375+ # 0384

I had not checked The Other Site lately, and had not seen the new top-posted stuff. These emails (copies attached) -- showing that Wexner and his agent Stu Carpenter had actual knowledge of the existence of the Swaters v. Lawson litigation two months prior to the June 2014 auction, and that this knowledge had persuaded Wexner not to be interested in buying the car -- go to element (a) in my previous post: that Wexner (or his agent) must have actually relied on an alleged misrepresentation. I am beginning to wonder if Wexner does not have some level of dementia, e.g., that he does not presently have conscious recollection of his knowledge and thoughts on the car in April 2014. Most litigation attorneys will gladly take a client's money to pursue even the most tenuous claim. This is all the more the case if the client is a willful man with essentially infinite funds. But a client's right to a legal advocate who will forcefully present the client's views does not override the attorney's duty to give the client good advice on the likely results of that advocacy. As in all things, one must handicap the likelihood of various future events, and complete certainty about the future is rare. At the same time, it is highly unlikely that Wexner and Carpenter can persuade the finder of fact that they actually relied on Bonhams' representations regarding the status of the Swaters v. Lawson case, and that it was reasonable for them so to rely. If The Other Site is correct, that there is a mediation coming up in mid-May, my prediction -- IMHO! -- is that Wexner will see the light and will drop his claims against Bonhams, probably for a mutual waiver of fees and costs. I predict more strongly that Wexner will dismiss Swaters and Gardner. I predict with 100% confidence that Joe Ford will never agree to any settlement. In any event, as we have seen with the HOA, there is no functional difference between Joe Ford agreeing to a settlement and declining to settle. Therefore, the Made in Ohio Ford-Lawson circus will survive a May mediation. Don't cancel your popcorn order yet.
Image Unavailable, Please Login
Image Unavailable, Please Login
Image Unavailable, Please Login
Image Unavailable, Please Login

 

He was "scatch and dent" sale shopping, IMO

He knew about the title issues and laid his money down anyway.
He's gambling he gets it sorted, at "80% of retail $$"

Like buying a 250GTO with a death scent to it, you pay "a little less"....

You know the mark up, on Victoria's Secret items?
It has to be over 1000%!!

 

It is possible that this is an M. Night Shyamalan movie script, and that we FChatters are not audience members, we're cast members. But there are at least three flaws with the theory. First, the clouded-title discount was priced into the auction already, with no need for years of litigation -- and the attendant uncertainties of winning a judgment or losing and having to pay the fees of the prevailing party -- to enjoy the resulting reduction in price. Second, to prevail on a theory of fraud requires Mr. Wexner to portray himself as the biggest and most ignorant idiot ever to drive a red car onto a show field, and his choice of an agent, Stu Carpenter, as the most incompetent auto broker in the western world. Or the eastern. Third, with a fortune of $6 billion -- which at a nominal annual return of 5% would add $300 million/year to the total -- the few millions he will make from this caper, best case scenario, is sofa cushion money. The equivalent to you or me stooping over to pick up a dirty penny from the sidewalk.

On the other hand, I don't have a better explanation. Maybe The Game is its own reward. I don't know. I would rather fire up that 4.9 liter and see how long a burnout it will do with those skinny replica tires. But that's just me.

 

It is disturbing to me that you disparage Les Wexner so easily. He is definitely a pretty smart guy to have built an entire empire from zero. He employs very serious legal talent so one should reasonably assume that they are able to sift through legions of smoke and mirrors to discern actionable points. Mr. Wexner certainly has the wherewithal to aggressively fight a fight for as long as it can possibly take. What you seem to miss is that it is possible that he feels he was seriously wronged. As such he can deploy all of his immense resources to pursue his point with little regard to a cost/benefit ratio.

 

there are two sides to this "coin"... the sellers need to diminish the title history and its' defects... to make the sale attractive to solicit a bid...

a third party ( UK courts ) cannot close any gaps in Ohio ownership / title history, nor can Ohio assign a duty Ohio has accepted as an arbiter of title to a third party... the UK court can rule as it pleases and dispense the case before it in the UK... as long as there is a gap in Ohio title ownership, there is cause to challenge any ruling / ownership issued by a third party... any open defect in linage can cause concern, if, the car should find itself in CONUS jurisdiction making it fair game to challenge ( and confiscation ) until all is resolved in Ohio The existence of a defect can put Wexner at risk if he takes the car within CONUS...

