Miller Barondess

Ben Taylor’s Take on the Sham Guaranty Defense

2012-02-02T03:43:14Z

The limitations of the sham guaranty defense

By Benjamin Taylor

Many commercial loan transactions involve a personal guaranty of repayment, given by either a principal of the borrower or a related entity. Lenders will often require a personal guaranty, sometimes from multiple guarantors, even when the underlying loan is secured by real estate or personal property. In the context of a collections action to enforce the guaranty, a popular but often improperly claimed defense is that of the “sham guaranty.” With the increasing number of breach of guaranty lawsuits that has accompanied the economic downtown of the last several years, the sham guaranty defense has been asserted with more regularity, but rarely is it truly applicable.

The sham guaranty defense is well-established in California law. Distilled to its essence, the defense applies where a guaranty is nothing more than, well, a sham. Under California Civil Code Section 2787, a guarantee is defined as “the promise to answer for the debt…of another person.” By definition, then, one cannot guarantee his own debt. If “A” borrows $1 million from the bank and signs a promissory note evidencing that debt and promising to repay, “A” cannot then also sign a personal guaranty of repayment. Since he is already contractually obligated to repay the $1 million, his “guaranty” of repayment adds nothing – it’s a sham. This illustration is the most simplistic example of sham guaranty. As in many areas of the law, however, the applicability of the sham guaranty defense is rarely so straightforward.

One of the thornier questions of the applicability of the sham guaranty defense arises when the borrower is an individual and the guarantor is the borrower’s trust (or vice versa). The leading case in this area, and the one perhaps most often cited by counsel for guarantor defendants in such a circumstance, is Torrey Pines Bank v. Hoffman (1991) 213 Cal.App.3d 308. In Torrey Pines, husband and wife Jerome and Naomi Hoffman personally guaranteed a construction loan to their own revocable living trust, of which they were the trustors, trustees and beneficiaries. After completing a non- judicial foreclosure of the deed of trust on the property that secured the loan, the bank sued the Hoffmans to recover the resulting deficiency balance.

With the increasing number of breach of guaranty lawsuits that has accompanied the economic downtown of the last several years, the sham guaranty defense has been asserted with more regularity, but rarely is it truly applicable.

The Hoffmans argued successfully to the trial court that, because they were in fact already the principal obligors under the promissory note, their guarantee was a sham and therefore, under the antideficiency protections of Civil Code Section 580d, they were entitled to summary judgment. In its analysis of the trial court’s ruling on the sham guaranty defense, the appellate court summarized the proper inquiry into whether a guaranty is a sham, as follows:

“The correct inquiry set out by the authority is whether the purported debtor is anything other than an instrumentality used by the individuals who guaranteed the debtor’s obligation, and whether such instrumentality actually removed the individuals from their status and obligations as debtors…. Put another way, are the supposed guarantors nothing more than the principal obligors under another name?”

In concluding that the guarantee given by the individual trustors, trustees and beneficiaries of the debt of their own revocable trust was a sham, the appellate court looked to the applicable law governing trusts to determine whether the guarantees by the trustees in fact created any separate obligation that did not already exist. Under the rules in effect at the time the loan was made in 1986, a trustee was personally liable on a contract unless the contract stipulated that the trustee was not liable. Thus, the individual trustees (guarantors) were already personally liable under the promissory note evidencing the loan to the trust, and their purported guarantees added nothing.

However, in 1991, an important change in the trust law took effect. Probate Code Section 18000(a) was modified to excuse a trustee from personal liability on a contract where either his representative capacity or the identity of the trust is revealed in the contract. This rule marked an important change in the substantive law in this area, and in fact is the reverse of the prior long standing case-law rule in California. Although certain subsequent appellate court opinions have declined to apply Section 18000(a) to trust guaranty cases (most notably, The Cadle Company II v. Harvey (2002) 83 Cal.App.4th 927), these cases appear to have misapplied the law, and courts should probably now decline to find that a guaranty is a sham in such situations.

