#40 - Case Update

Hi Gang! Not much has happened in the lawsuit since the injunction hearing back in the summer. Wow, seems like a million years ago that it was even warm . . . Remember summer?

However, today there was a phone conference between the Judge, myself, our attorney, and the attorney for Jill Koehler and Mike Kosowski.

I wanted to post because I am sure information is already buzzing around in emails and group posts and phone calls. As always, I wanted to provide our side of the story.

Justin (our attorney who Jill likened to Jason from Friday the 13th in an email to me) and I talked long and hard the last two weeks and came to a decision.

Because of Noah's accident, there was no way he can participate in the preparation for the trial and the actual trial. He is still in the active recovery process from his spinal fusion surgery and in a lot of pain.

Also, we don't have a vehicle that could safely and comfortably take him to and from Kansas City (about 100 miles each way) and the entire process could seriously undermine his health and recovery from his accident and surgery.

As much as we love Johnny West and the hobby, family has to come before business.

As a result, we have dismissed our case against Koehler and Kosowski. The dismissal was granted without prejudice, meaning I am free to refile the case at a later date. After Noah has recovered from his surgery and feels more comfortable with his condition, we will reexamine our position, and take whatever legal action we feel is right for our business. Again, family first, business later.

That action released Michael Kosowski from any further participation in this lawsuit unless Jill Koehler calls him as a witness.

Koehler had the option to also dismiss her counter-claim to cancel our trademarks (on her claim of 'fraud'), but chose not do, despite her knowledge of Noah's condition. As they say, there is no enemy like an old friend. No problem, that is her absolute legal right.

Regardless, even though the only claim left is identical to the one that Jill Koehler has on file before the federal Patent and Trademark Court, she chose to go forward with the duplicative lawsuit in Kansas. No problem, again, that is her absolute right and I look forward to seeing her personally in court. No night-before-the-trial ambushes this time. The question will be settled.

Meanwhile, we wait for the judge's ruling in the latest round of motions in the other case. For the last two years, the judge has issued rulings on March 1st, so we'll wait and we'll see.

To refresh your memory, that is the motion where I have asked for attorneys fees against American Plastic, joint and several with his attorney (who now represents Jill K). I asked for fees because the court ruled in our favor on all trademark and copyright claims. The other side filed a motion asking the judge to reconsider his decision on the copyrights because they just found a bunch of info that should have been in first claims all along, but wasn't, but they really mean it this time . . .

Again, as I said, we'll see what happens. Thanks for sticking with me during this seemingly never-ending process. I have no problem with the American court system. Yes, it seems like it takes forever (especially when it is your case), but the system does work. Back in law school there was a saying that the main thing you'll learn in three years is how to 'love the law.' It is times like this, that I understand that saying. Both sides have their say and the judge decides based on the accumulated legal knowledge of our culture. That is freedom and that is what we are about.

Terri

#39 - Preliminary Injunction Hearing

#39

Hi Gang! Sorry to be so remiss on keeping the law blog up to date. We've just been running 90 miles an hour setting up the new building, trying to keep up with orders and getting ready for JohnnyCon.

However, I wanted to tell you about the prelim injunction hearing on June 17, 2009. I'm sure the opposition's camp is abuzz with info and I wanted to tell our side of it.

On March 15, 2009, I filed for a preliminary injunction to stop Koehler and Kosowski, better known as The Friends of Johnny or FoJ from selling goods bearing the trademarks registered to our company.

On May 24th, on a phone conference, both Koehler and Kosowski explicitly said they would be at the hearing scheduled for June 17, 2009.

An aside, as a result of Kansas rules regarding an attorney who is also a party in the case, I have joined a friend and colleague of mine, Justin Meeks to act as counsel when we have evidentiary hearings in front of the court. Koehler did not disqualify me with her motion. The judge rejected most of her demands and adopted my voluntary order almost word for word. I can do all the fun stuff lawyers do (such as filing briefs) except for advocate in open court.

So, Justin and I prepared for the hearing on June 17, 2009. We had our line of questioning ready and our exhibits ready to go.

At about 8:00 PM, on June 16th (the night before the hearing), guess who files an entry of appearance on behalf of Koehler and Kosowski?

My old buddy David Herron, attorney for American Plastic Equipment. The entry seems providential, filed too late for me to be able to contact Justin, discuss it with Justin, or do anything about it.

The next surprise occurred in court when I discovered that Koehler and Kosowski decided they didn't need to show up for their own hearing. Only Mr. Herron appeared. As the two defendants explicitly told the judge they would be appearing, I didn't subpeona them. That won't happen again. Also, it is fairly unheard of for parties to blow off their own court appearances.

