Cameo Clips

Texas Court of Appeals Upholds Ruling for Lawyer Defendant in Malpractice Suit over TV Network Stock Dispute

The Texas Court of Appeals, Fifth District, upheld a grant of summary judgment in favor of an attorney sued for legal malpractice allegedly arising out of a dispute between two clients over a buyout of one client's stock interest by the other clients in the Gospel Music Television Network. Kuzmin v. Schiller, 05-13-01394.

Attorney David Schiller put together a deal in which his clients Jimmy and Dorothy Fay Jones agreed to buy the 57% stock interest in the music network held by Gary Kuzmin, another Schiller client. Kuzmin and the Joneses all signed conflict of interest waivers. But after the Joneses failed to pay Kuzmin the $531,000 purchase price, Kuzmin sued Schiller for negligence. On appeal, Kuzmin argued that his expert Ronald Reneker's affidavit on proximate cause raised a genuine issue of material fact.

But the court of appeals emphasized: “Kuzmin never argued in his opening brief that the trial court abused its discretion by excluding portions of Reneker's affidavit. ' He merely cited the opinions on proximate cause in support of his argument that he presented sufficient evidence to avoid summary judgment. Kuzmin argues in his reply brief that he effectively challenged the order excluding Reneker's opinions by citing a case defining proximate cause and detailing Reneker's opinions. We disagree. Kuzmin did not cite the appropriate standard of review for evidentiary rulings and did not mention the trial court's order sustaining the objections to the affidavit. There is simply no discussion or analysis in Kuzmin's appellate brief of how the trial court abused its discretion by excluding the opinions.”

The court of appeals further explained: “In his affidavit, Kuzmin did state he would have given an independent attorney's advice 'strong consideration.' However, without the excluded portions of Reneker's affidavit, there is no evidence an independent attorney would have advised Kuzmin against making the investment. Thus, Kuzmin's statement that he would have given such advice strong consideration does not raise a genuine issue of material fact as to proximate cause.”

TV Executive Can't Get Punitive Damages from Alleged Fraud in Hiring

The U.S. District Court for the Eastern District of New York denied an Internet TV executive's bid for punitive damages arising from a fraudulent inducement claim against iTV Media. Huang v. iTV Media Inc., 13-CV-3439. Tianbo Huang filed suit claiming iTV lured him away from his high-level job at a Chinese Internet TV company by promising him responsibility for iTV's worldwide operations, and to pay him $300,000 per year, plus stock options to be enhanced through an initial public offering. According to Huang's complaint for breach of contract and fraud, iTV didn't follow through on any of these alleged promises.

Under New York law, punitive damages can't be recovered for breach of contract or a fraudulent inducement claim, unless a public right is corrected. District Judge Joseph F. Bianco noted that, “even if the allegations (viewed in a light most favorable to plaintiff) demonstrate a 'clear intent to defraud,'” punitive damages aren't awarded in cases of “ordinary” deceit. “For example,” Judge Bianco explained, “plaintiff has identified no authority suggesting that any conduct analogous to the alleged failure to hold a promised initial public offering, or to grant an employee the expected level of authority, involves any degree of 'moral turpitude,' much less a high one, or is so wanton as to 'imply a criminal indifference.'”

The district judge added as to Huang's public right argument, “that there was some incidental effect on the general public, in the form of funds that should have been paid under the Federal Insurance Contribution Act,” ' “a fraudulent scheme that allegedly affects the general public in some way is not the equivalent of a fraud that targets the public.” In other words, Judge Bianco wrote, “an alleged effect on public funds, whether related to a tax dispute or FICA payments, does not change the orientation of defendants' conduct: plaintiff claims that defendants singled him out.”

Texas Court of Appeals Upholds Ruling for Lawyer Defendant in Malpractice Suit over TV Network Stock Dispute

The Texas Court of Appeals, Fifth District, upheld a grant of summary judgment in favor of an attorney sued for legal malpractice allegedly arising out of a dispute between two clients over a buyout of one client's stock interest by the other clients in the Gospel Music Television Network. Kuzmin v. Schiller, 05-13-01394.

Attorney David Schiller put together a deal in which his clients Jimmy and Dorothy Fay Jones agreed to buy the 57% stock interest in the music network held by Gary Kuzmin, another Schiller client. Kuzmin and the Joneses all signed conflict of interest waivers. But after the Joneses failed to pay Kuzmin the $531,000 purchase price, Kuzmin sued Schiller for negligence. On appeal, Kuzmin argued that his expert Ronald Reneker's affidavit on proximate cause raised a genuine issue of material fact.

But the court of appeals emphasized: “Kuzmin never argued in his opening brief that the trial court abused its discretion by excluding portions of Reneker's affidavit. ' He merely cited the opinions on proximate cause in support of his argument that he presented sufficient evidence to avoid summary judgment. Kuzmin argues in his reply brief that he effectively challenged the order excluding Reneker's opinions by citing a case defining proximate cause and detailing Reneker's opinions. We disagree. Kuzmin did not cite the appropriate standard of review for evidentiary rulings and did not mention the trial court's order sustaining the objections to the affidavit. There is simply no discussion or analysis in Kuzmin's appellate brief of how the trial court abused its discretion by excluding the opinions.”

The court of appeals further explained: “In his affidavit, Kuzmin did state he would have given an independent attorney's advice 'strong consideration.' However, without the excluded portions of Reneker's affidavit, there is no evidence an independent attorney would have advised Kuzmin against making the investment. Thus, Kuzmin's statement that he would have given such advice strong consideration does not raise a genuine issue of material fact as to proximate cause.”

TV Executive Can't Get Punitive Damages from Alleged Fraud in Hiring

The U.S. District Court for the Eastern District of New York denied an Internet TV executive's bid for punitive damages arising from a fraudulent inducement claim against iTV Media. Huang v. iTV Media Inc., 13-CV-3439. Tianbo Huang filed suit claiming iTV lured him away from his high-level job at a Chinese Internet TV company by promising him responsibility for iTV's worldwide operations, and to pay him $300,000 per year, plus stock options to be enhanced through an initial public offering. According to Huang's complaint for breach of contract and fraud, iTV didn't follow through on any of these alleged promises.

Under New York law, punitive damages can't be recovered for breach of contract or a fraudulent inducement claim, unless a public right is corrected. District Judge Joseph F. Bianco noted that, “even if the allegations (viewed in a light most favorable to plaintiff) demonstrate a 'clear intent to defraud,'” punitive damages aren't awarded in cases of “ordinary” deceit. “For example,” Judge Bianco explained, “plaintiff has identified no authority suggesting that any conduct analogous to the alleged failure to hold a promised initial public offering, or to grant an employee the expected level of authority, involves any degree of 'moral turpitude,' much less a high one, or is so wanton as to 'imply a criminal indifference.'”

The district judge added as to Huang's public right argument, “that there was some incidental effect on the general public, in the form of funds that should have been paid under the Federal Insurance Contribution Act,” ' “a fraudulent scheme that allegedly affects the general public in some way is not the equivalent of a fraud that targets the public.” In other words, Judge Bianco wrote, “an alleged effect on public funds, whether related to a tax dispute or FICA payments, does not change the orientation of defendants' conduct: plaintiff claims that defendants singled him out.”