Another leading case in the sham guaranty area is River Bank America v. Diller (1995) 38 Cal.App.4th 1400. In River Bank, Sanford and Helen Diller, individually and as trustees of the DNS Trust, signed guarantees of River Bank’s loan to Hacienda Gardens Venture, a limited partnership, for the purpose of financing construction of an apartment complex. The bank sued to enforce the guaranty after rental income from the completed apartment project proved to be inadequate to service the debt. In ruling on the bank’s motion for summary judgment, the trial court found that there was a triable issue of fact on the Dillers’ sham guaranty defense. The bank appealed.

The appellate court concluded that there was a triable issue of fact on whether the guaranty was in fact a sham. Although River Bank is often cited by counsel for guarantors for the principle that the subject guarantee is a sham, it is usually distinguishable because the evidence before the court suggested that the bank’s conduct in that case was particularly egregious: There was evidence that, in originating the loan, the bank looked to the guarantors as the principal obligors, and in an attempt to avoid the antideficiency statutes, insisted that the guarantors set up a new entity “borrower.”

While the appellate court did not find that the guaranty was a sham as a matter of law, as it is properly a question of fact, it noted that the evidence suggested that the “purpose and effect” of the guarantees was to recover deficiencies in violation of Code of Civil Procedure Section 580d. In the wake of River Bank, rarely if ever is a lender so careless in structuring a loan transaction.

With the collapse of the real estate market in 2008, the ensuing flood of litigation involving failed construction projects and the unpaid loans that financed them has been accompanied by a renewed attempt by guarantors to assert the sham guaranty defense. Most frequently, it is asserted (without success) in cases involving a personal guaranty of repayment of a loan to an LLC given by a member of that LLC. While the applicability of the sham guaranty defense depends on the facts of the case, courts will generally continue to enforce the guarantees in such situations. Although judges are reluctant to disregard the separate legal identities of a corporation or LLC and its individual shareholders or members, if a guarantor can present evidence that the guaranty was obtained for the purpose of subverting California’s antidefiency statutes, the sham guaranty defense might still have a chance of success.

While the sham guaranty defense still has its place, its applicability is more limited in the wake of the change to Section 18000. The bottom line for lenders is to sidestep this potential quandary by either requiring that the borrower provide some other grant of security or obtain a guarantee from a truly separate guarantor. Lenders that attempt to enforce guarantees given by the borrower’s trust or that structure a transaction looking primarily to the guarantor as the source of repayment do so at their own peril.

Benjamin Taylor is an associate with Miller Barondess LLP in Century City, practicing general business and commercial litigation with a focus on high-stakes disputes. He can be reached at btaylor@millerbarondess.com.

Brian Procel Honored in Top 20 Under 40 List – The Daily Journal

2012-01-31T00:01:21Z

by PAT BRODERICK

Procel figures he was way ahead of the curve when he took Thomas Jefferson School of Law to task for allegedly misrepresenting post-graduation employment statistics.

In May 2011, he filed the groundbreaking suit against the San Diego law school, alleging the motive was to lure prospective students to the institution and profit from millions of dollars in student loans. Alaburda v. Thomas Jefferson School of Law, 00091898 (San Diego Super. Ct.).

Thomas Jefferson has denied the claims, dismissing them as being part of “a bad- economy lawsuit.” The case is now in discovery.

“Based on what I’ve seen, it seems there is immense pressure on many law schools, particularly in the lower tiers, to manufacture data,” he said. “U.S. News & World Report’s rankings are extremely important and can make or break a law school’s success.”

Similar lawsuits have followed elsewhere in the nation, part of a wave that previously has included other types of professional schools.

Procel said he wants greater transparency when law schools are calculating statistics.

“If students read in U.S. News that at a given law school 95 percent of students are employed after law school, it’s impressive. But this could include any employment, non-law related – working part time as a cook at McDonald’s. The numbers currently being presented to students are extremely misleading.”

In April, 2011, Procel secured a $4.7 million verdict on behalf of his real estate developer client, SunCal Cos., which was suing for lost profits involving a $12.5 million purchase agreement in Riverside County. SCC Acquisitions Inc. v. Eston, INC057703 (Riverside County Super. Ct.).

Procel’s client claimed the defendants reneged on the deal because the property value later rose substantially.