Justin and I discussed it. Of course, we had prepared inquiries for Koehler and Kosowski. We couldn't question their lawyer.

So, at this time, I had three choices:

1. We could ask for a continuance and subpeona Koehler and Kosowski into court. However, that would delay things another 6 - 8 weeks.

2. I could turn around and walk out. If Koehler and Kosowski didn't need to be there, neither did it. I could have let Justin speak for me.

3. I could 'man up' and stand up for my company and my beliefs in court and not hide behind my lawyer.

I chose option #3.

I spend nearly two and a half hours on the witness stand with Mr. Herron screaming and ranting at me. He rolled his eyes. He waved his arms. He beseeched the heavens. He called me a liar and a thief. He asked the same question over and over (and over) trying to get me to change my answer.

I believe I answered the same question three times with something along the lines of:

Yes, to the best of my knowledge Jill Koehler was taking scans of vintage boxes to Kinko's and printing them out. Those boxes said 'Trademark of Marx Toys of Glendale West Virginia.'

Ask me the same question over and over again and you will get the same answer.

He tried to get me to authenticate a book written by Jay Horowitz as somehow relevant to the proceedings. He tried to get me to admit that the fact that 'Circle X Ranch' had been used in 1965 was relevant to the matter. He tried to get me to admit that we had 'stolen' Jed Gibson because people sell vintage Jed Gibsons on ebay. He tried to get me to admit that those broken-down-piece-of-crap Custers made by Jay Horowitz were relevant. It went on and on and on . . .

I admit, it was a long afternoon. Three years of rage and emnity between myself and Mr. Herron was played out. Justin and even the judge were spectators. I'm not at the computer where I can post links to the most recent documents filed in the other trademark case, but they are 'pointed' to say the least, including one where I have filed a substantial fee motion where I also ask for sanctions against Mr. Herron.

He, of course, countered with a fee motion for the prelim injunction hearing. I have case law saying, sorry, can't do that at this stage of the game and, by the way, your fee motion is woefully inadequate in form, style, and function. I have to waste my time preparing and filing an answer. Oh well . . .

Back to court. Option #3 had its high points. Since I chose to face the issue head on and show up for court, it gave me a chance to make eye contact with the judge, and tell him, in my own words, the entire history of both cases, including the fact that Mr. Herron had lost American Plastic's case in the other court. I got the chance to lay out all of our business and how we came to be where we are today. I got to connect. The judge now knows me.

I tell clients all the time that this is their one chance to get to talk to the judge directly and if they are confident in their position to take that chance. Let the judge hear your voice and connect your name with your face.

I got to frame the debate in my own tone and my own words. I didn't yell, I didn't scream, I didn't rant, I didn't call names. I talked. I talked as long as I thought the judge would listen. I introduced as much case law and trademark law as I could remember off the top of my head. I educated the judge about toy collecting and our business. He now knows our story. He knows me. The judge knows nothing about Koehler and Kosowski other than their screaming gesticulating attorney who he had to continually tell to stop interrupting me.

How is it going to come out? I really don't know. We weren't able to formally introduce a fair amount of our evidence, such as the terms of Koehler's licensing agreement or Kosowski's website. It is all in our brief and instead of trying to out-drama Mr. Herron, Justin just kept asking the judge to read the brief, that it was all in the document.

This judge is very formal and very old-school. He will consider everything and apply the law. We may win. We may lose. The last minute ambush may have allowed the other side to sufficiently muddy the waters that the judge may feel the balance didn't tip far enough in our favor for the injunction. I was reading some Supreme Court case law about this type of tactic and the court talked about parties that may win the injunction battle, but shoot everything they have in that proceeding and go on to lose the war. They showed us all they have and now we will be prepared for it.

It's just one battle in what will be a long hard war. Also, we won't fall for the 8:00 night-before-the-proceeding ambush again . . .

#38 . . . Status On The Status Conference

A quick post this afternoon. In our second lawsuit against American Plastic and its licensees, I filed first for a preliminary injunction and second for a temporary restraining order.

The judge had us all on a telephone conference today and this was the result:

1. My motion for a temporary restraining order was denied on procedural grounds. Repeat, on procedural grounds. I didn't follow the correct practice/procedure rule when I filed it, and the judge denied it on those grounds alone. He addressed nothing about my underlying argument, but denied it based on procedure. The judge felt that the existing preliminary injunction filing was adequate.

