Michael Jackson's estate Generates Large Income while Creditor Claims Continue to Pile

When the world-renowned pop star Michael Jackson died in June 2009, he was in financial trouble and his property Neverland Ranch was facing foreclosure. Since his death, his estate has received substantial amounts of income, while numerous claims have been brought against his estate.

The New York Times has quoted Michael Jackson's former advisors who blame Jackson's spending habits for his financial difficulties. Alvin Malnik remarked "[Michael Jackson] never kept track of what he was spending. He would indiscriminately charter jets. He would buy paintings for $1.5 million. You couldn't do that ever other week and expect your books to balance." Charles Koppelman, another former Jackson advisor, commented "[Michael Jackson] was a fantastic visionary on the business front. He just couldn't deal with his personal finances."

Six months after his death, new claims continue to be brought against the late pop star's estate. Attorneys Thomas Mesreau Jr. and Susan Yu, of the law firm Mesereau & Yu, LLP, have filed a $341,452 claim against Michael Jackson's estate, for amounts owed for the defense of the late pop star in his child molestation case in 2005. The accounting firm of Cannon and Company has filed a creditor's claim seeking $56,582 for services rendered earlier this year. A company called Video & Audio Center has filed a $128,482.77 claim for installing electronic audio and video equipment at the Neverland Ranch. Michael Jackson's probate case is currently pending before the Los Angeles Superior Court as case number BP117321, and a search of the court's online case summary page can show a summary of the case activities.

Although Michael Jackson had to grapple with financial issues prior to his death, his estate appears to be pulling out of the red. Since the pop star's death, there has been a large influx of revenue from his music sales, film deals and merchandising contracts. Commentators project Jackson's estate can generate revenues of $30 Million annually, from his own music sales and from other music rights Jackson had purchased (which is rather low compared to the $55 Million generated by Elvis Presley's estate last year). Some believe the Neverland Ranch may have income potential, much like Elvis Presley's mansion Graceland.

During his life, Michael Jackson frequently engaged in humanitarian activities. The photograph to the right shows the late star with the late President Ronald Reagan and first lady Nancy Reagan at a White House ceremony on May 14, 1984, to launch the campaign against drunk driving.

Robin Mashal is a partner at the law firm of Hong & Mashal LLP. He can be reached at (310) 286-2000.

Can Your Facebook Photos Cost You Your Insurance Benefits?

A 29-year-old Canadian women who was on long-term sick leave from her job, stopped receiving insurance benefit checks after she posted some photographs on her Facebook page. According to the news, Natalie Blanchard who used to work at IBM's Bromont, Quebec office, was diagnosed with major depression and placed on sick leave a year ago. She was receiving monthly sick leave benfits from Manulife.

Soon after Blanchard posted her vacation photos on her Facebook account, she noticed she is no longer receiving her insurance benefit checks. When Blanchard contacted the insurance office, her insurance agent referred to her vacation photos saying she is no longer depressed and should be able to return to work. The photos showed Blanchard having fun at her birthday party, and at a Chippendales bar show.

Thomas Lavin, Blanchard's attorney is threatening legal action against Manulife and IBM, saying Blanchard went on vacation based on her doctor's orders. Lavin complains that the insurance company stopped his client's benefits without proper notice to her, and his client has been constructively terminated from her employment.

The materials for this blog are based on articles in ABC News and The Washington Post. For additional information, run a search on Google.

Robin Mashal is a partner at the law firm of Hong & Mashal LLP. He can be reached at (310) 286-2000.

Is Loan Modification Dead?

It was about two years ago when the U.S. real estate market crashed. The headline news contstantly talked about the increase in unemployment, how people are unable to make their mortgage payments, how the real estate values are dropping, and how most property values are "upside down."

And then came a sigh a relief: the "loan modification experts" who could negotiate with the lenders to reduce the loan principal balances, reduce the mortgage interest rates, or modify the mortgage payoff terms. Suddenly everyone was an expert in loan modification, the lawyers, the real estate brokers ... everyone and their best friend had some expertise in the field.

Well, it seems like the loan modification industry has also turned upside down. For a while now the news talks about government regulation of this industry. Here is a highlight of the news in California:

* On January 22, 2009, Senators Calderon, Corbett and Steinberg introduced Senate Bill 94, proposing to amend several California statutes in response to the urgent mortgage loan problems.

* On July 23, 2009, California Attorney General, Edmund G. Brown Jr. made a news release warning homeowners "to avoid 'shadowy and unscrupulous' loan modification consultants who use aggressive telemarketing tactics and charge thousands of dollars in upfront fees for foreclosure relied." This news release and related materials can be found on Attorney General's web pages entitled "Stop Loan Modification Fraud."

