A silver lining for Frank McCourt?
He might be able to recoup some of his losses. Plus, issues in the Sam Hurd case.
Even here in our Courtside Seat, the language of the law sometimes can be a little ... what's the right word? Abstruse? Mystifying? Downright bewildering? So when you hear that today's subject matter includes declaratory judgments, malpractice actions and aberrational scenarios, well, you're forgiven for that glazed-over look in your eyes.
Let's try to sex it up a little and say it a different way. Today's subject matter also includes the Los Angeles Dodgers, really nasty ugly divorces and "Scarface" quantities of cocaine. Now we're talking, right? So today, we start with ...
Order in the McCourt
For Frank McCourt, the beleaguered owner of the Los Angeles Dodgers, it's been a three-year nightmare of expensive and disastrous litigation. He was on the wrong end of the most important legal decision in his bitterly contested divorce, and he's about to lose his ownership of the Dodgers in a court-ordered auction. Before it's over, his losses could add up to hundreds of millions of dollars.
But there appears to be the opportunity for at least one positive outcome in the litany of McCourt's legal woes. He has reason for considerable hope that he can recapture a significant amount of money from, incredibly, a legal malpractice action against the Bingham McCutchen law firm, a global powerhouse of 1,100 attorneys that, until now, has enjoyed a gilt-edged reputation representing Fortune 100 companies. During their early dealings with McCourt, the lawyers at the Bingham firm seem to have made a blunder of Biblical dimension.
A malpractice suit hasn't been filed, but it's a strong possibility. Here's the situation:
When McCourt and his former wife, Jamie, bought the Dodgers, they asked Bingham attorney Lawrence Silverstein for help in their ownership structure and in protecting the assets they had accumulated during their marriage. Concerned about the loans used to purchase the Dodgers and potential liabilities from the ownership of an MLB franchise, Jamie wanted an ownership scheme that would protect the couple's homes and other holdings. It should not have been a difficult assignment for the 60-ish Silverstein, a magna cum laude graduate of Harvard Law School. It's the sort of thing lawyers like Silverstein do routinely.
The marital property agreement that Silverstein drafted provided that Frank McCourt would own the Dodgers and that Jamie McCourt would own everything else. But in the process of executing the documents, something apparently went terribly wrong.
The agreement included lists of what each McCourt was to own. Under Silverstein's guidance, the couple signed what they thought were identical copies of the agreement and the lists. But the copies signed in Massachusetts, where the McCourts lived at the time, did not match the copies signed in California, the couple's intended new residence. The Massachusetts version provided that the Dodgers were to be Frank's property, and the California version provided the exact opposite. Silverstein and the Bingham lawyers seem to have somehow mixed up the words "included" and "excluded."
When Silverstein discovered the errors, he could easily and quickly have explained the situation to the McCourts and prepared new and correct agreements. Instead, he initiated a clumsy cover-up. A later court decision noted that Silverstein "took it upon himself to substitute what he regarded as the correct version" and "did not inform the McCourts of his discovery and substitution." He substituted correct pages for the erroneous pages in the agreements, a maneuver to which he admitted when he was questioned under oath in the divorce litigation initiated by Jamie in 2009.
Troubled by Silverstein's testimony and the contradictory agreements, and noting that they indicated that the McCourts had not reached a "meeting of the minds" on the ownership of the Dodgers, the divorce court in California ruled that both Frank and Jamie shared ownership of the franchise. It was a disaster for Frank McCourt in the divorce proceeding and led to a cascade of financial hits that continues even now.
As the losses began to multiply, Frank McCourt sought new lawyers, and he now seems to have hired the right firm -- Bartlit Beck Herman Palenchar & Scott, a Chicago-based litigation firm whose record of courthouse successes is the best I've seen in four decades of working with lawyers and judges throughout the nation. The Bartlit attorneys, for example, were among those responsible for the court victories of President George W. Bush in the contested presidential election of 2000.
When McCourt hired the Bartlit firm to prepare the malpractice case against the Bingham firm, Silverstein and the Boston-based lawyers at Bingham sued McCourt in state court in Boston, an obvious attempt to gain some sort of home-court advantage and a move that smacked of desperation. In what is known as declaratory judgment action, they asked Suffolk County Superior Court Judge Janet L. Sanders for a ruling that they had done nothing wrong and that McCourt should be barred from suing them for malpractice.
At the earliest possible moment in the litigation process, McCourt's new lawyers asked Sanders to dismiss that case, and she quickly agreed, leaving the Bingham firm with no option beyond an appeal of her ruling -- an appeal that appears, based on legal precedents, to be hopeless. Other law firms, caught in similar circumstances, have tried the same maneuver in at least eight states, and none has succeeded.