2. The preliminary injunction motion is set for a full hearing in May 2009.

3. Responses to the preliminary injunction by the defendants were allowed. I argued they were out of time, but the judge relied on a Colorado case allowing a longer response period. Again, a procedural issue.

Aren't y'all glad you didn't go to law school? More rules than when you visit your Aunt who collects antique crystal and has white carpet!

More updates to come! Tomorrow is a full out law day, preparing some other motions to file. Talk to ya all later. Terri

#37 . . . Terri Speaks Out

Good Morning All! A long one today, so make some coffee or print it out for reading at your leisure.

I decided to use this post to tell my side of the story on the issue of the ethical matters that are currently pending before the Kansas Bar Association.

As Noah predicted, one of the defendants in the case I now call 'Trademark II' basically ignored everything that happened the day before in 'Trademark I' (see post #36) to fixate and gleefully comment on a companion opinion filed on the same day by Judge Waxse.

In this opinion, the judge declined to disqualify me from motions practice (filing legal papers in the case) on the grounds of American's claim of professional misconduct. However, in his duty as a judge, he did forward a copy of his opinion and the related pleadings to the ethics committee.

To summarize the ruling. On other grounds I was disqualified from conducting the trial because I would also be a witness. I had volunteered for this disqualification and the ruling was almost word for word my profferred order. However, I am still allowed to pursue post-judgment motions.

On the claim of professional misconduct, I was not disqualified, but was admonished from using any information I received during my direct and ex parte communications with American Plastic, should the case go to trial. Half an hour later, the judge published a ruling in favor of the Ranch and closed the case (except for post-judgment motions). The claim of misconduct was also rightfully forwarded to the appropriate professionals for further review. All in all, fair and reasonable under the facts and the law. Again, I stand in awe of this judge, one of the most respected in the Kansas legal system.

Now, because defendant Koehler had gleefully filed a multi-count ethics complaint against me last year, and included a cryptic reference to this matter, which did not concern her in the least, I took the opportunity to explain myself to the investigator about the ex parte communication. The investigator has already filed his report with the head of the ethics committee, so the judge's referral is not new news. I await the committee's ruling on the complaint and will act appropriately. In the meantime, my ability to practice law is not, in any way, impaired or diminished.

In 'Trademark I', I declined, in my response, for several reasons, to elaborate on the whole affair, stating only the defense of consent. I requested a full evidentiary hearing, and the judge declined.

Again, I was not found guilty of anything by Judge Waxse. I was not disqualified based on my actions. I was properly, and gently, admonished and the matter was sent on to the ethics committee for further review.

That being said, to anyone who is interested, here is my side of the story:

In Spring of 2008, I was approached by American's lawyer about a possible settlement of Trademark I. That settlement offer included an invitation to purchase certain assets owned by American Plastic Equipment. During the back-and-forth, the offer included an invitation to physically inspect the assets.

I asked for a list of those assets and was not satisfied with the result. I told the lawyer that we would not agree to anything without better lists and an opportunity to physically inspect the assets.

I knew I was going to be in West Virginia in June 2008 for JohnnyCon. I informed the lawyer I would like to physically inspect the assets on my way back home to Kansas. I received a one-line email from the lawyer saying he had informed his client of my intent to visit the American Plastic Equipment, Inc. facility in Sebring, Ohio. I thought the matter was settled.

On the drive home from West Virginia to Kansas, I detoured north into Ohio and presented myself at the Sebring facility on Monday morning. Nothing was ready, no one was prepared, one secretary said something like, 'oh yeah, I remember hearing something about that, but didn't know what was going on . . . '

I was not amused. I had taken an extra day of traveling to make this journey. However, by stroke of luck, Jay Horowitz was in residence that day and deigned to meet with me.

Now is where it started getting and feeling weird . . .

--------------------------------------------

The crux of this entire issue is that once a person or company is represented by counsel, the opposing attorney is not to have contact with the person or company so represented. The one defense is consent.

I was operating under the assumption that I had consent.

--------------------------------------------

Back to our story. I met with Jay Horowitz. I absolutely told him he had the right to have his attorney present and asked him if he wanted to contact his attorney. He declined. He said some other things as well, that I will not disclose.

We discussed the assets. The conversation remained polite, but did become curt after a while. Again, all I will say. I agreed with Mr. Horowitz to keep the specifics of the negotiations confidential. That is the reason I did not post a defense in my brief. However, today, I am including some generalities.

We agreed that American would, by email, send us a detailed list of assets in possession of American and other parties. Upon an agreement on the asset list, we would offer a price.

So now, I am on the road again and back home.

