Return to Sender

Well, I guess there's one more court development to report on today, and it's a bit unusual:


Apparently, plaintiff Charles Carver tried yesterday to send by fax a direct personal letter addressed to "CLERK OF HER HONOR ELIZABETH TIMOTHY," and it was rejected by the Court for a whole host of good reasons.

And in accordance with the Order, the letter was never docketed or filed. So, the obvious questions of what's it's contents were, and/or what motivated the author to send it, must at this time remain a mystery...

Chisholm's Summary Judgment Motion DENIED

Again, probably denied. This too is an "Order, Report and Recommendation" by the magistrate, so it'll have to be approved by the District Court judge just like the bond decision mentioned here earlier today.

But assuming it's officially signed off on...this is a pretty significant development in the case. For those of you who have forgotten the details of this motion (and I can't blame you if you did...it was actually filed waaay back in June of 2009) you can reacquaint yourselves with it here. As you can see, the last significant update on the whole issue I posted to Facebook back on July 6, 2009. And so, we've been patiently waiting for a decision ever since.

Now, fast forward to this past Monday, when Chisholm filed his Response (to the bond motion). In that Response he wrote:


Well, ask and ye shall receive! Yesterday the magistrate finally made her decision:


You can read the entire 15 page decision here, but in a nutshell, the usury argument was rejected because there were areas of fact-finding that needed a jury to sort out (for a summary judgment motion to succeed, there has to be no significant facts in dispute), while the "economic loss rule" argument was rejected because it was, well, just totally wrong according to the law.

This summary judgment decision is, I'd say, what Joe Biden would probably call "a big f-ing deal." This "usury" gambit was pretty much the last great hope for those in Camp Chisholm for Johnny to nullify the Bardfield loan and thus come out of the case unscathed, and now, it looks like that hope is officially going down in flames.

What happens next? Well, besides the District Court judge making the final call on these recommendations, the main outstanding issue now in both the Bardfield and DeForest cases are the various plaintiffs' default motions against Johnny Chisholm. And since we're now waiting on Chisholm to file something on that (he has until March 31), it looks like it'll be at least April before any big decision there.

Addendum 4/26/10: It's official, the district judge has approved the magistrate's recommendation; Chisholm's "usury" summary judgment motion has been DENIED:

Bardfield and Carver To Get 90% of Their Deposit Back

Well, to be accurate, it looks like they probably will get 90% it back. This is actually an "Order, Report and Recommendation" from the magistrate overseeing the Bardfield (and DeForest) case, in response to Bardfield and Carver's earlier motion to get their bond money back. Which means it'll be sent up to the District Court judge for final approval on April 6, along with any other last minute arguments submitted by the parties before that time. Assuming the District Court judge agrees with the logic of the magistrate here (and I can scarcely see why he wouldn't) Bardfield and Carver will soon have $180,000 of their $200,000 bond money returned to them by the Court:




Addendum 4/26/10: It's official, the district judge has approved the magistrate's recommendation, and reduced Bardfield and Carver's injunction bond amount to $20,000, returning to them $180,000. The preliminary injunction remains in full force:

"Gross Untimeliness"

The recent Johnny Chisholm filings have stirred the District Court in Pensacola into sudden activity. This is actually the first of three Chisholm court updates to report on today, all having to do with Orders issued in the past couple days by the magistrate in the Bardfield and DeForest cases. Look for the other two updates later today, which I'll post as my free time permits...

First off, there was another Chisholm motion filed on the 22nd (it wasn't docketed right away, which is why I did not see it when I wrote my earlier post), this one an Opposition to the summary judgment motion in the Bardfield case, worded very similarly to the one he filed in the DeForest Case:



And late Wednesday, the magistrate responded to both of these filings:



So, to recap: Chisholm has to now file motions seeking leave to file his Oppositions. Reason being, as I noted earlier in the last post, Chisholm's extreme lateness in filing these papers, or as the Court put it, "...his gross untimeliness."

Chisholm has until March 31 to file these permission-seeking motions, and if he either fails to do so and/or fails to conjure up therein a sufficiently good excuse why his new Oppositions were 150 days late (both were due on October 23, 2009), the court won't even look at them.

I should add too, the Court is being very generous to Johnny Chisholm here, on account of him being a "pro se" litigant. Had an attorney tried to file something 150 days late in Federal Court, there would have been no second chances to explain, as we're seeing here.

Addendum 4/2/10: Chisholm filed this "Leave to File" motion on time late Wednesday (the day it was due) in the DeForest case; there does not seem to be any corresponding filing in the Bardfield case, however:


So, his excuse as to why he was 150 days late in filing his recent Opposition boils down to he could not find a lawyer in the Pensacola area this entire time willing to work for free (or, at least on a no retainer basis).