“We were locked into a contract for $12.5 million, but the property owners thought it was worth $100 million,” Procel said. “They had a big incentive to back out of this deal and they did.”

The cards were pretty much stacked against him, Procel said, considering the county had been hard hit by the real estate bust. Then, on the first day of what was to be his first jury trial, the defendant settled with one of the other parties.

“It ruined my entire trial theme,” he said. “My opening statements were completely irrelevant and had to be modified. I was in the middle of jury selection.”

Procel remains philosophical about the job.

“If you’re going to be a litigator, you have to be able to think on your feet,” he said. “You have to roll with the punches. During a trial, anything can happen. You have some issues go your way, and some that don’t go your way. You can’t slow down or stop. You have to keep moving forward.”

Procel said he used a straightforward approach to the case, which is on appeal.

“Jurors understand what a contract is, and they understand that when parties agree to do something in writing, they need to do it.”

The jury awarded $4.7 million to Procel’s client following a three-week trial.

“I think that in a different economic climate, we would have been rewarded substantially more than we received,” he said. “But the jury was very generous, and we were happy with what we got.”

Legal education under fire from critics

2012-01-24T02:45:48Z

Students, senators wonder if a JD is worth the cost, seek more accurate data

By Don J. DeBenedictis

SANTA ANA – Late last summer, Dean Bryant G. Garth asked Southwestern University School of Law’s newest entering class members if they had a friend or relative share a New York Times article exposing the financial risks of going to law school.

“Every person raised their hand,” Garth recalled.

The front-page story last January focused national attention on a rising chorus of complaints by law students that schools had suckered them into taking on huge debt with false promises of six-figure salaries immediately upon graduation.

Those complaints went on last year to spark several lawsuits, new rules from the American Bar Association’s accreditation arm and demands from U.S. senators for answers.

“This period has been so distressing,” said Susan Westerberg Prager, the former UCLA law dean who now heads the Association of American Law Schools.

Why legal education has come under such fire now is disputed, but only partially. Certainly, part of the answer is money, experts say.

“The economy is the big problem,” Prager said.

Over the past decade, competition for new law students – quantified each year in U.S. News & World Report’s rankings – has intensified. But when the economy tanked, jobs for lawyers plummeted, leaving new graduates with high debt and fewer prospects for jobs to pay it down.

“When the market for lawyers is good … there’s less stress in legal education,” said Dean Erwin Chemerinsky of the UCI School of Law. “At a time when the market is bad, there’s more stress in legal education.”

But others say the source of the problems lies deeper.

“I think that law students and the public are starting to take a good, hard look at legal education in this country for the better,” said Brian A. Procel of Miller Barondess LLP, who is suing San Diego’s Thomas Jefferson School of Law under consumer protection laws. “They’re just starting to realize this industry is not being run correctly.”

Vanderbilt law graduate and blogger Kyle P. McEntee said his nonprofit, called “Law School Transparency,” is exploring a number of alternative models, such as having more classes taught by part-time adjunct professors – practicing lawyers – who would command lower salaries.

Underlying all the complaints is concern over the accuracy of schools’ employment data.

Many schools report that 80 percent to 90 percent of graduates have jobs nine months after graduation, earning a median salary of $160,000. But those numbers can be misleading.

While 90 percent of graduates may have jobs, only 50 percent or 60 percent may have jobs as lawyers. A few schools even have reported as employed graduates hired by the schools themselves at low-paying temporary posts.

And as McEntee and his colleagues have shown, only a small percentage of a school’s graduates may actually earn $160,000. The figure qualifies as the statistical median because only the graduates with good jobs tend to report their pay to their schools – a fact Prager said means employment data is “inherently flawed.”

Further, data from the National Association for Law Placement indicates that from at least 2001 forward, roughly 25 percent of law school graduates didn’t have jobs as lawyers at the nine-month mark. In 2009, the figure was 29.2 percent.

“There just aren’t enough jobs,” Procel said.

