Jacoby & Myers
The law firm became famous with national TV ads urging viewers to call for legal help. Leonard Jacoby claimes that Steve Myers is trying to squeeze him out of the business
QUINN, KULLY AND MORROW
A PROFESSIONAL LAW CORPORATION
JOHN J. QUINN [SB 029588]
DAVID S. EISEN [SB 100263]
MICHAEL H. WALIZER [SB 133331]
520 South Grand Avenue
The Biltmore Court, Eighth Floor
Los Angeles, California 90071-2608
Telephone: (213) 622-0300
Fax: (213) 622-3799
Attorneys for Plaintiff
Leonard D. Jacoby
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
LEONARD D. JACOBY,
Plaintiff
vs .
GAIL J. KOFF; STEPHEN Z.
MEYERS; AND DOES 1 THROUGH 50,
INCLUSIVE,
Defendants.
CASE NO.
COMPLAINT FOR:
1) BREACH OF PARTNERSHIP AGREEMENT;
2) BREACH OF PARTNERSHIP FIDUCIARY DUTY; 3)
BREACH OF ORAL AGREEMENT; 4) ANTICIPATORY
BREACH AND REPUDIATION; 5) BREACH OF
FIDUCIARY DUTY TO MINORITY SHAREHOLDER; 6)
FRAUD; 7) INTENTIONAL AND NEGLIGENT INFLICTION
OF EMOTIONAL DISTRESS; 8) INJUNCTIVE RELIEF; 9)
DECLARATORY RELIEF; 10) JUDICIAL WINDING UP OF
PARTNERSHIP; 11) AN ACCOUNTING; AND 12)
APPOINTMENT OF RECEIVER.
DEMAND FOR JURY
Plaintiff LEONARD D. JACOBY alleges as follows:
PARTIES
1. Plaintiff LEONARD D. JACOBY ("Jacoby") is a natural
person domiciled and residing in the State of California, Los
Angeles County.
2. Plaintiff is informed and believes, and on that basis alleges,
that defendant GAIL J. KOFF ("Koff") is a natural person
domiciled and residing in the State of New York.
3. Plaintiff is informed and believes, and on that basis alleges,
that defendant STEPHEN Z. MEYERS ("Meyers") is a natural
person domiciled and residing in the State of New York.
COMMON FACTUAL ALLEGATIONS
4. On or about January 1, 1984, Jacoby, Meyers and Koff
(collectively, "Partners") entered into the Amended and Restated
General Partnership Agreement of Jacoby & Meyers Law Offices
("Partnership Agreement"), which created the present form of the
Jacoby and Meyers Law Offices, a California general partnership
("Partnership").
5. Section 1.6 of the Partnership Agreement vests full
management of the Partnership in the Management Committee,
permanently composed of Jacoby, Meyers and Koff, each with
one vote for each unit of participation allocated to the particular
partner.
6. Section 8.1 of the Partnership Agreement provides that
Jacoby and Meyers each hold 40 units of participation and Koff
holds 20 units of participation.
7. The Partnership Agreement provides generally for
management decisions by the Management Committee on a
majority basis. Specific decisions enumerated in the Partnership
Agreement, however, require unanimous approval of the
Management Committee, defined by Section 1.9 of the
Partnership Agreement as the unanimous approval of Jacoby,
Meyers and Koff.
8. Unanimous approval of the Management Committee is
required in order to: (a) change the principal office of the
Partnership from Los Angeles, California [Section 2.4,
Partnership Agreement]; (b) modify the procedures by which the
Management Committee may act and bind the Partnership
[Section 5.1, Partnership Agreement]; (c) withdraw capital from
the Partnership [Section 7.2, Partnership Agreement]; and (d)
distribute to partners cash available for distribution (a defined
term in the Partnership Agreement), pay salaries to partners
and/or permit partners to take draws from the Partnership
[Section 8.2, Partnership Agreement].
9. Section 10.1 of the Partnership Agreement requires that the
Partnership books and records, together with all of the documents
and papers pertaining to the business of the Partnership, be kept
at the principal place of business of the Partnership in Los
Angeles, California.
10. In the late 1970s to early 1980s, the Partners planned on
growing their business to form a national law firm, with offices
across the country. To help accomplish that goal, Jacoby,
Meyers and Koff formed a separate closely held corporation,
Jamko Service Corporation ("Jamko"), to provide all ancillary
services to the Partnership, including such support as non-
professional personnel, business management and acquisition
and leasing of offices.
