DAILY JOURNAL – Monday, June 9, 2014
Vol 127. No. 110
APPEAL PANEL SKEPTICAL OF FEE ENHANCEMENT
Jury awards divorce lawyer five times his standards rate in complicated case
By: Kylie Reynolds
LOS ANGELES – A state appeals court on Friday appeared unconvinced that a jury should have enhanced an award for unpaid attorney fees by multiplying the lawyer’s hourly rate by five.
Fee multipliers have traditionally been used to reward attorneys for winning certain exceptional cases in order to further the public interest. Here, the dispute itself is over unpaid attorney fees, stemming from a complicated divorce.
A jury in 2013 awarded prominent Los Angeles attorney Hillel Chodos $7.8 million for his time after he scored his client a multimillion dollar settlement in her split from her husband. In a 12-0 vote, the jury inflated Chodos’ hourly rate from $1000 to $5000 because of risks involved in taking the case, among other issues. Chodos did not have a written fee agreement with his client. Chodos et al. v Borman, SC107421 (L.A. Super. Ct., filed April 1, 2010).
Ronald Richards, a Beverly Hills-based attorney representing Chodos’ former client, is seeking a reversal of the award in part because of alleged flaws with the jury instruction and verdict forms in the case. But Justice Richard M. Mosk, who largely dominated Friday’s oral argument in the 2nd District Court of Appeal, questioned Richards over his assertion that no jury in the “history of the United States” has awarded a multiplier in a fee dispute.
“Have you scoured the country on this?” Mosk asked Richards, to which the attorney replied, “Till my eyeballs fell out.”
Chodos’ lawyer, Philip Kaufler of Beverly Hills, raised a 2nd District decision from 2007 in which it upheld a $1.2 million jury verdict in an attorney fee dispute. The jury was asked to determine the reasonable attorney fees based on a series of factors, including the results obtained. The verdict was a greater amount than the attorney’s original contingency fee agreement. Fergus v. Songer 150 Cal. App. 4th 552 (Cal. App. 2nd Dist. 2007).
But the argument was met with criticism from Mosk, who said the Fergus ruling doesn’t “tell us one way or another” if the instructions permitting the jury to consider the value of recovery were valid. Rather, the Fergus appeal only looked at whether there was substantial evidence to uphold the jury verdict, he said.
“It looks like the court is focused on whether or not a jury is ever entitled to award an enhancement,” Kaufler said in an interview after the argument. “We think the law fully supports it. We have to wait and see what happens.”
While Justice Paul Turner recognized that extending multipliers to attorney fee provisions is “becoming a trend of the law,” the justices questioned whether Chodos’ $1000 hourly was sufficient for his expertise.
The case was admittedly complicated. There were three lawsuits that dealt with the dissolution of Navabeh and Burton Borman’s marriage: two divorce actions and a so-called “Marvin” case, which relates to contracts made outside of a marriage.
Chodos secured Navabeh Borman a settlement valued at $26 million in assets, including a sculpture and a shared ownership of a Malibu home that she said Burton promised her before their marriage.
Kaufler said the jury listened to the case’s complex details and determined that Chodos’ “time in this particular matter was worth $5000” an hour. But the justices contended that Chodos’ $1000 hourly rate proved appropriate for top-tier work, and any further fee enhancements might be considered “double counting.”
Judge Michael Mink, sitting by designation, added that if Chodos had a written fee agreement with his client, he would have received a $1000 an hour rate for his work. Instead, Chodos was rewarded with five times his usual rate for violating state business and professions codes by not writing a fee agreement, Mink said.
“It makes no sense at all,” he said.
After the argument, Richards said he thought the justices did a “fantastic job” understanding the nuances of the case.
“I think the justices were able to see…that a lawyer blatantly disregarding the statutory requirement for written fee agreements is not going to be rewarded by a $5000 an hour jury verdict,” he said.
The panel is expected to rule within 90 days.
AGAINST THE GRAIN
Burrowing into television’s Byzantine finances and taking on one of LA’s ‘big gun’ accounting firms require persistence, time, thoroughness and a bold expert witness.
By Anne La Jeunesse – Daily Journal Staff Writer
Television producer and writer Deborah Pratt had “had it” with attorneys, whom she considered to be at the same level in the evolutionary chain as car mechanics when they deal with women clients – not highly evolved.
