A Compelling Demand Letter

Shaun Martin posts about a recent California Court of Appeal case, Malin v. Singer at the California Appellate Report.

Martin summarizes the case pretty well, which involves an anti-SLAPP motion in response to an extortion suit.  What this basically means is that the plaintiffs sued for extortion and the defendants responded by arguing that this lawsuit is meritless and was filed to quash speech that is protected by the First Amendment.  The court quoted the contents of the letter.  Here is the boring, normal part:

I am litigation counsel to Shereene Arazm. I am writing to you with respect to your outrageous, malicious, wrongful and tortious conduct. As a result of your embezzlement, conversion and breach of fiduciary duty, you have misappropriated more than a million dollars from my client. As a result thereof, my client intends to file the enclosed lawsuit against you, Lonnie Moore, and various business entities that you and Mr. Moore control. As alleged in the Complaint, you, Mr. Moore and several of your co-conspirators have been embezzling and stealing money from Ms. Arazm and Geisha House, LLC for years. As set forth in detail in the Complaint, you and Mr. Moore have devised various schemes to embezzle money from the restaurants and clubs which you own and/or manage, including, but not limited to Geisha House and WonderLand. You and Mr. Moore have created a special account or ‘ledger,’ which allows you to keep tabs on how the stolen funds are divided among you, Mr. Moore and your various co-conspirators. My client intends, as part of the lawsuit, to seek a full-fledged forensic accounting of the books and records for Geisha House, LLC, 2HYPE Productions, Inc., LTM Consulting, Inc., and Malin & Moore Enterprises, LLC, in addition to your personal accounts.

In addition, as set forth in the Complaint, we have information that you and Mr. Moore have engaged in insurance scams designed to defraud not only the insurers of your establishments, but also the insurers of WonderLand. You have also taken steps to hide your assets from creditors as well as from the taxing authorities. We are aware that you have converted my client’s monies and deposited them in accounts in the Cook Islands.

We have also confirmed that you have planned to illegally transfer your shares in Geisha House Los Angeles to Sylvain Bitton in a further attempt to hide from creditors and avoid tax liability.

Here is where it gets interesting:

Because Mr. Moore has also received a copy of the enclosed lawsuit, I have deliberately left blank spaces in portions of the Complaint dealing with your using company resources to arrange sexual liaisons with older men such as ‘Uncle Jerry,’ Judge [name redacted] a/k/a ‘Dad’ (see enclosed photo), and many others. When the Complaint is filed with the Los Angeles Superior Court, there will be no blanks in the pleading.

My client will file the Complaint against you and your other joint conspirators unless this matter is resolved to my client’s satisfaction within five (5) business days from your receipt of this Complaint. . . . (Italics added.)

The court then quoted the relevant part of the draft complaint:

[O]ver the past several months, _______________ has arranged through email and through Internet websites such as craigslist.org to have multiple sexual encounters with [redacted] which include _________________________. Based on information and belief, _______________ used company resources to facilitate these rendezvous and to communicate with various [redacted] including _______________, _______________, and _______________.

Strong writing all around.  My favorite line is “(see enclosed photo).”

The court concludes that this is not extortion for a few reasons.  First, the court notes that the sexual information is related to the subject matter of the lawsuit because it allegedly involved embezzled money.  Second, the court notes that third parties are not being threatened by this letter within the meaning of the extortion statute because the third parties need to be related to the threatened party.

Since my internships so far have all been working for the government in a criminal prosecution context, I have not yet had the opportunity to write a demand letter.  Fortunately, this opinion seems to provide a compelling, and apparently not-extortive, template.