11. Jamko is a Delaware corporation, with the only voting shares
in the company being the common stock. A total of 800,000
shares of common stock of Jamko have been issued, with Jacoby
and Meyers each holding 320,000 shares and Koff holding
160,000 shares.
12. The general practice of the Partnership, until recently, was to
pay Jamko for services on a marked-up basis. Jamko would use
those payments to pay its obligations. Funds remaining with
Jamko would be used to compensate Jacoby, Meyers and Koff in
proportion to their common stock ownership of Jamko. The
compensation from Jamko was agreed to constitute the remainder
of the Partners' compensation from the Partnership.
13. The law firm grew from one office in California in 1972 to
approximately 150 local field offices in six states by the mid-
1980s. Offices were located in California, Arizona,
Pennsylvania, Connecticut, New Jersey and New York. The
Arizona and California offices were generally supervised directly
by Jacoby and the Northeastern offices were generally supervised
directly by Koff. Oversight and national responsibilities were
shared by the Partners. The field offices operated as linked
neighborhood law offices, specializing in providing quality
personal legal services to middle-class individuals. In addition to
the local field offices, the Partnership opened certain specialized
"units" containing centralized groups of attorneys with particular
practice skills, including personal injury units. The personal
injury units, along with other specialized units, provided
expertise not available in the neighborhood field offices of the
Partnership. The neighborhood field offices routinely utilized
the services of the specialized units for cases meriting such
attention.
14. The rapid expansion in the number of field offices and the
expensive creation of personal injury units unfortunately
coincided with the general decline in economic conditions
throughout the country. In response to these economic forces
and other financial setbacks, the Partnership was forced to retreat
from its expansion plans and to consolidate its offices. By the
middle of 1994 the firm had closed most of its field offices and
specialty units, including all of those located in California except
for the personal injury units. At the present time, the firm
operates eight personal injury units located in San Francisco,
Sacramento, Tucson, Philadelphia, Long Island, New York City
and New Jersey. It also has approximately twelve field offices
located in the Northeast.
15. During the course of downsizing the Partnership, Jacoby
presented to his partners several alternative organizational
structures designed for the sharing of duties and responsibilities
among all of the Partners. These suggestions were given short
shrift by Koff and Meyers but they promised Jacoby he would be
treated fairly and there would be no change in his total
compensation, no matter what kind of final business structure
evolved.
16. Rather than creating a system for dividing the day-to-day
operating tasks for shared management of the firm and Jamko,
Meyers and Koff undertook a deliberate course of action to
isolate Jacoby from the operation of the Partnership and Jamko.
They stopped paying rent on the principal office of the firm in
Los Angeles. They refused to give pertinent financial
information about the Partnership to Jacoby. They stopped
paying Jacoby certain benefits traditionally provided to each of
the Partners, while at the same time continuing to pay their own
benefits. Jacoby had to argue with and harangue Meyers and
Koff in order to receive any payment from the Partnership.
Jacoby is informed and believes, and on that basis alleges, that
Meyers and Koff have in the past and continue to take
Partnership resources for their own individual purposes rather
then legitimate Partnership expenses. Moreover, Meyers and
Koff have refused to reimburse Jacoby for expenses incurred on
behalf of the Partnership as part of the winding up of certain
Partnership operations in the Western states, including
California.
17. Meyers and Koff also forced Jacoby out of the shared control
of the Partnership and Jamko and refused to pay him in the same
manner they paid themselves.
18. It became evident to Jacoby that his partners were not going
to treat him fairly. Notwithstanding this reality, Jacoby was
willing to come to some sort of understanding with Meyers and
Koff respecting his continuing but lessened involvement within
the firm. With that objective in mind, Jacoby began negotiating
with Meyers and Koff respecting his gradual withdrawal from as
active an involvement in the management of the firm and Jamko,
while still retaining an interest in the Partnership and Jamko for
the mutual benefit of all concerned.
19. The negotiations between Jacoby on the one hand and
Meyers and Koff on the other hand culminated in a written
memorandum of terms, dated March 29, 1994 ("March
Agreement"). The final provisions of the March Agreement were
developed after the negotiation of terms contained in a proposal
by Meyers dated February 25, 1994 ("February Proposal"). The
terms and conditions of the March Agreement were accepted
orally by Meyers and Koff prior to March 29, 1994.