Court papers show that McCourt will be looking for hundreds of millions of dollars in the malpractice suit. His lawyers from the Bartlit firm, led by Fred Bartlit and Glen Summers, will argue that Silverstein's error and the court ruling on the ownership of the team prompted both MLB commissioner Bud Selig's effort to drive McCourt out of baseball and subsequent rulings in the Dodgers' bankruptcy case that have resulted in the auction of the team.
The amount of McCourt's losses is not yet known, but they are substantial. The bidding on the sale of the Dodgers will be a key factor. If the price is low, he could walk away from the franchise with a net of nothing, which would add to his claim against Silverstein and the Bingham firm.
None of the lawyers involved in the McCourt-Bingham dispute would discuss it with ESPN.com, but there is little doubt that it will be one of the largest legal malpractice cases in the history of American jurisprudence. If the auction goes badly, McCourt's damages could be more than $500 million.
Although it is clear from the court papers filed in Boston that McCourt and the Bartlit firm are ready to file suit, it is possible that the matter could be settled without litigation. Silverstein's blunder appears to be a major embarrassment for the Bingham firm; it likely will be in the firm's interest to try to settle with McCourt on a confidential basis. But the magnitude of McCourt's losses and the resulting threat to the existence of the Bingham firm may preclude a quiet settlement.
A lawsuit for legal malpractice in all likelihood won't replace McCourt's ownership of the Dodgers, but it looks like his only hope to regain some of what he's lost.
Kingpin? Or Pawn in a Government Game?
Is anything amiss in the federal government's drug dealing case against former NFL wide receiver Sam Hurd?
Claiming that Hurd told two strangers (an informer and an undercover operative) over a steakhouse dinner that he wanted to spend $575,000 each week purchasing wholesale quantities of cocaine and marijuana, agents of the Department of Homeland Security arrested him in the restaurant's parking lot in suburban Chicago on Dec. 14. The arrest, the agents say, came after they delivered a kilogram of cocaine to Hurd in return for his solemn promise to pay them later after football practice with the Chicago Bears.
For the federal agents, that was enough to label Hurd a kingpin in the drug world of Chicago, where he had lived for less than five months after signing with the Bears last summer.
But Hurd's lawyer, David Kenner, tells a version of the story that is quite different.
"He meets a couple of guys he's never seen before," Kenner says. "They talk over dinner; and after dinner in the parking lot, they throw a kilo of coke at him and arrest him."
If the agents and their informer are telling the truth, then, yes, Hurd probably qualifies as a drug kingpin and a threat to African-American and Mexican gangs that have dominated the Chicago drug market for three generations. But he would be running the enormous operation, of course, while working full-time on his NFL career, first at the Bears' training camp more than 40 miles from the city and then at the team's facility in the leafy suburb of Lake Forest. So a point can be made that it sounds a little implausible.
And the government's case gets even more bizarre than that. In a sworn statement from a supervising agent, the government offers three scenarios that seem barely tenable.
First, according to the government affidavit, they suggest that Hurd wanted his two dinner companions at the steakhouse to obtain Mexican cell phones. Hurd thought, according to the sworn statement, that "law enforcement did not have the capability of 'listening' to Mexican telephones." A 26-year-old member of the digital generation who spent four years in college and four more years with the Dallas Cowboys and was in the middle of another NFL season would actually think that agents from the Department of Homeland Security responsible for the border between Mexico and the U.S. could not tap into Mexican phones? OK ...
Then there's the suggestion that Hurd, after agents in Dallas seized $88,000 in cash from one of his cars in August, told the Dallas authorities that it was his money and he wanted it back. If Hurd is a drug dealer selling cocaine and marijuana at retail prices in the millions of dollars, is he going to risk identifying himself to the Department of Homeland Security for $88,000?
And finally, there is the agents' claim that Hurd told them at their dinner meeting that he was already selling four kilograms of cocaine a week in Chicago and wanted to expand his business. It is hard to imagine that Hurd could have built up a drug business of that magnitude during his short stay in Chicago.
Attorney Kenner describes the government's scenario as "aberrational."
The indictment that federal prosecutors obtained three weeks after Hurd's arrest contains very little of the melodramatic story of crime described in the sworn statement about the dinner, Hurd's alleged admissions of drug dealing, and his role as a "kingpin." It's a curiously thin drug conspiracy indictment, alleging only possession of cocaine and a plan to sell it. And nothing more.
The financial reports that Hurd filed in support of his release on bond do not show any of the indications of a dealer with a secret income. Multiple reports also suggest that those who know Hurd in Dallas and in Chicago were stunned by his arrest and the government's allegations.
The wild stories, the thin indictment, and Hurd's own squeaky-clean background raise the question: Is there something wrong with this prosecution?
Lester Munson, a Chicago lawyer and journalist who reports on investigative and legal issues in the sports industry, is a senior writer for ESPN.com.
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