Since the subject of legal fees and retainers was brought up, I went back and checked to see if there had been any new development in the lawsuit for unpaid legal bills brought against Johnny Chisholm by Liberis & Associates, his former law firm referred to in this filing that left Chisholm "without counsel of record since December 19, 2009, when this court granted his attorney's motion to withdraw." (The date is incorrect; Fehr's withdrawal motions in both cases were approved July 17, 2009). And there was...about a month ago a final judgment was entered, and the dollar amount was mentioned in the online docket records: $24,705.78.


So, this was apparently Chisholm's unpaid legal bill (plus court costs?) as of July 17 of last year. Thus I guess it should come as no great shock to anyone that he's unable to find a lawyer willing to work for him on a no retainer basis.

Addendum 4/3/10: The corresponding "Leave to File" motion in the Bardfield case was filed, with the same basic "no money, no lawyer" excuse. Looks like it got stamped "received" on March 31st, but not "filed" until April 2nd because it had the wrong case number on it:



Addendum 4/14/10: DeForest filed a Response to Chisholm's Leave To File Motion today, it's 9 pages long and can be found here.

One interesting part that caught my eye:

"...Defendant has taken advantage of the leniency this Court provides to pro se litigants to the prejudice of Plaintiff. Meanwhile, it is obvious from Chisholm’s recent motions that he had an undisclosed attorney prepare his motions, while Chisholm signed the motions. Such “ghost writing” is looked at unfavorably by the courts. See Somerset Pharm. Inc. v. Kimball, 168 F.R.D. 69 (M.D. Fla. 1996) (explaining that “the practice of filing pro se pleading which are actually prepared by a legal advocate does taint the legal process and creates disparity between the parties”)."

In fact, Chisholm actually hinted in his motion above that he indeed had such a "ghost writing" attorney, helping him out on a "piecemeal basis":

"Defendant expects to be able to obtain some assistance with this case on a piecemeal basis, even if he cannot retain counsel to appear as his attorney, and expects, therefore, to be able to mount a defense."

Addendum 4/17/10: And here's Bardfield and Carver's Response, filed yesterday.

Chisholm Finally Responds

After literally months of simply ignoring the civil cases against him, Chisholm has finally filed some legal papers in the Bardfield and DeForest cases. Both responses were filed pro se (on behalf of oneself, and not by an attorney).

This Response was filed in the Bardfield case, in response to the recent motion to lift or reduce the $200,000 bond amount:



And this Opposition was to the pending default motion in the DeForest case:



The first response is timely (a new bond motion was just filed, and Chisholm had until March 22 to reply...he waited until the last day, but he got it in there), while the second one would have to be considered extremely untimely (the DeForest default motion was filed back in October, just before OMW filed for bankruptcy). Hence it's questionable if the court will even consider the second filing.

Nevertheless, there was one assertion in the DeForest Opposition that caught my eye, and is worth commenting on, I think:

"Plaintiffs' motion seeks, essentially, to punish this defendant because he has been unable to retain counsel. As this Court knows, defendant's counsel has withdrawn because he had not been paid. Defendant is no more able now to pay a new attorney than he was able to pay his old attorney. Ironically, it is this Court's freezing of tens of thousands of dollars of defendant's funds in the Bardfield and Carver case, at the request of the same attorneys as those representing plaintiffs here, that has been at the heart of defendant's financial problems. It is abundantly clear that plaintiff's efforts in this action are well funded and his skilled and aggressive attorneys can propound discovery to defendant at will, knowing he cannot respond, and can file numerous motions seeking relief from this Court, knowing that only his voice can be heard. Defendant, standing alone against plaintiff's hired guns, does not have the luxury of being a proactive litigant."

A couple of points: One, Chisholm hasn't entirely been without lawyers at his disposal during this time. He is currently employing a bankruptcy attorney (who has been very active as of late), and there was at least one recent instance when his old lawyer made an appearance on his behalf after he was allowed to withdraw from the Federal civil cases (an aborted attempt to get the default judgment in the PRG case rolled back).

And two, I'd say the use of the word "ironically" here is misplaced, in that the asset freeze was approved largely due to Chisholm's threat back in May of 2009 that he would resort to "burning up even more money" through drawn out litigation if he were ever sued:


The definition of "irony" is "the quality or state of an event being both coincidental and contradictory in a humorous or poignant and extremely improbable way." And in this case, there is nothing really coincidental or contradictory about this situation. The asset freeze was put in place to prevent the threatened dissipation of contested assets, and it's operating exactly as expected and advertised. Although by no means adequately, as the Bardfield plaintiff's noted in their recent bond motion:

"...the injunction only netted nominal amounts against him personally...Chisholm is not depositing monies in any enjoined accounts and has not done so since the temporary injunction was granted. Any initial money enjoined from the corporate Defendant has dwindled due to refunds and is far less than the bond amount."

