"You are the most difficult client I have ever had in my career."
ocr'd with minor correction
U.S. District Court
District of Columbia (Washington, DC)
CIVIL DOCKET FOR CASE #: 1:03-cv-01693-RBW
OLIVIER L. F. ASSER
v.
HERBERT E. MILSTEIN,
STEVEN J. TOLL and
COHEN, MILSTEIN, HAUSFELD
& TOLL, P.L.L.C.
DATE STAMP: 08/08/2003
Plaintiff Olivier L. F. Asser (“Plaintiff’) alleges the following based upon his relationship of two years with his former attorneys, Herbert E. Milstein, Steven J. Toll and Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (“Milstein,” “Toll,” “CMHT” and, collectively, “Defendants”), nearly a dozen meetings he attended at Defendants’ offices in Washington, DC, a voluminous correspondence of more than 100 letters comprising thousands of pages of material evidence, papers filed by Defendants as lead counsel representing Plaintiffs and the General Public’s claims in an action tiled October 11, 2002 before the Superior Court of the State of California for the County of San Francisco (“the Case”), papers filed by the defendants in that action, and official records of the San Francisco Superior Court.
NATURE OF THE CLAIM
1. This is a civil action brought by Plaintiff against Defendants to compel specific performance of financial obligations they undertook Gy executing the Retainer Agreement (“the Agreement”) with him on October 9, 2002; to recover die substantial damages Defendants have caused Plaintiff and the General Public by their grossly negligent representation of claims against Christopher Rea (“Rea”), Trading Places, Inc. (“Trading Places”), Philip Berber (“Berber”), CyberTrader, Inc. (“CyberTrader”), the Charles Schwab Corporation (“Schwab”), Manhattan Beach Trading, Inc. (“MB Trading”), Terra Nova Trading, LLC (“Terra Nova”) and DOES 1-10 (collectively, “the Case Defendants”); for damages arising out of their default under the Agreement, their breach of the Agreement and their breach of the fiduciary duty they owed Plaintiff; for punitive and exemplary relief trebling all damages; and for an injunction prohibiting further such conduct.
2. This action arises as a result of Defendants’ gross negligence, breach of fiduciary duty and breach of contract, causing Plaintiff and the General Public damages including, but not limited to, the loss of all claims against Case Defendants Rea, Trading Places and Berber — individual and public claims, as specifically enumerated in the Case Complaint filed by Defendants and therefore valued by Defendants themselves at some $10 million and $1/2 billion, respectively.
JURISDICTION AND VENUE
3. This Court has jurisdiction over the subject matter of this action
pursuant to 28 U.S.C. § 1332(a~(1). The amount in controversy exceeds the sum or value of $75,000, and there is diversity of citizenship among the parties to this action, who are located in the State of Maryland and Washington, DC.
4. Venue is proper in this District pursuant to 28 U.S.C. §1391(a)(2) and (c). Substantial acts damaging Plaintiff and members of thç General Public have occurred within this District.
CHOICE OF LAW
5. Where, as in the Agreement, there is no contractual choice of law, Section 188 of the Restatement 2’~ of the Conflict of Laws provides:
The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the nost significant relationship to the transaction and the parties.
6. Plaintiff submits that the proper choice of law to govern this action is California state law. California law applies to the substantive events giving rise to this action. Though admittedly not all, the majority of the acts and omissions at issue took place in California: (1) Defendants filed claims against Case Defendants Rea, T:rading Places and Berber in California; (2) Defendants filed briefs opposing these Case Defendants’ motions to dismiss in California; (3) Defendant Milstein appeared to argue against the motions to dismiss in California; and, not least, (4) the claims Plaintiff seeks to recover were lost by the Defendants in California. Furthermore, the Agreement, drafted in its entirety by Defendants, not Plaintiff; specifically provides that Defendants would “represent [Plaintiff] in a lawsuit to be filed in a Cal jfornia court.” The Case Complaint was filed there, all briefs were filed there and Defendant Milstein was on March 13, 2003. admitted pro hac vice to plead Plaintiffs opposition to four Case Defendant motions before the San Francisco Superior Court. He appeared before that Court a second time on May 20, 2003.
PARTIES
7. Plaintiff Olivier L. F. Asser, a resident of Rockville, Maryland, is a former securities trader who, as alleged in the Case Complaint, filed by Defendants, was damaged in excess of $10 million by the Case Defendants. He was represented by Defendants in these claims on a full contingent basis, per the terms of the Agreement he signed with them. He was damaged by Defendants, including but not limited to the loss of all claims against Case Defendants Berber, Rea and Trading Places.
8. Defendant Herbert B. Milstein, a residçnt of Bethesda, Maryland, is an honors graduate of Harvard University and Columbia University School of Law, former Chief Counsel, Securities and Exchange Commission, former Chairman of the Executive Council of the Securities Law Committee of the Federal Bar Association and senior partner of CMHT. He represented Plaintiff’s and the General Public’s claims. He is rated AV, Martindale-Hubbell’s top rating for attorneys. He breached the Agreement with Plaintiff; breached his fiduciary duty to Plaintiff; and. damaged Plaintiff and the General Public by his gross negligence before, during and after the March 13 hearings before the San Francisco Superior Court. He formally threatened Plaintiff with sanction if he filed this action. He caused the loss, in their entirety, of Plaintiff’s and the General Public’s claims against Case Defendants Rea, Trading Places and Berber.
9. Defendant Steven J. Toll, a resident of Potomac, Maryland, is an honors graduate of Wharton School of Business and Georgetown University Law Center and Managing Partner of CMHT. He represented Plaintiffs and the General Public’s claims. He is rated AV, Martindale-Hubbell’s top rating for attorneys. He breached the Agreement with Plaintiff; breached his fiduciary duty to Plaintiff and damaged Plaintiff and the General Public by his gross negligence before and after the March 13 hearings before the San Francisco Superior Court. He on three separate occasions formally threatened Plaintiff with sanction if he filed this action. He caused the loss, in their entirety, of Plaintiffs and the General Public’s claims against Case Defendants Rea, Trading Places and Berber.
10. Defendant Cohen, Milstein, Hausfeld & Toll, P.L.L.C., headquartered in Washington, DC, is one of the most prominent securities fraud specialist law finns in the nation. It recently secured a verdict of nearly $500 million against Lucent Technologies for the clients it represented in that action. Through its partners, associate attorneys and employees, it breached the Agreement, breached its fiduciary duty to Plaintiff and damaged Plaintiff and the General Public by its gross negligence before, during and. after the March 13 hearings before the San Francisco Superior Court. It in four separate letters formally threatened Plaintiff with sanction if he filed thi.s action. It caused the loss, in their entirety, of Plaintiff’s and the General Public’s claims against Case Defendants Rea, Trading Places and Berber.