 

Hi Jeff. You misunderstand completely. What I wrote -- and what is true -- is that in order for Les Wexner to discharge his burden of proof with respect to the element that he actually relied on Bonhams' allegedly false representations of the status of the Swaters v. Lawson action as of April-June 2014, is to portray himself as the biggest idiot in the vintage race paddock. It is Wexner who contends this to be the case. I don't personally believe it, and I don't think the trier of fact in London -- whether it be Justice Flaux sitting in equity, or a jury trying a claim for damages -- will believe it either. The trier of fact will be making no inquiry into whether Wexner has subjective feelings that he has been seriously wronged. Rather, the relevant issue of fact is, did Wexner -- or his agent Carpenter -- actually lack personal knowledge of the status of the Swaters v. Lawson action as of April-June 2014?

Next, Wexner must also carry the burden of proof with respect to the second element of reasonable reliance: That he and Carpenter performed all reasonable inquiries into the truth of Bonhams' alleged misrepresentations. Just now I typed the terms "ferrari 0384" into Google. Google auto-completed to add "am" to the query. Attached is a screenshot of the results. The top hit is this thread. Links to posts subsequent to June 2014 would not have been available to Wexner or Carpenter prior to the Goodwood auction. But it is an objective fact that a Google query requiring about 3 seconds to type, and an hour or less to review the posts to this thread in the April, May and June 2013 time frame, would have been sufficient to put Wexner or Carpenter on actual notice that it would not be reasonable to rely on Bonhams representations regarding the status of the Swaters v. Lawson litigation. In order to prevail on his absurd contention that he did make a reasonable inquiry, again Wexner must portray himself as the biggest idiot in the paddock.

It is Wexner who has voluntarily put himself in this position. To the extent that my readiness to disparage Wexner is an issue, I do disparage his idiotic choice to adopt this as his litigation posture. But I do not personally believe his posture to be true.
Image Unavailable, Please Login

 

Let’s look at what we now know about the time line of the actual knowledge of Wexner and his agent Carpenter. First, some context. In March 2013, Swaters, Lawson, and Ford agreed to waive and release their respective claims to ownership of #0384, in exchange for an agreement to deliver the car, the Ohio parts, and all written memoranda of ownership to Bonhams. Swaters, Lawson, and Ford authorized Bonhams to act as their agent to auction the car in September 2013. They also gave Bonhams unilateral authority to dispose of all existing memoranda of ownership, and to unilaterally decide on behalf of Swaters, Lawson, and Ford the form of the written memorandum of ownership to be conveyed the auction buyer.

The September 2013 auction did not occur. Thereafter, Ford and Lawson went back and forth on whether the HOA continued to be effective and controlling of the issues falling within its scope; e.g., Bonhams’ agency to sell the car and to decide the form of title, and e.g., the waiver and release of the parties’ substantive claims of ownership. In an Opening Brief that Ford and Lawson filed on December 3, 2013 — in their appeal from Judge Nadel’s August 2013 Judgment to dismiss the Swaters v. Lawson action — Ford and Lawson argued that the HOA continued to be controlling and effective, with respect to its forum selection and choice of law provision. At a hearing before Judge Martin on December 16, 2013 — regarding a motion filed by Gardner, seeking an order to substitute Gardner’s name for Ford’s on the Ohio Certificate of Title — Ford and Lawson argued that the HOA continued to be controlling and effective, with respect to its provision that Bonhams had and has unilateral authority to decide the form of any memorandum of title.

Ford and Lawson’s contentions prevailed in both cases. The Gardner motion was not granted, and Judge Nadel’s Judgment was reversed. The opinion of the Court of Appeals, reversing the Judgment, expressly turned on the Court’s observation that no party was disputing that the HOA continued to be controlling and effective, with respect to its forum selection and choice of law provision.

The opinion was issued on May 28, 2014. The auction took place on June 27, 2014.

(Note that Ford and Lawson continued to make the same argument — that the HOA continues to be effective and controlling — in their appeal from Judge Nadel’s second Judgment of dismissal. In an opinion issued on March 11, 2015, the Court of Appeals continued to agree.)