Given that the bond amount was $200,000, it's probably safe to infer that this "nominal" "far less" amount would have been eaten up in litigation in only a few short months. So, the blame Chisholm assigns on the OMW asset freeze for all his current woes is not only misplaced (since he brought it upon himself) but overstated as well.

But I will say this, the overall point he's making as to his current financial state is probably accurate. Given recent problems in his other bankruptcy cases (two additional unpaid creditors filed relief-from-stay motions last week), as well as his continued reliance on the free services offered by a marketing partner of questionable value and reputation, I would say right now Chisholm in no more condition to carry on protracted litigation as he is to produce quality circuit parties.

Could Johnny Chisholm Be Banned From Circuit Party Promotions For Life?

At this moment, the answer appears to be yes. Indeed, indications are such a ban could be imposed relatively soon*.

This intriguing possibility arises due to the pending default motion against Chisholm in the Bardfield case. If you recall, one of the causes of action brought by Bardfield and Carver in their OMW lawsuit was for civil RICO violations, and it so happens a victorious litigant can not only win money damages under civil RICO, but under Florida law can also get permanent post-judgment injunctive relief as well.

We've already seen how powerful the pre-judgment injunctive relief under the Florida civil RICO statute can be: The freezing of Chisholm's bank accounts last June when the Bardfield lawsuit got underway. So what kind of permanent injunctive relief is available to RICO plaintiffs post-judgment? Well, according to Fla. Stat. 895.05(1):

OFFENSES CONCERNING RACKETEERING AND ILLEGAL DEBTS

895.05 Civil remedies.--

(1) Any circuit court may, after making due provision for the rights of innocent persons, enjoin violations of the provisions of s. 895.03 by issuing appropriate orders and judgments, including, but not limited to:

(a) Ordering any defendant to divest himself or herself of any interest in any enterprise, including real property.

(b) Imposing reasonable restrictions upon the future activities or investments of any defendant, including, but not limited to, prohibiting any defendant from engaging in the same type of endeavor as the enterprise in which the defendant was engaged in violation of the provisions of s. 895.03.

(c) Ordering the dissolution or reorganization of any enterprise.

(d) Ordering the suspension or revocation of a license, permit, or prior approval granted to any enterprise by any agency of the state.

(e) Ordering the forfeiture of the charter of a corporation organized under the laws of the state, or the revocation of a certificate authorizing a foreign corporation to conduct business within the state, upon finding that the board of directors or a managerial agent acting on behalf of the corporation, in conducting the affairs of the corporation, has authorized or engaged in conduct in violation of s. 895.03 and that, for the prevention of future criminal activity, the public interest requires the charter of the corporation forfeited and the corporation dissolved or the certificate revoked.

As you can see, courts have pretty sweeping authority under Florida RICO law to put an end to the corrupt practices of discovered racketeers. In particular, the "prohibiting any defendant from engaging in the same type of endeavor as the enterprise in which the defendant was engaged in violation of the provisions of" Florida racketeering laws.

And the enterprise Chisholm was engaged in when he defrauded DeForest, Bardfield and Carver was the production of circuit parties. So, if this default goes through and Chisholm is therefore found to be a racketeer, it is certainly within the power of the court to injunctively force Chisholm sell his interests in and/or dissolve his party corporations, to revoke his state business licences...it could even outright prohibit Chisholm from engaging in circuit party business endeavors, period.

So, you might ask, are Bardfield and Carver actually asking the court to slap Chisholm with such a prohibition on future party production endeavors?

And the answer is...YES they are. This from the pending default motion:

Now, it should be noted that even though the plaintiffs are asking for this ban, and the court can impose this ban, there is no guarantee the court will impose such a ban. It's up to the discretion of the court whether such a ban would be "appropriate" and "reasonable" under the circumstances. However, when you look at the circumstances....Chisholm's violations of the TRO (including at one point stuffing cash in a desk drawer to avoid depositing it into a frozen account), ignoring the lawsuit and "thumbing his nose" at numerous court orders for months, discovery violations, and supinely letting the case slide into default...they don't make a very good case for the court to show much leniency towards Chisholm when it comes to making this decision.

Indeed, if the court wanted to send Chisholm a message after months of these shenanigans on his part...such a permanent injunction would fit the bill nicely.