Then, while trying to understand how she came out on the short end of the financial stick in her divorce from fellow producer Donald P. Bellisario, creator of such hit shows as “Magnum P.I.” “Airwolf” and the current series “JAG,” she was referred to Beverly Hills attorney Philip Kaufler.
Kaufler doggedly pursued her former husband’s complex contracts with studios and studied the intricacies of the long-term pay structures peculiar to Hollywood’s entertainment industry. His in-depth research paid off, to the tune of a $2.5 million arbitration award early last year.
“Philip Kaufler renewed my faith in lawyers and the judicial system,” Pratt says. “I had given up on attorneys before I met him. He’s honest, he’s the hardest-working attorney I’ve ever met, he has integrity.”
Pratt says Kaufler diligently kept her apprised of the details and progress of her accounting malpractice lawsuit against the forensic accounting firm that examined Bellisario’s worth and earnings under his television contracts. She says Kaufler made her sit down, listen and comprehend what was at stake.
“He helped me understand what the case was about. Usually (lawyers) don’t want to bother at all,” Pratt says. “He’s the only attorney I want to work with… He gives 200 percent. He’s gracious and has integrity.”
Kaufler has been a sole practitioner since he graduated from Loyola Law School in 1978, confident that the law clerking he had done while in school prepared him to hang out his own shingle.
An Orthodox Jew, Kaufler is intrigued with the historical derivation of Judeo-Christian laws that great Jewish legal scholars wrote 2,000 years ago. People throughout Western civilization still abide by many of these laws.
When he speaks of the Pratt case and the intricate details of Bellisario’s many studio contracts, Byzantine pay structures and complex payout schedules, he feels as if he is peeling an onion that grows new layers as the previous levels are revealed.
“I really spent a lot of time learning all of this, a huge amount of time,” Kaufler says.
In order to prevail in an accounting malpractice matter, he says, an expert witness, in this case a forensic accountant, must testify about the standard of care for accountants. The expert must describe for the fact-finder how the defendant firm breached that accepted standard.
“You can’t just argue that they were negligent,” Kaufler says.
A significant obstacle to establishing that kind of testimony in the Pratt case, he says, was that he and his client were going against the accounting firm of Gursey, Schneider & Co., considered “big guns” in Los Angeles, he says. The firm was countering his client’s $2.8 million settlement demand with an offer of $150,000, he says.
“The first major problem I had in this case was that I contacted 10 of the top forensic accountants in the city and not one of them would testify against Don Gursey,” Kaufler says.
To address this problem, Kaufler says, he went to Northern California to find an accounting firm less fearful of going against the industries’ heavy hitter. Although the accounting firm did background work, the accountant did not have the qualifications to testify at trial, leaving Kaufler searching again for an expert witness.
“At the last minute, I found Stephen Reiss. He knew Don Gursey, and he was the only guy willing to testify against him,” Kaufler says.
The calculations presented to retired Judge Jerry K. Fields, a neutral with Alternative Resolution Centers in West Los Angeles for 10 years, sitting as the sole arbitrator in the matter, were so well-researched and prepared, Fields says, that they convinced him to find in Pratt’s favor.
Kaufler “did a very good job” on the case, Field says. “He was right on all the issues.”
Attorney Hillel Chodos, a sole practitioner in Los Angeles, who referred the attorney-shy Pratt to Kaufler, says he was the perfect lawyer for the job.
“I think Phil is a very capable lawyer. He’s thoughtful. He has, I think, a sophisticated approach to the matters he handles. He’s extremely determined, and he worked hard on that case for those results,” Chodos says. “Phil’s the kind of lawyer I admire because he takes it as far as it needs to go.”
Attorney John Gibson, a Beverly Hills sole practitioner, is a colleague and long-time friend of Kaufler who echoes’ Chodos’ sentiments.
“He’s very aggressive on the cross-examination. He’s quick-thinking on his feet, very capable,” Gibson says. “He is a very quick study on any subject matter that comes to his attention.”
Kaufler says he is enthusiastic about the interesting cases that cross his professional path and sees himself as a competitive advocate working hard to win cases.
He mentions a case he lost, but in which he represented the client because he believed in the client’s case. The client was a homeless man. One of his retinas became detached when a Larchmont Village landlord wielding a glass ashtray allegedly attacked him.
Kaufler tried to get the man some recompense, but the frustrations he says he experienced – trying to keep his client off the street and in a hotel that Kaufler rented, wearing decent clothes, bathing and making his appearances in court – contributed to losing the case.
