kiki5711 wrote:plus, they are demanding recovering "their" Richard attorney's legal fees. Aren't they? but then that's standard in every complaint, doesn't mean it will be granted.
The court will grant attorneys fees: (a) if a written agreement between the parties provides for it, or (b) there is a statute or court rule that provides for it in a given situation.
Here's the complaint:
http://scienceblogs.com/pharyngula/uplo ... imonen.pdf
O.k. - here's the deal - it looks like Timonen first did some work for Dawkins personally. Then he was hired to work on web sites for RDF (UK and US). Then the issue of the store came up. Timonen was asked to set up the store, and paragraph 22 is interesting in that it says, "Timonen...agreed to use his personal corporation UBP to operate The Store for RDFRS’ benefit."
So, issue number 1 - we have no written contract regarding this, apparently. And, Timonen started The Store under the name of UBP, Timonen's own corporation. On the surface, Timonen could argue that UBP owns the Store. Dawkins alleges that there was an oral agreement for Timonen to use the Store for the benefit of RDF. In paragraph 23, Dawkins states that Timonen was "already being adequately compensated" for the personal and RDF website work, and would get nothing more for doing the additional work relative to the Store. Hmmm....that, to me, opens up the door for Timonen to say something to the effect of, "See! With all the mountains of work involved in building The Store, I would never have agreed to do it without compensation over and above what I was already doing." Dawkins anticipates that allegation by Timonen, and Dawkins stresses in the complaint that Timonen is already being paid "generously" and far more than a mere 24-25 year old should get.
Question: why would Dawkins need Timonen to run "The Store" under the name of UBP, a company owned by Timonen? Why wouldn't Dawkins just have a new corporation called "The Dawk-Store, Inc." formed? It makes no real sense to just have Timonen put everything in his company's name.
Paragraph 25 is puzzling. Dawkins' says that Timonen and Norton cried him and RDF a river about all the hard work that Norton was doing in relation to the Store, and that she really needed money, but had been working for free. Dawkins then states that he and RDF were so touched by Norton's efforts that they gave her $10,000. But, it wasn't for the efforts at the Store, it was for "as thanks for her efforts in connection with an RDFRS fund-raising event held in Menlo Park, California in 2009." Query: so, was it for her work at the Store? Or, was it for the fund-raising event?
Paragraph 28 looks a little bit odd: "UBP made a single $30,000 “donation” of “profit” from The Store to RDFRS in January
2008." - Note the year - 2 years ago. It's UBP - owned by Timonen - and they openly gave a $30,000 DONATION. If this Store is really part of or operating "for the benefit of" RDF, then why isn't RDF asking for the books? Balance sheet? Etc. They know about the $30,000 "donation" and they accept it. Arguably, that's a separate company, UBP, giving a donation to RDF.
Note - there is no recitation of the terms of any agreement between UBP and Dawkins/RDF. How much of profit was to go to RDF? How much would go back into UBP for expansion, development, salaries, etc.? How much work is involved? Did Timonen pay himself a salary and Norton a salary out of UBP? That wouldn't be, on the surface, abnormal, since UBP is his company. Timonen has to keep the company in good standing, file annual reports with California, maintain a sales tax permit, handle sales, bookkeeping, inventory, shipping, receiving, all that sort of thing.
So - is the issue here going to be whether Timonen rightfully took a salary from UBP, and rightfully incurred various other expenses through UBP?
In paragraph 28, RDF complains about not having received any books, records, p&l statements, etc. regarding UBP. Well, if it was Timonen's corporation you wouldn't EXPECT him to give RDF that information anymore than RDF would be entitled to any other separate corporation's books/records/bookkeeping. And, if RDF expected this information, then why didn't they remind Timonen of that expectation 1 and 2 years ago, with an email or letter stating, "we are not in receipt of your annual books/records/financial data".....?
In paragraph 29, RDF now wants to take over the Store because the "legal impediments preventing it from operating the Store directly had been removed." They ask for financial data - Timonen gives it up. The data reveals the improprieties, or what RDF says are improprieties. It doesn't look like Timonen was covering anything up, though, which one would expect him to do if he thought he was up to no good.
Paragraph 30-31 delineates the "embezzled" funds - which are essentially business expenses of UBP, which RDF characterizes as "improper." There appear to be dinners, supermarket bills, salaries to Timonen and Norton, and an unkown amount categorized CSL which which are "officer salaries" and "wages." There's a $29,000 payment, for example, to Ms. Norton's teenage son Graham - but, one can imagine that Timonen and Norton will be able to characterize that as payment for services rendered. Maybe they needed Graham for data entry and other office work....