SUBSTANTIVE ALLEGATIONS
Background: The Underlying Action
11. Plaintiff; through Defendants, his lead counsel of record, flied the’ Case in San Francisco Superior Court on October 11, 2002. The Case Defendants, who during the period 1998-2000 conspired with one another in furtherance of their common scheme to defraud Plaintiff and thousands of members of the General Public, fall into two distinct groups.
12. The Case Investment Advisory Defendants, Christopher Rea and his company Trading Places, Inc., of Niles, Illinois, issued, recommendations in “realtime” on which securities to purchase and sell, when and at what price. They charged their clients, at one time or another well over 1,000 in number, monthly fees of up to $500 in these investment advisory services, which they delivered via an interactive “chat:” module purchased from and located on the computer servers of the Carlsbad, California company ChatSpaee, Inc., n.k.a. Akin, Inc. Plaintiff in total paid Rea and Trading Places approximately $7,000 in fees for their advice. The securities recommendations were intended for immediate execution through the facilities of a number ‘of brokerage firms these defendants’ recommended to their clients. The securities were to be purchased and sold within a relatively brief timeframe, sometimes minutes, sometimes a bit longer, but always within a single day’s market session. The investment advice was not intended to be anything more than “intraday,” or extremely short-term. These Case Defendants purported solely to offer investment advice, not brokerage services. They were at no time registered as a securities brokerage.
13. The Case Brokerage Defendants, Manhattan Beach Trading, Inc., of El Segundo, California and its parent company, Terra Nova Trading, LLC, of Chicago, Illinois, and CyberTrader, Inc., of Austin, Texas, in early March, 2000 purchased for more than $112 billion by the Charles Schwab Corporation of San Francisco, offered clients so-called “instant execution” brokerage services, whereby, for fees of approximately $25-30 per transaction, securities transactions ordered by a client: would within seconds be executed through sophisticated order entry and execution software. Plaintiff maintained an account with Case Defendants MB Trading and Terra Nova for the greatest part of the period encompassing his claims, paying nearly $300,000 in commissions for the execution of more than 10,000 securities transactions valued at mote than $500 million. He incurred a loss of some $10 million on these transactions. He maintained an account with Case Defendant CyberTrader for a comparatively brief period, paying roughly $10,000 in commissions for a few hundred securities transactions. These defendants purported only to offer brokerage services, the technical, mechanical, electronic execution .of seeuritites orders their clients would direct them to process. They specifically disclaimed any involvement in investment advisory services.
14. However, unbeknownst to any of their thousands of clients, including Plaintiff; the Case Defendants conspired to vastly inflate commission revenues through a scheme whereby the Case Brokerage Defendants would kick back to the Case Investment Advisory Defendants a fixed percentage of commissions the Case Investment Advisory Defendants’ clients would generate. This created a critical conflict of interest, an enormous incentive, dwarfing investment advisory fee revenues. This scheme, which was never disclosed by any of the Case Defendants, led the Case Investment Advisory Defendants to issue countless securities recommendations of little or no merit to their clients, to disregard the losses their clients would incur, in order to induce these clients to execute as many securities transactions as possible, to generate inflated commission revenues for the Case Brokerage Defendants and, in turn, millions of dollars in commission kickbacks for the Case Investment Advisory Defendants. This scheme led to catastrophic financial loss for thousands of the Case Defendants’ clients, many of whom were completely mined. However, the Case Defendants were vastly enriched.
15. For example, the founder and owner of Case Defendant CyberTrader, Case Individual Defendant Philip Berber of Austin, Texas, who, though he solicited and interacted with clients regularly, and personally orchestrated the kickback scheme with the Investment Advisory Defendants, has never held a brokerage license of any kind, sold his company CyberTrader to Schwab, personally netting him between $300 and 500 million. An illustrative statistic: in 1998, before the kickback scheme was fully launched, CyberTrader revenues were $5.5 million; in 1999, when the scheme was operating at full throttle, these revenues skyrocketed some 3 50%, to $24.5 million. The purchase price Schwab paid for CyberTrader was directly calculated based on these vastly inflated revenues. Case Defendant Terra Nova, owner of the NASDAQ electronic communications network — an order route for executing securities transactions — the “ECN” Archipelago, which charges fees for each transaction it processes, and which has recently been granted exchange status, also vastly inflated its revenues through the kickback scheme. This enabled Terra Nova’s founder and CEO, Case DOE Defendant Gerald Putnam of Kenilworth, Illinois, also owner of ARCA, to sell the ECN to a consortium of investment banks for nearly $200 million.
16. Through Defendants, on October 11, 2002 Plaintiff filed claims in
San Francisco Superior Court against the Case Defendants alleging Unjust
Enrichment, Aiding and Abetting Unjust Enrichment, Breach of the Duties of
Good Faith and Fair Dealing, Civil Conspiracy, Violation of California Codes
§ § 1750, the Consumer Legal Remedies Act (“CLRA”) and 17200, the Unfair
Competition Law (“UCL”). He sought relief; specifically $10,307,000 in compensatory economic damages; punitive damages, disgorgement of all ill-gotten gains, a public injunction; and litigation costs.
17. On January 7, 2003, Case Defendants Rea, Trading Places and Berber filed motions to quash and to dismiss claims against them on personal jurisdiction grounds. On March 13, 2003, these motions were granted by the Superior Court, dismissing in their entirety claims against these Case Defendants.
Background: The Attorney-Client Relationship
Plaintiff Requests Representation
18. In August, 2001, upon the recommendation of David C. Walton, a partner in the San Diego office of the prominent law finn Milberg, Weiss, Bershad, Hynes &. Lerach, LLP, Plaintiff first approached Defendants, seeking individual representation on a full contingent basis. He first formally requested such representation in a letter to Milstein dated September 6, 2001, which was received by CMHT at 9:36 p.m. that evening.
Defendants Express Interest: Allegations Twice Published
by the New York Times
19. Dcfendants expressed great interest in Plaintiffs claims, for, among other reaso. ns, the sums involved, the potential recovery from the Case Defendants and the documentary and testimonial evidence Plaintiff had assembled. Defendants further recognized the credibility of Plaintiff’s allegations: they had previously been endorsed and published, twice, by the New York Times. The Pulitzer Prize-winning fmancial journalist Gretchen Morgenson, arguably the most respected journalist on Wall Street, authored both of these articles. The first article, published on February 28, 1999, endorsed Plaintiffs allegations against Case Defendants Trading Places, MB Trading and Terra Nova:
MB Trading. . . [has] made financial payments to two Internet sites devoted to stock investing, without disclosure, according to a person close to Terra Nova who spoke on condition of anonymity. The. sites are Trading-places.net, which has a link with MB Trading...