With this as our context, let’s look at the three Stu Carpenter emails that I posted up a couple days ago.

On March 31, 2014, Stu writes to Lawrence Elliott. (Professor Google tells me Elliott is a Ferrari expert living in Beverly Hills.) Stu thanks Lawrence for the information regarding Kristi Lawson “and her feelings about the 375 Plu.” Stu acknowledges that “the ownership situation surrounding 0384 these past decades has been . . . muddled,” rendering the car “a bit hairy.” Stu writes that he is “curious about the ownership situation and would like to have a conversation with one of the attorney’s [sic] and/or Jon’s colleague.” (“Jon’s colleague” appears to be a reference to David Clark, another auto broker and the husband of FChatter Debc.)

In the second of these three emails, David Clark writes Carpenter on April 5, 2014, stating that Lawrence Elliott and Jon Janowski have told him that Carpenter is making inquiries about #0384. He writes “It was brought to my attention that you have a few concerns about the history and ownership.” Clark writes “I represent Kristy [sic] Kleve Lawson and Joseph Ford two of the owners of the car and would gladly answer your questions.” He writes “I would welcome the opportunity to speak with you directly.” He writes that it is his “aim to answer any and all of your questions.”

Clark then “past[es] in this email a summary of events. . . .” Notice at the bottom of this summary, the name of its author: “By: Joseph Ford.” Joe Ford’s April 2014 summary, as copied and pasted by Clark, includes the line item that “March 2013 Settlement ends Ohio suit A1001370: Claimants agree to drop all claims, unite Ohio parts, titles, car, spare motor as one package. . . . Pending appeal will be dropped as part of sale of united package.” The next line is “Bonhams contract to sell expired Sept 2013.” (Emphasis added.)

Ford’s summary also discloses the pendency of the Gardner v. Ford litigation. He writes that “If required, we can have Gardner sign off on any sale in an abundance of caution, as Gardner already did in March of 2013.”

In the third email, Stu writes to David Clark and to Lawrence Elliott, as well as to another email address we do not see in the other two emails, [email protected]. He states that he has received a voicemail from Clark and some emails, and that he is grateful for the additional details. He then writes “in short, my client does not want to pursue the purchase of 0384 at this time.”

In May 2014 (iirc), Bonhams published its catalog for the June Goodwood auction. The entry for #0384 included these representations, now alleged by Wexner and Carpenter to be fraudulent (emphasis added):

“The situation between Jacques Swaters and Kristine Kleve and her American advisors ebbed and flowed during this period, becoming a legal dispute in 2010. Jacques Swaters – himself a towering figure within the Ferrari world – died that December, and ‘0384 AM’ was inherited by his daughter Florence.

“She invited Bonhams to assist, in part to help mediate between the Belgian and American parties and – if litigation could be settled – to sell the car by auction for mutual benefit. As in several other instances over many years, Bonhams has been successful in bringing these parties together.

“Today – with all relevant litigation settled - this magnificently presented ex- González Silverstone-winning, ex-Maglioli Mille Miglia and Le Mans works Ferrari is now poised to enter a caring new ownership.”

Wexner and Carpenter also apparently allege that Bonhams personnel and the author of the catalog entry – a respected Ferrari historian – added additional false representations at the auction itself.

I’m tired of typing now, so I will not argue or editorialize. I close by repeating what I have written many times before, that in order for Wexner and Carpenter to prevail on their claim of fraud, they submit evidence sufficient to convince the trier of fact that it is more likely than not that, as of June 27, 2014, they actually had no knowledge of information which was inconsistent with Bonhams’ representations, e.g., that “all relevant litigation [has been] settled.” And they must likewise show by a preponderance of the evidence that no reasonably diligent inquiry could have revealed any such inconsistent information.

 

I have been following this for a long time, and have a question. Is the restored car actually THE original car, restored? How much of the original is in it? Seems the body is an entire recreation. I would think someone with very deep pockets would do well to take the Ohio parts, if they haven't been used, and restore them.

Just wondering.