20. Notwithstanding their acceptance of the terms of the March
Agreement, Meyers and Koff failed to pay Jacoby the amounts
required by that agreement and to otherwise fulfill their
obligations under the March Agreement.
21. Jacoby is informed and believes and on that basis alleges
that recently Meyers and Koff have essentially gutted Jamko, to
the point where Jamko has no employees and virtually no duties.
Nonetheless, Meyers and Koff continue to pay themselves
substantial additional draw, salary and benefits through Jamko,
under the guise of "consulting fees", by transferring to Jamko
monies belonging to the Partnership, solely for the purpose of
paying themselves additional draws, salaries and benefits.
FIRST CAUSE OF ACTION
(Breach of Partnership Agreement)
22. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 21 of this Complaint.
23. Jacoby has duly performed all obligations, conditions and
promises to be performed by him pursuant to the Partnership
Agreement.
24. Meyers and Koff have breached and continue to breach the
Partnership Agreement by, without limitation:
(i) refusing to maintain a principal office of the Partnership in
Los Angeles as required;
(ii) refusing to keep Partnership books and records or copies
thereof, together with all of the documents and papers pertaining
to the business of the Partnership, at the principal place of
business of the Partnership in Los Angeles, California; and
(iii) failing to conduct the business of the Partnership Pursuant
to the Partnership Agreement.
25. As a direct and proximate result of Meyers' and Koff's
breach of the Partnership Agreement, Jacoby has been prohibited
from rightful access to Partnership books and records, denied full
disclosure from his Partners and prevented from participating in
the management of and shared decision making within the firm.
Jacoby has thereby been injured in an amount which Jacoby has
not yet ascertained, but in an amount in excess of the
jurisdictional limits of this Court and estimated to be at least
$2,000,000.00. When the monetary damages are fully
ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
SECOND CAUSE OF ACTION
(Breach of Partnership Fiduciary Duty)
26. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 25 of this Complaint.
27. Meyers and Koff have breached and continue to breach their
fiduciary duty to Jacoby of utmost good faith, fairness and
loyalty due partners by, without limitation:
(a) paying themselves and not Jacoby;
(b) undertaking a course of action to force Jacoby out of the
partnership and Jamko;
(c) prohibited Jacoby from rightful access to Partnership and
Jamko books and records;
(d) denying Jacoby full disclosure of Partnership and Jamko
activities and information;
(e) preventing Jacoby from participating in the management of
the Partnership and Jamko;
(f) failing to permit Jacoby to engage in shared decision making;
(g) denying Jacoby benefits rightfully due him, including
insurance and other benefits;
(h) failing to pay Jacoby's expenses; and
(i) failing to make rent payments on the Partnership's principal
place of business in Los Angeles, forcing Jacoby to relocate the
office and to pay rent out of his own personal resources.
28. As a direct and proximate result of Meyers' and Koff's
breach of their fiduciary duties to Jacoby, he is being deprived of
his right to participate in the Partnership and has been injured in
an amount which Jacoby has not yet ascertained, but in an
amount in excess of the jurisdictional limits of this Court and
estimated to be at least $2,000,000.00. When the monetary
damages are fully ascertained, Jacoby will seek leave to amend
this Complaint accordingly.
29. In committing the acts alleged above, Meyers and Koff acted
knowingly, willfully and with the intent to injure, and/or with
reckless disregard of the resulting injuries to, Jacoby. By
engaging in such conduct, Meyers and Koff have been guilty of
oppression, fraud or malice, and Jacoby, in addition to the actual
damages, may recover damages from Meyers and Koff for the
sake of example and by way of punishing them.
THIRD CAUSE OF ACTION
(Breach of the March Agreement)
30. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 29 of this Complaint.
31. Jacoby has duly performed all obligations, conditions and
promises to be performed by him pursuant to the March
Agreement.
32. Meyers and Koff have breached and continue to breach the
March Agreement by failing to pay the monies due Jacoby,
failing to pay required benefits and insurance and failing to
provide the information and financial reports and according
Jacoby his proper management authority under the March
Agreement.
33. As a direct and proximate result of Meyers' and Koff's
breach of the March Agreement, Jacoby has been injured in an
amount which Jacoby has not yet ascertained, but in an amount
in excess of the jurisdictional limits of this Court and estimated
to be at least $2,000,000.00. When the monetary damages are
fully ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
FOURTH CAUSE OF ACTION
(Anticipatory Breach and Repudiation of the March Agreement)
34. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in Paragraphs
1 through 33 of this Complaint.