In exchange for referring customers to MB Trading, the Inte:rnet. site receives $1 to $2 a trade from the branch office...
in a section of its site abput software providers, a page pops up with this headline in bold type: “Trading Places Recommends MB Trading.”
Neither Trading-places .net nor Pristine..com is registered with securities regulators. While it does not comment on specific cases, the S.E.C. has stated in the past that registration would be required of any person receiving a percentage of commissions or other transaction-based compensation.
20. The second. article, published on October 15, 2000, confirmed many of the allegations contained in the Case Complaint Defendants filed on Plaintiff’s behalf before the San Franpisco Superior Court two years later. For example:
He has populated his site with “ghosts,” traders who wax enthusiastic about the money they, have made on Mr. Rea’s calls but who insiders say can be tracked electronically to Mr. Rea himself. (New York Times)
Indeed, Rea would berate members who did not follow every rcco:mmendation, and published statements of support for his recommendations and testaments to his abilities on Trading Places’
website. Plaintiff has reason to believe that many of these statements, which were attributed to Trading Places’ members, were in fact written by Rea himself. (Case Complaint)
For more than a year, Mr. Rea has been under investigation by the Securities and Exchange Commission. ..the S.E.C. was looking at his relationship with some of the brokers whose services he recommends on his site. (New York Times)
To support his assertion, Mr. Asser points to two e-mail messages from Trading-places to brokerage firms discussing the terms of such deals. One message, written last May to an electronic brokerage firm specializing in futures, says that Trading-places will be paid $6 for each round-trip trade -- trades getting in and out of a position -- by a client referred by the Web site. The other e-mail message, to another futures broker, confirmed discussions with Trading-places about the Web ‘site receiving $5 per round-trip trade by a. Trading-places participant. . . One of those finns, CybcrCorp, a subsidiary of the Charles Schwab Corporation, said late Friday that it was reviewing its relationship with Trading-places. (New York Times)
Rea entered into the kickback arrangements with the
Brokerage Defendants. (Case Complaint)
CyberTrader participated in the kickback arrangements with Trac]ing Places. (Case Complaint)
Trading Places and the Brokerage Defendants had every incentive to generate as many round-trip transactions as possible by Trading Places’ members, regardless of the gains or losses members would incur on those trades. (Case Complaint)
Defendants Direct Plaintiff to Solicit Clients for a Class Action Lawsuit
21. Beginning in October, 2001, Dr. Tobias M. C. Asser, former Assistant General Counsel, World Bank and International Monetary Fund, and Adjunct Professor of International Law, Georgetown University Law Center, accompanied Plaintiff to a number of meetings with Defendants. During these meetings, Defendants directed Plaintiff to not only research and provide further materials supporting the proposed action, but also to solicit clients on their behalf. Defendanl:s directed Plaintiff to organize conference calls with potential
Upon their instruction, he sent Defendants letters identifying more than a dozen potential clients, their trading activities, brokerage account and contact information — though at no time: did Defendants ever offer representation of Plaintiff’s own claims during this period.
Case Defendants MB Trading and Terra Nova Withhold Arbitration Agreement; Fraudulently File 1099’s with the IRS Claiming Plaintiff
Has ‘a Tax Liability of $50 Million; Are Accused of Forging
50 Account Agreements by a United States
Senator — None of this Information Is
Ever Provided to the Court
22. Plaintiff provided Defendants a copy of the Account Agreement he received from Case Defendant Terra Nova. Plaintiff repeatedly requested Terra Nova counsel Ms. Susan Lippold send him the Account Agreement. After many months, she finally did, via Airborne Express Airbill Number 6440512680. However, these documents did not include the arbitration agreement later introduced as Exhibit A attached to Terra Nova’s Memorandum of Points and Authorities in Support of Motion to Compel Arbitration, filed January 7, 2003, later joined by Case Defendant MB Trading. In a series of letters sent in October, 2002, Plaintiff informed Defendants that the clearing finn of Case Defendants MB Trading and Terra Nova, Southwest Securities, Inc. (“Southwest Securities”), of Dallas, Texas, had fraudulently sent 1099 forms to the Internal Revenue Service and the Virginia Department of Taxation, resulting in that state ordering a lien placed on Plaintiffs bank account for $1,295,976.03. This lien was placed years after the purported back taxes would have come due,
13
Coincidentally, this lien was attached to Plaintiffs assets less than 3 weeks after Terra Nova cashed the check Plaintiff made out to and sent it. Terra Nova had required this payment for thecopying and transmitting of Plaintiffs account transaction history. Terra Nova cashed the check; however it did at no time send the account records to Plaintiff, The lien was placed on the bank account on which this check was drawn. After, at 10am, October 23, 2002, speaking with an IRS ageni:, a Mr. Cohron, Agent No. 3506425, Plaintiff learned that Southwest Securil:ies had sent 1099 forms in connection with Plaintiffs account transactions for 1998 and 1999 to the IRS far later than required, documents sent the IRS on July 27, 2000. Another coincidence: this was only a few weeks after Plaintiff first made public his allegations of commission kickbacks against Case Defendants MB Trading and Terra Nova. IRS records based on these 1099 forms belatedly forwarded to the IRS show Plaintiff’s “broker and barter” income for the period April, 1998— March, 1999 to be $124,971,003.00, requiring an attendant tax liability of $49,441,636.00. In connection with this activity, it is notable that, during the Congressional day trading hearings in early 2000, SEC counsel Deborah Feld and United States Senator Susan Collins (RMaine), publicly accused Terra Nova of the forgery of no less than 50 account agreements:
We have also uncovered evidence that some day trading firms altered new account forms to make their customers appear more suitable for day trading. [Refer to Ex. 5] For example, this is a new account form produced to the Subcommittee by Terra Nova Trading. As you can see from the form, this customer initially indicated that his income and net worth were $24,000 and $15,000, respectively. These figures were then crossed out, and someone wrote $30,000 in each category. As you may have guessed, Terra Nova’s minimum financial requirement for day traders is $30,000 of income and $30,000 of net worth.
The Subcommittee staff asked Terra Nova about the changes to this account form as well as four others. Terra Nova informed the Subcommittee that its employees made these changes but contended that they were made “with the knowledge and consent of the customer based on information received from the customer. ‘~ However, we found 50 Terra Nova new account forms that were similarly altered. It’s hard to believe that 50 customers first provided the firm with incorrect financial information and then later informed the firm that their net worth and income were actually $30,000 or more.
During the course of its eight-month investigation, the
Subcommittee uncovered some potentially illegal conduct, such as forgery and unauthorized trading.