So, as a practical matter, what does this mean for the party-going public? Obviously, a bit of consumer protection wariness is called for, I'd say...it would be foolhardy, for example, to purchase advance tickets to an event that may in the near future be effectively cancelled by order of a Federal judge. You could end up not only losing your ticket money (as many did during the Chisholm fiasco of 2009) but also stuck with nonrefundable deposits at a "host" hotel that is no longer hosting anything (the notoriously inflexible policy of the Buena Vista Palace Hotel despite cancelled venues last year springs to mind).

So, as long as this ticking time bomb of a default motion is out there...caveat emptor, folks.

* See March 1, 2010 post: "Additionally, at the earliest possible time, this court anticipates entering a separate Report and Recommendation to the district court on Plaintiffs’ motion for default judgment against Defendant Chisholm."

OMW Bankruptcy Case CLOSED

This just filed today, in the Chisholm Properties Circuit Events, LLC bankruptcy case:


As you can see, this comes on the heels of a "Chapter 7 Trustee's Report of No Distribution" on Friday, which is a signal to the unsecured creditors that there are no unsecured assets to distribute to them, and they will get nothing. And sadly, that includes all of you party goers who followed horrific advice, and failed to get refunds in time.

And there you have it, case closed. And rather suddenly, I must say...for a while I thought it might get a bit more interesting, due to a planned behind-the-scenes "asset" sale by the trustee, but I guess this "asset" sale fell through. Perhaps due to people realizing there was really no legally transferable asset to sell after all. Oh well!

Anyways, what happens now is...Chisholm Properties Circuit Events, LLC ceases to exist. Unlike when an individual goes through Chapter 7, a business (in this case, a limited liability company) does NOT get it's debts discharged. Instead, the business entity gets liquidated and dissolved at the conclusion of the bankruptcy, in accordance with state law.

One Mighty Weekend is now officially dead. As Tony Hayden of The Circuit Dog graphically described it last year:

Bardfield and Carver Ask For Their Deposit Back

Well, after an extremely long period of no activity at all, we finally have a new development in the Bardfield case: The plaintiffs are requesting that their bond money be returned by the court.

If you recall, the plaintiffs in this case had to post a $200,000 bond back in June of 2009 in order to get the original TRO (and later preliminary injunction) against Chisholm, attaching and freezing his various OMW bank accounts. And that money has been sitting in the Court Registry ever since.

And now, they'd like it returned (or, at least dramatically reduced). Noting the very long time it's taken the court to rule on the latest batch of default motions:

"...Plaintiffs respectfully point out that this Court has not disposed of the pending Motion for Default Judgment against Defendant, even though such motion was reinstated over three months ago."

...they further point out that since a) OMW is now over, and "the event was a financial disaster"; and b) "Defendant Chisholm Properties Circuit Events, LLC is now defunct and liquidating through the bankruptcy court;" and c) there is relatively little in the frozen accounts, because Chisholm violated the TRO by "not using banks to avoid the injunction"; and d) Chisholm is now essentially ignoring the lawsuit, "thumbing his nose" and letting it slide into default...there is no longer any need for a bond in this case. The purpose of an injunction bond, after all, is to protect the interests of the defendant in case the injunction is wrongly granted; and in this case, Chisholm doesn't have any interests left to protect, for reasons that have nothing to do with this injunction.

Here's the full copy of this new motion:





Sorry for the paucity of posts in recent months folks, but the simple reason for that is that prior to this latest filing...not much has been happening in the various Chisholm cases. For example, in the DeForest case Bobby Warner was finally served. She filed an answer generally denying most every allegation (thereby making it generally uninteresting); the most revealing aspect of which was probably the fact that she filed it pro se (ie, without an attorney).

In the latest crisis involving the Emerald City bankruptcy, the court gave Emerald City one more chance to come up with an approvable Chapter 11 plan. And a new plan was indeed submitted, sweetening the deal for the recalcitrant creditors in that case; it remains to be seen if it'll be approved.

And in the OMW bankruptcy case, there has been no activity in the case file there at all, since Universal Orlando filed it's claim. Which is not to say the case has been inactive; there HAS been some stuff going on, but behind the scenes. Once that (rather comedic, I must say) activity is reflected in the filings, I'll post about it here.

So, what's been going on as of late has either been too minor or too incomplete to warrant a new post (or even an update). Perhaps this new motion in the Bardfield case will rustle the tree branches a bit, and get things going again.

Addendum 3/5/10: And we have a decision! Motion is temporarily denied for a technical deficiency...BUT once that is corrected, the court indicates that it's inclined to reduce the bond from $200,000 to $1,000. "Additionally, at the earliest possible time, this court anticipates entering a separate Report and Recommendation to the district court on Plaintiffs’ motion for
default judgment against Defendant Chisholm."