* On September 18, 2009, the State Bar of California made a news release about 16 attorneys who were "under invesitgation for misconduct related to loan modification."

* On October 11, 2009, California Governor Arnold Schwarzenegger signed into law Senate Bill 94 (Calderon) prohibiting any person from demanding of collecting any advance fee, retainer fee or other pre-payment from a consumer for loan modification or mortgage loan forbearance related to a residential unit of 4 units or less. The California Department of Real Estate has placed a Consumer Alert on its web site detailing Senate Bill 94's provisions.

* The November 2009 edition of the California Bar Journal contains an article by Nancy McCarthy entitled More Lawyers in Trouble for Foreclosure Activity. The article recites 3 more California attorneys having resigned the California State Bar, and one California attorney placed on inactive status, "as a result of their misconduct related to their loan modification activities."

Although the law is not putting a complete halt to loan modifications, it will significantly reduce the industry's activities. The few who will remain in the field will be under close scrutiny, but they will be assist those truly in need of their services.

Robin Mashal is a partner at the law firm of Hong & Mashal LLP. He can be reached at (310) 286-2000.

Playboy sues Chicago Lawyer who Had Posed for the Magazine

Playboy magazine has sued Corri Fetman, a Chicago lawyer who had posed nude for Playboy and used to write a Playboy.com advice column titled "Lawyer of Love", report ABA Journal and Chicago Sun Times. Playboy is complaining about Fetman's use of the phrase "Lawyer of Love", and her attempt to register this phrase as a trademark, because Playboy argues Fetman gave up any rights to this mark in her freelance agreement with Playboy.

According to Chicago Tribune, in March 2009 Corri Fetman filed a $5.4 Million sexual harassment lawsuit against Playboy, claiming Fetman lost her writing column with Playboy as a result of her resisting sexual advances by Playboy executive Thomas Hagopian.

Corri D. Fetman is a Chicago divorce lawyer at the law firm of Fetman, Garland & Associates Ltd. Her firm's web site, has a prominent "Playboy Press" page, and as well provides a link to "Love Lawyer Advice Blog" maintained by Ms. Fetman.

It Happens to the Best of Us: $1.26 Billion Default Judgment Entered Against PepsiCo

Anyone who has consulted a lawyer about defending a lawsuit knows that if you don't file your answer on time, the plaintiff can can a "default judgment" against you. We can imagine someone who has never been sued before and has not had a chance to consult a lawyer to fall into this trap. But, could it also happen to a large, multi-national corporation which has been a party to many lawsuits, and has a bunch of lawyers on its payroll? Apparently it can.

The case in point is a recent $1.26 Billion default judgment entered against PepsiCo, Inc. in the Wisconsin state court. According to the news buzz, in April 2009, Charles Joyce and James Voigt filed a lawsuit alleging PepsiCo, Inc. developed Aqafina based on misappropriated trade secrets from the confidential conversations plaintiffs had with their distributors about selling purified water. The lawsuit was served on PepsiCo, Inc.'s agent in North Carlina. When PepsiCo did not answer the complaint, plaintiffs obtained the default judgment.

On October 13, 2009, PepsiCo's attorneys brought motion to set aside the judgment. They are making various arguments, that the documents were not properly served on the company's agent in North Carolina, that the papers were mislaid by PepsiCo's employees instead of being forwarded to the attorneys, etc. According to Yahoo! News, PepsiCo's attorneys have made this account of the events in their motion so set aside the judgment:

• June 11, 2009: Stith & Stith, PepsiCo's law firm in North Carolina was "allegedly" served with process, but PepsiCo was not made aware of this;
• September 15, 2009: Stith & Stith sends a correspondence concerning this lawsuit to Tom Tamoney in PepsiCo's legal department, but his secretary Kathy Henry was so occupied with other matters that she did not communicate the letter to anyone nor did she enter it into the log;
• September 29, 2009: Plaintiffs Charles Joyce and James Voigt request entry of default judgment against PepsiCo;
• September 30, 2009: The Wisconsin court enters default judgment against PepsiCo;
• October 5, 2009: Kathy Henry receives notice of judgment, and as she enters it into the log, she is reminded about the earlier letter;
• October 6, 2009: PepsiCo's attorneys learn about the case.

At the end of the day, the court may set aside the judgment and allow PepsiCo to file its answer and defend the lawsuit. But in the meantime, PepsiCo's attorneys and employees will need to explain this public embarrassment. How could it be that such a large company overlooks defending a good size lawsuit as this? Can a large company be at a disadvantage in such matters, because the various departments cannot effectively communicate with each other?

Some of the materials for this blog were obtained from ABA Journal and Yahoo! News. For additional information visit the Wisconsin Court web site or run a search on Google.