Now, law schools are being sued over how they use their allegedly phony employment statistics to attract students. Procel sued Thomas Jefferson School of Law in May. The potential class-action charges that by “misrepresenting its post- graduate employment statistics,” the school has “churned out law school graduates, many of whom have little or no hope of working as attorneys at any point in their careers.” Alaburda v. Thomas Jefferson School of Law, 37-2011-00091898 (San Diego Super., filed May 26, 2011).

A pair of New York lawyers later sued New York Law School and Thomas M. Cooley Law School on similar grounds, and they promise to soon sue 15 more, including several in California.

The uproar also prompted California Sen. Barbara Boxer and two of her Republican colleagues to write letters to the ABA and the Department of Education demanding improvements.

In response to the transparency movement, U.S. News & World Report took steps in 2011 to post greater detail about law graduates’ employment.

The ABA Section on Legal Education and Admission to the Bar, which accredits law schools, is beginning to collect detailed annual graduate employment data directly from schools rather than second-hand from the National Association for Law Placement.

But even that effort generated controversy in the fall when the ABA said it would drop questions for the class of 2010 about how many graduates had jobs requiring bar admission or preferring a law degree. The committee said it would bring back the questions for the class of 2011 but needed more time to thrash out the definition of “preferred.”

Responding to the controversy, some top law schools, such as Yale, Chicago and Virginia, have begun posting detailed employment statistics on their websites.

Critics have latched onto job data because of the high cost of legal education. At Thomas Jefferson, tuition is about $40,000 a year, and the average graduate’s debt is $135,000. Nationally, law graduates’ average debt load is about $100,000, and some new lawyers carry $200,000.

“That’s too much to pay for an education,” McEntee said. The federal government is on the hook for nearly all of the debt. Since the adoption

in 2010 of the Student Aid and Fiscal Responsibility Act, most student loans come directly from the U.S. Department of Education.

These facts worry law school academics. Indiana University’s William Henderson, who studies the legal profession, wrote in an October article that if defaults go too high, the education department won’t have enough money to fund new loans. “In short, the whole system could easily run off the tracks,” he wrote.

All of the bad news has begun to trickle down to potential students. According to the Law School Admissions Council, applications for the 2011-12 school year fell nearly 10 percent, the sharpest drop in a decade.

Even more significant, the number of people filing to take the Law School Admissions Test plummeted 18.7 percent in June and 16.9 percent in October. That number has been sliding since October 2010, when 10.5 percent fewer students applied for the test compared to October 2009. The statistics sadden Prager.

“I actually think one of the tragedies of this is the number of people who are deciding not to go to law school now,” the AALS chief said. “I happen to believe that legal education is a great, broad education … in which you develop skills that are useful in many, many other realms.”

Kelly C. Jones, CPA

2011-08-29T22:42:10Z

Litigation Support / CFO
University of California, Los Angeles, B.A.

tel. 310-552-7558
kjones@millerbarondess.com
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Kelly Jones is a Certified Public Accountant in the State of California and assists the Miller Barondess Litigation Support Team. Mr. Jones serves as the Firm’s Chief Financial Officer and has extensive experience in forensic accounting investigations, litigation disputes, damage calculations, economic and data analysis, entertainment consulting, assurance, and finance.

Kelly has provided forensic accounting services for Fortune 500 clients in various industries, some of which include: technology, manufacturing, healthcare, telecommunications, and energy. He has provided expert accounting support in a $10 billion class action lawsuit alleging a negligent audit performed by a Big 4 accounting firm. In addition to recreating financial statements for several business contract disputes, Kelly has investigated public corporations for stock-option backdating, misappropriation of government funds, financial statement manipulation, and embezzlement. Other experience includes independently calculating economic damages for a global television provider, as well as lost profits for a prominent video game creator and distributor.

His securitization experience includes large transactions on behalf of investment banks and underwriters. He has also analyzed $700 million in cash-flow projections for a syndicated television series and has consulted for the Academy Awards. Kelly has also performed internal and external audit procedures for various public companies, and he has assisted in restating 10 years of financial statements for a multi-billion-dollar technology company.

Prior to joining Miller Barondess, Mr. Jones worked for PricewaterhouseCoopers’ Advisory practice, with a focus on Dispute Analysis, Forensic Investigations, and Risk Management. He also worked at Countrywide Financial Corporation, which was later acquired by Bank of America.

