Supposedly, an individual who is not authorized to practice law is not allowed to represent another person in court. This applies even if the representative is a licensed attorney in another state.

But Judge Janis L. Sammartino, a Federal District Court Judge in Southern California allowed me to represent a limited liability company in what is called a “derivative action” until I discovered the error myself. She then required me to defend against a bogus attorney fee award.

After Judge Sammartino was transferred off the case, replacements Todd Robinson and Linda Lopez affirmed the ongoing proceedings and astronomical attorney fee award.

I have a pending appeal in the Ninth Circuit. Here are excerpts of the opening brief with the entire document below.

Silver Strand Plaza, LLC was formed in 2005. In 2009, there was an amendment that resulted in my ownership of 14.1571% of the shares.

Ellis Stern and his firm, Stern & Goldberg (“Stern”) represented my mother’s, SSP’s and the other individual members’ interests in SSP. The retainer agreement with SSP specified that Stern would oppose me, singling me out by name.

At the end of 2013, I demanded to see the company books and records. Stern allowed me to go to his office and make copies of what he claimed were the entire books and records. There were indications that pertinent documents were excluded.

I found discrepancies that concerned me and brought these to the attention of the other members in a special meeting by telephonic conference. The other members, who had the right and obligation to make “major” decisions in good faith and fair dealing, did not agree to have a professional accounting. Stern made an inaccurate written record of the meeting. I corrected him in writing.

On June 9, 2015, I wrote this in an email to my sisters, mother and Stern:

“It is about 18 months since I was included in any meeting of partners of SSP, LLC. I had a few concerns come up in the last couple days. My conclusion is that we would all be better off if the other partners bought me out of SSP, LLC.” I used the “tax basis” of my shares as the offer price, $516,839.

Stern authored a counter-offer couched as his opinion presented on June 15, 2015, of $218,000 from SSP for my share of SSP. My offer was clearly a transaction between me on the one side and my sisters on the other side. The counter-offer looked like it was from SSP. There was no company meeting of the members that I was informed about to decide how to handle the offer. There was no explanation about if I would be required to provide 14.1571% of the $218,000 capital to purchase the property from myself, as would be the literal meaning of the operating agreement, dropping my net to $187,138. I used $218,000 in my pleadings to the lower court, because my offer was to my sisters, not SSP. The statutory buyout provisions of the Cal. Corp. Code provide defendants in an involuntary dissolution action with a mechanism for avoiding dissolution by purchasing the plaintiff’s shares or other interests. It is not the corporation buying out the shares.

I rejected the counter-offer.

In May 2016, Sherman recommended selling the shopping center, and the members accepted that recommendation. (This came at about the time our sister Roberta Kramer (deceased) discovered she had cancer.) In October 2016, only 16 months after Stern wrote an offer of $218,000 for my interest in SSP, the shopping center went into escrow at a purchase price that valued my interest at nearly $1.5 million.

[After advising the manager to make four other breaches of fiduciary duty to me], in that same February 2, 2017 e-mail, Sherman used the excuse of the time spent communicating on the withhold issue as the reason she could not wire my distribution to me, even though other members were being paid, and even though Sherman’s e-mail claiming that she “will not have time today to go to the bank” was sent at 10:45 a.m. When I responded only an hour later that Sherman had a fiduciary obligation to wire the amount of my distribution less whatever amount Sherman believed had to be withheld for California taxes, Sherman responded through Stern and asserted for the first time that, in addition to California taxes, Sherman was required to withhold the amount of a Child Support Division lien against other property unrelated to SSP, and that determining the amount of the lien would further delay payment to me of my distribution. Sherman and Stern had been aware of the Child Support Division lien against other property for over a year and had never previously indicated that money would have to be withheld to pay that lien. With this excuse, Sherman delayed wiring any of my distribution (even the amount that was undisputed) until February 6, 2017.

Again, instead of Stern advising Sherman to make a full payment and leave the issue alone, he advised her to improperly withhold and convert $50,000 from my distribution wired on February 6, 2017. The stated reason: the funds were held as a litigation fund that Mary Sherman could use if I litigated to obtain the funds! Through Stern, Sherman not only defended this unlawful conversion and breach of fiduciary duty, Stern informed me that the funds would not be released until I released any of my claims against Mary Sherman for breach of fiduciary duty: “Perhaps we can discuss a method to protect the Manager [Mary Sherman] in connection with release of the reserved funds. Otherwise, they will be withheld to cover the litigation expense or for the period of time until the statute of limitations has run its course.”

