This judgment I received this morning made me very happy. What a way to end the New Year. We have the best friends, clients, and businesses any firm can ever wish for. Click here to see it: JUDGMENT AGAINST GARRETT ERKSINE. The Law Offices of Ronald Richards & Associates, APC, loves these days.
On April 11, 2008, our client MD Synergy, LLC was hit with a demand for arbitration with JAMS (Private Judges). On May 9, 2008, our client was then ambushed with a complaint for breach of employment agreement. Faced with a multiplicity of litigation, the firm took swift action and filed a cross complaint on both matters in the Los Angeles Superior Court trying to procedurally limit the plaintiff. On January 8, 2009, the Court ordered by stipulation all matters to JAMS for adjudication.
The claim and lawsuit arose from an asset purchase agreement executed by MD Synergy, LLC from a company that was controlled by Garrett Erskine, who is the current CEO of Alteer Corporation. Subsequent to the purchase, MD Synergy, LLC employed Garrett Erskine then terminated him months after the purchase. Without any demand, he filed a claim for millions of dollars in fraudulent amounts he alleged were due under the asset purchase agreement’s complex earn out formula and his severance pay once he was terminated. He contended there was an off the books WIP (work in progress) that was not accounted for in the written sales documents. MD Synergy contended these receivables were recognized at the time of the sale and were deemed to be phantom or fictitious.
These claims and the lawsuit were in fact completely baseless except for the severance of the former employee which was withheld as an offset against any future damages. MD Synergy, LLC is a peaceful company that is in the business of medical billing. It likes to avoid litigation. To avoid a costly trial and stress on the client, a $100,000.00 998 Offer was made on July 15, 2009 to Garrett Erskine. A 998 Offer shifts the expert witness fees and attorney’s fees (if there is an agreement) to the party who does not beat the 998 Offer at trial. It is an important tool in forcing a settlement.
However, Mr. Erskine, through his avarice, insisted on millions of dollars. He believed he could use the legal system to act as a quasi blackmail device to force a higher settlement. Once resolution was ruled out, a full marshalling of all resources occurred and arbitration took place on August 4, 5, and 6th in the beautiful private courts of JAMS. This is luxury law at its finest. A side of the law that only fortunate attorneys and litigants see with patient judges, five star facilities, and detailed decisions at both parties shared expense.
On September 1, 2009, an interim award was issued finding personal liability against Mr. Erskine both for fraudulent concealment and alter ego as requested by the firm. A series of further briefings took place on three issues: the disgorgement of the 500,000 shares given to Mr. Erskine pursuant to the asset purchase agreement, punitive damages, and alter ego liability.
Further oral argument was heard on October 21, 2009. Further briefing was taken and completed by November 30, 2009 from all sides. Today is JUDGMENT DAY, coincidently, the last day of the year. What a way to end what was a truly remarkable year for a truly remarkable group of businesses, people, and friends, who all comprise the client base of this firm.
The Judge found that the defendant in this matter who filed a cross complaint was entitled to an award of $800,000.00 giving it all of its attorney’s fees, expert witness fees, prejudgment interest, compensatory damages, and punitive damages. In addition, the Judge ordered the disgorgement of the 500,000 shares issued to Mr. Erskine by MD Synergy, LLC due to this breaches of the asset purchase agreement. Incredibly, Mr. Erskine could have settled this matter for $100,000.00 in his favor but his greed and naïveté about his required burden of proof and the credible and convincing testimony of the MD Synergy CEO and its outside accountant proved to be his downfall.
The firm is preparing a EWO (Earnings Withholding Order) and a petition to confirm the award forthwith. Justin Ibrahim for his handling of the logistics each day, in the downtown maze. Tina M. Lazaroff, CPA, Partner, Solomon Ross Grey & Company, LLP for her competent and accurate testimony and calculations. Balbir Tuli for his trial support and daily attendance. Randhir Tuli for his outstanding case preparation, digestion of the asset purchase agreement, simply flawless trial testimony, and patience(98% of the time with what was a complex legal process. Civil litigation defendants, when faced with millions of dollars of claims, can be just as stressful as criminal cases.