23. Defendants did not present this evidence to the Superior Court.
Defendants Attempt to Dispense with Plaintiff’s Interests;
Dr. Asser Questions the Propriety of their Professional Conduct
24. During a meeting on or about May 1, 2002, attended by Plaintiff, Dr. Asser, Milstein, Toil and CMHT associate Joshua S. Devore, Milstein stated his “negative” view of representing Plaintiff. Plaintiff requested an explanation. Milstein offered none. He stated that he “never promised anything.” Dr. Asser, in attendance, observed that as a member of the Bar Milstein. should know that “the minute he walked through your door, a pre-contractual relationship existed between you and your potential client.” A fiduciary relationship. Milstein did not respond. Dr. Asser then asked whether or not Defendants intended to represent Plaintiff. After a lengthy pause, Dr. Asser stated that he could understand attorneys making a business decision; however, if Defendants did make that decision, then they would owe Plaintiff an explanation for the lengthy delay in making such a determination. However, Defendants did neither offer Plaintiff representation nor any explanation at this meeting.
Defendants Orally Agree to Represent Plaintiff after Nearly a Year
25. The following meeting took place on or about early July, 2002, again attended by the five parties present previously. Milstein stated to Plaintiff, “What would you like us to do?” Plaintiff repeatedhis request, dating back now some 10 months, fbr individual contingent representation. Milstein stated he would shortly draft a complaint, and file it in California. Milstein then asked DE. Asser, “What is your interest in this case?” His reply: “Nothing.” Milstein subsequently expressed his satisfaction that Dr. Asser would disengage from further talks with Defendants.
Defendants Further Delay Representing Plaintiff and Filing the Action
26. The Retainer Agreement was not executed until October 9, 2002, more than three months after Defendants orally agreed to represent Plaintiff. The Case was not filed until October 11, 2002, well over a year after Plaintiff first requested Defendants’ representation.
Counsel to Case Defendants MB Trading and Terra Nova
Attempt to Coerce Plaintiff
27. After Case Defendants MB Trading and Terra Nova filed briefs in
the Case, Plaintiff identified to Defendants attorneys representing them as the same who had earlier notified him of potential. legal action if he did not withdraw the public allegations he had made against their clients. These were:
counsel to Case Defendant Terra Nova, Jonathan. S. Feld, of the law fmn Katten Muchin Zavis, who wrote Plaintiff a letter dated December 1, 2000; and counsel to Case Defendant MB Trading, Deana La Barbera, formerly of the law firm Morgan Lewis & Bockius, who sent a letter dated December 4, 2000. In those letters counsel to Case Defendants MB Trading and Terra Nova accused Plaintiff of “meritiess{lyJ defaming” them, regarding public statements virtually identical to the allegations subsequently filed in the Case Complaint. Though copies were provided Defendants, they were never introduced into evidence.
Defendants Refuse to Communicate with Plaintiff for
Two Months after the Case is Filed
28. Defendants refused to respond to any of Plaintiff’s repeated telephone calls and letters between October 11, the date the Case was filed, and December 5, 2002. As a result, Plaintiff sent a letter to Defendants, questioning their failure to communicate with him, and expressing his expectation that they would in future properly communicate to him developments in the Case. In a letter dated December 3, 2002, addressed not to Plaintiff but to Defendants, which was later forwarded without comment by Milstein, San Francisco local counsel, Berman i)eValerio, Pease, T.abacco, Burt & Pucillo, retained by Defendants to represent Plaintiff, stated that Plaintiff was at no time to contact
them seeking.any information whatsoever.
Defendants Threaten to Withdraw, Invite Plaintiff to Sue Them
29. Milstein called a meeting, which took place on December 19, 2002. During the meeting, Plaintiff again inquired why Defendants had barred communication for more than two months. Milstein replied, “Because I had nothing to say to you!” He then threatened withdrawal of representation. When Plaintiff observed that this would place Defendants in default of the Agreement, Milstein responded, “Then sue me!” When asked for an explanation, he stated, “You are the most difficult client I have ever had in my career.” [emphasis added] When asked to explain this statement, he refused, requiring the presence of Dr. Asser for any explanation, though Dr. Asser is a non-signatory to the Agreement. When Plaintiff asked Miistein why in that case he had not requested Dr. Asser’s presence at this meeting, he stated, “Because, as I am honorable, I wanted you to know my decision immediately.” Yet previously, in writing, Plaintiff repeatedly requested that this. meeting would be postponed so that Dr. Asser indeed would be able to attend. Following Milstein’s threat, Plaintiff requested he either reconsider, or otherwise confirm Defendants’ intent to withdraw formally, in writing. Milstein stated that he would. Plaintiff confirmed the contents of the meeting in a letter he sent Milstein that same afternoon, again requesting confirmation in writing. Yet Milstein never formally confirmed his threat to withdraw representation.
Defendants Ignore Material Tnformation Proving Plaintiff Executed
More than $150 Million in Securities Transactions in Three Months;
Refuse to Address Case Defendants’ Mockery of Plaintiff’s Claims
30. During the following meeting, on or about February 12, 2003, Plaintiff’s final meeting with Defendants preceding Milstein’s appearance before the Superior Court, Milstein repeated his threat to withdraw. In connection with this threat, it should be noted that Milstein met with Plaintiff twice after the Case was filed. He threatened Plaintiff with unilateral withdrawal of representation at both meetings. A third time, Plaintiff requested written confirmation. None was forthcoming, however. During this meeting, after Case Defendants CyberTrader and Schwab had in papers filed with the Superior Court disparagingly termed his damages “minimal,” Plaintiff provided Milstein a. hard-copy of a fraction of his MB Trading account transaction history, January 4 — April 1, 1999, comprising more than 3,000 transactions, $75,000 in commissions paid for over $151 million worth of securities transactions — and. losses of more than $3 million on these transactions. Milstein refused to accept it. This information Plaintiff had previously provided Defendants some 7 months earlier. Yet Defendants did never provide this infonnation to the Superior Court.
Defendants Neglect to Address Case Defendants’
False and Inapposite Arguments
31. In their Memorandum of Points and 4uthorities in Support of Motion to Compel Arbitration and Stay Further Proceedings, filed December
10, 2002, Case Defendants CyberTradcr and Schwab conceded:
“CyberTrader and Schwab have no knowledge of the magnitude of Asser’s commissions or trading losses in accounts he maintained at any other firm than CyberTrader. They do know that, at CyberTrader, the total commissions were $10,210 and the total trading loss was $13,350.”
32. Despite this ignorance of Plaintiff’s claims, these defendants contended that Plaintiff’s claims were nevertheless retroactively arbifrable under the agreement they executed with him, an agreement executed long after 95% of Plaintiff’s damages were incurred. Before the hearings, Plaintiff wrote Milstein a letter concerning this issue. Unlike the account agreement Plaintiff executed with Case Defendants MB Trading and Terra Nova, the agreement he executed with Case Defendant CyberTrader contained no provision for retroactivity of its covenants. In a series of letters, Plaintiff explicitly requested Milstein raise this key issue at the hearings. He did not do so.
