Background: Tohme filed a complaint against MJ Estate asking for fees he’s owed. These were 10% from Neverland refinancing, 10% from any future transaction about Neverland, 15% of income from services he provided (plus interest when applicable).Estate petitioned Labor Commissioner based on California’s Talent Agency Act to cancel three agreements MJ had with Tohme. This was heard in 2013 however Labor Commissioner hasn’t ruled yet. Late 2014 Tohme requested to put Neverland finder’s fee agreement issue on calendar and judge lifted the stay on January 2015. Parties have filed their initial motions about the Neverland Finder’s Fee. Below you will find a summary of these motions. The first hearing about Neverland Finder's Fee issue is set for April 27th, 2015.
Tohme Summary Adjudication Motion
On February 2015, Tohme filed a motion for summary adjudication stating that he is entitled to fees per finder’s fee agreement and there are no issues for trial. Tohme states that it is undisputed that MJ signed the agreement, Tohme provided the services required and MJ secured the funds needed to prevent foreclosure of Neverland. Tohme claims there is no possible defense that Estate can use. Tohme also addresses some of previous claims such as Tohme states MJ was represented by independent counsel Earle Goodman. Tohme states finder’s fee agreement was signed on May, 2008 – 2 months before the management agreement was signed on July, 2008 .
Tohme is asking the court to order Estate to pay the finder’s fee plus interest. Tohme is also asking the judge to declare that Tohme is entitled to 10% from future sale of Neverland. According to Tohme’s lawyers as of May 2014, Tohme is owed around $3.5 to $3.9 Million for Finder’s fee.
Note: Tohme’s Summary Adjudication Motion is the first time that we fans see the contract between MJ and Colony Capital. I did a post about the Neverland deal and posted the contracts before. You can find it here: http://dailymichael.com/lawsuits/estate-v-tohme/293-exclusive-to-sell-neverland-was-the-goal-of-colony-capital-and-mj-all-along
Estate Objection Motion
Estate objected to Tohme’s Summary Adjudication motion stating that there are disputes that needs to be resolved.
Estate argues Tohme and MJ’s relationship was based on lies. Tohme told MJ that he was a doctor when he is not. Estate argues Tohme created a false sense of security and trust in MJ telling him that he was a doctor. Estate questions if MJ would have entered into any agreement with Tohme if he knew Tohme was deliberately lying to him. Estate also argues that MJ did not know Tohme went through bankruptcy and abused the bankruptcy process. Estate argues if MJ knew this, he wouldn’t let Tohme took over his entire financial affairs.
For most of their motion Estate uses Tohme’s testimony in Labor Commissioner hearing. In that testimony Tohme states he became MJ’s manager around January – February 2008 (this is contrary to the timeline presented before). This is several months before the Neverland Finder’s Fee agreement was signed. When asked again, Tohme states he became MJ’s manager “from day 1”. Tohme states in his testimony that he had total control of MJ’s life and business deals. Tohme states he hired and fired people. (He also states MJ asked him 3 times to fire Michael Amir Williams but he didn’t). Tohme states MJ gave him two power of attorneys, these were very powerful and he could “do whatever I want” and MJ “gave me full power over everything”. Tohme says MJ told him “You have my family and my life in the palm of your hand. Please don’t hurt me”.
(Note: In an interesting tidbit, in his testimony Tohme also states “I was sitting on $20 Million of his (MJ) money”.)
Estate argues Tohme’s compensation for Neverland is 100-200 times higher than the customary compensation for finder’s fee. Furthermore Estate points out in addition to the finder’s fee, per agreement Tohme is also supposed to get 10% from any future transaction. Estate points out Tohme himself described MJ’s situation as “Jackson’s personal and financial affairs were in turmoil” but yet charged him this high amounts. Estate argues this is taking advantage of MJ’s necessities or distress. Tohme in his motion explained Neverland foreclosure was imminent. Estate argues this may mean “take it or leave it” type of a deal with no real negotiation.
Estate states although Tohme disclosed he had relationship with Colony Capital. There’s nothing to suggest that Tohme disclosed the full details such as if Tohme was going to receive compensation from Colony Capital as well for the Neverland deal. Estate argues given Tohme’s relationship with Colony Capital, he should have advised MJ to get independent advice. Tohme in his testimony stated that he located and hired the attorney Earle Goodman that represented MJ during Neverland deal – hence not really an independent counsel.
Furthermore Estate states there was at least one other refinancing deal offered by Plainfield Asset Management. They believe Tohme ended the negotiations with that company. Estate states they don’t know the details of that offer so they cannot state which deal was better for MJ. They want to conduct discovery. At this time they question if Tohme ending negotiations with Plainfield Asset Management was due to his relationship with Colony Capital.
Estate also has issues with the April 27 hearing date. Tohme filed his summary adjudication motion on February 11. At that time parties were told the earliest available date was in June 2015. However, later the hearing was set for April 27. Estate has a problem with this date because it doesn’t allow Estate any time for discovery. Tohme’s responses for the written discovery request Estate sent is due on May 7 – after the deadline for filing motions and the hearing. Estate also wants to depose Tohme (set for May 28), Colony Capital (June 3) and Earle Goodman (June 9) for discovery. Estate states they aim to investigate Tohme’s prior and current relationship with Colony Capital, if alternate financing opportunities were considered, if MJ got independent advice, if the finder’s fee agreement was negotiated at all, if MJ’s vulnerable state made him susceptible to Tohme’s influence and so on.
Estate argues for the above listed reasons, there are trial able issues and Tohme’s motion for summary adjudication should be denied.
Tohme responds by saying it’s not disputed that there’s a finder’s fee agreement between MJ and Tohme and Colony Capital prevented foreclosure of Neverland. Tohme states in the 14 months between the Finder’s Fee agreement and MJ’s death, MJ did nothing to invalidate the agreement between them. (Note : Tohme claims MJ worked with him until his passing in June 2009)
Tohme argues that the testimony Estate used wasn’t clear. Tohme used terms as “early 2008” which doesn’t clearly mention which month. Tohme lawyers argue any management agreement between MJ and Tohme did not start until a contract was signed in July 2008. They also add a declaration from Tohme that he denies working as MJ’s manager in January/February 2008 and states he did not become or act as MJ’s manager until July 2008. Tohme lawyers argue therefore Tohme did not have any fiduciary duty towards MJ at May 2008 when the Neverland Finder’s Fee was signed.
Tohme argues Estate cannot prove some of their claims as MJ is deceased and Estate is speculating about his mindset about certain situations such as they cannot prove if MJ was unhappy with the deal or not.
For the fee amount Tohme is supposed to receive, Tohme states it’s not a regular situation and mentions complexity of the situation. As for not being a doctor and bankruptcy, Tohme argues those are totally irrelevant to the issue at hand.
Finally for Estate’s discovery requests, Tohme again argues that they are irrelevant. The only thing matters was finder’s fee was signed, Tohme provided required services and he is entitled to his fee. Furthermore Tohme argues Estate knew since September 2014 that Tohme would file summary adjudication motion and they could have started their investigation back then.
Conclusion: Hearing for Tohme’s Summary Adjudication motion is set for April 27, 2015. Keep in mind as Estate is asking for more time for discovery, there might not be an immediate decision in regards to Neverland Finder’s Fee issue.