35. Jacoby has demanded that defendants voluntarily comply
with their obligation to pay money and engage in other conduct
consistent with the March Agreement. The defendants have,
however, not agreed to do so and have stated in words and
actions that they do not intend to perform under the March
Agreement. In so doing, Meyers and Koff anticipatorily
breached and/or repudiated the March Agreement.
36. As a direct and proximate result of Meyers' and Koff's
anticipatory breach and/or repudiation of the March Agreement,
Jacoby has been injured in an amount which Jacoby has not yet
ascertained, but in an amount in excess of the jurisdictional limits
of this Court and estimated to be at least $2,000,000.00. When
the monetary damages are fully ascertained, Jacoby will seek
leave to amend this Complaint accordingly.
FIFTH CAUSE OF ACTION
(Specific Performance of the March Agreement)
37. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 36 of this Complaint.
38. Jacoby has no adequate remedy at law to enforce his rights,
and he will suffer great and irreparable injury if Meyers and Koff
are permitted to dissipate the property of the Partnership.
SIXTH CAUSE OF ACTION
(Breach of Fiduciary Duty to Minority Shareholder)
39. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 38 of this Complaint.
40. By ending Jacoby's employment in Jamko and denying him
access to information concerning the operations of Jamko,
Meyers and Koff have used their collective power as majority
shareholders to oust Jacoby from the corporation. They have
abruptly removed a minority shareholder from positions of
employment and management in a devastatingly effective
squeeze-out technique.
41. As the only other and majority shareholders, Meyers and
Koff owe a fiduciary duty to Jacoby as a minority shareholder.
Their conduct has impacted negatively on Jacoby and has not
been in good faith. Indeed, under the circumstances described
herein their conduct has been inherently unfair.
42. There is no business justification for terminating Jacoby's
employment with Jamko and failing to pay Jacoby his
proportionate share of the revenues of Jamko in the same
amounts as Meyers has received. Indeed, Jacoby has in good
faith proposed number of alternatives to Meyers and Koff for
how the responsibilities of the firm and of Jamko could be
divided among the three Partners. These proposals have not,
however, been received in good faith by Meyers and Koff or for
that matter been considered at all. Meyers and Koff are
attempting to use Jamko to exert economic coercion against
Jacoby to force him to accept their wrongdoing relating to the
Partnership for their own personal benefit and not for the benefit
of the corporation.
43. As a direct and proximate result of Meyers' and Koff's
freezing Jacoby out of Jamko, he has been injured in an amount
which Jacoby has not yet ascertained, but in an amount in excess
of the jurisdictional limits of this Court and estimated to be at
least $2,000,000.00. When the monetary damages are fully
ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
44. In committing the acts alleged above, Meyers and Koff acted
knowingly, willfully and with the intent to injure, and/or with
reckless disregard of the resulting injuries to, Jacoby. By
engaging in such conduct, Meyers and Koff have been guilty of
oppression, fraud or malice, and Jacoby, in addition to the actual
damages, may recover damages from Meyers and Koff for the
sake of example and by way of Punishing them.
SEVENTH CAUSE OF ACTION
(Fraud Re Compensation)
45. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 44 of this Complaint.
46. Jacoby is informed and believes, and on that basis alleges,
that Jamko is no longer a functioning entity. It has no employees
and conducts virtually no business. The purposes for which
Jamko were established, i.e. to assist the Partners in growing the
law practice into a national firm, have been abrogated by the
closing of most of the neighborhood field offices, the financial
decline of the business and the abandonment of plans for the firm
to become a national concern.
47. Notwithstanding the cessation of business by Jamko, Meyers
and Koff continue to pay themselves thousands of dollars in so-
called "consulting fees". There is no honest business reason for
Jamko to be paying any consultants for any kind of service, let
alone the tens of thousands of dollars being paid to Meyers and
Koff.
48. In reality, the monies being paid to Meyers and Koff by
themselves to themselves as officers of Jamko constitute nothing
more than disguised partnership salary, compensation and/or
draws. They know that a unanimous decision of the
Management Committee would be required in order to increase
their compensation being paid directly from the Partnership.
They also know that under the circumstances, Jacoby is not
likely to agree to pay Meyers and Koff without fair compensation
being paid to himself. In an effort to conceal the true nature of
these payments and to avoid being subject to the proper
constraints of the Partnership Agreement, Meyers and Koff are
fraudulently paying themselves Partnership compensation
through Jamko in an effort to cheat Jacoby.
