When a group led by Earvin "Magic" Johnson agreed to purchase
the Los Angeles Dodgers from Frank McCourt for $2 billion, the
news surely spread quickly through the halls of McCourt's former
law firm, Bingham McCutchen. But whether the sale, a record
price for a major U.S. sports franchise, will keep McCourt from
pursing malpractice claims against the firm is an open question.
As you may recall, Bingham partner Lawrence Silverstein
drafted a post-nuptial agreement for McCourt and his now ex-wife
Jamie in 2004. The agreement was intended to describe which
McCourt property was owned together and which was owned
separately. The agreement contained language that the Dodgers
were "inclusive" of Frank McCourt's separate property, but when
the husband and wife signed the final documents, not all of the
copies included that language. Instead, some said the Dodgers
were "exclusive" of his separate property, which would mean they
were co-owned. At the McCourts' divorce trial in 2010,
Silverstein said that when he noticed the discrepancy, he
replaced the pages that said "exclusive" with those that said
"inclusive," but did not tell the McCourts he had done so.
Jamie McCourt used the page the switch to question the
validity of the agreement and the agreement was eventually
thrown out. Late last year, Frank McCourt agreed to pay Jamie
approximately $131 million to end her ownership claim of the
team. (The term sheet of their settlement doesn't describe
specifically what the $131 million is for, and once he pays that
amount he'll pay no further spousal support, but the amount is
over and above four houses, including furnishings and fixtures
and $225,000 monthly in "temporary support" until the lump sum
The term sheet indicates Jamie McCourt must be paid by April
30, 2012, so the announcement of the sale of the Dodgers came
under the wire. The team is currently going through bankruptcy
proceedings in Delaware, and the sale requires court approval.
But, if finalized, McCourt, after paying approximately $500
million in debt and the monies owed Jamie, could walk away with
more than $1 billion.
No matter what McCourt made on the sale, he can still argue
he would not have had to pay Jamie a penny to give up her claim
of ownership if Bingham attorneys hadn't acted the way they did,
sai d Michael Downey of Armstrong Teasdale, who advises law firms
on malpractice claims.
McCourt hasn't filed a suit. But there's little doubt that
he -- and Bingham -- believe one is possible. In April of last year, Bingham asked a Massachusetts state court in Boston to
make a declaratory judgment that it "met the standard of care"
in drafting the McCourts' post-nuptial agreement. The judge was
skeptical of forcing a client to litigate his malpractice claim
before he chose to bring it and threw out the action. At the
time, McCourt's lawyers at Bartlit Beck Herman Palenchar & Scott
made clear McCourt believes he has reason to bring a suit,
especially as Silverstein failed to reveal his page switch even
after he knew McCourt's divorce lawyers, including a team from
Susman Godfrey, intended to use the document at trial.
Of course, the fact that one can bring a suit doesn't mean
one will be filed. It's up to McCourt whether pursuing a
malpractice claim is worth the hassle of even more litigation.
It might come down to how bad the blood still is between him and
his former lawyers. From the sound of things, it's still pretty
bad. "We continue to believe that Frank McCourt has suffered
enormous damages as a result of Bingham's malpractice, that
require compensation," Bartlit Beck's Glen Summers told On The
Bingham McCutchen declined to comment. John Villa of
Williams & Connolly, who represented Bingham in the Boston
declaratory judgment action and who continues to represent the
firm in the matter, also declined to comment.
(Reporting by Erin Geiger Smith)
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