Perry

 

+1

Joe

*

 

Bill,

I think it would help the readers to know that the Ohio Court of Appeals is a court of record. Its opinions and analysis is based upon the record on appeal. Events after the decision that is being appealled have no bearing. Likewise, any argument made also only relates to that record, and not subsequent events. I think you err in trying to extend the appeal opinion or appeal argument to points beyond the appeal record.

Our view has consistently been that the HOA, if it was a contract, was only effective and authorized the Sept 2013 auction, after which it expired. After that, the available remedy is breach. If one is truely interested in enforcing the HOA, one must do so in London prior to the expiration. No party bothered to do so in London, so the enforcement remedy is abandoned and gone, and what remains is a possible claim for beach.

My prior posts explain other HOA issues such as misrepresentation.

Also, have you read Copley/Wexner's complaint?

Joe

*

 

Joe, It has always been a mystery to me why, if you believed the HOA had expired, you did not issue proceedings in London to stop the sale. It is a simple and effective process, as demonstrated by Zanotti, and yet you chose to ignore it.

 

I agree but given the size of his empire, I very much doubt if he ever got involved in the detail of sale and he was not even a party to the auction contract.

I can fully appreciate why he may feel "seriously wronged" but when it comes to "discerning actionable points" as a pretty smart guy, and having seen the emails, I expect he will be asking some serious questions of his Agent

 

It is your opinion only that all terms of the HOA expired in September 2013. My opinion is that it is an issue of construction of contract: with a mere six month time frame to prepare the car for auction, what did the express terms imply would happen if one party's failure to perform made it impossible for another party to perform everything necessary to meet the September 2013 deadline? Your construction is that the parties intend to negate the waiver and release of their substantive claims; to negate their agreement to a 50/50 split of the proceeds of sale, regardless of the merits of their substantive claims; and to return to full-on litigation of their substantive claims. There are also the facts on the ground, that in August 2013 Judge Nadel had in substance converted the HOA to the Judgment of the court, and had dismissed the action, and that by September the BC and the OC had delivered their goods to Bonhams in England. I think -- IMHO -- that your construction is absurd. It's not even a close question.

It is also false that subsequent to September 2013 you and Lawson have consistently contended that the HOA had ceased to exist. The most recent evidence to the contrary is in the Carpenter emails of March 31 and April 6, 2014. In his March 31 email, Carpenter thanks Elliott for the information regarding Kristi Lawson “and her feelings about the 375 Plu.” If Lawson had in fact spent the previous six months expressing her unalterable opposition to the Bonhams-Swaters-Gardner scheme to sell the car at auction in June 2014, it is not believable that a March 2014 description of Kristi's "feelings about the 375 Plus" would not have included this information. It is central to Carpenter's London lawsuit that he did not have this piece of information until weeks after the auction. Regardless of what Carpenter did or did not know about the "settled" status of the Swaters v. Lawson action, I am sure that he that he did not have this piece information. The reason he did not have this information is because it is not true. The one and only thing that you and Lawson have consistently done since September 2013 is to play both ends against the middle, to keep all options on the table, and to change your story according to the needs of the moment. Therefore, whatever Lawson had shared with Elliott regarding her "feelings," she did not share with him the unequivocal view that Bonhams' had no authority to auction the car in June 2014.

In his April 6 email Carpenter thanks Clark for sharing emails (in the plural) and a voicemail, in which Clark purports to be speaking for Ford and Lawson as their agent. The inferences to be drawn from this email are less clear. Again, Carpenter must be willing to testify that these communications included no information that is inconsistent with the Bonhams' catalog representation, that "all relevant litigation [is] settled." Either Clark did not include that information in his communications, or he did include it and Carpenter is a liar and willing to perjure himself in service to his client Wexner. It is very hard to believe that someone is this much a liar (although with some people there is no other possible conclusion). On the other hand it is hard to believe that Clark did not make it real clear to Carpenter that a June 2014 auction by Bonhams would be unauthorized, contested, and litigated -- *IF* this is what Clark was hearing from Ford and Lawson.

In any event, the existence of a set of April emails and a voicemail from the agent for Ford and Lawson -- an agent whose self interest lay in the car being sold through him and not Bonhams -- together with a representation by Carpenter that he had no knowledge in June 2014 that Ford and Lawson had any objection to a Bonhams auction, is not consistent with a Ford-Lawson contention that the HOA had expired in September 2013.