He was more successful in another case, Adams v. Murakhami, 54 Cal.3d 105 (1991), which resulted in a state Supreme Court decision requiring evidence of a physician’s net worth in cases seeking punitive damages.
That case, Kaufler says, unfolded like a tragic screenplay.
The doctor in the case, who was treating a traumatized schizophrenic young woman in a locked mental facility, overlooked signs of her pregnancy and continued prescribing psychotropic drugs.
When he realized she was pregnant, Kaufler says, the doctor arranged to have the woman undergo an abortion without her knowledge or consent. A nurse who had befriended the pregnant woman foiled that plan by informing her of the plan. The patient later gave birth to the baby, who is retarded, Kaufler says.
“I’m usually representing people who are on the disadvantaged side,” he says. “Without a lawyer helping them, they would just get eaten up in the system.”
LAWYERS WEEKLY USA – Sept. 12, 2005
Verdicts & Settlements
Intoxicated Driver Wins Millions in Bus Accident
By Natalie White
A California jury recently awarded $6 million to a man whose pick up truck was hit by a speeding bus, despite the fact that he had been drinking heavily and backed out of the driveway without being able to see oncoming traffic.
While plaintiff’s attorneys Arash Homampour and Philip Kaufler were not able to erase their client’s personal fault, they did manage to mitigate his actions in the eyes of jurors who awarded a multi-million verdict to Ramone Melendez, a 63-year old construction worker from El Salvador.
Jurors handed down a $12 million verdict, but found Melendez 50 percent at fault, leaving him with a $6 million award.
The case was based on a 2003 accident in which a Los Angeles County bus smashed into the rear of Melendez’s pick up truck, spinning it around and down the street. After the impact the bus traveled another 60 feet, jumping the curb after the driver pulled the emergency brake.
Melendez was transported to the hospital, where he was treated for a broken neck and a brain injury that has left him confined to a wheelchair with limited use of his arms and legs, as well as a significant short-term memory deficit. He was in the hospital for two months before transferring to Rancho Los Amigos Hospital for two additional months of rehabilitation therapy.
Homampour said Melendez’s health care bills total more than $800,000.
During discovery the defense claimed that the bus was going just 15 to 20 mph and that plaintiff backed out a high rate of speed.
The Metropolitan Transit Authority presented a key witness who testified that she saw Melendez’s pick up gun out of the driveway.
But during cross examination, Homampour confronted her with a tape recorded deposition in which she said she didn’t see the pick up until impact. Homampour said that the witness based her conclusion on the sound of burning rubber, but he told the jury that this sound was actually made by the bus braking, not the pick up.
Accident reconstructionists for the plaintiff also testified that the pick up backed out at 3 to 6 miles per hour.
Tackling the Drinking Issue
On Sept. 14, 2003 Melendez was visiting a friend who lives on a narrow LA residential street. The two spent the day visiting and working on the friend’s car, which needed its alternator replaced. During the day the two had lunch, drank several beers and had an afternoon snack.
Defense attorney Paul O’Reilly declined to comment on the case, but at trial he argued that Melendez was intoxicated and impaired when he left his friend’s house, Homampour said. The defense had experts that testified the plaintiff’s blood alcohol level was above the legal limit, be he was never charged with DUI.
The plaintiff’s attorneys decided the best strategy to combat the drinking defense was to confront it head on. They admitted he consumed 10 to 12 beers during the day, but countered with the argument that alcohol had nothing to do with the accident – because according to his friend, Melendez was not impaired when he left and was not driving drunkenly.
“When he left he got into his pickup truck, he put on his seat belt and he backed out of the driveway very slowly because he couldn’t see oncoming traffic because of other vehicles parked on the narrow street,” Homampour said. “This accident was not caused by alcohol but by a speeding bus.”
Stressing that theme – that speeding and not alcohol caused the accident – was key to the plaintiff’s strategy, Homampour said. He said that they also had to fight juror’s opinions that Melendez should not have backed into the street without being able to see oncoming traffic.
Homampour said he asked jurors whether they had ever been in a parking lot unable to see traffic because of a van parked next to them. “What do you do? You back out slowly and you hope no one is coming like a yahoo,” he said.
He argued that this is what Melendez did in this case – backed out carefully – and that the bus was at fault for barreling down a narrow residential street.
