Posted Jul 17, 2013 07:30 pm CDT
Ruling in a case that has been closely watched by lawyers, a California appeals court held that a pre-litigation demand letter threatening to reveal an opponent’s sexual activities if he did not provide an accounting and return allegedly embezzled business funds did not amount to extortion.
The opponent, former reality television star Mike “Boogie” Malin, responded to the demand letter by filing suit against celebrity attorney Martin “Marty” Singer, and a trial court judge agreed that the demand-letter threat was extortion. But the state Court of Appeal reversed on Tuesday, explaining in its opinion (PDF) that the claimed sexual activities were “inextricably tied” to the alleged embezzlement at issue in the pending civil complaint by Singer’s client, Shereene Arazm, and hence protected by litigation privilege. A draft of her proposed complaint was attached to the demand letter.
“The demand letter accused Malin of embezzling money and simply informed him that Arazm knew how he had spent those funds,” the court wrote. “There is no doubt the demand letter could have appropriately noted that the filing of the complaint would disclose Malin had spent stolen monies on a car or a villa, if that had been the case. The fact that the funds were allegedly used for a more provocative purpose does not make the threatened disclosure of that purpose during litigation extortion. We cannot conclude that the exposure of Malin’s alleged activities would subject him to any more disgrace than the claim that he was an embezzler.”
“We have been completely vindicated by the Court of Appeal’s holding that our prelitigation demand letter was not extortion,” Singer told The Wrap. “The defensive lawsuit that Malin filed was a desperate and futile attempt to prevent (my client) from pursuing claims for embezzlement.”
A representative for Malin, who starred on a season of Big Brother, did not immediately respond to a request for comment, The Wrap says.
ABAJournal.com: “Was well-known lawyer’s demand letter ‘extortion’? Appeals court to hear arguments on judge’s ruling”