Mr. Jones graduated with a Bachelor’s Degree in Economics and Minor in Accounting from the University of California, Los Angeles.

Betsy G. Miller, CPA

2011-11-28T19:33:05Z

Litigation Support / Director of Administration
University of California, Los Angeles, B.S.

tel. 310-552-5232
bmiller@millerbarondess.com
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Betsy Miller is a Certified Public Accountant in the State of California. She heads up the Miller Barondess Litigation Support Group and also serves as the Firm’s Director of Administration.

Ms. Miller has extensive experience in litigation consulting and financial accounting. Her experience includes the analysis and preparation of damage calculations for one of the largest automobile companies in the nation, defense of a securities litigation case regarding an audit performed by one of the Big 4 accounting firms, and an investigation of a publicly traded company accused of accounting fraud and embezzlement. Ms. Miller also participated in the audit and completion of Sarbanes Oxley / 404 compliance for a publicly traded client, in addition to the securitization of a film library, and the defense of the U.S. government in a $100 billion class action lawsuit. This consulting work included the review and analysis of financial statements, reconciliations of alleged revenues and expenses, review of compliance with GAAP and GAAS (accounting standards), financial modeling, damage calculations, complex data analytics for a multi-million record database, trust account statement reconciliations, and the preparation of multiple expert accountant reports.

Before joining Miller Barondess, Betsy Miller was an associate with PricewaterhouseCoopers’ Dispute Analysis and Investigations department and a Senior Consultant with FTI Consulting’s Forensic and Litigation Consulting group. She graduated cum laude with a Bachelor’s Degree in Psychology and minor in Accounting from the University of California, Los Angeles. While studying at UCLA, Ms. Miller founded the University’s Beta Alpha Psi chapter, a nationally recognized professional business and financial honors society.

Donald R. Karr, CPA

2011-11-28T22:23:03Z

Litigation Support / Controller
University of California, Los Angeles, B.A.

tel. 310-552-7566
dkarr@millerbarondess.com

Donald Karr is a Certified Public Accountant in the State of California and assists the Miller Barondess Litigation Support Team. Mr. Karr serves as the firm’s Controller and has extensive experience in accounting, finance, financial modeling, economic and data analysis, and financial statement audits.

Mr. Karr has provided financial statement audits and consulting services for numerous Fortune 500 clients in various industries, including technology, consumer goods, healthcare, and financial services. He planned, performed, and managed financial statement audits to ensure companies are in compliance with GAAP, IFRS, GAGAS, GAAS and Sarbanes Oxley (accounting standards). This audit work has included testwork over multi-billion dollar accounts including cash, accounts receivable, payroll, taxes, revenue, expenses, leases, goodwill, impairment, intercompany transactions, VIE’s, and transfer pricing. He has further consulted with companies on strategies to improve risk management, internal controls over financial reporting, and net margins.

Before joining Miller Barondess, Donald Karr was a senior associate in KPMG’s audit department and founded/managed a prominent Los Angeles tutoring company. He graduated cum laude with a Bachelor’s Degree in Business Economics and Minor in Accounting from the University of California, Los Angeles.

Miller Barondess Wins Appeal on Behalf of the County of Los Angeles

2011-09-20T00:13:06Z

Panel rules Family Medical Leave Act’s protections only extend for 12 weeks

By Laura Ernde
Daily Journal Staff Writer

A state appellate court on Tuesday reversed a $356,000 jury verdict in favor of a Los Angeles County employee who came back from medical leave to find she was bring transferred to a new job.

The 2nd District Court of Appeal said the California Family Medical Leave Act’s job protections only cover a 12-week period. Katrina L. Rogers had extended her leave to 19 weeks.

“Roger’s right to reinstatement expired when the 12-week protected CFRA leave expired,” Justice Kathryn Doi Todd wrote for the court.

Also, Todd said the county presented undisputed evidence that the reason for her transfer had nothing to do with the medical leave and, instead, was based on a management reorganization. The case is Rogers v. County of Los Angeles, 2011 DJDAR 12429.