“Yes he was drinking, and yes he backed out without being able to see. But we argued that this would have happened to someone who was sober and that we all at some time have had to trust other drivers and trust that other drivers are using reasonable care operating their vehicles and not speeding,” Homampour said.
The plaintiff’s team also contested the conclusion of the initial investigator that the bus had been traveling under the street’s 25 mph speed limit. Homampour said his experts studied the accident reports and discovered the investigator used a faulty formula to establish his conclusion.
“If you looked at the amount if distance the bus traveled after the impact, you could tell it was impossible for the bus to be going the speed limit and it was clear that the officer made a mistake,” he said. “Even their own expert had to agree the speed had been miscalculated and that it was from 35 to 39 miles per hour.”
The plaintiffs supported this argument with video evidence obtained during discovery. For security purposes, the bus was equipped with three interior cameras that recorded time stamped images captured in one second intervals. One of the cameras had a view outside the driver’s window, and from markings on the street, the plaintiff’s accident reconstructionist was able to confirm that the bus was going nearly 40mph.
The video was also damning in that it showed the driver driving with one hand and, at times, with no hand balancing the wheel on her finger or knee, Homampour said. The plaintiffs used the MTA’s own operator rulebook to establish that drivers should always drive with two hands on the steering wheel.
The defense also argued that it should not be held liable for damages because the plaintiff’s spinal injury was not a result of the accident. They based this on a CT scan taken the day of the accident that showed the plaintiff’s back was normal. The defense did not dispute that he suffered an injury, only that it occurred sometime after the accident.
But plaintiff’s orthopedic expert testified that the spinal tear could be misread as normal because the plaintiff also had a degenerative damage that could mas the problem.
The jury awarded $807,000 for past medical cost, $5million for future medical costs, $1,000,000 for past pain and suffering, and $5.1million future pain and suffering.
Based on interviews with jurors after the trial, Homampour said they assigned his client 50 percent of the fault largely because of the backing out issue and not the alcohol.
“They said that the alcohol wasn’t a big factor because he had only driven 10 feet – but I still think that subconsciously, it was because of the alcohol,” Homampour said.
Plaintiff’s Attorneys: Arash Homampour of the Homampour Law Firm in Beverly Hills, Calif; and Philip Kaufler of the Law Offices of Philip Kaufler in Beverly Hills, Calif.
Defense Attorney: Paul O’Reilly of the Law Offices of O’Reilly & McDermott in Torrance, Calif.
The Case: Melendez v Los Angeles County Metropolitan Transit Authority; August 2, 2005; Los Angeles Superior Court; Judge Robert Higa
METROPOLITAN NEWS ENTERPRISE – May 3, 2004
Vol 104, No. 85
$1 Million Award for Man’s Abuse of Mother Upheld
A judgment for $1 million against a Burbank businessman in a suit brought about by the defendant’s niece, accusing him of physically and financially abusing his mother, was affirmed Friday by this district’s Court of Appeal.
Div. Three rejected Sheldon L. Lowrie’s contention that because he was the executor of his mother’s estate and trustee of her pour over trust, his niece – the successor trustee and executor – lacked standing to sue him.
“If accepted, this argument would create opportunities for abusers to benefit from their wrongful conduct,” Justice Richard Aldrich wrote for the Court of Appeal.
Laura Marie Lowrie’s husband died in 1986, leaving her an estate that included several pieces of real estate – including the family residence and another house, both in Burbank – and a Burbank airplane parts business. Sheldon Lowrie took over operation of the business after his father’s death.
Laura Lowrie died in 1999 at age 89, leaving an estate valued at about $1 million. Her will and trust left everything to her other two children, Alan Lowrie and Norma Goodreau and to her granddaughter, Lynelle Goodreau. Goodreau was designated as the residual beneficiary if her uncle predeceased his mother.
A year later, Lynell Goodreau sued under the Elder Abuse and Dependent Adult Civil Protection Act. She accused her uncle of having used manipulation, fraud and undue influence to obtain control of her grandmother’s property.
The plaintiff presented evidence that Sheldon Lowrie abused the decedent, isolating her from the rest of the family by not allowing her to make or receive telephone calls and by locking her in the house so that she could not leave. He had also, delayed medical care and failed to assist with her personal hygiene, the plaintiff said,
The evidence also showed that the decedent had originally left the second Burbank house to the plaintiff, but had changed the trust terms in 1992 to substitute the $10,000 bequest. The decedent subsequently transferred both Burbank houses and all of her personal property to the defendant, and did so – according to testimony – without the knowledge of the rest of the family.
