Tuesday, April 12, 2011

Bingham v. McCourt: Why now?

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Yesterday, Bingham McCutchen filed suit against Frank McCourt seeking a declaratory judgment that the law firm cannot be held liable for Frank's loss on the Marital Property Agreement. Essentially, Bingham anticipates eventual litigation for its role in the creation and modification of the MPA, and would rather get this all going now. From Bingham's Complaint:
There is a bona fide dispute and actual controversy among the parties concerning whether Bingham's legal services to Mr. McCourt were in accordance with the standards of care ordinarily provided by professionals providing legal representation, consistent with any fiduciary duty owed to Mr. McCourt, and the cause of any loss with respect to Mr. McCourt's ownership of the Dodgers.
In English: Bingham has been accused of malpractice, though not yet sued for it, and is choosing to bring the fight to Frank rather than respond to his own eventual lawsuit. Why? Craig Calcaterra already gave us a good starting point:
It’s always better to be the plaintiff than a defendant, of course, especially because you get to pick the court and get the first crack at framing the issues. Bingham has done that, picking Massachusetts as the forum and casting this as a case in which McCourt’s damages are all of his own doing.
This is all true, but I think there's something else at work. We all know Frank's got a heck of a lot on his plate right now. He's engaged in some form of settlement discussions with Jamie. He's  trying to convince Major League Baseball to approve his financing efforts. He's dealing with a tragedy that occurred on Dodgers property. And, of course, it's baseball season. 

*Note: I am not suggesting Bingham viewed Bryan Stow's awful beating as an opportunity. I'm just noting it as an issue obviously demanding Frank's attention.

Simply put, this just isn't an easy time for Frank to respond to this lawsuit. Massachusetts Rules of Civil Procedure call for him to serve an Answer and Counter-/Cross-Claims within twenty days or risk losing altogether. Now, don't get me wrong: Frank is not going to lose to Bingham because of this deadline. Just saying that it puts more work to an already-busy legal support system.

Which is probably one reason why neither Susman Godfrey, which represented Frank at the MPA trial, nor Sullivan & Cromwell, which replaced Bingham as Frank's business counsel, are representing Frank in his defense to Bingham's claims. Instead, an as-yet-unpublicized firm will handle this matter.

As to the viability of Bingham's claims--I'll wait to get too deep into this until it's clear the suit will indeed go forward reasonably soon in a Masschusetts courtroom, but Bingham's argument comes down to this: So what? So what if the documents were switched? Bingham claims, relying on an ABA Informal Opinion, that "where a lawyer recognizes a clerical or scrivener's error in a document, he may correct it without notice or consultation with the clients."

Further, Bingham claims that Frank's "repeated, public assertions of damage due to Bingham's purported conduct" are premature, as he has not yet availed himself of other methods by which he might keep the Dodgers despite the failure of the MPA. Bingham's theory here is solid: where a client can't prove that a lawyer's error caused the damage complained of--technically speaking, where a client can't say that he would have won but for the lawyer's actions--there is generally not malpractice.

Of course, the problem is obvious: Frank hasn't filed a malpractice suit and hasn't alleged damages. At least in the legal sense, anyway. Frank's will likely contend that he shouldn't be faulted for not yet pursuing other avenues against Jamie because he hasn't yet tried to hold Bingham legally accountable for his loss. Bingham would probably respond that Larry Silverstein's evisceration on the stand constituted all the public notice in the world that someone would be coming after Bingham, so it wants to go ahead and settle this now.

Ah, yes, settling. I feel foolish even discussing why everyone should want to settle this--because everyone should have wanted to settle this twenty months ago--but I'll persist: Bingham should want to settle because Frank's eventual loss could be in the hundreds of millions. Frank should want to settle because it's one source of cash Bud Selig can't fiddle with. And Jamie might be interested in a Frank/Bingham settlement because, in the desert, you don't turn down a bottle of water for its stubborn failure to be a jug.
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15 comments:

  1. ISN'T IT GRAND? STAND AND APPLAUD BINGHAM'S BRAZEN ARROGANCE.

    Took a second look at Josh's post of yesterday, and if you look at the statements set forth in Bingham's lawsuit against Frank, they submarine Frank's position. Juxtapose those statements with the relatively mild statements set forth in the Bingham publicity release, one must stand and applaued the audacity and arrogance of Bingham's position.

    For the non-lawyers, Bingham has a duty of loyalty to its client (i.e., even if they no longer represent Frank, they're not supposed to issue statements that trash the position of their former client). Also, out of court statements trashing a former client could be a basis for liability (e.g., libel, defamation, breach of fiduciary duty, etc.), but statements made in Bingham's complaint are broadly protected by "privilege" (i.e., if you make the statement in furtherance of your legal position, it's generally protected).

    Bingham clearly understands that Frank has taken some big hits over the last few weeks including the deterioration of attendance (and revenue), the rejection of the Fox bailout deal by Selig, and Frank's cratering support in the community culminating with the Giant fan beating. Like jackals, Bingham understands the concept of throwing an anchor to a sinking man. The sheer audacity of their approach is awesome.

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  2. To Annonymous who said "ISN'T IT GRAND? STAND AND APPLAUD BINGHAM'S BRAZEN ARROGANCE."

    This will say more about me than I care to admit but I don't feel sorry for Frank at all. Aside from the cowardly act of those two "Dodgers Fans", I am glad Frank has to deal with all the mess him and his wife created. I just hope it all leads to the sell of the team.

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  3. The best defense is a good offense.

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  4. Going through a divorce is not so easy. There are a lot of things to consider and deal with. In able for you to do this, you need the help of reliable lawyer.

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  5. Bingham's clients, you are on notice. If Bingham screws up, they'll sue you. You'll be branded the bad guy for relying on their "expertise," which they will prove met the standard of care we should expect from a prominent law firm, even if their screw up costs you millions.

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