Mike_Frazer
New Member
My wife and I were recently served a summons by the firm that represented Corporation (of which she was President and I was a contract employee) in a very fast, ugly and expensive trade secrets lawsuit filed against her new start-up company by a former employer (who basically sued the corporation annd me to prevent the new start-up from becoming a competitive force in a market which he largely controlled).
Initially the firm retained to represent the corporation refused to represent me as a seperately named party and even refused to include me in the initial discussion about fees, options etc. They insisted to my wife (the President) that I would need my own attorney as they could not legally defend us both.
I retained a seperate attorney which the coproration paid for (10K).
6 weeks into proceedings my attorney (who did have me sign an agreement with fee and retainer outline structure) advised me that there was no legal reason the coproration's attorneys could not also defend me and that (since my personal funds and the corporations were limited as a startup company) they recommend withdrawing as my counsel and having the coprorate attorneys represent me for the remainder of the case.
Corporate attorney were not at all happy about it but had little choice....still.....no written agreement between the corporation or their firm and none between the firm and me. At NO time did any of us personally guarantee the payment of fees.
3 months in (with attorney repeatedly advising us that now is NOT the time to settle) the corporation ran out of money to pay the attorneys (who had already received $30K from corporation).
The firm asked Federal Judge to allow them to withdrawl which the judge flatly refused and verbally scolded attorneys for requesting to withdrawl because of a fee dispute just 3 weeks before the date of the hearing to decide whether an injunction hearing.
Having been denied their motion to withdrawl the attorneys met with me and the VP of the company and exclaimed "you cannot afford a Cadillac defense and we cannot afford to be your bankers" they also exclaimed that they would be reducing our representation from 2 attorneys to 1 and that we would be reasponsible for preparing ourselves for depositions.
Following my deposition (for which I was totally unprepared) the the corporation's attorney was again asked about the feasibility of a settlement and this time was egare to present the question to opposing counsel.
The case ended with a settlement after 3 1/2 months as the corporation could not afford to keep up with the mounting legal expense (which at the time had already cost 30K in fees paid over 2 months by the corporation for the defense of the Corporation and me personally).
Again, the attorneys representing the corporation had nothing more than an oral agreement with the corporation's officers which did not include any personal guarantees by any of the corporate officers. There was never a written agreement of any kind between the corporation and the firm that defendened it (and eventually me).
Two months later three of the corporation board members (bitter over their involvement in the lawsuit) fired my wife and I and took control of the corporation which they immediately ran into the ground and eventually shut down.
Now the corporation's former attorneys have filed suit against me and my wife personally, all corporate officers and shareholders personally siting "Indiana Case law regarding the piercing of the corporate veil." My wife and I filed a response Pro Se...denying responsibility for another $30K in claimed legal fees based on a lack of any written agreement and protection under the corporate veil. Also counterclaimed that the firm knowingly and fraudulently sited in their complaint an oral agreement between all parties to "personally guarantee payment."
How likely is the firm to succeed in piercing the corporate veil based on an oral agreement for representation which in no way included a personal guarantee by any of the parties being represented?
Can the firm get into trouble for fraud for claiming I was among the parties who personally guaranteed their fees in the first meeting (In fact I was in another State during that time and refused repeated requests to talk with them by phone)?
Initially the firm retained to represent the corporation refused to represent me as a seperately named party and even refused to include me in the initial discussion about fees, options etc. They insisted to my wife (the President) that I would need my own attorney as they could not legally defend us both.
I retained a seperate attorney which the coproration paid for (10K).
6 weeks into proceedings my attorney (who did have me sign an agreement with fee and retainer outline structure) advised me that there was no legal reason the coproration's attorneys could not also defend me and that (since my personal funds and the corporations were limited as a startup company) they recommend withdrawing as my counsel and having the coprorate attorneys represent me for the remainder of the case.
Corporate attorney were not at all happy about it but had little choice....still.....no written agreement between the corporation or their firm and none between the firm and me. At NO time did any of us personally guarantee the payment of fees.
3 months in (with attorney repeatedly advising us that now is NOT the time to settle) the corporation ran out of money to pay the attorneys (who had already received $30K from corporation).
The firm asked Federal Judge to allow them to withdrawl which the judge flatly refused and verbally scolded attorneys for requesting to withdrawl because of a fee dispute just 3 weeks before the date of the hearing to decide whether an injunction hearing.
Having been denied their motion to withdrawl the attorneys met with me and the VP of the company and exclaimed "you cannot afford a Cadillac defense and we cannot afford to be your bankers" they also exclaimed that they would be reducing our representation from 2 attorneys to 1 and that we would be reasponsible for preparing ourselves for depositions.
Following my deposition (for which I was totally unprepared) the the corporation's attorney was again asked about the feasibility of a settlement and this time was egare to present the question to opposing counsel.
The case ended with a settlement after 3 1/2 months as the corporation could not afford to keep up with the mounting legal expense (which at the time had already cost 30K in fees paid over 2 months by the corporation for the defense of the Corporation and me personally).
Again, the attorneys representing the corporation had nothing more than an oral agreement with the corporation's officers which did not include any personal guarantees by any of the corporate officers. There was never a written agreement of any kind between the corporation and the firm that defendened it (and eventually me).
Two months later three of the corporation board members (bitter over their involvement in the lawsuit) fired my wife and I and took control of the corporation which they immediately ran into the ground and eventually shut down.
Now the corporation's former attorneys have filed suit against me and my wife personally, all corporate officers and shareholders personally siting "Indiana Case law regarding the piercing of the corporate veil." My wife and I filed a response Pro Se...denying responsibility for another $30K in claimed legal fees based on a lack of any written agreement and protection under the corporate veil. Also counterclaimed that the firm knowingly and fraudulently sited in their complaint an oral agreement between all parties to "personally guarantee payment."
How likely is the firm to succeed in piercing the corporate veil based on an oral agreement for representation which in no way included a personal guarantee by any of the parties being represented?
Can the firm get into trouble for fraud for claiming I was among the parties who personally guaranteed their fees in the first meeting (In fact I was in another State during that time and refused repeated requests to talk with them by phone)?