I exchanged several emails and telephone calls with Mr. Horowitz. For the most part the communications were highly technical, dealing primarily with the list and condition of the assets. However, the tension escalated with each phone call.

Still with me? I was attempting to negotiate a settlement with Mr. Horowitz to end Trademark I through a purchase of assets. In this stead I was acting more as a company owner than a lawyer.

However, one of the problems was American's absolute refusal to admit or believe that we had won a judgment in our favor on all trademark related counts back in August 2007. All settlement offers included a demand that we 'buy the rights' from American. I felt like I was talking to a brick wall.

In the meantime,

1. I have American's lawyer battering me with discovery requests and demands for depositions. Those discovery requests included demands for information relating to at least one trademark count that had already been dismissed. I finally applied for, and received, a protective order stopping all discovery. I should have done it weeks earlier and saved myself a lot of tension.

2. I have the 'so-called licensees' gleefully ignoring said court decisions and aggressively marketing goods under trademarks that had been stripped from American (to this day not one defendant will admit that the court decision has any validity)

3. I have the pressure of trying to put together the asset list and a settlement offer and carry my day-to-day responsibilities.

Boys and Girls, I cracked under the strain and I lost my temper. I took the bait that was being dangled in front of me and waded right on in.

I unloaded, via more than one email, on Mr. Horowitz my overall opinion of the negotiations, his attorney, the case in general, and the licensees. Those emails were immediately forwarded by Jay to his attorney and almost instantaneously the motion to DQ me for 'ethical violations' was filed.

Those last few days of the settlement negotiations are where I made my error.

When I saw that there was no middle ground for settlement, in that American would never admit the validity of the court ruling, I should have broken off the emails and blocked any further phone calls from Jay Horowitz. That's what a cold, cool, uber-attorney would have done.

I didn't. I let my temper get the best of me.

That is my ethical violation. I exceeded the bounds of the consent to inspect the assets and had an improper ex parte communication with Jay Horowitz regarding the case and those involved in it. That was the basis for American's demand that I be completely disqualified from acting as attorney for the case.

This rule is sound. It is intended to prevent attorneys from going around a client's protective legal shield to coerce and intimidate vulnerable parties.

However, I doubt Mr. Horowitz felt either coerced or intimidated. He gave as good as he got during the technical discussions.

The microsecond that American's attorney filed his motion to DQ me, I informed Mr. Horowitz that our discussions were finished and I would not make any additional contact, nor would I could accept any contact from him. I turned the whole thing over to Noah to continue the discussions. The entire tentative deal almost immediately fell apart and all chances of settlement disappeared - if they had ever existed in the first place. So, nine months later, because of that DQ complaint, instead of a settlement, American lost the case and has had judgment entered against it on all counts.

However, I did step over the line. I fully admit it, and it will certainly not happen again. It is not the serious, egregious, horrific ethical violation that the defendants in Trademark II would like everyone to believe. If I am to be penalized in any way, I will deal with it as it comes. My business is now between myself and the bar association and no business of the defendants in Trademark II.

Rules exist for a reason and this acts as a reminder to me. That's what the canon of ethics is for. Geneations of attorneys making errors and a series of rules resulted from those errors. Don't you just hate it when authority figures are proved right again and again? Again, rules exist for a reason. No, you shouldn't run with scissors, and, no, even when it might result in a settlement beneficial to all parties, a lawyer/owner shouldn't negotiate directly with the other party. It is asking for trouble.

As for the other complaint filed by a Trademark II defendant. I thought about publishing it here on the blog. I have an absolute right to anonimity. However, the Trademark II defendant decided to reference her complaint in pleadings she has made. That gave me an absolute right to mount a public defense.

However, her complaint includes a lot of personal information about a lot of people that she took upon herself to include in the complaint. If the complaint is ever formally adjudicated in court, a LOT of very personal dirty laundry is going to be thoroughly washed and aired in public. Therefore, I will withold any statements on that case until such time as it is adjudicated.

So, in closing, I will say, there is no 'new' or additional referral to the ethics committee in the judge's opinion. It is the same issue being submitted through a different channel. Judge Waxse had an absolute duty to make the referral and I neither suprised, offended, or worried. It is all being dealt with. Meanwhile Trademark II clunks along at a micro-snail pace (more posts to come on THAT issue).

Thanks again everyone - Terri

#36 Extra . . . Extra . . . Read All About It . . .

The original lawsuit where American Plastic Equipment, Inc. sued the Ranch for everything and the kitchen sink is OVER!

And the Ranch WON!

Today, the Judge issued an order granting summary judgment in favor of Toytrackerz LLC (the legal name for the Ranch) on the issue of copyright violation.

