Friday, October 12, 2018
Page 3
Appeal Over $1.3 Million Transfer Fails Based on Inept Brief
C.A. Won’t Determine if Superior Court Erred in Issuing Summary Judgments in Favor Of Defendants in Action Over Shift of Ownership of Fashion Magazine
By a MetNews Staff Writer
Appeals by the husband-and-wife co-founders of the fashion magazine Nylon from summary judgments in favor of the outfit that purchased the publication without their knowledge, and other defendants, have been tossed by the Court of Appeal for this district because the appellate brief filed on their behalf by Pasadena attorney John A. Belcher was unacceptably shoddy.
“We dismiss plaintiffs’ appeal from the summary judgments, finding plaintiffs have abandoned all issues on appeal by failing to present adequate appellate briefing,” Justice Victoria Chaney of Div. One said in an opinion filed Wednesday and not certified for publication.
The appellants were Jaclynn and Marvin Jarrett—she had been publisher and he was editor, until the sale—and their company, Creator LLC. Creator held a 49 percent interest in Nylon Holding, Inc., the assets of which were sold in 2014 by Donald Hellinger, who owned the other 51 percent interest, through a business entity, to Nylon Media for $1.3 million, an amount the Jarretts assert was inadequate.
The complaint seeks an undoing of the transaction, as well as damages under various theories.
The Jarretts, who founded the magazine in 1999 but lost complete ownership when they could not pay off loans to Hellinger’s company, reportedly learned from May 3, 2014 news reports that they had been ousted from their respective posts as publisher and editor, and then found that they had been locked out of their offices.
“The conspirators have surreptitiously and literally under cover of night conspired with each other to secretly steal well known and valuable Nylon brand and trademark from plaintiffs,” the complaint alleges.
Chaney’s Opinion
In explaining the dismissal of the appeals, Chaney took exception to the appellants’ briefs repeatedly citing “evidence” which Los Angeles Superior Court Judge Frederick Shaller had ruled inadmissible, and pointed to other deficiencies. She wrote:
“Here, plaintiffs chose to ignore the trial court’s evidentiary rulings, improperly referencing the inadmissible evidence throughout their briefing as if it were admissible, and leaving it to this court to parse the cited evidence to determine if any admissible evidence supports their arguments….
“We dismiss plaintiffs’ appeal from the two summary judgments. Plaintiffs’ briefing fails to disclose to which cause of action, which defendant, and which judgment their legal arguments pertain. Plaintiffs attempt to support their arguments with evidence the trial court excluded, without challenging the evidentiary rulings. Based on these significant deficiencies in plaintiffs’ briefing, plaintiffs have failed to adequately raise ‘any pertinent or intelligible legal argument,’ and we therefore find they have abandoned their contentions on appeal….Dismissal is the appropriate disposition.”
Chaney’s opinion refers to Nylon Holding and related parties as “Holding” and Nylon Media and others as “Media.”
Attorney Fees
Notwithstanding the dismissal of the appeal as to the summary judgments, the appeals court did address the propriety of Shaller’s post-judgment ruling that the Jarretts and their company were obligated, jointly and severally, to pay $79,803 in attorney fees to Media based on an attorney-fee provision in the contract between Holding and Media.
Shaller declared:
“When Plaintiffs derivatively sought to rescind and invalidate a contract that Nylon Holding was a party to, they ‘stood in the shoes’ of Nylon Holding at least as far as the attorney’s fees provisions. Had Plaintiffs prevailed on such a claim, then they would have been entitled to recover attorney’s fees as to that aspect of the litigation ‘on the contract.’ In such a case, it would be appropriate to find that the Media Defendants are entitled to an award of attorney’s fees.”
Chaney said that liability may be imposed only on Creator, explaining:
“A review of plaintiffs’ complaint makes clear plaintiffs (all three of them) intended to sue the Media defendants derivatively on behalf of Holding to void and set aside the asset purchase. Plaintiffs’ derivative claims were ‘on the contract’—the Asset Purchase Agreement—within the meaning of Civil Code section 1717.”
That section says that if one party is entitled under a contract to attorney fees if it prevails, the other side is also so entitled if it wins.
No Standing
“The fact of the matter is, however, the Jarretts were not shareholders of Holding and had no right to sue derivatively on behalf of Holding,” Chaney noted. “Accordingly, the Jarretts would not have been entitled to attorney fees under the Asset Purchase Agreement.”
The case is Jarrett v. Diversis Management, B277835.
Aside from Bletcher’s representation of the Jarretts and their company, David R. Krause-Leemon of the downtown Los Angeles firm of Beaudoin & Krause-Leemon acted for Nylon Media, Inc. and two other defendants and Brett Rubin of the Century City firm of Clarkson Riley Rubin also put forth the case for Nylon Media.
Copyright 2018, Metropolitan News Company