Regarding the London litigation, ever since Enigma Kim's report of the March 19 hearing before Justice Flaux, I had been wondering about this part of Kim's report:

"Judge says the fundamental starting point is to work out who owns the car, if Swaters owns it then Swaters can give good title to Bonhams and the car can be sold and the money distributed. Judge did not understand why Swaters agreed to give 50% of the sale proceeds on top of the money that was paid by her father under a notarized legal agreement."

What I didn't understand was how the Justice could assert jurisdiction to adjudicate the substantive claims to ownership of Swaters, Lawson, Ford and Gardner. My thinking was, that the only reason the parties were before the London court was the HOA's forum selection clause, and that therefore the HOA's waiver and release of the signatories' substantive ownership claims took these claims off the table. But it came to me, thanks to cheesey's most recent rendition of his fetish for Ohio Certificates of Title, what has happened. By virtue of their general appearances in the Wexner/Carpenter action and the Bonhams action, Lawson and Ford have voluntarily submitted to the London Court's jurisdiction for all purposes. Unless Ford and Lawson's super brilliant London attorneys have consistently plead, in every court paper they have filed, that Ford and Lawson appear specially only, for the limited purpose of litigating their claims under the HOA, they have made a general appearance, and are indeed subject to the High Court's jurisdiction for all purposes. I am doubting that they thought to do this.

It is also the case that, being parties to the London litigation, Ford and Lawson will be bound by its results in Ohio. By virtue of the doctrine of res judicata, the fact that the HOA gave jurisdiction to the High Court only to hear claims arising under the HOA, will have no effect. Having been parties to the London litigation, Ford and Lawson will be bound to its results, including in Ohio.

In short, Ford and Lawson seem to have got their wish, to be able to litigate their ownership claims on the merits. However, it's going to be in London, not Cincinnati. I hope they enjoy the expense, as well as the exposure to paying attorney fees to the prevailing parties. After all, this is what Joe Ford calls winning.

 

Spot on and if Justice Flaux does rule that the 1999 Settlement is binding and that Florence Swaters does indeed own the car, there will be silence from those questioning the validity of the HoA.

Bill, I see there is activity on the mysterious Lawson vs Swaters case A1404305. I Googled the CIV.R. 41(B) hearing and it appears to relate to a dismissal on the grounds of failure to prosecute. Given that everything else in Ohio is stayed and gone to London, does this not prevent other related cases being filed ? as on the face of it it looks like device intended to keep yet more litigation going in the US.

 

I can only think of four possible answers

A. The litigation in Ohio somehow prevented you from doing so
B. You were not confident on the outcome
C. You wanted to avoid paying money into Court and save money
D. You made a mistake

 

Hi Kim. Attached is a copy of the Court's Rule 41(b)(1) Order to Show Cause, retrieved from The Other Site. The image is low resolution, but it's good enough to inform us that Judge Beth Meyers has issued an order that plaintiff Lawson appear on May 28, 2015, and show cause why this case should not be dismissed for failure to prosecute. This looks like a housekeeping measure, presenting the plaintiff with the option to get on with it -- serve the defendants and take their defaults if they don't answer -- or let the case be dismissed. The Federal Rules of Civil Procedure version of this rule provides that such a dismissal be on the merits, meaning the same claim for relief can never be refiled against the same defendants. The Ohio version has deleted that provision. This leads me to believe that, if Lawson does not appear on May 28 and the case is dismissed, she can refile, provided that no statute of limitation has run at the time of the refiling. I expect that if Lawson's attorney appears on May 28, that the Court will choose not to dismiss, no matter what "cause" Lawson offers as the reason not to dismiss. However the Court is likely to require that Lawson give some indication of what she intends to do next. Lawson could decide to get busy and use this case to perform discovery that would be helpful with the London case, but on terms that are more advantageous to her, or cheaper or more convenient, than the ones which apply in London. I would expect the defendants' response to this to be to move to stay, on the ground that the London litigation will adjudicate the same issues, and parallel litigation of the same claims will squander resources and will run the risk of inconsistent results. I expect that Judge Meyers would agree. It is possible that Lawson can see this coming and would do the reasonable thing -- there's a first time for everything! -- and that she herself will ask Judge Meyers to stay the case on May 28. Bottom line, though, is that Judge Meyers is unlikely to dismiss on May 28, unless Lawson simply chooses not to appear.
Image Unavailable, Please Login

 

Did Zanotti actually file in London pre-auction or only make an assertion of having a claim to Bonhams?