Robin Mashal is a partner at the law firm of Hong & Mashal LLP. He can be reached at (310) 286-2000.

Lawyers are Admonished and Fined for Sloppy Work

In the past few months, there has been some news about judges criticizing lawyers and imposing fines on them for poor written products.

The first matter in the news was in the case of Nault v. The Evangelical Lutheran Good Samaritan Foundation, United States District Court, Middle District of Florida, Case no. 6:09-cv-1229-Orl-31GJK. Judge Presnell was irritated at Plaintiff's attorney for filing moving papers "riddled with unprofessional grammatical and typographical errors that nearly render the entire Motion incomprehensible." Judge Presnell denied the motion without prejudice and ordered the attorney to "read the Local Rules and the Federal Rules of Civil Procedure in their entirety" and file a Notice of Compliance with the court.

The other matter in the news was the 2008 unpublished opinion, in the case of Espitia v. Fouche, where the Wisconsin Court of Appeals imposed a $100 fine on an attorney for providing an inaccurate case citation in his court brief. The Court explained its frustration with the lawyer's work in that the case citation was wrong, the case title was wrong, and it was from a different district. Apparently, the court had to spend a great deal of time locating the case cited in the lawyer's brief, all of which could have been prevented by the lawyer verifying and proof-reading his work. Here is the entire footnote from the Court's opinion justifying the $100 fine:

"Counsel for Espitia cites to an unpublished case assertedly upholding a stipulated damages clause due to the difficulty of ascertaining "the exact amount of income certain vending machines would produce." The cite provided is "Buellesbach v. Roob, 2005 AP 160 (Ct.App.Dist.I)." Buellesbach indeed is unpublished but it has nothing to do with liquidated damage clauses or vending machines; it is a misrepresentation case brought by newlyweds against a wedding photographer. Also, "2005 AP 160" is the docket number, which we discovered only after reaching a dead end at 2005 WI App 160, 285 Wis.2d 472, 702 N.W.2d 433. At last we located the unpublished case that addresses the subject matter for which counsel cited Buellesbach: Stansfield Vending, Inc. v. Osseo Truck Travel Plaza, LLC, 2003 WI App 201, 267 Wis.2d 280, 670 N.W.2d 558. Different name, different citation, different district (District IV) but, as promised, unpublished. It is a violation of Wis. Stat. Rule 809.19(1)(e) to provide citations which do not conform to the Uniform System of Citation and of Wis. Stat. Rule 809.23(3) to cite to unpublished opinions. One reason may be that they can be time-consuming to locate. A $100 penalty is imposed against Espitia's counsel. See Hagen v. Gulrud, 151 Wis.2d 1, 8, 442 N.W.2d 570 (Ct.App.1989)."

Such judicial criticism and sanctions come as little surprise. With the current volume of litigated case, and relative shortage of judicial officers, judges are typically assigned a large case load. Since judges can allocate little time to each matter, they appreciate well-drafted pleadings and documents from the litigators.

Some of the information for this blog were gathered from Robert J. Ambrogi's blog, and ABA Journal.

Robin Mashal is a partner at the law firm of Hong & Mashal, LLP, and can be reached at (310) 286-2000. His practice focuses on business law, real estate law and civil litigation. Hong & Mashal LLP is a California business law firm.

Can Social Networking Do You Harm?

In today's world, everyone talks about the benefit of social networking and blogging. However, few talk about its potential drawbacks. Some recent events illustrate how social networking can have adverse legal cosequences.

State and Federal tax collectors have been using social networking forums to assist in locating tax evaders and collecting back taxes from them. In one case, the California tax collectors were able to collect "four figure" taxes from a person after a discussion board posting showed the debtor had closed his business and "moved across the bay." The Minessota taxing authorities found a long sought tax delinquent when he announced on MySpace the name and location of his new employment. Searching for information on Google and social networking sites is supplemental to the traditional search methods, such as searching for bank accounts, employment records, real estate records, and motor vehicle records.

In December 2008, Master Harper of the ACT Supreme Court, Australia, authorized a plaintiff to "substitute serve" a default judgment on a hard-to-reach defendants via Facebook. The normal procedure is to serve default judgment on a defendant by personal service or by mail. Given the difficulty in locating the defendants, this Australian court ordered plaintiff to serve notice of entry of default judgment on defendants by transmitting computer messages to defendants' Facebook page.

Some information for this blog was gathered from articles on The Wall Street Journal, and The Sydney Morning Herald. For further information, run a search on Google.

Robin Mashal is a partner at the law firm of Hong & Mashal, LLP, and can be reached at (310) 286-2000. His practice focuses on business law, real estate law and civil litigation. Hong & Mashal LLP is a California business law firm.