Milstein Appears before the Snperior Court: Makes Inaccurate,
Misleading and False Statements;
Implies his own Client has Perjured Himself
[Defendants] to respond to in a letter.” Toll stated in that letter that “no orders” had yet been entered by the Court, when in fact three had been entered a week previous to the date of his letter, on March 20 and 21. When on April 2, 2003 Plaintiff sent Defendants evidence proving this statement false, made without any basis, Toll responded, in the first of two letters sent April., that bringing this material error to his attention was “obnoxious and inappropriate.”
Case Defendant Rea and Trading Places’ Motion to Quash and to Dismiss on Personal Jurisdiétion and Forum non Couveniens Grounds
Milstein Agrees with Case Defendants;
‘Contradicts his own Firm’s Opposition Brief
34. In connection with the motion of Case Defendants Rea and Trading Places to quash and to dismiss, Milstein made the following statements before the Superior Court:
1. “...because he thought the center of activity of a case that had, he thought, multiple defendants, was here.”
2. “...Mr. Rca.is one of the people wh~ acts as a moderator.”
3. “And the moderator puts in information and the people who are active, that’s the customers like Mr. Asser, the plaintiff, are giving information, and the information is being traded...”
4. “I’m no computer genius, to say the least.”
5. “Yeah, the case is much too technical for me to understand exactly what went on here.”
6. ‘I’m not looking at the results of the case which, you’re correct, doesn’t help, your Honor.”
7. “Well, I think the only people here are Defendants and they’re going to make distinctions. I cannot —that’s all I know.”
8. “The computers... and they were rented from an unrelated entity.”
35. No. 1 refers to Plaintiff [“thinking”] that California had jurisdiction over Case Defendants Rea and Trading Places. Implying that Milstein does not agree with the opposition briefs his own firm filed, it contradicts the Case Complaint and all briefs filed by Defendants, which argued that jurisdiction specifically applied to each Case Defendant individually. It also contradicts the Agreement, drafted in its entirety by Defendants, not Plaintiff, which called for Plaintiffs claims to be brought “in a California court.”
Case Defendant Rea Committed Perjury Before the Superior Court;
Plaintiff Informed Defendants; They Took No Action Whatsoever
36. No. ~ 2 and 3, in contradiction of the Case Complaint and the opposition brief drafted and filed by Defendants on February 7, 2003, are in full agreement with th.e following patently false statements, many under oath, made by Case Defendants Rea, Trading Places and their counsel of record:
“Trading Places never had any advisory function
whatsoever.”
“I declare under penalty of perjury under the laws of the States of California and Illinois that the foregoing is true and correct.”
DATED: February 13, 2003.
[Signature of Christopher Rea]
“Contrary to Plaintiffs Opposition, Trading Places was ~ a ‘day trading advisory site.’ [citation omitted] Also, contrary to Plaintiff’s Opposition, Plaintiff was not ‘given trading recommendations on securities transactions’ at that site.” [citation omittedj “In fact, Trading Places had no advisory flmction whatsoever.”
37. These statements clearly demonstrate Case Defendant perjury. Yet Defendants did at no time provide the Superior Court any of the following statements made by Rea in the New York Times, statements which contradict his own sworn statements before that Couii, evidence Plaintiff provided Defendants more than a year before the hearings:
“The bottom line is, we call stocks on an hourly, minute-to-minute basis, and our only intention is to offer an advantage and opportunity for our members to make money. That is what we strive for and live for.”
Mr. Rca recalled recommending RMI stock at around $7, where it was trading at the beginning of February~ and predicting that it would rise to $90.
38. Though Plaintiff had sent them this article nearly 17 months before the hearings, Defendants did not produce this evidence. Defendants also neglected to introduce thousands of pages of other documents demonstrating the perjured nature of Rea’s statements, all of which Plaintiff had provided them long before the hearings. These included:
39. A T:rading Places ‘Trade Desk’ Transcript dated October 2, 1999. Plaintiff provided this record to Defendants via electronic mail attachment on February 19, 2003. It is a record from the Trading Places website located at:
digitajtraders.com. This official Trading Places transcript contains, in only the first hour of defendant operations, filly 67 direct securities recommendations made by Rea and other Trading Places analysts subordinate to him — or an average of one recommendation every 54 seconds. In total, in a single day, this transcript contains several hundred recommendations, a record of some 129 pages. Plaintiff at the same time provided Defendants an additional 10 such. Trading Places transcripts, more than 1,000 pages, comprising thousands of securities recommendations made by Rea and Trading Places.
40. A Trading Places website document containing performance claims, located at bttp://www.tradi.ng-pl.aces.net/pri.cing.htm, which in relevant part states:
94% Accuracy On All Plays
NYSE & NASDAQ Plays
Real Time Stock Alerts
Short Call Specialists
Real time stock play alerts
Nasdaq market specialists
All plays directed by Merlin
Long, Short, Hold and Sell Alerts in real time
41. Plaintiff provided Defendants this document twice: in letters dated June 6, 2002 and February 20, 2003. Attached to the second letter be also provided Defendants a Trading Places transcript dated July 10, 2000, further demonstrating Rea’s perjury before the Superior Court:
12:1.9:21 [Merlin] URGENT: All Traders Consider BUY: MRVC Always use a stop loss
12:1.9:21 [Merlinj OK for new members the above alert means you should buy some MRVC
12:27:43 [Merlin] point here is that nothing has changed I can show you logs from a yearago, with exact same setup.. .1 have always posted alerts and singular stock symbols
42. . On February 20, 2003, Plaintiff wrote Defendants that the contention of Rea, a.k.a. “Merlin,” and Trading Places that they were not investment advisers had previously been struck down by the United States District Court for the Northern District of Illinois, in SEC v. Par/c
“Before submitting his settlement offer, Park moved to dismiss the Commission’s Complaint, arguing primarily that, since he dispensed his stock picks and investment advice over the Internet, he was not an “investment adviser” within the meaning of the Advisers Act and that the antifraud provisions of that Act could not be constitutionally applied to him. The District Court denied Park’s motion to dismiss in its entirety and held that the Commission’s Complaint sufficiently alleged that Park was an ttinvestment adviser” under the Advisers Act and that Park was subject to that Apt’s antiiraud provisions. SEC v. Park, 99 F. Supp. 2d 889 (N.D. Ill. 2000). Efforts by Park to seek interlocutory rçview of the District Court’s ruling were rejected by the Seventh Circuit.”
43. In a sworn statement filed with the Superior Court on January 28,
2003, Rea stated as follows:
“2. From some time in early 1999 to early 2000, however, Plaintiff was banished from participating on this site because of his uncontrollable behavior and breach of the terms of his agreement with Trading Places. 4. . . .Plaintiff would have been particularly familiar with these Terms of Use because at one point he became a moderator on the site.”