In other words, American LOST!

For those of you who've been around for awhile, this order comes exactly one year after the same judge dismissed all counts, with prejudice, regarding the trademarks.

In other words, American LOST!

Now it's on all counts. The case is concluded except for any post-judgment motions that might come along in the next 10 days.

I'll be posting more updates, including a copy of the judge's decision.

Thanks to everyone for their support - Terri

#35 . . . How Far Can You Push An Attorney?

The answer is simple . . . all the way to the courthouse.

This post is somewhat off-topic, but still interesting food for thought. As I wait for the assorted lawsuits to meander their way through the court system, I research constantly and keep track of new cases that might affect our cases.

For example, a recent Supreme Court case caused me to toss out a stack of caselaw I had been assembling for my next motion. The Supremes decision did not go against my position, it summarized and clarified all the of the disparate and inconsistent applications of a certain legal doctrine. Clarified them in my favor, I might add.

However, back to the discussion at hand. There has been a case back east I've been watching. In a small nutshell:

1. An attorney (call him Floyd) sent some strongly worded demand letters and cease and desist letters to someone (call her Mary) threatening Mary with legal action if she continued on a certain course.

2. A second person (call him Joe), not related to Mary, apparently took it upon himself to file an ethics complaint with the state bar association on behalf of Mary and others claiming that Floyd was guilty of extortion and a plethora of other unethical acts.

3. Joe also made it all public, where they could potentially influence the legal positions of Floyd's client and Mary.

Okay, dokey . . . so attorney Floyd has been dragged into an ethics complaint before the Bar based on his actions as an attorney on his client's behalf. The fact that the complaint was filed has been made public. What does Floyd do?

Floyd sues Joe . . . . with a vengeance, for personal and professional defamation.

A year later, a jury comes back in favor of Floyd against Joe. To the tune of $225,000 . . . . In my research, this is the biggest jury award given to an attorney against someone who tried to use the legal ethics process as a cudgel in a civil legal situation.

Interesting times. An appeal will come and there may be some adjustment. However, based on my research, I don't think the verdict will be overturned.

I haven't gotten into the meaty details of Floyd's actions as an attorney and Joe's complaints regarding those actions, because they aren't the point.

The point is that the Legal Ethics Process in place in every Bar Association in the country is there for a reason.

1. That reason is NOT to use it in an attempt to influence the outcome of civil litigation.

2. That reason is NOT to attempt to intimidate attorneys or influence the actions they take on behalf of their clients.

3. That reason is NOT to try and ruin the professional reputation of an attorney.

4. That reason is NOT to attempt to influence public opinion, and try to make others, including the client, think badly of the attorney and question the attorney's ethics and abilities.

No matter what you think of an attorney, either professionally or personally, the Bar Association Ethics Process is not a legal weapon of mass destruction.

I think the reason I am interested in this case is obvious to all. If not, read the last few posts in this blog. Using the Bar complaint process and then alleging and including it in a pleading that will be read by the judge??? What possible reason could the person have for that except for reasons 1 - 4 listed above?

A last observation on the above case. Joe went pro se and represented himself in court. Every adult is entitled to represent themself in court. However, just because you can, doesn't mean you should . . . One of my first thoughts as I read the outcome of the case above was, "Pro Se is on the same page as Professional Suicide in the big book of Common Sense."

When you call out an attorney in their own house, you don't often get the results you want . . .

Thanks for hanging in during this long slow strange ride. Your friendship and support is appreciated.

#34 - My Responses To Motions To Dismiss

#34

Greetings all! Too busy today to be clever with titles, but I wanted to post an update for those who are following the world's slowest tennis match.

Mike and Robin filed their expected motions to dismiss for lack of personal jurisdiction. They didn't use my response as a guide and filed pretty much the same documents as Jill.

I filed my responses to those motions:

Here is my response to Robin.

Here is my response to Mike.

Most of the cover stuff is the same in both responses, but there are some interesting differences if you are patient enough to dig into it. As always I apologize for the cotton-picking typos that seem to elude my multiple proofreadings!

I spared everyone the 90+ pages of attachments to each response, but they are available to the truly masochistic if you wish.

Jay's attorney, no great surprise called me and asked for a 10-day extension and I agreed. However, when the paperwork went to the court, it was more like a 15-day extension. . . . Hmmmmm . . . . Oh well! American really isn't the focal point of this suit anyway.

I have to wait for one more deadline to pass before I can file my next round of motions. I have a shorty due Monday, so I have to get that one done ASAP!

Have a great holiday weekend everyone and thank you for your continued support.

Terri