49. As a direct and proximate result of Meyers' and Koff's
conduct alleged above, Jacoby has been injured in an amount
which Jacoby has not yet ascertained, but in an amount in excess
of the jurisdictional limits of this Court and estimated to be at
least $2,000,000.00. When the monetary damages are fully
ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
50. In committing the acts alleged above, Meyers and Koff acted
knowingly, willfully and with the intent to injure, and/or with
reckless disregard of the resulting injuries to, Jacoby. By
engaging in such conduct, Meyers and Koff have been guilty of
oppression, fraud or malice, and Jacoby, in addition to the actual
damages, may recover damages from Meyers and Koff for the
sake of example and by way of punishing them.
EIGHTH CAUSE OF ACTION
(Fraud Re March Agreement
51. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 50 of this Complaint.
52. Jacoby is informed and believes, and on that basis alleges,
that at the time Meyers and Koff entered into the March
Agreement they did not intend to perform under that agreement.
Defendants concealed their true intentions from Jacoby and
falsely represented to him that they intended to carry out their
obligations under the March Agreement. Jacoby had no way of
determining defendants' concealment or that their representations
were false.
53. In reliance upon Meyers' and Koff's misrepresentations and
because of their deceit, Jacoby hastened the closure of the
California offices of the Partnership. Instead of the planned
phasing out of those offices over a two-year period, during which
time Jacoby would have been in charge of those operations, the
offices were closed shortly after the March Agreement.
54. As a direct and proximate result of Meyers' and Koff's
concealment and misrepresentations alleged above, Jacoby has
been injured in an amount which Jacoby has not yet ascertained,
but in an amount in excess of the jurisdictional limits of this
Court and estimated to be at least $2,000,000.00. When the
monetary damages are fully ascertained, Jacoby will seek leave
to amend this Complaint accordingly.
55. In committing the acts alleged above, Meyers and Koff acted
knowingly, willfully and with the intent to injure, and/or with
reckless disregard of the resulting injuries to, Jacoby. By
engaging in such conduct, Meyers and Koff have been guilty of
oppression, fraud or malice, and Jacoby, in addition to the actual
damages, may recover damages from Meyers and Koff for the
sake of example and by way of punishing them.
NINTH CAUSE OF ACTION
(Intentional Infliction of Emotional Distress)
56. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in Paragraphs
1 through 55 of this Complaint.
57. The conduct of the defendants described above constitutes
outrageous behavior. Their conduct was intentional and
malicious and done for the purpose of causing Jacoby to suffer
humiliation, mental anguish, and emotional and physical distress.
58. As a direct and proximate result of the wrongful conduct of
Meyers and Koff, Jacoby has suffered humiliation, mental
anguish, and emotional and physical distress. Jacoby has
suffered severe emotional distress with accompanying physical
and bodily injury, which require the care of a physician. Jacoby
has been injured in mind and body as described above in an
amount which he have not yet ascertained. When the same are
ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
59. As a further proximate result of the wrongful conduct of
defendants, Jacoby was required to and did employ physicians
and other health care professionals to examine, treat, and care for
him and has incurred medical expenses in an amount which he
has not yet ascertained. When the same are ascertained, Jacoby
will seek leave to amend this Complaint accordingly.
60. By reason of the wrongful conduct of Meyers and Koff,
Jacoby was prevented from attending to his usual occupation or
profession and thereby lost earnings in an amount which he has
not yet ascertained. When the same are ascertained, Jacoby will
seek leave to amend this Complaint accordingly.
61. The actions of defendants, and each of them, as alleged
above were done with a willful and conscious disregard of
Jacoby's rights and with the intent to vex, injure and annoy
Jacoby, so as to constitute oppression, fraud, and malice under
California Civil Code Section 3294, entitling Jacoby to punitive
damages in an amount appropriate to punish and to make an
example of defendants and each of them
TENTH CAUSE OF ACTION
(Negligent Infliction of Emotional Distress)
62. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 61 of this Complaint.
63. The conduct of the defendants described above constitutes
outrageous behavior. Defendants failed to exercise reasonable
care and skill in the performance of their obligations to Jacoby,
thereby causing Jacoby to suffer humiliation, mental anguish,
and emotional and physical distress.
