News
Litigation
Feb. 19, 2002
Sticky, Slippery Res Judicata Can't Stop Squabbling Over Jeans Empire
Column by Garry Abrams - Res judicata. Is it a disease? Or a dessert? That's what I wondered when I first cast wary eyes on Benasra v. Mitchell Silberberg & Knupp, a stack of papers at least twice as thick as my high school Latin textbook - and almost as hard to understand, though ostensibly written in English.
By Garry Abrams
Res judicata. Is it a disease? Or a dessert?
That's what I wondered when I first cast wary eyes on Benasra v. Mitchell Silberberg & Knupp, a stack of papers at least twice as thick as my high school Latin textbook - and almost as hard to understand, though ostensibly written in English. (When a lawyer warns you that something is dull reading, stack lots of pillows on your desk. That way, when you are knocked senseless by the legal prose, you are less likely to fracture your skull.)
I soon learned that res judicata is neither the plague nor a chocolate torte.
It is a legal doctrine over which lawyers can argue until Judgment Day, and possibly after. This is ironic since the doctrine itself - that an issue has already been decided and should not be endlessly litigated - is supposed to put a stop to perpetual squabbling.
Moreover, an argument over res judicata is at the heart of a long-running, passionate conflict of interest dispute between Los Angeles lawyers over an arbitration proceeding between former partners in the sprawling Guess? jeans fashion empire.
Last week, a California appellate court dealt a blow to the old-line firm Mitchell Silberberg in the fight, one of a flurry of actions filed by Michel Benasra, a former Guess? licensee and onetime boyfriend of actress Sharon Stone, following a spectacular falling out with the well-known Marciano brothers who founded Guess?.
A three-justice panel of the 2nd District Court of Appeal ruled Feb. 13 that an arbitration panel and a lower court had been wrong when they denied attempts by Benasra to disqualify Mitchell Silberberg. Specifically, the court ruled that the concept of res judicata was not sufficient to allow the summary dismissal of a malpractice lawsuit filed by Benasra.
Benasra's attorney, Jerold Fagelbaum, filed the action in Los Angeles Superior Court after arbitrators declined to remove Mitchell Silberberg, which at one time had represented both Guess? and Benasra and his company. Superior Court Judge James R. Dunn held that Fagelbaum's unsuccessful attempt to disqualify Mitchell Silberberg before the arbitrators was the only bite of the apple allowed.
Res judicata!
Fagelbaum most strenuously disagreed with the res judicata diet and filed the appeal for a second bite. Meanwhile, the arbitration panel awarded Guess? $7.6 million in its dispute with Benasra. That award is on appeal to the same court but has not been argued.
In last week's decision, the justices carefully noted that their decision did not address the merits of the conflict and breach of fiduciary duty claims against Mitchell Silberberg and that "nothing said here is intended to express any view" on the underlying claims against Mitchell Silberberg.
The court also found that the attempt to disqualify before the arbitrators was not adequate in part because neither Guess? nor Benasra "had agreed to arbitrate disputes arising out of the legal representation."
Fagelbaum, who exhibits a passion about this case that I have seldom witnessed in an attorney, sees the ruling as a vindication of a more than two-year struggle in which he lost every round but the last one.
"You have to hope that eventually the system works," Fagelbaum told me.
Fagelbaum said he now hopes to try his complaint against Mitchell Silberberg in open court.
Not surprisingly, Mitchell Silberberg is unhappy with the ruling. The firm likely will petition the California Supreme Court for a review of the case, according to Mitchell Silberberg's Peter B. Gelblum.
"[The appellate court] got it all wrong," Gelblum said, asserting that one of the things at stake is the right of clients to choose their attorneys.
Meanwhile, Daniel Petrocelli- who is best known for winning a wrongful death suit against O.J. Simpson and was a partner at Mitchell Silberberg when the dispute with Benasra began- continues to represent Guess?.
Petrocelli said he is concerned that last week's decision is evidence of "the growing antagonism that California appellate courts are exhibiting toward arbitration."
My conclusion: Res judicata never stopped anything.
Res judicata. Is it a disease? Or a dessert?
That's what I wondered when I first cast wary eyes on Benasra v. Mitchell Silberberg & Knupp, a stack of papers at least twice as thick as my high school Latin textbook - and almost as hard to understand, though ostensibly written in English. (When a lawyer warns you that something is dull reading, stack lots of pillows on your desk. That way, when you are knocked senseless by the legal prose, you are less likely to fracture your skull.)
I soon learned that res judicata is neither the plague nor a chocolate torte.
It is a legal doctrine over which lawyers can argue until Judgment Day, and possibly after. This is ironic since the doctrine itself - that an issue has already been decided and should not be endlessly litigated - is supposed to put a stop to perpetual squabbling.
Moreover, an argument over res judicata is at the heart of a long-running, passionate conflict of interest dispute between Los Angeles lawyers over an arbitration proceeding between former partners in the sprawling Guess? jeans fashion empire.
Last week, a California appellate court dealt a blow to the old-line firm Mitchell Silberberg in the fight, one of a flurry of actions filed by Michel Benasra, a former Guess? licensee and onetime boyfriend of actress Sharon Stone, following a spectacular falling out with the well-known Marciano brothers who founded Guess?.
A three-justice panel of the 2nd District Court of Appeal ruled Feb. 13 that an arbitration panel and a lower court had been wrong when they denied attempts by Benasra to disqualify Mitchell Silberberg. Specifically, the court ruled that the concept of res judicata was not sufficient to allow the summary dismissal of a malpractice lawsuit filed by Benasra.
Benasra's attorney, Jerold Fagelbaum, filed the action in Los Angeles Superior Court after arbitrators declined to remove Mitchell Silberberg, which at one time had represented both Guess? and Benasra and his company. Superior Court Judge James R. Dunn held that Fagelbaum's unsuccessful attempt to disqualify Mitchell Silberberg before the arbitrators was the only bite of the apple allowed.
Res judicata!
Fagelbaum most strenuously disagreed with the res judicata diet and filed the appeal for a second bite. Meanwhile, the arbitration panel awarded Guess? $7.6 million in its dispute with Benasra. That award is on appeal to the same court but has not been argued.
In last week's decision, the justices carefully noted that their decision did not address the merits of the conflict and breach of fiduciary duty claims against Mitchell Silberberg and that "nothing said here is intended to express any view" on the underlying claims against Mitchell Silberberg.
The court also found that the attempt to disqualify before the arbitrators was not adequate in part because neither Guess? nor Benasra "had agreed to arbitrate disputes arising out of the legal representation."
Fagelbaum, who exhibits a passion about this case that I have seldom witnessed in an attorney, sees the ruling as a vindication of a more than two-year struggle in which he lost every round but the last one.
"You have to hope that eventually the system works," Fagelbaum told me.
Fagelbaum said he now hopes to try his complaint against Mitchell Silberberg in open court.
Not surprisingly, Mitchell Silberberg is unhappy with the ruling. The firm likely will petition the California Supreme Court for a review of the case, according to Mitchell Silberberg's Peter B. Gelblum.
"[The appellate court] got it all wrong," Gelblum said, asserting that one of the things at stake is the right of clients to choose their attorneys.
Meanwhile, Daniel Petrocelli- who is best known for winning a wrongful death suit against O.J. Simpson and was a partner at Mitchell Silberberg when the dispute with Benasra began- continues to represent Guess?.
Petrocelli said he is concerned that last week's decision is evidence of "the growing antagonism that California appellate courts are exhibiting toward arbitration."
My conclusion: Res judicata never stopped anything.
#337691
Garry Abrams
Daily Journal Staff Writer
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