Stern reiterated this effort to extort a release from me in a second e-mail to my attorney on February 9, 2017, in which he wrote: “The $50,000.00 will be released promptly upon your furnishing to me a signed General Release by your client [me], releasing Mary Sherman from all claims in her capacity as Manager of the LLC.” I did not respond to this blatant effort to extort a release from me. Realizing that she was only compounding her breach of fiduciary duty, Sherman released the $50,000 by wiring the funds to me on February 10, 2017.

Attorney Michael Early, Stanford and Hastings trained and with over two decades of experience, agreed that the books and records presented to me were inconsistent with the arm’s length valuation of the property. He represented me on contingency in an attempt to obtain a full disclosure of the financials and recover the capital in my account that was owed to me. We saw that the “corrected” prospectus stated expected income that was significantly higher than the income reported to me.

When I pressed for an explanation for the difference in NOI after the sale, Sherman responded through Stern, in pertinent part, as follows: “The numbers of the package were developed by the broker as part of his sales effort to maximize the sales price of the property, since the sales price is proportional to the net operating income.  Our broker added back certain expenses to obtain a higher net operating income, and he reviewed these add backs with the buyer.”

When I then asked for 1) evidence that would verify the statement and 2) a brief description of the “certain expenses” that were added back “to obtain a higher net operating income,” Stern forwarded an e-mail from Sherman in which she stated that the buyer of the SSP property received the same financials that were used to prepare SSP tax documents and that: “the Buyer bought the building based on these numbers (with certain add backs, such as all management fees, earthquake insurance, and other costs that they deemed irrelevant since they would not be paying those costs once they owned the building).” No further explanation was provided.

When I inquired further of Sherman, Stern further muddied the waters by responding that: “There apparently were certain non-recurring expenses that formed the basis for the financial statements presented to the buyer, which, as [Mary Sherman] indicates, were fully identified and explained to the buyer.” In this “explanation,” items such as management fees and earthquake insurance are apparently described as “non-recurring expenses.”

Michael Early filed a lawsuit in the Central district of California on my behalf against SSP, and Mary Sherman as an individual and as manager of SSP about April 27, 2018.

In early May 2018, I was informed through Michael Early that SSP retained Patrick McGarrigle and his firm (“McGarrigle”) to represent it in the litigation.

McGarrigle said I would receive the full disclosure of SSP records if I dismissed the first lawsuit. I fell for his fraudulent statement and withdrew the suit.

I still have not received a full disclosure.

During the six years following the post-sale distribution, Sherman has not distributed any funds to me, even though the K-1s provided on behalf of SSP show over $70,000 in my capital account which fell by $54 this year.

There were a few random line items on the K-1s and bank records that were disclosed to me that indicate there is a loan and a property bought in part with my capital account that are self-dealing by the Shermans: “THE SHERMAN FA” as payee; “MSFP Loan”; “MSFP II LP”; and a “Sherman Family Limited Partnership” as real estate owned by SSP listed on a K-1. Sherman, Stern, McGarrigle and the current SSP attorney all refused to tell me what these line items indicate and there is a second bank account, “CBB”, for which they did not produce statements.

It is apparent to me that the Defendants intend to withhold my capital account indefinitely, so I agreed that Michael Early cannot afford to work on contingency for the protracted litigation that was threatened.  I agreed to release him and handle the matter on my own with substitute counsel on limited scope. The attorney I consulted, LaToya Redd (“Redd”), informed me that the Southern District of California “frowns on” attorneys helping pro se litigants for distinct pieces of the case. She said I must obtain leave to hire her piecemeal before I could retain her.

Throughout 2019, McGarrigle advocated on behalf of the individual defendants. Dennis is the only member who communicated significantly with me directly in 2019.  She wrote over 50 emails, most copied to the other members and McGarrigle. While Dennis showed some interest in getting an accounting, over 30 of her emails were disturbing, as detailed below.

McGarrigle authored over 40 emails, advocating for the position of the individual members and manager. It was obvious he was speaking on behalf of each member, Kramer as an individual, as well as for SSP. He claimed my emails used “pejorative”, “inflammatory language”, and “wild accusations”. Yet he said not a single word to rein in Diane Dennis.

Dennis sent several emails that are considered “defamation per se” in all but three states. I live in one of the states that breaks from the availability of “per se” protection against these kinds of comments. The recipients of the malicious emails and my business interest in SSP are in states that recognize “per se”.

McGarrigle admonished me for discussing SSP business, yet refrained from admonishing Dennis for completely inappropriate and disturbing emails.

