Bankruptcy court or Probate Court, I think it would stand because it is not conflicting with California Family Law. This MPA wasn't designed for divorce in a California Family Law Court. There has to be waivers, and very clear cut financial incentives for one party to waive their rights to a business that was acquired during a 30 year marriage.

    The Argument that "Jamie should had known better, after all she was a divorce lawyer" is kind of trite and silly. Yes she practice family law, but it was the Massachusetts Bar, not California. The problem was trying to be fixed since 2007, when the mistake was finally caught.

    I don't see Silverstein as a proper whipping boy. I just Frank and his side trying to go all out to make an asset protection agreement into a separate property agreement.

    The only thing I am really critical of Jamie, besides both of their neurotic excessive spending, is her demands for a couple hundred million for a settlement. She is probably going to get $80-100 million, if she is lucky, given the precarious financial state the Dodgers are in, and probably one reason for the divorce, besides the dip in their residential properties..

  6. At the risk of sounding naive here, these people were married for 35 years, doesn't the law say they each get 50% of the pie? Frank is fighting to maintain control of an "asset" that will one day be worth over a billion - that is if he doesn't continue to drive that money bus over a cliff. But what is the couple worth right now? Whatever they have accumulated in their time together gets divided equally. She gets half, he gets half.

    If that can't be done without selling assets, then assets must be sold. Sure as hell won't be the first time this has happened in California and it sure won't be the last.

  7. "Don't worry a ton about what happened after April 14, 2004; Jamie wanted what she signed on March 31, and she shouldn't be allowed to get out of it just because it didn't turn out as she expected. "If Jamie McCourt, Esq., is not bound by her MPA, no one ever can be," her lawyers argue.

    And I think they're right."

    If you think they're right, you got a lot more studying to do. What MPA is Jamie bound by? Setting aside what happened after April 14, they still signed two different MPA's -- there ain't a contract in that situation. You don't need to be a lawyer to figure that out. Also, minimizing the switch that took place after April 14 is laughable -- you don't tamper with signed & notarized documents. Josh might not think that is a "smoking gun" but I guarantee he will never in his legal career ever see something like this. It just doesn't happen.

  8. So, to all the lawyers in the comments:

    Are Silverstein & Bingham going to face a a 9-10 figure malpractice suit when Frank loses?

  9. As another anonymous attorney, I think it's funny that someone with 35 YEARS experience can only come up with "meeting of the minds," as an argument. Maybe a case citation? Maybe open up that fancy Westlaw or Lexis account you should have, since you're an attorney? Or should we start arguing if there was a valid offer, acceptance, and consideration?

  10. So if the forced sale of the Dodgers is the best outcome for fans, what's the best & worst case scenario that can be expected in terms of a time frame for said sale? How long should the fans expect to have to watch a team with no backing from ownership? Also, if there is a sale, would it pretty much be guaranteed that the McCourts will sell off the future TV rights to pad their pockets even more in the sale? I'm not a lawyer, just a fan, so I don't know what to expect.

  11. 1) Everyone who is denigrating Josh's experience or efforts should cease and desist. As a non-lawyer and Dodger fan, I read Josh's blog every day to gain some predictive capacity as to the future of my team, and am grateful for Josh's detailed coverage and analysis. None of you are at the trial, putting in the work, and doing the blogging.

    2) Commenter #1, with the 35 YEARS, doesn't command the English language properly, and thus his comment resembled the jealous ramblings of a preschooler. "some kid who has not taken the bar, no less passed the bar"--should be: "some kid who has not passed the bar, much less taken the bar". If you're "galled", then don't read and don't hate, go do something else with your valuable time.

    3) The fact that settlement talks have the parties very far apart suggests that the lawyers for the two sides have materially different expectations as to the probable outcome of the case (including appeals, which are expected by both sides in the absence of a settlement). If these expert lawyers, who are very close to the case, differ so significantly as to the expected outcome, then how can any commenter here possibly claim any degree of predictive certainty one way or the other?