The bottom line is that the $375,000 that in the news article was called "embezzled funds" are arguably UBP business expenses. RDF claims that these expenses should never have been incurred because Timonen verbally agreed to operate his own company, UBP, for the benefit of RDF, without a dime additional compensation over what he was being paid for doing work for Dawkins and RDF directly, AND RDF is claiming to have never received (or sought) to monitor or examine the books/records of UBP or to be concerned about how it was being operated prior to the shit hitting the fan this year. They claim, apparently, that they did not do that sort of thing because Timonen lied to them and said the Store was not profitable....they aren't very clear about when/where these representations are made, and an objective observer might wonder why RDF just took Timonen's word for it.
Paragraph 33 and 34 are very important - RDF says that Timonen's lawyer claimed that Timonen owns the intellectual property rights (copyright and trademark) in what he created. Dawkins says that it was all a "work for hire." The thing is, the Devil in this case is in the details. Does Timonen own it? Well, you ever get a picture taken by a photographer and they hand you the picture, but you can't make copies of it (legally) because the photographer owns the copyright? Well, it's a lot like that - Timonen says "I created this stuff and its mine," I never released it to RDF. RDF says, yes you did.
Where is the written assignment of intellectual property rights?
Paragraphs 35-40 detail some video that Timonen wanted to create with Nate Phelps. RDF says that Timonen approached RDF "for financing," and that while RDF was mulling it over RDF gave them $15,000 to finance some footage that would be lost. No promise for additional financing was given. RDF now wants that $15,000 back, and claims it was a "work for hire." I don't immediately see their claim here, though. Timonen could seek "financing" without it being a "work for hire" - maybe he just asked for a loan? Where is the written assignment agreement indicating it is a "work for hire?"
Now - the legal theories:
Count One and Two - RDF and Dawk say that Timonen breached VERBAL contract with RDF. That's count one - top of the list - breach of a verbal contract. That contract? Timonen was to use his own company, UBP, to create and run an online store (The Store) all for the benefit of RDF. Timonen was to receive no compensation for doing all of that except what he was already being paid for doing the other things for RDF. There is a consideration issue there. We have an oral contract for Timonen, arguably, to do a large amount of work for no consideration over what he was already being paid for.
Count Three - Breach of Convenant of Good Faith and Fair Dealing - California has an implied covenant in every contract to act in good faith and not prevent the other side from receiving the benefit of the contract. One - there has to actually be a contract first, Two - RDF needs to prove how they were deprived the benefit of the contract. No contract terms are spelled out as to how much money RDF was to get, and the bad faith lies in Timonen and Norton taking salaries and spending money on what RDF considers excessive or non-business related expenses. That sounds kind of thin, actually.
The Fourth Count is Breach of Fiduciary Duty, the Fifth is Fraud, and the Sixth is Embezzlement. These are all based on the same facts. I don't think Norton had a fiduciary duty, and it my gut tells me Timonen didn't either. He worked for UBP, which was not a 501c3 organization and was not part of RDF. I doubt they can prove he was a fiduciary. The fifth count, Fraud, has not been pled with particularity - we don't see specific allegations of false representations and including rough dates and who was present, etc.
The fraud count, IMHO, is what this case will end up hinging on. RDF needs to show that Timonen affirmatively represented various things on which RDF JUSTIFIABLY relied and thereby suffered these damages. They might be able to come up with some representations on the part of Timonen, but they will have a harder time proving "justifiable" reliance. I really think that the judge and most juries would think that RDF, had it been interested in how UBP was run, would have asked for financial data a year or two ago, and not waited until it found out that Timonen was taking a salary from UBP.
The sense I get from the timeline is that the real beef here is that RDF/Dawkins thought Timonen was working on The Store for free. Caught by surprised and seeing that Timonen had basically taken a second salary from UBP in additon to what Dawk and RDF were paying him for other things, Dawkins was like "OMG - WTF?" Then they flyspecked the books and found the other "expenses" like "whole foods" and fancy restaurants and stuff, and were like, "STFU - GTFO" and said, send it to yon lawyers and sue him.
I think Dawkins took one look at this and saw Timonen had, in his view, overreached and reaped a windfall that could have gone to RDF and got pissed off. I think Timonen was probably to some extent honestly believing that he was to run the store and that since he owned it, he could set it up the way he wanted, and that because of the large amount of work involved he could legitimately pay himself a salary out of it. I am sure their honest recollections of their mutual conversations are both honestly held, but markedly different.
The hurdle that I see for Dawkins here is that nothing is in writing, and Timonen does own UBP.