Click here to read the opinion

Miller Barondess Adds Leading Internet Attorney, Erik Syverson

2011-08-05T07:58:44Z

LOS ANGELES–(BUSINESS WIRE)– Miller Barondess adds new partner, Erik Syverson, expanding the Century City litigation boutique by adding an internet and technology law practice. Mr. Syverson is a trial lawyer specializing in internet and e-commerce related issues.

According to Miller Barondess managing partner Skip Miller, “We are very excited about Erik joining our firm. His expertise in internet and technology related law will augment our growing litigation practice.”

Mr. Syverson is one of America’s leading internet and technology attorneys. In addition to his extensive litigation and trial experience, national news media organizations frequently turn to Syverson for analysis of contemporary internet law issues including CNBC, FOX NEWS, THE HUFFINGTON POST and CNN.

His practice includes internet defamation and anonymous speech rights, trade libel, unfair competition, privacy rights, internet copyright and trademark infringement, e-commerce class actions, affiliate marketing, social media litigation, commercial email and spam litigation, internet impersonation, data theft, trade secrets, defense of FTC and Attorney General lawsuits, and complex commercial litigation. Syverson was recently lead trial counsel in three commercial business trials, two of which resulted in defense judgments for his clients.

Mr. Syverson frequently counsels clients regarding internet advertising and marketing. This often includes litigation related to intellectual property infringement, unfair competition, trade secrets and fraud. Recently, Syverson obtained a dismissal with prejudice on behalf of one of the country’s largest internet advertising networks for alleged Google based keyword trademark infringement. Syverson has also handled complex class action litigation on behalf of internet advertisers on a number of digital platforms. He recently obtained a potential seven figure class action settlement on behalf of advertisers on a publicly traded company’s internet advertising network. Syverson also represents advertisers with similar claims in pending lawsuits against Google, Microsoft and Yahoo.

In recent years, internet based defamation and trade libel has become a focus for Syverson as companies and professionals who are targeted often retain Syverson as counsel. Frequently, the defendants in such cases are initially anonymous, however, Syverson has developed expertise in using the litigation process to identify such wrongdoers. Syverson has obtained favorable settlements and judgments on behalf of many clients who have been the target of such internet based assaults including educational institutions, medical facilities, and financial services firms. These settlements and judgments often include the payment of monetary damages and the removal of harmful and defamatory content from the internet and search engine results.

Syverson states, “Internet and technology law is a burgeoning practice area presenting many opportunities to shape the legal landscape in coming years. With its roster of top trial lawyers, Miller Barondess is an ideal home for my practice.”

http://finance.yahoo.com/news/Miller-Barondess-Adds-Leading-bw-1589633779.html?x=0

Law school defends job statistics

2011-09-20T00:13:48Z

Law school defends job statistics

By Sarra Randazzo

Attorneys for San Diego’s Thomas Jefferson School of Law put forward a self-deprecating argument in court papers last week to rebut claims the school misrepresented graduates’ chances of finding gainful employment – that applicants should have known the employment number wasn’t as rosy as it looked by comparing it to the school’s low bar passage rates.

For the past nine years of reported data, the school’s bar passage rate has consistently been lower than the percentage of graduates employed nine months after graduation – often by at least 20 percentage points – which should have told prospective students the employment figure includes more than just lawyers, according to court filings. The percentage employed has ranged from 56 percent to 92 percent, with passage rates consistently below 60 percent.

The law school filed a demurrer and motion to strike July 18 in San Diego County Superior Court in response to a proposed class action brought May 26 by former student Anna Alaburda, who graduated in 2008 and hasn’t been able to find a job as a full-time attorney despite sending resumes to more than 150 employers. Alaburda v. Thomas Jefferson School of Law, 00091898.

Brian Procel of Miller Barondess LLP, who represents the plaintiff, said in a statement that the school’s argument “is neither flattering for Thomas Jefferson nor factually accurate,” since many law-related jobs are available to graduates who haven’t yet passed the bar. “Regardless, why would a law school include statistics for all jobs in its employment figures – theoretically including part-time employees at fast food restaurants – unless they were intending to deceive the public?”