In the current London proceedings isn't Zanotti's claim just that he is owed the remainder of the money Bonhams agreed to?

As for A-D above it is an interesting question.

 

E. When you enter into an agreement with someone, your counterparts think the agreement has fixed the parties' respective rights and duties, and that performance on all sides will be forthcoming in good faith. You, however, consider a party's agreement to terms merely to be another weapon in your arsenal, to exert leverage against the party. The desires of your counterparts to keep the agreement alive and to keep prospective performance in view, is a weakness on their part that you will exploit to improve the benefits flowing to you. For example, when Swaters agreed to release her claims to 50% of the proceeds of the auction sale, from your perspective this was merely the starting point. You and Lawson tried to use the proximity of the September 2013 Auction to extort an additional 20% of the proceeds from Swaters, in exchange for your performance of the things you and Lawson had already agreed to perform. After September 2013 came and went with no sale, you used the HOA's provision that only Bonhams could change the form of title to defeat Gardner's motion to substitute his name for yours on the Ohio Certificate of Title. You twice used the HOA's choice of forum provision to overturn Judge Nadel's Judgments to dismiss the Swaters v. Lawson case. In the December 2013-January 2014 timeframe you and Lawson attempted to sit at the table with Bonhams, Swaters and Gardner, again using your counterparts' continued reliance on the terms of the HOA to try to extort an additional share of the proceeds of sale. You were rebuffed out of hand.

To file an action in London to declare that the HOA had expired in September 2013 would have eliminated the leverage you enjoyed under the HOA. It would have eliminated Swaters' concession of 50% of the proceeds of sale, and put her back at a claim to 100%. It would have left you with no bargaining chips with respect to Gardner's claim to 100% ownership of your share of Lawson's share of the car.

Does that sound about right? IMHO, it does.

 

Not sure if they actually filed but what ever they did it must have been a sufficiently comprehensive and persuasive threat to convince Bonhams to pay £1m out of their own pocket as part of a £2m settlement agreement.

Yes and Bonhams are seeking to recind the agreement and recover the initial payment on the basis of "duress"

 

Coupled with C, I agree it is a better explanation

 

This weeks Private Eye has it in for Bonhams and suggests that the dispute will have an impact on their ability to find a buyer.

Good news for the other auction houses, their associates and investors
Image Unavailable, Please Login
Image Unavailable, Please Login

 

We (lawyers advice) decided to simply put Bonhams on official, written notice that they had no authority, that Ohio litigation was ongoing, that the Ohio BMV blocked any conveyance, etc, as was done repeatedly, starting months before the auction and months before the catalogue. Bonhams had many chances to act honorably. Thus, when Lot 320 was put on the block, they proceeded at their peril and could not convey, as warned.

It is my view that this single, deliberate, high-profile act by Bonhams defies logic and sound business practice -- and it was wrong.

WE WATCHED IN DISBELIEF when Lot 320 was put on the block. Further, I still cannot believe Bonhams did not refund the Buyer's money on the minute he demanded it back. It is so disrespectful as well as wrong.

There is always time for a lawsuit, to right a wrong.

Why do you say the Private Eye "has it in for Bonhams?" I think the article is straight-forward reporting. Did you see anything inaccurate in the article?

Joe

*
Image Unavailable, Please Login

 

Based on this statement, what makes the Belgium Title less of a title for conveyance than your fraudulent Ohio Title , when each were clearly Court Ordered ownership ?

Why is your Ohio ‘’title’’ a required document for Wexner, and why is the 1990 Court Appointed Belgium ownership document not a legal document given the sale took place in the EEC under the law of London which recognizes the Belgium Court authority over a suspect Ohio title ?

 

Please Kim the answers to your questions have been known for years.

 

These are London Court questions not Ohio

What single item of fact/device/document constitutes the Ferrari being Ford/Lawsons car and not the Swaters Ferrari ?