Los Angeles Superior Court Judge Ernest George Williams found that the defendant had committed elder abuse by reason of neglect, isolation, and financial abuse and had acted with recklessness, oppression, fraud and malice. Pursuant to the Elder Abuse Act and Probate Code Sec 259, he ordered Lowrie disinherited, and awarded Goodreau $664,000 in economic damages, $250,000 for pain and suffering, $50,000 in punitive damages, and more than $400,000 in attorney fees and costs.
Aldrich, writing for the appellate panel, said that Goodreau was “entitled to succeed to the decedent’s estate” and thus had a standing to sue under the Elder Abuse Act.
The justice acknowledged that Goodreau would not have had standing to bring a survivorship or wrongful death action. But the argument that she cannot sue in this case “ignores Probate Code section 259 and the purpose of the Elder Abuse Act,” Aldrich wrote.
Sec. 259 provides for disinheritance of any person who is shown by clear and convincing evidence to have abused a decedent who was elderly or dependent, and who was unable to manage his or her own affairs or to protect his or her own interests, by reckless, oppressive, fraudulent, or malicious conduct.
Such a defendant is treated as if he or she had predeceased the decedent.
“According to decedent’s estate plan, if Sheldon pre-deceased decedent, Lynelle would become the successor trustee and the successor beneficiary to the remainder. Thus, Lynelle would become the person entitled to succeed to decedent’s estate and Lynelle would have standing to bring this case.”
That interpretation serves the purpose of the Elder Abuse Act, the justice elaborated, because it ensures that a party with “strong incentive” to pursue an elder abuse action will have standing to do so. The defendant’s assertion that only the named executor or trustee, or a person who would succeed in the event of intestacy, “is based upon an unduly restrictive interpretation leading to an unwarranted result.”
Attorneys on appeal were Philip Kaufler for Goodreau and Michael Robert Bassin for Lowrie.
The case is Estate of Lowrie, 04 S.O.S. 2218.
LOS ANGELES DAILY JOURNAL – May 19, 2020
Alternative Dispute Resolution
AT ISSUE: After a writer-producer couple divorced, the wife sued her forensic accounting firm for inadequately analyzing her husband’s assets.
By Anne La Jeunesse
When television producers and writers Deborah Pratt and Donald P. Bellisario, who created the mega-hit “Quantum Leap,” divorced after seven years of marriage and two children, Pratt relied on her attorneys and the high-priced forensic accounting firm they hired to correctly evaluate the couples community property so that she would get her proper share.
But, it didn’t work out that way, Pratt believed she had not been well-served by her attorneys and hired Beverly Hills sole practitioner Philip Kaufler to pursue an accounting malpractice action against the initial accounting team. Kaufler turned Pratt’s settlement, which says left her with “nearly nothing” after taxes, into a $2,474,752 award.
Pratt initially agreed to a $1 million settlement, a lifetime spousal-support buyout of $185,000 and a monthly $5,775 child-support payment for both children, despite Bellisario earning an average of $2.7 million during each year of the marriage. The primary community assets included the television shows “Quantum Leap” and “Airwolf” and a $3 million home that underwent $2.7 million in renovations.
Within weeks of that initial settlement, Bellisario received nearly $700,000 as advances for profits for “Airwolf” which had not been included in the settlement. That money had been neither disclosed to nor discovered by Pratt’s legal team, Kaufler said.
After further investigation, Pratt filed a motion to set aside the divorce settlement based on Bellisario’s alleged fraudulent concealment of money certain to come from “Airwolf.” A year later, the court agreed, and that settlement was set aside, according to Kaufler.
Pratt then filed legal and accounting malpractice claims against her divorce lawyers and the accounting firm they hired, Gursey Schneider & Co.
The law firm was dismissed from the suit after it asserted that her claim against it was barred by a one-year statue of limitations. However, the accounting firm remained as a defendant because accounting malpractice actions are subject to two-year statutes of limitations.
Kaufler, who took over the case as Pratt’s attorney after the initial law firm was dismissed from the suite, contended that the accounting firm “committed multiple breaches of the standard of care” by allegedly completing an inaccurate and incomplete analysis of Bellisario’s income. A significant portion of Bellisario’s income continues to accrue after divorce as the result of work during the marriage.
