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A lawyer for Bingham McCutchen attempted to convince a Massachusetts judge that state law allows the firm to bring a declaratory judgment action attempting to stop Los Angeles Dodgers owner Frank McCourt Jr. from bringing a malpractice suit against the firm. The Aug. 8 hearing in Bingham McCutchen v. McCourt in Suffolk County, Mass., Superior Court included oral argument about whether Bingham belongs on the defense side of the table in any litigation with Frank McCourt, because the firm is allegedly the tortfeaser. Associate Justice Janet Sanders, who heard the case in the court’s business session, expressed some skepticism about whether Bingham could use a declaratory judgment action to stop a malpractice lawsuit. Frank McCourt is embroiled in bitter divorce proceedings with his estranged wife, Jamie McCourt, in the Superior Court of Los Angeles County, Calif. Financial papers prepared by Bingham lawyers to establish that the McCourts separately owned certain assets have been a central issue in that case. On April 11, Bingham sued McCourt in Massachusetts, asking the court to declare that the firm’s legal work was up to par. The law firm asked for a declaration that Bingham didn’t cause any of Frank McCourt’s losses related to the Dodgers, a professional baseball team currently in Chapter 11, and was “in accordance with ordinary standards of care for legal professionals.” According to the complaint, Frank McCourt and Jamie McCourt contacted Bingham Boston partner Lawrence “Larry” Silverstein in 2001 and hired the firm for estate planning and other legal work. Silverstein and other Bingham lawyers later represented Frank McCourt during his acquisition of the Dodgers. At the time, the McCourts asked Bingham for help in protecting assets from Frank McCourt’s creditors, because the Dodgers had operated in the red for several years and Frank McCourt shouldered substantial debt to buy the team. Ultimately, Bingham prepared a contract called the “Marital Property Agreement” to protect assets in Jamie McCourt’s name from Frank McCourt’s creditors, particularly those related to the Dodgers deal. Bingham claims Silverstein gave the McCourts a draft agreement in March 2004. The firm also claims Silverstein advised them that each should seek independent counsel, but they declined. At the McCourts’ direction, Bingham prepared agreement supplements in May and October 2004 to add new residential property to Jamie’s property. When Jamie McCourt filed for divorce October 2009, she claimed that “the division of property reflected in the [marital property agreement] did not mean that she had no rights in the Dodgers.” In December 2010, the California court declined to enforce the agreement on the grounds that it wasn’t a valid agreement under California marital property law and that “there had never been a sufficient meeting of the minds between the McCourts,” according to Frank McCourt’s Massachusetts court papers. The Massachusetts hearing was about Frank McCourt’s June 13 motion to dismiss Bingham’s case. His brief claims that Bingham has “taken the unprecedented action of suing the victim of its own malpractice.” The McCourt’s agreement contained three schedules, but the three he signed in Massachusetts did not match the three he signed after moving to California. Frank McCourt’s court papers claim that Silverstein quickly discovered the error but “chose to secretly substitute the relevant page from the California version of the [agreement] to conform it to the Massachusetts version.” Fred Bartlit Jr., a Denver partner at Chicago-based Bartlit Beck Herman Palenchar & Scott who argued for Frank McCourt in the Massachusetts case, said Frank McCourt’s legal team negotiated a tolling agreement with Bingham on Feb. 11. “It gives the prospective plaintiff, us, who signed the agreement, maybe wrongfully, some comfort that we’re going be able to work through [disputes],” Bartlit said. “Two months later they sued us here, with no notice, out of the blue.” Bartlit also said that Bingham’s underlying position is that “they’re saying as a matter of law in Massachusetts any tortfeaser…can run over someone [with a car] and when they’re in the emergency room sue them and say they weren’t paying attention.” The declaratory judgment law doesn’t say such actions are allowed when the prospective defendant is negligent, Bartlit said. “More importantly, if that was the law, there would have been somebody before now that would have started the practice of a wrongdoer suing someone they ran over.” Bartlit also argued that the thrust of Frank McCourt’s argument is that “this court has discretion to say the language [governing declaratory judgments] is not going to allow the tortfeaser to sue his victim first.” John Villa, a partner at Washington’s Williams & Connolly who argued for Bingham, first tackled Bartlit’s argument that somehow the tolling agreement was a snooker job. “If you don’t want to be sued, offer the other side a standstill agreement,” Villa said. Villa also argued that the Massachusetts declaratory judgment statute is unique in America. “It is the broadest declaratory judgment statute indeed by an order of magnitude,” Villa said. “For Mr. Bartlit to get up and argue that nobody has ever sustained a tort action by a tortfeaser against a non-tortfeaser [omits the fact that] no Massachusetts judge has ever denied it.” Sanders asked if any Massachusetts court has allowed it. “I did read the two cases you cited to show it was not forbidden, but nobody has been able to cite any case where it was allowed,” Sanders said. After further debate, Sanders later said that, as far as she can tell, two to three dozen states have found declaratory judgment to be inappropriate when it’s the tortfeaser suing the victim. “If that were allowed by the Massachusetts court, then that means every tort could be the subject of a declaratory judgment,” Sanders said. “There aren’t’ any cases in the last 50 to 60 years saying that.” When Villa started to say “it’s not as if there was a floodgate” Sanders asked: “Wouldn’t we be opening it?” Villa later argued that it would be premature for Sanders to dismiss the case because “this statute expressly permits jury trials on declaratory judgment actions for common law claims for past conduct.” Villa said that, based on the language of the statute, the court may refuse to make a declaratory judgment only after it hears the case and determines that issuing such a judgment would not resolve the controversy. Sanders said, “To wait and require the alleged victim to litigate for some period of time before I decide, that’s not fair and it makes no sense. It makes no sense to wait.” “It is prejudging the outcome of the case to start off with,” Villa said. “You haven’t heard the evidence, you haven’t heard the arguments.” “What am I doing to prejudge the outcome?” Sanders asked. “I’m not saying that malpractice occurred,” Sanders said. “I’m saying your client has been accused, and the person accusing is Frank McCourt. Those are the accusations. How am I prejudging the case? You have an alleged tortfeaser being able to sue the alleged victim.” Following the hearing, firm spokesperson Claire Papanastasiou said in a statement that “this is a case with unique circumstances, including the Massachusetts statute under which the action was filed.” “We appreciate having the opportunity to present our view of the legal issues to Judge Sanders at today’s motion hearing and the careful consideration she is giving this matter,” Papanastasiou said. Sheri Qualters can be contacted at [email protected].

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