44. Tn a second sworn statement, filed February 18, 2003, Rea stated:
“12. Plaintiff left Trading Places in March, 2000, when he was banished.” Supplemental Rea Declaration, p.3, 2. So, according to Rea’s twice sworn statements, Plaintiff was “banished” from Trading Places on two separate occasions.
45. Defendants never addressed these perjured statements, though Plaintiff provided them extensive evidence, including an agreement calling for Plaintiff to provide securities analysis to Trading Places clients as an independent contractor. It was offered Plaintiff on March 16, 2000 by Rea personally, on behalf of Trading Places. According to Rea, Plaintiff was “banished” at the same time he was offered this contract. Plaintiff also provided Defendants invoices proving that he was paid by Trading Places for his work the same month Rea under oath claimed he was banished.
46. Milstein statements No.’s 4-7, especially No.7, are incomprehensible for an attorney of his education and experience.
47. No. 8 contradicted the February 7, 2003 opposition brief Milstein’s own. finn filed, which argued that ChatSpace, Inc. was directly related to the allegations contained in the Case Complaint. The key allegation in the Case Complaint was that the Case Brokerage Defendants paid commission kickbacks to Rea and Trading Places so that the investment advice given there would, without any regard for the losses Trading Places clients would incur, be biased towards the revenue generation interest of the Case Brokerage Defendants. The vast majority of Plaintiffs transactions were executed by Cas.e Defendant MB Trading of El Segundo, California. The kickbacks were paid out of this account, located at all relevant times in California. This should have established specific jurisdiction over Rea and Trading Places, as it represented a continuous contact forming a nexus between Plaintiff’s claims, Rea, Trading Places and California — but Milstein never argued this point at any time.
48. Counsel to Rea and Trading Places made the following false statement at the hearings, referring to Trading Places operations: “Not transactions - not commercial transactions.” The kickback payments were commercial transactions. So were the investment advisory fees Plaintiff paid Trading Places, which Plaintiff pointed out to Defendants were paid in California, to the “e-commcrcc module” of ChatSpace. Therefore, all of these were commercial transactions, and all of them were executed in California. In fact, Plaintiff had earlier provided Defendants documentary evidence demonstrating the contacts between Rea, Trading Places and California, showing for example that Case Defendant MB Trading employees operated through the actual Trading Places investment advisory “chat” area on a daily basis, and that the account forms requisite to opening accounts with MB Trading were actually located on the Trading Places website. Again, Milstein neglected to raise this issue.
Defendant Berber Motion to Quash and to Dismiss
on Personal Jurisdiction Grounds
Milstein Agrees with Defense Counsel;
Contradicts his own Firm’s Opposition Brief
49. In connection with this motion, Milstein stated before the Superior
Court,. “And the defendants rightly point out that that was an agreement that relates to the signatories of the agreement.” Again, this completely contradicted the opposition brief filed by his own firm on February 13, 2003. In a series of letters, dated November 12, 2002, January 20, 2003 and February 5, 2003, Plaintiff had pointed out to Defendants that this agreement’s forum selection clause pertained not only to its signatories, but also to the provisions of the agreement. Plaintiff further informed Defendants that, according to press releases put out by Berber’s company, Case Defendant CyberTrader, in 1998, when the kickback scheme had yet not been fully launched, that company’s revenues were $5.5 million; however, in 1999, when the scheme had been fully implemented, the
revenues of Berber’ s firm skyrocketed some 350%, to $24.5 million. Milstein neglected to make any of these arguments.
Berber Earned More than $300 Million in California; Then Under Oath Falsely Claimed lie “Never Engaged in Business in the State of
California” — Milstein Says Nothing
50. UndLer oath, Case Defendant Berber stated, “I am not now engaged and have never engaged in business in the State of California except as was required in the performance of my duties as a director of CyberBroker andlor its associated companies and parent company.” Yet Berber owned more than 60% of the company. He founded it and controlled it. The company was his alter ego. He signed the agreement with the San Francisco forum selection clause, selling his company to the San Francisco company Schwab, in his personal capacity. That agreement reaped him more than $300 million, personally, in San Francisco — and he declared under oath that he “never engaged in business in the State of California.” Milstein never questioned any of these perjured statements.
MB Trading’s Improper Joinder to Terra Nova’s Motion to Compel
Arbitration and Stay Further Proceedings
51. On December 30, 2002, Case Defendant MB Trading filed an answer to the Case Complaint. MB Trading then reversed course and sought to join Terra Nova’s motion to compel arbitration, on January 27, 2003. California Code of Civil Procedure § 1281.5(b) specifically provides that arbitration is waived by the filing of an answer unless an arbitration petition is filed “at or before” the filing of the answer. Yet Defendants never raised this obvious issue at any time.
52. Furthermore, MB Trading at no time provided the Superior Court any credible evidence that Plaintiff had agreed to arbitrate his claims against it. Yet Defendants never raised this obvious issue, either.
53. As a result of this gross negligence, Plaintiff’s and the General Public’s claims against MB Trading were in their entirety improperly compelled to NASD arbitration.
CyberTrader and Schwab Motion to Compel Arbitration and
Stay Further Proceedings: Defendants Seek to Induce
Perjury in their own Client, Then Attempt to
Expose Him in Open Court
54. During the meeting of December 19, 2002, Milstein for the first time produced CyberTrader and Schwab’s Memorandum of Points and Authorities in Support of Motion to Compel Arbitration, filed December 16, 2002. Within less than a minute, Plaintiff identified the exhibits proffered by these Case Defendants claiming Plaintiff had agreed to an arbitration clause. Plaintiff immediai:ely remarked to Milstein and his associate Devore that he had never seen these documents before, and that they were completely blank where signatures were, according to their own text, clearly required for the arbitration clause to be executed. Milstein, surprised, stated, “Where?” He then rapidly adjudged the non-execution of these purported arbitration agreements to be immaterial.
Defendants Induce Plaintiff to Sign Affidavit They Believe to be False
55. Defendants later prepared for Plaintiffs signature a sworn statement. Sent to Plaintiff on January 23 at 5:35PM by Defendants, this sworn declaration was drafted by Defendants, not Plaintiff.
Defendants Imply Plaintiff Committed Perjury
56; On March 13, 2003, when the Superior Court asked him to argue Plaintiffs opposition to Case Defendant CyberTrader and Schwab’s motion to compel arbitration and stay ifirther proceedings, Milstein made the following statements:
“I mean to me, the argument is relatively easy. It may not be correct but it’s easy.”
“This agreement was signed on-line.”
.we’ve got an affidavit from Asser saying, hey, he didn’t see the other. For whatever reason, he didn’t see the other. He didn’t see these agreements.”
