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April 12, 2011 6:26 PM

Brushback: Bingham McCutchen Sues Dodgers Owner and Former Client McCourt

Posted by Drew Combs

Los Angeles Dodgers owner Frank McCourt's 30-year relationship with his wife Jamie McCourt turned into a nasty courtroom battle. Now, it appears his decadelong relationship with the law firm Bingham McCutchen is headed in the same direction.

Bingham filed a lawsuit against McCourt late Monday in superior court in Massachusetts, seeking a declaratory judgment that the firm is not liable for any losses the real estate developer turned baseball team owner might suffer as a result of the pending divorce action.

A Bingham-drafted marital property agreement (MPA) between Jamie and Frank McCourt was ruled invalid by a Los Angeles superior court judge in December 2010. The ruling has provided Jamie McCourt's lawyers a basis to contend that as result of California community property statues, she is co-owner of the baseball team. Frank McCourt asserts he is the sole owner of the team. (The Am Law Daily and The Litigation Daily have covered the case extensively--see below for links to earlier coverage.)

But if Jamie McCourt is one day deemed a co-owner of the Los Angeles Dodgers, Bingham argues that Frank McCourt has no one to blame but himself. "Despite Mr. McCourt's repeated, public assertions of damage due to Bingham's purported conduct, any injury, loss, or expense he has sustained or will sustain were not caused by Bingham's conduct but by his own widely publicized financial problems, huge withdrawals of cash from the Dodgers, and strained relationship with Major League Baseball," the complaint states.

The complaint also contends that the issue of the MPA's enforceability is "largely irrelevant" because even without it, there are legal arguments available to Frank McCourt to assert his sole ownership of the Dodgers. "[V]arious defenses are available to Mr. McCourt that exist apart from the questions concerning enforceability of the MPA," the complaint states.

Bingham asserts that Frank McCourt still owes the firm hundreds of thousands of dollars that he has so far refused to pay because he contends the firm committed legal malpractice in drafting the MPA.

Bingham is represented in its lawsuit by partners John Villa, David Blatt, and Margaret Keeley at Willams & Connolly; Michael Keating and Martin Murphy at Foley Hoag; and Kevin Rosen at Gibson, Dunn & Crutcher.

"We are confident that when all the evidence has been fully developed, it will become clear to everyone that Bingham has fulfilled its professional obligations," said Villa, in a written statement provided by Bingham.

Following an 11-day trial last year, Los Angeles superior court judge Scott Gordon on December 7 ruled that the marital property agreement between Jamie and Frank McCourt was invalid mainly because the parties signed two contradictory versions. "The existence of two materially inconsistent and contradictory exhibits to the MPA detailing what property is included and excluded within [Frank McCourt's] separate property assets contributes to the ambiguity," the ruling stated.

Boston-based Bingham partner Larry Silverstein, who was primarily responsible for drafting the MPA, has said that the two versions are the result of a drafting error. The American Lawyer detailed Silverstein's role in the McCourt divorce case in this feature in the March 2011 issue.

As a result of Gordon's ruling, Jamie McCourt's lawyers have argued she is co-owner of the Los Angeles Dodgers under California community property rules. Frank McCourt has always argued and continues to argue that the Dodgers franchise, which was valued at $727 million by Forbes magazine in 2010, is solely his property. (The court has yet to take up the issue of whether the team is community property or Frank McCourt's alone.)

Weeks after the ruling invalidating the McCourts' MPA, Frank McCourt ended his relationship with Bingham and soon after hired Sullivan & Cromwell chairman Joseph Shenker as finance counsel to the team, which has been in search of additional capital.

When contacted by The Am Law Daily, Frank McCourt spokesman Steve Sugerman said, via e-mail: "Mr. McCourt is disappointed that the Bingham firm is unwilling to accept responsibility for its actions and instead is now trying to defend conduct that is indefensible."

It is not yet clear which law firm will respond to the lawsuit on Frank McCourt's behalf. It definitely won't be Susman Godfrey, which is representing McCourt in the divorce case. In an interview with The American Lawyer magazine earlier this year, name partner Stephen Susman said, "We told Frank that…there is not enough money to get us to say bad things about the Bingham firm."

 

•RELATED ARTICLES FROM THE AMERICAN LAWYER

Sullivan & Cromwell Hired in Dodgers Dispute
February 8, 2011

Bad News for Bingham: Dodgers Divorce Trial Judge Delivers Ruling for Jamie McCourt
December 7, 2010

Spotlight Falls on Bingham Lawyer Again as McCourt Divorce Trial Ends
September 30, 2010

Bingham Partner Admits to Altering Document at Heart of McCourt Divorce
September 22, 2010

Dodger Blues: Bingham Takes Center Stage in McCourt Divorce Drama
September 20, 2010

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