Kaufler also alleged that the accountants erroneously interpreted Bellisario’s business contracts, failed to review related records from his involvement with Universal Studios and his theatrical agent, failed to review the most recent financial records relating to Bellisario’s payments from the studio and failed to include “Airwolf” as a community account receivable.
Bellisario’s contracts provided that after a certain number of episodes were produced, he would become an executive producer. This meant that he would continue to be paid on an upward scale whether or not he worked on the show. In addition, in an interesting clause in the agreement, the contract stated that if, during the time he was paid but not required to work, he came up with an idea for a new show, he would be paid for that. The payments for one position would be subtracted from the other position. All of this left him considerably well-off.
“He got $9.6 million for ‘Quantum Leap’ after the separation. The big issue was: How much of the $9.6 million was Deborah entitled to?” Kaufler says.
Their [the defendants’] position was that she was only entitled to part of the profits based on a formula of how many episodes were done over the course of the marriage vs. how many after the marriage. She ended up with almost no money after taxes were paid,” he says.
Kaufler proved to retired Judge Jerry K. Fields of Alternative Dispute Resolution Services in West Los Angeles, who arbitrated the matter, that even though Bellisario received payment for “Quantum Leap” after the marriage ended, because of the complex graduated payment structure involved in production contracts, the show was created during the marriage, so those earnings, despite time of payment, were community property.
Part of Bellisario’s contract stated that after 96 episodes were produced he would receive additional compensation, on an increasing scale, for each show, as executive producer.
“My argument was that even if he would have not been working for the studio at all, working at another studio, retired or was in Tahiti drinking strawberry daiquiris, if it’s 96 episodes, which came to $4.8 million, it’s still community property,” despite some of that money being paid after the divorce but while the show was still running, Kaufler says.
However, attorney Randall Dean, who represented the accounting firm sued by Pratt, communicated in a written statement that his clients’ work was performed at the direction of her divorce firm, to further divorce settlement negotiations.
“There were disputes in the underlying divorce over the interpretation of Bellisario’s contracts and whether the income received thereunder was community or separate property,” Dean writes.
“Plaintiff elected to settle the underlying divorce with the understanding that her settlement was potentially less than she would receive if she went to trial,” his statement continues.
Dean writes that Pratt did so because of her desire to move on with her own career as an executive producer of television shows.
His clients, Dean states, contended that any duty to analyze the contracts and appropriateness of the divorce settlement to which Pratt originally agreed rested with her attorneys.
The defendants’ Petition to Vacate the award on the grounds that Fields refused to hear material evidence and other unspecified misconduct was denied. The defendants are appealing the matter.
Fields, nothing that misconduct is one of the few grounds on which to pursue an action against an award reached in binding arbitration, says the “misconduct” alleged was merely the fact that he agreed with the plaintiff over the defendants.
Kaufler says the alleged haphazard evaluation of Bellisario’s earnings, by what he says is considered to be the pre-eminent accounting firm in Hollywood, simply may have been because, while the case involved millions of dollars, it did not involve the kind of bigger-money clients the law firm the firm usually represents.
“Sometimes these firms get busy with bigger cases. I think that was a major part of it,” Kaufler says, noting that Pratt’s divorce attorney testified at the arbitration that he relied on the accounting firm because of their experience in family and entertainment.
“But, he shouldn’t have. He’s the lawyer, he’s supposed to be the captain of the ship,” Kaufler says.
Kaufler adds that Pratt had offered to settle the accounting malpractice case for $2.8 million, and she was offered only $150,000 near the end of the trial, though Dean says she was offered $250,000.
LA TIMES – Jan. 3, 2014
Court Clears Former Schools Chief
Supt. Jeffrey Hubbard was convicted in 2012 of misappropriating public funds
Nearly two years after a jury found former Beverly Hills Schools Supt. Jeffrey Hubbard guilty of misappropriating public funds, a state appellate court panel has reversed his two felony convictions.
Hubbard was convicted in January 2012 of two counts of misappropriating public funds while acting as superintendent of the Beverly Hills Unified School District from July 2003 to June 2006. The charges stemmed from allegations that Hubbard paid Karen Christiansen, former district director of planning and facilities, an unauthorized bonus and increased car allowance, the Daily Pilot reported.
Christiansen’s car allowance was boosted from $150 monthly to $500 in 2005. She was also granted a $20,000 stipend in 2006, according to the appellate court panel’s 10-page ruling.