57. These statements demonstrate no substantive belief whatsoever in
I the sworn declaration Defendants themselves drafted and instructed Plaintiff to
sign.
Defendants Confirm Intent to Induce Perjury
58. Plaintiff later confirmed the deliberate nature of this activity. Milstein’s partner Steven Toll wrote Plaintiff, in a letter dated April 3, 2003:
“. . .the motions before the Court on the arbitration issue were lost in large measure because you misrepresented the facts to us and told us you never signed an arbitration agreement in response to our repeated questions. Not until after we agreed to reprcsent you did you produce to us documents showing you signed a customer agreement with an arbitration clause with a broker, directly contrary to your prior representation that no such agreement existed.”
59. Defendants never raised this issue at any time before the hearings. On April 5, 2003, Plaintiff requested Defendants send him evidence supporting this statement. Toll did not respond, nor did he send evidence in support of his assertion.
Defendants Committed a Crime
60. Under California law, the activity described above rises to the level of a criminal offense:
“Business and Professions Code section 6128, subdivision (a) provides an attorney is guilty of a crime if the attorney ‘[is] guilty of any deceit or collusion, or consents to any deceit or collusion, with inte:at to deceive tIE court or any party.’ As a natural corollary Business and Professions Code section 6068 provides, in pertinent part, ‘[it] is the duty of an attorney to. . . employ, for the purpose of maintaining the causes confided to him or her such means only as are consistent with truth, and never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law.’ (Bus. & Prof. Code, § 6068, subd. (d).) Clearly an attorney not only “owes no duty to offer on his client’s behalf testimony which is untrue” (In re Branch (1969) 70 Cal.2d 200, 210 [74 CaLRptr. 238, 449 P.2d 174]), ‘[it] is utterly reprehensible fOr an attorney at law to actively procure or knowingly countenance the commission of perjury .. ..‘ (In reJones (1971) 5 Cal.3d 390, 400 [96 Cal.Rptr. 448, 487 P.2d 1016].)” People v. Brown, (1988) 203 Cal. App. 3d
1335.
61. In this case, Defendants actively procured what they fully believed to be the commission of perjury. They drafted the declaration they believed to be false; they ther.L sought to indicate their own client’s perjury during critical hearings before the Superior Court. Toll’s letter of April 3 demonstrates
31
a
Defendants’ intent to deceive not only Plaintiff, but also the Superior Court.
Milstein States the Court Cannot Properly Assert Jurisdiction over the Case Defendants; Contradicts the Complaint and
All Opposition Briefs Filed by his own Firm
62. In his final statement before the Superior Court, Milstein observed: “There’s no place where everyone can be sued, at least, on state court violations.” This statement contradicted the Case Complaint and all opposition briefs CMHT filed in the Case. Milstein supposedly appeared before the Superior Court to represent Plaintiff, not the Case Defendants, to support the Case Complaint and opposition briefs filed by his firm, which argued that California jurisdiction was proper over each Case Defendant. Yet, incomprehensibly, in his final statement before the Superior Court, he argued exactly the opposite.
Defendants Neglect to Warn Plaintiff of Appellate Deadlines
63. In no less than 9 signed, dated letters, Plaintiff repeatedly requested Defendants provide him information concerning appeal of the Superior Court’s orders. Yet Defendants refused to inform Plaintiff of the deadlines for filing appeals for some 7 weeks after the Court ruled on the Case Defendant motions.
Defendants Refuse to Name the California-Resident DOE Defendants
64. In no less than 12 letters dating back to May 6, 2002, the majority sent before the hearings, Plaintiff requested that Defendants identify the Case DOE Defendants, MB Trading directors Steven Demarest and Ross Ditlove, and Gerald Putnam, founder, owner and director of Case Defendant Terra Nov; personally worth over $150 million — vast wealth, like Case Defendant Berber, he
obtained through the scheme contained in the Complaint. The first two individuals were at all relevant times California residents. The latter owned MB Trading’s parent company. All three directed the kickback scheme with Trading Places. Though the Case Complaint specifically.~rovided for the naming of additional DOE Defendants, Defendants ignored Plaintiff’s letters, refusing to identify and serve the Case DOE Defendants. In his April 30, 2003 letter, nearly a year after Plaintiff first requested the DOE Defendants be identified and served, Toll for the first time explained: “Those three individuals were employees of the brokerage firms and would also be covered by an arbitration agreement.” Yet this statement totally and completely contradicted his firm’s February 13, 2003 opposition to Case Defendant Berber’s motion to quash and to dismiss, which argued that:
“Berber is not entitled to an ‘official capacity’ shield for his
conduct, as such a shield does not apply in cases which allege an intentionally tortious action by the individual corporate employee.”
Defendants Violated Numerous California Rules of Professional Conduct Rule 3-110, Failing to Act Competently:
(A) A member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence. (B) For purposes of this rule, “competence” in any legal service shall mean to apply the 1) diligence, 2) learning and skill, and 3) mental, emotional, and physical ability reasonably necessary for the performance of such service.
65. In his letter of April 30, 2003, Toll stated that Milstein’s “reputation for competency and integrity is unparalleled in this field,” and that he is “one of the most respected members of the Bar.” In a letter sent May 1, Plaintiff replied that he did not doubt this. In view of Defendants’ outstanding reputation for excellence, their representation of Plaintiffs and the General Public’s claims was remarkable, an exceedingly poor performance indeed, according to their own standards. Defendants were neither diligent, nor did they apply their superior learning and skill to representation of the Case claims. They completely failed to meet the relevant standard of care.
Rule 3-210, Advising the Violation of Law:
A member shall not advise the violation of any law, rule, or ruling of a tribunal unless the member believes in good faith that such law, rule, or ruling is invalid.
66. Defendants drafted a sworn declaration for Piaintiff to sign, though they believed it to be false. Milstein followed this up b.efore the Superior Court, questioning the declaration his firm had drafted. The deliberate nature of this act is demonstrated by Toll’s letter to Plaintiff of April 3, 2003.
Rule 3-500, Communication:
A member shall keep a client reasonably informed about significant developments relating to the employment or representation, including promptly complying with reasonable requests for information and copies of significant documents when necessary to keep the client so informed.
67. Defendants refused to communicate with Plaintiff for two months after the case was filed. When Plaintiff questioned this non-communication, Milstein threatened withdrawal of representation, and advised Plaintiff to sue him if he disputed this unethical act. Defendants further failed to respond to Plaintiff’s repeated requests for an explanation of Miistein’s performance before the Superior Court, which resulted in the loss of claims his firm itself valued at more than $500 million.
