Arizona Lender Says Loan Dispute With Girardi Should Remain in Court
Girardi earlier this month asked to compel arbitration. The lender's lawyers at DLA Piper claim in recently filed court papers that the dispute concerns a forbearance agreement which has no arbitration clause and the lawyer who filed Girardi's motion isn't licensed to practice in Arizona.
August 23, 2019 at 05:46 PM
4 minute read
Arizona lender Stillwell Madison claims that its dispute with prominent Los Angeles plaintiffs lawyer Thomas Girardi should play out in court rather than arbitration.
Stillwell Madison, represented by counsel at DLA Piper, sued Girardi, his law firm Girard Keese, and his wife, Real Housewives of Beverley Hills cast member Erika Jayne, in Arizona federal court in May claiming that the lender had been fraudulently misled to grant a forbearance of $3,454,804 on a loan of more than $5 million to the law firm. The lender claims Girardi failed to disclose that he and the firm had defaulted on a loan from a separate lender at the time of the forbearance.
Earlier this month, Girardi's lawyer, Robert Baker of Baker, Keener & Nahra in Los Angeles, asked that the case—which he labeled a "publicity stunt"—be dismissed and routed to arbitration, citing an arbitration clause in Stillwell Madison's original loan agreement with the firm.
But in a court filing this week, Stillwell Madison's DLA lawyers contend that the dispute belongs in court. Girardi, they maintain, personally guaranteed the firm's initial loan in an independent agreement that included no arbitration clause and contained language that indicated the lender would pursue "a judgment" if the firm defaulted. The lender's lawyers also contend that Stillwell Madison's fraud claim is based on the forbearance agreement with Girardi, which they also say contains no arbitration agreement. Additionally, the DLA lawyers contend that Baker, Girardi's lawyer, was not admitted to the Arizona bar and had not sought pro hac vice status with the court, rendering Girardi's motion null.
"Notwithstanding defense counsel's unauthorized practice of law, defendants' confused motion fails to present any valid ground requiring the Court to compel arbitration of this action," wrote DLA Piper's Laura Sixkiller, Kate Benveniste and David Onuschak in the Aug. 21 filing.
"Further highlighting out-of-state counsel's lack of familiarity with this Court's Local Rules, defendants might have better understood Stillwell's position had Defendants engaged in a meaningful meet and confer rather than send a perfunctory email asking Stillwell to dismiss the case," they wrote in a footnote.
Phoenix lawyer Patrick McGroder III of Beus Gilbert responded to the DLA filing on Girardi's behalf Aug. 22 maintaining that the dispute belongs in arbitration, pointing to the arbitration clause in the original loan agreement. "The painful exercise of claiming the correspondence regarding payments should invalidate the Loan Agreement's express language is inconsistent with the complaint, inconsistent with case law, and ignores the language of both agreements," McGroder wrote. The Phoenix lawyer added that Baker had been admitted pro hac vice with the Arizona court in prior cases and "in good faith believed he was still admitted by reviewing the Court website as to attorneys admitted before this Court." McGroder offered to refile Girardi's motion while Baker's pro hac vice status is pending, if the court desires.
DLA lawyers on the case didn't respond to email messages seeking comment Friday.
In a letter to the Recorder sent via email by his assistant Friday, Girardi called the lawsuit "unethical, illegal and irresponsible."
"It was their client who demanded mandatory arbitration of any issue," Girardi wrote. "However, by being honest and filing for arbitration, they couldn't get their hit piece against me in the press."
The Arizona lawsuit came as Girardi and the firm faced separate litigation filed in California state court in early 2019 by Mill Valley-based funder Law Finance Group over repayment of more than $15 million in loans. Law Finance Group claimed that Girardi and the firm refused to hand over recovered fees from cases designated for repayment. The California lender, represented by lawyers at Eisner, secured a $6 million judgment against Girardi and the firm in Los Angeles Superior Court last month. Leslie Corwin of Eisner said in an email Friday that Girardi and the firm have made additional payments, but that the judgment "remains outstanding." Neither Girardi nor an outside firm spokesperson immediately responded Friday to questions about the remaining balance in the California dispute.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllJudge Asks: Should Tom Girardi Serve Sentence in a Medical Facility or Behind Bars?
4 minute readTrending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250