  12. The first comment is ludicrous, and we should ignore it.

    My own feelings are the ones voiced by Mcsnapper. I think, like Josh, that "Frank's version" of the MPA was the one the parties agreed to, but that, unlike Josh, it was meant to protect assets for both Frank and Jamie from third parties, and not as a division of property in case of divorce. In my reading, it was not a bargain Frank made to assume more risk for the possibility of greater reward, but a mechanism to allow them both to seek the reward at lesser risk. Although Jamie may not be well-placed to argue that should she be able to ignore it now, Frank is in no better position to argue that he should be allowed to use this agreement which was basically a swindle on others to also swindle Jamie.

    A plague on all of their many houses.

  13. I have followed this from day one and must say that some thing is not right in Denmark. (in reading this sight)I have come to notice that the numbers are lowered for Jamie every day, it has a very PRO Frank feel to everything on here. It is fairly obvious to all who read this that the MPA was made to protect all their assets,(not to work in a matter of a divorce) I am no lawyer as many of you who are posting are. But as a lifelong Dodger fan it does hurt me to say that as long as the McCourts own the Dodgers, I for one will not buy any merchandise, nor will I attend another game. They used OUR team like a piggy bank, did not pay taxes,made a mockery of our loyalty, and took out loans in excess of the original purchase price. Please Frank, Jamie sell our team so we can no longer be the joke of MLB. I believe its fair to say that the masses feel as I do.

  14. Here's my theory on the switch in exhibits. Both Frank and Jamie knew and approved of both. And here's why:

    As Frank alleges, if the Dodger investment tanks, Jamie pulls out her exhibit and yells, sorry creditors, the homes are my separate propery.

    However, should either Frank or Jamie die while owning the Dodgers, the survivor brings out the other exhibit and claims community property. Hence, the survivor would get a stepped up basis in the assets with no estate tax.

    It's a great, if somewhat unethical, plan with one exception. No one counted on a divorce.

  15. I'm not a lawyer, so I'll leave the chastisement/defense of Josh to those of you who are. I used to be on Frank's side in this thing, but the more I read about the MPA, the more I believe that Jamie was trying to protect herself by limiting her exposure to the purchase of the Dodgers.

    To all you lawyers out there: What is the "normal" disposition of MPAs when a couple decides to divorce? For sake of argument, let's say the McCourts did not get divorced. And let's say the Dodgers continued to make a profit. Would Frank be within his rights to deny Jamie a share of those profits simply because the MPA says the Dodgers are his asset? Likewise, let's say Jamie sells some of the homes they bought. Would Frank be left out of the proceeds because the homes are in Jamie's name? If Frank seriously wanted the Dodgers as his and his alone, why not create a post-nuptial agreement that stated exactly that?

  16. To all you lawyers out there, I am a professional engineer with no legal training even though I did play one on TV once... One does not have to be an attorney to see what is going to happen here. It's not about contract law, its is about California family law and "fairness" as this liberal doctrine never enunciated in any statute or constitutional right had been inflicted into the courts by decades of liberal progressive infiltration starting with FDR packing the supreme court.. but I do digress...

    Clearly there are conflicts in the signed MPA documents. There are three signed copies that say the Dodgers are Frank's sole property and three signed documents that say the Dodgers are community property. The only thing the judge can do is to say "I don't know which one is correct" whether it be by fraud, no meeting of the minds, malpractice, pulling a fast on on taxes, ignorance on a lady attorney that says she didn't read them (yeah, right), or whatever. The judge will throw out all versions of the MPA's an fall back on strict CA statue community property statutes which will split all marital assets 50-50.

    Because there is not enough equity in the Dodgers for Frank to pay off her 50% the Dodgers would have to be sold - YAY ! That's fans like me want ... except even in Franks reptilian brain he knows that's what's going to happen so look for settlement talks to happen with a final settlement generated prior to the judges ruling that buys Jamie's 50% share of the dodgers current 2010 value but financed over time, mostly in the future using revenue and generated from the upcoming very large 2012 media contract.