An Atlanta attorney claimed he was duped into disbursing client funds to fraudsters pretending to book shows by Lil Wayne, shown above at the BET Awards in June. (Chris Pizzello/AP)
An Atlanta attorney has lost his defense of a lawsuit filed by an investor who accused him of handing over $200,000 of her money to con men the lawyer thought represented rapper Lil Wayne.
Besides rejecting the attorney’s defense on the merits, a Fulton County judge has declared the lawyer in default for failing to answer the complaint on time. According to the judge, that means the only issue left for the court is how much Venkatesh “Vinny” Kumar and his firm, Keniley Kumar, will have to pay in damages.
Kumar had asked Fulton County Superior Court Judge Robert McBurney to set aside the default judgment, claiming that he had “a reasonable excuse under the law” for failing to answer the complaint within the allotted time.
Kumar’s attorney, Karl Braun of Nashville’s Hall Booth Smith office, had argued in his briefs that he had been under the impression that the investor, Kimberly Blackwell, and her lawyer were willing to “cooperate” in moving the case forward so that discovery could continue and the perpetrators of the “elaborate fraud” could be identified.
But McBurney’s order said that Kumar and his firm’s contention that they should be allowed to open the default because they believed they had such a collegial relationship with Blackwell’s lawyer that they would be allowed to file an answer to an amended complaint was both unsupported by any evidence and disputed by the plaintiff.
“While professionalism is to be encouraged in the practice of law and truly civil civil litigators should be recognized,” wrote McBurney, “amicable relations cannot justify a failure to comply with the basic rules of civil practice.”
“They simply did not answer,” wrote McBurney, who set a hearing on damages for Sept. 29.
Neither Braun nor Kumar responded to requests for comment.
Blackwell’s lawyer, Evans, Scholz, Williams & Warnke partner Rickman Brown, declined to discuss the case at length.
“All I would say is that we appreciate Judge McBurney’s careful and reasoned opinion, and look forward to proving our damages at the upcoming hearing,” he said, adding that a total of $210,000 of Blackwell’s money was disbursed to “unauthorized persons” from Kumar’s escrow account. Another $65,000 was properly disbursed, he said.
Blackwell and Kumar were apparently among several victims of fraudsters claiming to represent the New Orleans-born rapper, whose real name is Dwayne Michael Carter Jr., shortly after he emerged from New York’s Rikers Island jail in late 2010 after serving an eight-month stint on weapons charges. Within days, according to contemporaneous news accounts, promoters began getting calls from people pretending to be Lil Wayne’s manager, Cortez Bryant, and another Bryant Management Group officer soliciting advance booking fees for a tour by the rapper.
The real Bryant released a widely circulated statement warning about the scam in late 2010.
Blackwell, the founder and CEO of a Columbus, Ohio, advertising and public relations firm, claims she was contacted in August 2011 by Ernest Foxx, the president of rap collective Black Mob Group, which Kumar once served as general manager.
Foxx and other representatives of Black Mob Group approached Blackwell about an opportunity to invest in two shows slated for October of that year to be staged at the Cajundome in Lafayette, La., and at the DeSoto Civic Center near Memphis, Tenn., according to Blackwell’s complaint. Blackwell was told Kumar had been retained by Foxx and Black Mob Group to act as escrow agent for the transaction, the complaint said.
Blackwell wired Kumar $400,000 in September 2011. According to the binder agreement, the money was to remain in his escrow account until Black Mob Group or Bryant Management confirmed the dates of the shows. If they had not been confirmed within 10 days, the money was to be refunded.
According to the binder’s terms, once written confirmation was received Kumar was to disburse $157,000 to entertainment giant Live Nation, Bryant Management and Black Mob Group. Another $42,500 was to be disbursed to Nicole Martin, an officer with the company representing Blackwell’s interests. The shows never happened, and in October Blackwell sent Kumar a letter demanding a refund.
Blackwell claims that the following month Kumar responded not by returning her deposit but by notifying her for the first time that he had transferred a total of $275,000 from his escrow account, including $235,000 to “Empire International Financial Group.”
Subsequently, the complaint said, Kumar confessed that Blackwell’s funds had been sent to various unauthorized parties, including Empire, an entity identified as Tyga Music LLC and someone named R. Gillis, Esq. Gillis, the complaint said, was purportedly a Maryland attorney, although no bar record of him could be found in that state or elsewhere.
An Atlanta Police Department report obtained by the Daily Report indicates that Foxx filed a fraud complaint on Oct. 21, 2011, indicating that he had deposited $210,000 into accounts held by Tyga Music, Empire and Gillis. The Daily Report was unable to reach Foxx.
Neither Tyga Music, Empire nor Gillis had been mentioned in the agreement, the suit said, and no one on Blackwell’s side of the binder agreement knew who they were or had authorized payment to them.
In January 2012, Kumar sent Blackwell a letter saying that his client, Foxx, “was the victim of a potential fraud by Bryant Management,” and that correspondence with individuals claiming to be Cortez Bryant and others affiliated with Lil Wayne’s label had “created a very complex and confusing situation.”
According to the complaint Blackwell filed against Kumar and his firm in August 2013, she was refunded $125,000 of her investment.
Braun entered an appearance the following month, and Blackwell agreed to an extension for the filing of “any and all responsive pleadings, motions or raised defenses” until Nov. 4.
On Nov. 4, the defendants filed a motion to dismiss, arguing that Blackwell had no standing to sue, since the binder agreements were signed by Martin, Blackwell’s representative.
The one-count suit claiming breach of fiduciary duty was originally filed by Atlanta solo Charlotte Perrell, who moved out of the country last fall, and Brown came aboard on Nov. 19. The next day he and Braun had a telephone conference during which, according to Brown’s filings and affidavit, the two discussed allowing an extension of time for the plaintiff to respond to the motion to dismiss.
According to a defense brief, the conversation also included a discussion about adding Martin and her business partner as defendants through the filing of an amended complaint.
Kumar and his firm, the brief said, “were operating under the reasonable expectation that cooperation would continue toward the proper alignment of the parties. Defendants’ actions were not, by any stretch, the consequences of willful and gross negligence. Rather, Defendants acted reasonably, in good faith, and within the spirit of mutual cooperation.”
Brown, however, disagreed.
“At no time during this conversation did I state or imply that new parties needed to be added,” said Brown in an affidavit.
On Feb. 11, 2014, Brown sent Braun an offer to settle the case for $260,000. There was no response, and on March 4 Brown filed a motion for entry of default judgment.
In denying the plaintiffs’ motion to open default, McBurney rejected Kumar and his firm’s claims that they thought an agreement had been struck to allow further pleadings or that, by filing a motion to dismiss, they need not file an answer. In a footnote, McBurney observed that Braun is a Tennessee attorney and said that perhaps that state follows the Federal Rules of Civil Procedure, under which a pending motion to dismiss “obviates the need to file a formal answer until the merits of the motion are considered. Unfortunately for defendants, that is not the law in Georgia.”
McBurney also said the defendants had not met the requirements to open default under Georgia law. “Defendants knew when their answer was due—indeed, they even negotiated an extension of their deadline and yet still failed to meet it,” he wrote.
Because the motion to open default was denied, the motion to dismiss is moot, McBurney wrote. Nonetheless, he weighed it as well, rejecting the defense argument that the failure to include Martin and her company as plaintiffs barred Blackwell’s claims.
The case is Blackwell v. Kumar, No. 2013CV234805.