However, the three-justice panel from California’s 2nd District Court of Appeal agreed with Hubbard’s lawyers that state law outlined that as superintendent, he was not “charged with the receipt, safekeeping, transfer, or disbursement of public moneys” and overturned his conviction, according to the ruling issued Tuesday.
“At trial it was undisputed that both the increased car allowance and the stipend required approval by the district’s board of education – Hubbard did not have the legal authority to order them unilaterally,” Justice Frances Rothschild wrote in the ruling.
Hubbard joined the Newport-Mesa Unified School District in Orange County after working in Beverly Hills and was fired in 2012, the day after he was convicted in Los Angeles County Superior Court.
“He was let go from Newport-Mesa because we were legally required to terminate him,” board President Karen Yelsey said Wednesday.
Because the power to authorize funding increases like bonuses and other allowances rests with the district’s board, Yelsey said she was not surprised by the court’s decision.
“I personally never thought he should have been charged,” she said. “A superintendent isn’t responsible for authorizing funds.”
Throughout the appeals process, Hubbard’s lawyers contended that others in Beverly Hills Unified failed to follow proper protocols when Christiansen’s compensation was enhanced. They also asserted that he would have been absolved by emails between Hubbard and school board members, which the court declined to order the district to recover.
` The state appellate court panel did not address those specific issues in its decision Tuesday.
After being sentenced in February 2012, Hubbard served four of his 60 days in jail. He was also sentenced to 280 hours of community service, thee years probation, $23,500 in restitution to the school district and a $6,000 fine. The appellate court vacated all of his penalties.
The appellate panel directed the Los Angeles County Superior Court to enter an order dismissing all charges against Hubbard, which must be done to completely clear his name, said Hillel Chodos who represented Hubbard during the appeals process. Hubbard was also represented by Los Angeles attorney Philip Kaufler.
Prosecutors have until February 9 to seek review of the appellate court panel’s decision. If they are denied review, the trial court will dismiss the charges within about two to three months, Chodos said.
“Even though he can demonstrate this was a gross travesty, anyplace he goes still has a mugshot on the Web,” he said. “It’s tough to get back from that.”
Hubbard declined to comment on the court’s decision.
Representative from Beverly Hills Unified could not be reached for comment Thursday.
SEALING OF DIVORCE FILES RULED ILLEGAL
By Caitlin Liu
Times Staff Writer
In a case arising from the split of billionaire investor Ronald Burkle and his wife, Janet, a jurist says the law’s secrecy is too broad.
A Los Angeles Superior Court Judge ruled Monday that a new state law permitting divorce case documents to be sealed in their entirety – even if only a small portion contains personal information – violates the 1st Amendment.
The law, signed by Gov. Arnold Schwarzenegger in June and hailed by privacy rights advocates, is so bread that it runs contrary to the constitutional right of public access to court records, Judge Roy I. Paul said in a 10-page decision.
Responding to arguments that sealing records helped protect litigants from identity theft and financial fraud, Paul said other measures could accomplish the same goal. For example, home addresses, credit card data and Social Security numbers could be blacked out, he said.
The ruling arose out of a bitterly fought divorce case between billionaire investor Ronald Burkle and his wife, Janet.
In December, Ronald Burkle’s lawyers – invoking the new state law – asked Paul to seal dozens of documents in the divorce file. The Times and Associated Press objected.
Susan Seager, who represented The Times and Associated Press, argued that litigants could use the statute to avoid public scrutiny.
Patricia Glaser, an attorney for Ronald Burke, said she was disappointed and would probably appeal the ruling.
“Under the present statute, certain things are appropriately sealed. We just think that there should be more,” she said.
An attorney for Janet Burkle said his client was happy with the ruling because she believed her divorce proceedings should remain public.
“This has been a very contentious divorce and there’s obviously a huge amount at stake” said attorney Philip Kaufler. “That statute is unconstitutional. This would have affected every divorce case in California.”
The statute was passed by both houses of the state Legislature in April as urgency legislation over opposition by 1st Amendment advocates.
Before it took effect, Judges had the power to send documents and close court hearings, but were required to balance the public’s right to know with the potential harm claimed by an individual. The new law removed judicial discretion when it came to records containing any financial information in divorce cases.
Kaufler said he believed Ron Burkle, who donated a total of $147,800 to Schwarzenegger and the state Democratic Party in February and March of last year, played a role in the passage of the new law.
Burkle has denied any such role.