64. As a direct and proximate result of the wrongful conduct of
Meyers and Koff, Jacoby has suffered humiliation, mental
anguish, and emotional and physical distress. Jacoby has
suffered severe emotional distress with accompanying physical
and bodily injury, including without limitation headaches and
stomach problems, which require the care of a physician. Jacoby
has been injured in mind and body as described above in an
amount which he have not yet ascertained. When the same are
ascertained, Jacoby will seek leave to amend this Complaint
accordingly.
65. As a further proximate result of the wrongful conduct of
defendants, Jacoby was required to and did employ physicians
and other health care professionals to examine, treat, and care for
him and has incurred medical expenses in an amount which he
has not yet ascertained. When the same are ascertained, Jacoby
will seek leave to amend this Complaint accordingly.
66. By reason of the wrongful conduct of Meyers and Koff,
Jacoby was prevented from attending to his usual occupation or
profession and thereby lost earnings in an amount which he has
not yet ascertained. When the same are ascertained, Jacoby will
seek leave to amend this Complaint accordingly.
ELEVENTH CAUSE OF ACTION
(Injunctive Relief)
67. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 66 of this Complaint.
68. Jacoby is informed and believes, and on that basis alleges,
that Meyers and Koff have wrongfully and unlawfully taken and
are taking Partnership property for their own personal use and
enjoyment. Defendants also continue to engage in conduct to
freeze Jacoby out of the business, infringing on Jacoby's right to
participate in the management and operations of the Partnership
and Jamko.
69. Jacoby has demanded that Meyers and Koff cease and desist
in depriving Jacoby of his property and rights. Defendants, and
each of them, have refused and still refuse to refrain from their
past and threatened conduct.
70. Meyers' and Koff's threatened and continuing wrongful
conduct, unless and until enjoined and restrained by order of this
court, will cause great and irreparable injury to Jacoby in that the
property of the Partnership will be dissipated and business
decisions made by plaintiffs and the consequences therefrom will
be unalterable.
71. Jacoby has no adequate remedy at law for the injuries
currently being suffered and that are threatened. It is impossible
for Jacoby to determine the precise amount of damages he will
suffer if defendants conduct is not restrained.
72. As a direct and proximate result of Meyers' and Koff's
freezing Jacoby out of the Partnership and Jamko, he has been
injured in an amount which Jacoby has not yet ascertained, but in
an amount in excess of the jurisdictional limits of this Court and
estimated to be at least $2,000,000.00. When the monetary
damages are fully ascertained, Jacoby will seek leave to amend
this Complaint accordingly. Jacoby will be further damaged in
like manner so long as defendants' conduct continues.
TWELFTH CAUSE OF ACTION
(Declaratory Relief)
73. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 72 of this Complaint.
74. The Partnership Agreement was not for any definite term or
for any particular undertaking. Accordingly, the Partnership is a
partnership terminable at will.
75. Jacoby announced his intention to dissolve the Partnership
and gave notice of dissolution on October 12, 1995, as an
exercise of his authority to dissolve the Partnership by his
express will.
76. An actual controversy has arisen and now exists between
Jacoby and defendants regarding their respective rights and
duties relating to the Partnership.
77. Jacoby contends that the conduct of defendants has in the
immediate past, and will in the future, affect prejudicially the
carrying on of the Partnership.
78. Jacoby contends that the conduct of defendants constitutes
the willful or persistent breach of the Partnership Agreement.
79. Jacoby contends that the conduct of defendants is such that it
is no longer practicable to carry on the business of the
Partnership.
80. Jacoby contends that the conduct of defendants has been
such that it is equitable for this court to order a dissolution of the
Partnership.
81. Jacoby contends that his announcement and notice of
dissolution on October 12, 1995 was a valid rightful exercise of
his authority to dissolve the Partnership by his express will.
82. Jacoby contends that he is entitled to a decree of dissolution
of the Partnership pursuant to California Corporations Code
Sections 15032(1)(c), (d), (e) and/or (f).
83. Jacoby is informed and believes, and on that basis alleges,
that defendants dispute the above contentions.
84. Jacoby desires a judicial determination of his rights and
duties and a declaration as to the effectiveness and rightfulness of
the notice of dissolution given to defendants. Jacoby desires a
judicial determination as to whether the actions of the defendants
have been such that Jacoby is entitled to a judicial decree of
dissolution of the Partnership.