The school, represented by San Diego law firm Paul, Plevin, Sullivan & Connaughton LLP, also asked the court to strike much of Alaburda’s complaint because they say the allegations are irrelevant to the matter at hand.

The list of paragraphs to strike includes examples of other schools admitting to intentionally misrepresenting data to improve their U.S. News & World Report’s ranking; quotes from a New York Times article focused on the struggle of one Thomas Jefferson graduate; and details of a new state-of-the-art campus the school built in downtown San Diego.

“The challenged allegations serve the improper purposes of sensationalizing plaintiff’s claims to this court, generating publicity for her lawsuit, and unfairly portraying TJSL as part of a broader ‘trend’ of law schools duping students,” the motion argues.

The school’s demurrer further details why the school can’t be found guilty of providing false or misleading information. A hearing is scheduled before Judge Joel M. Pressman on Nov. 18.

THR’s Power Lawyers – America’s Top 100 Entertainment Attorneys

2011-07-20T01:10:48Z

Skip Miller

Miller Barondess

Miller has a track record as enviable as his sports car collection, which includes a racing Porsche GT3 and a Ferrari 360 Spider. (He sold his Lamborghini because, he says, “It’s not nearly as good a car as the other two. And how many toys can you have?”) This year, he’s handled disputes for music figures including Guns N’ Roses frontman Axl Rose, Motley Crue and the estate of Tupac Shakur, not to mention regular clients Rod Stewart, Steven Tyler, Elton John and Bob Dylan. Miller’s upcoming trial between Rose and Activision over former GnR member Slash’s involvement in video game Guitar Hero III should lead to courtroom fireworks. “I like the plaintiff cases better than the defense cases because there’s more upside,” Miller says. “Your client usually is the one that’s been harmed, and I like getting up in front of a jury and explaining why we’re entitled to a lot of money.”

The quiet (and sometimes not so quiet) forces behind every deal, dispute and decision in Hollywood are honored in The Hollywood Reporter’s fifth annual list.

In early 2007 when the idea first surfaced here to do a power list of the top Hollywood lawyers, I called up one of the town’s most respected talent attorneys to see what he thought. “Great idea,” he said. “But no one will talk to you.” After all, the inner circle of entertainment lawyers had always been an impenetrable cabal that — unlike studio executives, agents and managers — hated seeing their names in print. It took hundreds of phone calls (and, yes, some begging), but nearly everyone in that first Power Lawyers issue agreed to be interviewed, and most showed up (some from New York and Nashville) for our breakfast, now an annual tradition.

Five years later, with the franchise fully formed and a true resource for the top names in litigation, corporate and talent dealmaking, I called up that same attorney to spitball ideas for this issue. Perhaps, I wondered, we could get the three feuding lawyers on the Charlie Sheen case to pose for a photo together. “Great idea,” he said. “But they’ll never do it.” (See above.) Even amid an unresolved and often rancorous arbitration, they all said yes. Case closed.

The Hollywood Reporter’s Power Lawyers 2011 list is broken down into the following categories:

Talent Dealmakers: Gross points, rich backends and franchise hunting: These attorneys for A-list stars keep them in the stratosphere.

Litigation Specialists: These hired guns can go all the way to trial to right a wrong in an industry where the rules are not always black, white or even fair.

The Troubleshooters: Plenty of Los Angeles lawyers handle high-stakes criminal cases and rich divorces, but it takes a special skill to expertly navigate both the legal issues and the glare of a rapturous media.

Corporate Dealmakers: The men and women behind the big-ticket transactions that keep money flowing to Hollywood.

METHODOLOGY: For a fifth year, THR canvassed the showbiz landscape to determine the attorneys behind the year’s biggest deals and cases. Candidates are evaluated against their peers (litigators vs. litigators, dealmakers vs. dealmakers), and we added a category this year for “troubleshooters,” those handling criminal and divorce cases. Studio, network and music label lawyers were not considered, with the exception of Jonathan Anschell, the Raising the Bar honoree, an in-house executive who was chosen in consultation with several top attorneys on the Power Lawyers list.

http://www.hollywoodreporter.com/lists/skip-miller-210379