Peter Eliasberg, managing attorney for the American Civil Liberties Union Foundation of Southern California, praised Paul’s ruling and said the statue posed freedom of information issues.
“It’s written in such a way that the entire pleading could be sealed,” Eliasburg said. “It’s inconsistent with the 1st Amendment, the public’s right to know.”
Associated Press contributed to this report
DAILY NEWS – Aug. 27, 2011
MOVIE PRODUCER TO PAY $3M IN HARASSMENT TRIAL
By City News Service
Movie producer Jon Peters was ordered by a jury Friday to pay more than $3 million to a former personal assistant, whom the panel determined was subjected to sexual harassment and a hostile work environment.
The nine-woman, three-man jury awarded Shelly Morita $822,000 in compensatory damages and found that Peters active with malice, which triggered an immediate second phase of trial in which the same panel awarded her $2.5 million.
Most of the compensatory award, $750,000 was for emotional distress and the rest for past wages.
Unlike the first part of the trial, the punitive damages portion did not include testimony, only arguments from the lawyers.
Morita’s attorney, Philip Kaufler, said Peters engaged in conduct “that should never be tolerated.”
The producer’s lawyer, John Gatti, said he acknowledged and respected the first phase verdict, but noted that Morita has been employed for several years in her current job as an executive for a law firm – earning more than $100,000 annually.
“Ms. Morita has gone on with her life,” Gatti said.
Peters, 66, was not present for the verdicts but repeatedly denied any wrongdoing when he testified at the trial, which began August 2. His attorney said the verdicts will be appealed.
DAILY JOURNAL – Jan. 24, 2014
Lawyer’s Big Payday in Domestic Split Prompts Appeal
A Jury handed family attorney Hillel Chodos a fee award of $5,000 per hour, or $7.8 million
By Saul Sugarman
Daily Journal Staff Writer
A woman who scored a multimillion dollar settlement offer after splitting from her husband wants a do-over with one of her lawyers who nabbed $7.8 million in attorney fees from the deal.
The award won by prominent Los Angeles family attorney Hillel Chodos is “uniquely high” and “excessive,” according to Ronald N. Richards, a Beverly Hills-based lawyer who wants to redo last year’s jury trial for unpaid fees.
The case has raised eyebrows among family law attorneys because Chodos had no written fee agreement with former client Navabeh Borman. A 12-0 jury vote also multiplied Chodos’ $1,000 hourly rate by five because of risks involved in taking the case and nuances in the couple’s separation, among other reasons.
Richards called this a mistake. “Unlike trial judges that understand the dynamics of litigation, lay jurors are not capable of judging the quality of an attorney’s representation in order to decide whether to enhance a fee award,” he wrote in court documents.
The decision has been appealed to the 2nd District Court of Appeal. Chodos et al. v Burman, SC107421 (L.A. Super Ct., filed April 1, 2010).
Three lawsuits dealt with the split of Malibu couple Navabeh and Burton Borman – two divorce actions and a so-called “Marvin” case. The latter earned the name from former movie star Lee Marvin, whose live-in girlfriend famously sued him for part of his income even though the couple never got married.
She didn’t win, but the state Supreme Court acknowledged that California law honors contracts made outside of marriage. Marvin v. Marvin, 18 Cal. 3d 660
San Francisco-based family lawyer Mindy L. Ross said Marvin lawsuits are rarely tried because agreements made prior to nuptials are hard to prove.
“It’s often a case of he said, she said. They’re hard cases to win,” said Ross, of Winter & Ross.
Navabeh Borman won a settlement valued at $26 million in assets, including a sculpture by the artist Donald Judd and shared ownership of a Malibu home that she said Burton promised to her before they married. Chodos argued that the case was “virtually unwinnable.”
“He had a very difficult case and took a risk on it,” said Philip Kaufler, a Beverly Hills-based lawyer who represent Chodos in the fee dispute. “He got her a jackpot result and then she refused to pay him.”
Several lawyers said they had not heard of a multiplier used in dissolution cases. But, they said, Chodos might deserve the enhancement if he successfully convinced a jury that his work was primarily in the Marvin action.
Still, Ross called the multiplier “nonsensical and likely fraught with potential problems.” The award could encourage other lawyers to not get written agreements in similar cases, she said. The value of Chodos’ services should also be set solely by his $1,000 rate, she added.
“Our hourly rate should already subsume our years of experience, stature among our professional colleagues and our success rate,” Ross said.