85. Absent the requested judicial declaration, Jacoby will suffer
irreparable harm of a continuing nature, in that he will not know
his rights and duties. Jacoby will be harmed in that defendants
will refuse to pay to Jacoby his respective interests in the assets
of the Partnership and other items due Jacoby. The defendants
will continue to assert both to Jacoby and to third parties, that
Jacoby remains liable to such third parties for certain debts
incurred after the date of dissolution of the Partnership. Other
irreparable harm will be suffered by Jacoby as result of the
uncertainty regarding the parties' status as partners.
86. Jacoby has no adequate remedy at law.
THIRTEENTH CAUSE OF ACTION
(Judicial Winding Up of Partnership)
87. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 86 of this Complaint.
88. By virtue of the dissolution of the Partnership on October
12, 1995, that entity must now be wound up pursuant to the
provisions of California Corporations Code Section 15029, et
seq.
89. As of October 12, 1995, the Partnership had substantial
assets and liabilities. The assets of the Partnership include
certain equipment, accounts receivable and other miscellaneous
assets.
90. Defendants are currently in the possession of the Partnership
books, assets and accounts. Defendants have already denied
Jacoby access to said partnership assets and records and Jacoby
believes that defendants will continue to do so despite his
requests.
91. Prior to October 12, 1995, the parties were actively engaged
in the practice of law and in the provision of legal services to a
substantial number of clients. As of this time, and for a period
into the future, the parties must continue to meet their legal,
professional and ethical obligations to those clients and provide
them legal services. Defendants have in their possession the files
and papers of these clients.
92. In order to properly protect the interests of Jacoby, Meyers
and Koff, as well as the interests of each client of the Partnership,
it is necessary to have an orderly winding up of the business of
the Partnership.
93. Absent the intervention of the court to order, direct and
control the winding up business of the Partnership, Jacoby will
suffer irreparable harm in that assets may be dissipated, liabilities
could increase and clients may not be properly served.
94. Jacoby has no adequate remedy at law. Pursuant to
California Corporations Code Section 15037, Jacoby seeks such
orders of this court as are necessary and appropriate to obtain a
court supervised winding up of the Partnership.
FOURTEENTH CAUSE OF ACTION
(For An Accounting)
95. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 94 of this Complaint.
96. By virtue of the dissolution of the Partnership it is necessary
to obtain from defendants an accounting of the affairs of the
Partnership. Such an accounting is authorized pursuant to
California Corporations Code Section 15043.
FIFTEENTH CAUSE OF ACTION
(Appointment of a Receiver)
97. Jacoby repeats, realleges and incorporates by this reference
as though fully set forth each and every allegation in paragraphs
1 through 96 of this Complaint.
98. Unless a receiver is appointed to take possession of and
manage the Partnership assets and its proceeds, the assets, the
business, and the proceeds thereof are in danger of being wasted
and dissipated by the defendants. Jacoby has no adequate
remedy at law to prevent this result and, unless a receiver is
appointed, will suffer great and irreparable harm.
99. A receiver should be appointed by the court to hold the
Partnership property and wind up Partnership affairs, in order to
carry into effect the judgments and orders of this court, and to
insure Jacoby against the dissipation, destruction and loss of his
interests in the Partnership assets.
WHEREFORE, Jacoby prays for judgment against defendants
and each of them, as follows:
A. On the First, Third, Fifth and Tenth Causes of Action:
1. For compensatory and consequential damages, according to
proof; and
2. For an order requiring defendants to show cause, if any they
have, why they should not be enjoined as set forth in this
complaint, during the pendency of this action;
3. For a temporary restraining order, a preliminary injunction,
and a permanent injunction, all enjoining defendants, and each of
them, and their agents, servants, and employees, and all persons
acting under, in concert with, or for them:
a. To arrange for the re-establishment of the principle place of
business of the Partnership in Los Angeles, California:
b. To deposit in the California office of the Partnership all of
the books and records of the Partnership, together with all of the
documents and papers pertaining to the business of the
Partnership; and
B. On the Second, Sixth, Seventh, Eighth and Ninth Causes of
Action:
1. For compensatory and consequential damages, according to
proof; and
2. For punitive damages in an amount appropriate to punish and
to make an example of defendants, and each of them; and
C. On the Fifth and Eleventh Causes of Action:
1. For an order requiring defendants to show cause, if any they
have, why they should not be enjoined as set forth in this