McGarrigle, and Stern before him, represented both the competing interests of individuals connected to SSP and SSP as a separate entity. The money used to pay for representing the individuals was a distribution of capital to each member, without a distribution to me.

Early in the proceedings I moved the court for leave to retain an attorney on limited scope, which I described as for the purpose of [], to explain derivative actions and other issues that were too complex for me, [], or handle issues that have a fee shifting provision, such as [] if I could prove the anti-SLAPP motion was filed maliciously [by the attorney defendants], as it was. I filed two motions and was denied twice.

Issue:

Whether the court and licensed attorneys were allowed to proceed on the FAC or more specifically the derivative causes of action included in the FAC, even though the complaint was written and filed by someone unauthorized to practice law. It was clear legal error to allow the void proceedings.

Law: [allowed to exclude citations as a pro se litigant]

The Ninth Circuit employs a de novo standard of review for issues addressing the unauthorized practice of law.

It is clear on the face of the FAC that I chose to file the cause of action for legal malpractice as a derivative action only. It is therefore a nullity.

If this court upholds the opinion of the lower court that certain rights that I claimed were violated were not my rights, but belonged to SSP, and must be brought as a derivative action, then amendment is not futile, as long as I can hire an attorney on limited scope for the derivative causes.

Judge Lopez’s spin on my motion to vacate the void orders that were the fruit of the void pleading is found in Doc. 266. Her conclusion: “Because no judgment was rendered on Plaintiff’s now-dismissed claims against the Attorney Defendants, none of the cases cited by Plaintiff support a finding of clear error by this Court.” It is well settled that a presiding judge must strike any document written by one not licensed to practice in that jurisdiction on behalf of anyone but herself. In Pietrczak v. [Hammett] and the Rural Revival Living Trust, Searcy County case 65CV-21-20, I was named as a common defense doctrine defendant. I prevailed as an individual. But the court granted default judgment against the trust after a hearing in which the court forbid me from defending the trust in any way or giving testimony as the trustee of the trust. (That case is on appeal. One reason, I was sole beneficiary, settlor and trustee of the trust, and therefore would only be representing myself.) In two related cases against Goodman Manufacturing Company Inc., et al in which I am plaintiff, an answer written by a Texas attorney was found void, and a Home Depot attorney’s signature on a settlement agreement was struck out with a written admonishment that he was not licensed to practice law in Arkansas. California usually treats this situation the same as Arkansas, but if the district court is allowed to veer from the California law on my case alone, and if choice of law is Arkansas law for defamation per se, then it must be choice of law for this issue also.

When the Attorney Defendants and their counsel first read the cover page of the FAC, they knew or should have known I was not allowed to proceed on a derivative cause of action. There is caselaw stating this. The court failed to deem the impermissible pleading void ab initio and then ordered me to pay attorney fees to the licensed attorneys who purposefully multiplied the proceedings by continuing to file hundreds of pages of argument and alleged evidence in support of the unnecessary anti-SLAPP motion.

Judge Lopez titled section “A” of her order “Plaintiff’s Voluntary Dismissal is Not Void”. I argued that all the proceedings on the derivative cause were void. The court should have dismissed the derivative cause or the entire pleading on her own or by motion of the Attorney Defendants on those grounds alone.

Judge Lopez wrote: “There is no merit to Plaintiff’s contention that the Attorney Defendants or the Court failed to adequately aid in the prosecution of her claim.” I never demanded “aid in the prosecution” of my claim. I notified the court of something the court knew or should have known, that the pleading on the derivative action and everything based on that pleading was a nullity.

An Arkansas court, if honorable, would disregard the California judgment as it is void ab initio. But this does not protect me, because most of my assets and anticipated assets are in California, (one indication the choice of law for all issues including defamation should have been California law).

Judge Lopez quoted me as writing, “[w]ith diligence, [P]laintiff could have known the law.” She left out the following sentence. “But as discussed earlier, the one exception to knowing the law is when the law makes an order void.” The derivative action did not become less void because I could have known it was void.

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The court awarded the attorney defendants over $70,000 in fees paid to their attorneys to advocate to strike the pleadings against them on the grounds that a malpractice and conversion cause of action were filed as a Strategic Litigation Against Public Participation. Neither cause is subject to the “anti-SLAPP” statute. The pleadings could easily be stricken as void because I was not authorized to practice law. But that would carry no fee shifting provision.

So, Judge Sammartino, Robinson and Lopez (the Three Stooges?) decided to let me practice law for a limited period of time, in order to rack up fees for other attorneys.