Joe Beninati: “I really am as stupid as I look.”
Joey Bagadonuts Beninati and Jimmy Cabrera lost control of their last possession, 100 West Putnam Avenue, Greenwich, to their creditors last year and are suing to recover management fees they claim are owed them, even though their written contract says otherwise. Here’s a partial transcript of a court hearing in the matter; the judge doesn’t believe them. Had they better counsel, they could have called anyone in Greenwich familiar with their business acumen to back up their claim.
THE COURT: I’m not talking about fraud in the inducement, I’m talking about fraud. You have a clear contract between sophisticated parties, black and white, signed off on. Where is there fraud?
[Counsel for Antares] MR. LEVINE: By making promises — not to fraud in the inducement. By making promises to us that we are entitled to certain — an oral agreement that we’re entitled to certain provisions, notwithstanding what is contained in the language of the agreement. We either have the — we’re either entitled to those things under —
THE COURT: Well, according to this — I believe there’s a merger clause in here stating it’s the entire agreement.
MR. FORTINSKY: Yes there is, Your Honor.
THE COURT: And, in fact, when it talks about amendments it talks about a writing.
MR. LEVINE: Yes. But under the — under New York law you cannot — the merger clause does not apply if — if the party — if one of the parties is reasonably led to believe that there’s something they’re going to be entitled to that they don’t get.
THE COURT: So what good is a merger clause? I never could understand that really.
MR. LEVINE: I’m only relying on New York law which provides that in the event there’s — notwithstanding a merger clause, if one party is frustrated in what their reasonable expectation is under the contract by the conduct of the other party, the merger clause does not preclude them —
THE COURT: It always seemed to me that that sort of says there’s no such thing as a merger clause. But let’s move on, because I really don’t understand that law. Just, I’m too thick.
MR. LEVINE: I try to be guided by the law.
THE COURT: But you’ve got, as I said, very sophisticated parties —
MR. LEVINE: Yes.
THE COURT: — and they’ve signed a contract.
MR. LEVINE: Yes.
THE COURT: Why would a sophisticated party assume things outside of the contract are part of a written
contract?
MR. LEVINE: ….[T]o your point about what — why would a sophisticated party: First, the issue of being a sophisticated party only applies under New York law if the sophisticated party could look to some objective fact to know that what they’re being told is unreasonable —
THE COURT: Well, it applies in all fraud cases, because there’s a reasonable reliance piece to every fraud case —
MR. LEVINE: Right.
THE COURT: — and that’s where it kicks in. So my question is: How could — Even if I would buy this argument, how could a sophisticated businessman, very sophisticated businessperson sign off on a contract and reasonably rely on oral — an alleged oral agreements that fly in the face of the contract language?
MR. LEVINE: The issue of whether or not my client is dumb –
THE COURT: It’s not dumb, it’s –
MR. LEVINE: No, no, no. Well, it is. Because,Your Honor, because your question assumes that — The flip side to your question is this: What sophisticated businessman would forego $1.6 million essentially would enter into a contract whereby he would (forego] million he had already earned, which is two years of management agreement — management services …
THE COURT: Doesn’t that happen in business all the time? Shouldn’t there have been a writing to protect your client?
MR. LEVINE: That comes back to the issue of whether or not they’re dumb. And if I can just finish my point, Your Honor?
THE COURT: But you can’t be dumb in business.
For What It's Worth 
I’m speechless.
I’m in the process of suing someone in small claims court for breach of contract. The offer and acceptance were by email, but the language was very clear. According to an attorney (a Greenwich attorney too), it should still be enforceable.
Stuff like this makes me worry that my claim could get derailed. Fortunately the judge doesn’t seem to be buying it.
this excerpt from the transcript, if read by college students of limited ability, would lead them to believe that you can be a bumbling idiot and still hope to get through law school, pass the bar exam, and get retained by clients. God help us.
And, by the way, the antares lawyer should have argued that the alleged oral agreement to pay management fees came into existence after the original agreement was signed, thereby avoiding the impact of the merger clause that said all the terms of the understanding of the parties was contained in that written document. folks amend contracts all the time, sometimes in writing, sometimes orally and sometimes by conduct that shows an intent to change the terms of the agreement.
Well I didn’t include all 30 pages or so of the transcript but basically, Antares admitted that they’d signed the contract and had discussed the merger clause and the provision that they could be fired as managers at any time, without cause, but insisted that the defendant had told them not to believe what was written but to rely instead on a promise to pay them millions of dollars the contract said weren’t owed them. Dumb as the boys are, they also had to convince a judge that the legal advisors they used in this $100 million deal were as stupid as they were. Tough row to hoe.
Neither he nor his partner are among Choate’s sharpest knives in the drawer.
Reblogged this on Benjamin Greene's Blog and commented:
When you are stuck arguing that your client is just really “dumb”, then you have hit rock bottom in your argument.
If they want the court to find them stupid, then let them be paid asshole wages, probably the near equivalent of the wages of sin.
I give your loyal followers…The Bauhouse Group (http://bauhousegroup.com/). Antares 2.0? Looks like Jim Cabrera was left behind by Joe this time around. I had forwarded this to Chris a while back, but I don’t think he felt it was worthy of a full blog post.
funny thing, google. type in his name and wikipedia link is #1, followed by chris fountain’s blog post with the snappy headline of joe & co. being too stupid to know what they’re doing.
now won’t that be an interesting question for those conducting due diligence!
interesting read: http://www.denverpost.com/ci_13187374