complaint, during the pendency of this action;
2. For a temporary restraining order, a preliminary injunction,
and a permanent injunction, all enjoining defendants, and each of
them, and their agents, servants, and employees, and all persons
acting under, in concert with, or for them:
a. From using any partnership Property for their own use and
expending any partnership Property for other than ordinary and
necessary business expenses;
b. From transferring the property or any interest in the property
of the Partnership pending resolution of this action;
c. To pay Jacoby the same compensation, expense and benefit
amounts paid, if any, to Meyers; and
d. To specifically perform their
obligations, including without limitation the payment of money
to Jacoby, of the Memorandum Agreement;
D. On the Twelfth Cause of Action:
1. For a judicial declaration that the Partnership was rightly and
validly dissolved by Jacoby on October 12, 1995;
2. For a judicial declaration that the defendants through their
actions and omissions dissolved the partnership;
3. For a judicial declaration that the Partnership be and is
dissolved by virtue of the action of defendants establishing cause
for dissolution;
4. For a judicial declaration of the rights and duties of the
Partners and in particular the rights of Jacoby to his respective
pro rata shares of the net assets of the Partnership;
5. For an order or orders directing that the Partnership be wound
up under the supervision of the court; and
E. On the Thirteenth Cause of Act:ion:
1. For a temporary restraining order, a preliminary injunction,
and a permanent injunction, all enjoining defendants, and each of
them, and their agents, servants, and employees, and all persons
acting under, in concert with, or for them from:
a. Acquiring any interest in real property, including leasehold
interest;
b. Entering into loans, drawing upon lines of credit, or
borrowing funds;
c. Entering into any single contract with obligates the dissolved
Partnership to expend funds in excess of $3,000.00;
d. Expending funds for the purchase or acquisition of equipment
or capital assets which exceed the sum of $3,000.00;
e. Granting any interest in any Partnership asset, including any
pledging, assigning or alienating of such assets;
f. Making distributions, in any amount whatsoever, from the
assets of the dissolved Partnership to Meyers and/or Koff;
g. Admitting any new partners to the
dissolved Partnership or changing the status or interest of Jacoby
in the dissolved Partnership;
h. Failing to comply with the written
directives of clients relating to the possession and control of
client files and papers or otherwise interfering with the ability of
Jacoby to meet his obligations to clients and meet ongoing court
and business deadlines;
i. Refusing to sign substitution of attorney forms;
j. Precluding Jacoby from complete access to all client files for
mattes Jacoby was handling prior to dissolution;
k. Representing to anyone that defendants are a continuation of
or successor to the dissolved Partnership;
l. Removing from the premises occupied by the dissolved
Partnership the files and papers of any clients except as may be
expressly authorized in writing by the client;
m. Precluding Jacoby from complete access to the premises of
the Partnership;
n. Removing from the premises occupied by the dissolved
partnership the books, records, and accounts of the dissolved
partnership;
o. Refusing to allow Jacoby access to his office, forms, form
files, word processing disks personal effects, and diskettes and
the equipment to access same;
p. Tampering with, copying, altering,
eliminating, destroying or accessing any information, documents
or materials found or contained in computers, computer memory
systems, disks, diskettes or other magnetic medium used in
conjunction with the operation of the Partnership; and
q. Undertaking any other actions or
omissions as are contrary to the interests of Jacoby and his rights
under the law; and
F. On the Fourteenth Cause of Action:
1. For an order compelling the defendants to render a full and
complete accounting of all partnership business; and
G. On the Fifteenth Cause of Action:
1. For the appointment of a receiver to take possession over the
management and control of the partnership property and assets,
to wind up Partnership affairs and control Partnership business
until the winding up is completed, and to keep Partnership assets
until their division among the Partners;
H. On All Causes of Action:
1. For costs of suit incurred herein;
2. For prejudgment interest;
3. For reasonable attorneys' fees; and
4. For such other and further relief as the Court deems just and
proper.
Date:
QUINN, KULLY AND MORROW
A PROFESSIONAL LAW CORPORATION
JOHN J. QUINN
DAVID S. EISEN
MICHAEL H WALIZER
By
by Michael H. Walizer
Attorneys For LEONARD D. JACOBY
=========================================
JURY DEMAND
LEONARD D. JACOBY hereby demands trial by jury of all
issues property triable thereby. Date:
QUINN, KULLY AND MORROW
A PROFESSIONAL LAW CORPORATION
JOHN J. QUINN
DAVID S. EISEN
MICHAEL H. WALIZER
By
by Michael H. Walizer
Attorneys For LEONARD D. JACOBY
|