Rule 3-700, Termination of Employment:
(A). In General (1) If permission for termination of employment is required by the rules of a tribunal, a member shall not withdraw from employment in a proceeding before that tribunal without its permission. (2) A member shall not withdraw from employment until the member bas.taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving due notice to the client, allowing time for employment of other Defendants, complying with rule 3-700(D), and complying with applicable laws and rules
68. Defendants formally withdrew representation on April 3, 2003, stating, “. . . our representation is at an end.” They made no effort to assist in securing substitute counsel; they ignored the deadlines for appeal; they gave Plaintiff no legal advice or information whatsoever that, at a critical juncture, might have safeguarded his and the General Public’s interests. They summarily abandoned and ejected Plaintiffs and the General Public’s claims. Yet Defendants did not inform the Superior Court of their summary withdrawal until after Plaintiff had warned them of their obligation to do so under California Rules of Court.
69. Therefore, Plaintiff brings the following Counts to recover the substantial damages Defendants have caused him and the General Public.
COUNT I
BREACH OF CONTRACT
70. The Agreement executed between Plaintiff and Defendants on October 9, 2002 contained a number of provisions. Defendants did breach almost all of them. During the meeting on or about early July, 2002, when Defendants orally agreed to represent Plaintiff, Milstein stated, in the presence of his associate Joshua Devore and both Plaintiff and Dr. Asser, that CMHT would expend “at least $900,000” on Plaintiffs claims.
71. The Agreement provided that Defendants would fbmish Plaintiff with regular statements of their costs, for it provided that above and beyond the 33% contingent fee, Defendants were entitled to substantial litigation costs they agreed to advance towards Plaintiff’s claims, including $495 per hour for Milstein’s work, $175 for the associate attorney Joshua Devore’s work, $135 per hour for the work of law clerks, $125 per hour for the work of paralegals and a comprehensive list of manifold other charges to be assessed against any settlement or award secured by Defendants through their representation of Plaintiffs claims, in advance of the 33% contingent fee being, applied to the remaining funds. Yet Defendants never sent Plaintiff any billing statements whatsoever.
72. Furthermore, due to Defendants’ refusal to communicate with him after the Case was flied, Plaintiff ascertained that they were not fulfilling theft responsibilities under the Agreement. Therefore, he was compelled to provide work product that under the Agreement was required of Defendants. Defendants therefore defaulted under the Agreement by not fulfilling this obligation. The work product Plaintiff provided them after the Agreement was executed on October 9, 2002, until the hearings of March 13, 2003, comprised some 1,500 hours of labor, which, according to statements made in papers filed in the Superior Court by Defendants themselves, met if not far exceeded the paralegal standard. Under the Agreement, this work was to be provided by Defendants, not Plaintiff, and to be billed at $125 per hour. Therefore, this work Plaintiff provided Defendants, as a direct result of their default under and breach of the Agreement, according to their own billing standard as enumerated therein, is worth $187,500.00, which Defendants were under the Agreement entitled to assess against any settlement or award. Defendants were at all times aware that Plaintiff was providing this work product. They received it at regular intervals, and indeed employed it in aid of their representation of Plaintiff’s and the General Public’s claims.
COUNT II
BREACH OF FIDUCIARY DUTY
73. Defendants, from the moment Plaintiff contacted them in late August, 2001, owed Plaintiff, a potential client, a fiduciary duty to safeguard his interests, and to honor the pre-contractual relationship they entered into with him up until and after they orally agreed to represent him, on or about early July, 2002, and formally executed the Agreement with him on October 9, 2002. They did not honor this duty. Assuming the good faith of Defendants, and at Defendants’ explicit request and instruction, Plaintiff offered them some 3,500 hours of work product supporting Case claims. According to the fee schedule enumerated in the Agreement, this work product is to be valued at $437,500.00. Defendants abused PlaintifFs trust by applying this work towards their own interest, at the cost of Plaintiff’s interests.
74. Furthermore, by threatening Plaintiff with withdrawal before the hearings, inducing him to execute a sworn declaration they believed to be false, then calling into question this declaration and Plaintiffs claims in open court, and refusing to proteci: Plaintiffs interests thereafter, Defendants breached the duty of loyalty they owed Plaintiff to represent him faithfully and honestly.
COUNT III
NEGLIGENT MALPRACTICE
75. As described above, Defendants, through their egregious professional misconduct and gross negligence, have directly caused Plaintiff and the General Public the loss of recoverable claims they themselves valued at $10,307,000.00 and $500,000,000.00, respectively, in the Case Complaint they filed. in San Francisco Superior Court. They never flied claims in Illinois and, Texas, where Case Defendants Rea, Trading Places and Berber respectively$ resided. They at no time advised Plaintiff that these claims were likely to be dismissed in California.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays for judgment as follows:
a. Declaring that the Defendants are liable under the laws of the State of California by reason of their conduct alleged herein;
b. Finding Defendants in breach of the Agreement, in breach of their fiduciary duty to Plaintiff and guilty of grossly negligent malpractice in their representation of Plaintiff and the General Public’s claims in the Case;
c. Compelling Defendants to specifically perform theft financial obligations under the Agreement in the amount of $900,000.00;
d. Awarding Plaintiff damages due to Defendants’ breach of the Agreement in the amount of $187,500.00;
e. Awarding ‘Plaintiff damages due to Defendants’ breach of their fiduciary duty to him in the amount of $437,500.00;
f. Awarding Plaintiff the recoverable claims lost due to Defendants’ negligent malpractice in the amount of$ 10,307,000.00;
g. ‘ Awarding the General Public the recoverable claims lost due to Defendants’ negligent malpractice in the amount of $500,000,000.00;
h. Awarding Plaintiff punitive and exemplary damages by trebling the damages above to $35,496,000.00;
i. Awarding the General Public punitive and exemplary damages by trebling the damages above to $1,500,000,000.00;
j.. Entering an injunction prohibiting Defendants from further perpetrating conduct of the type complained of above;
k. Awarding Plaintiff his costs and expenses incurred in this action, including reasonable attorneys’, accountants’, and experts’ fees;
I. Awarding Plaintiff and the General Public pre- and post-judgment interest as permitted by law; and,
m. Awarding Plaintiff and’ the General Public such other relief as the Court may deem just and proper.
Dated: August 8, 2003
By Plaintiff in propria persona
Olivier L. F. Asser
VERIFICATION
I, Olivier L. F. Asser, the undersigned, certify and declare that I have not only read but indeed did draft in its entirety the foregoing Verified Complaint for Damages and. Equitable Relief and know its contents.
I am the plaintiff in this action. The matters stated in the Verified
Complaint are true of my own knowledge and belief, except as to those matters stated on information and belief, and as to those matters I believe. them to be true.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on August 8, 2003 at Rockville, Maryland.
Olivier L. F’. Asser
. . . . . . . . .
Dismissed for Lack of Jurisdiction |
