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Chicago Law Firm Loses Jurisdictional Battle

Dillon v. MURPHY & HOURIHANE, LLP, Dist. Court, ND California 2014 – Google Scholar.

The plaintiff brought the legal malpractice action in federal court in San Jose. The defendant law firm moved to dismiss for lack of personal jurisdiction and, in the alternative, for transfer of the case to Illinois. The district judge denied both motions.

The court explained that the defendant had taken actions in California.

Defendant has injected itself into two California lawsuits, in one case representing Vesta for a period of time, and in both suits volunteering to be a witness by filing declarations. (See Dillon Decl., ECF 22 Exhs. 10, 12) The first case, Vesta Strategies v. Estupinian, Case No. C-07-06216-JW, was filed in this court. The second case, Tesoro Coast, LLC v. Vesta Strategies, Case No. 30-2008-00108304, was filed in California Superior Court in Orange County, California. Defendant participated in both of these cases in an effort to persuade California courts to rule in favor of Vesta’s requests for relief from default.

In Vesta Strategies v. Estupinian, Eugene Murphy, a named partner of Defendant, submitted an affidavit in support of Vesta’s motion to set aside entry of default judgment. (See ECF 22 Exh. 10) In that declaration, Mr. Murphy outlined the substantial efforts he undertook for Defendant in order to assist Vesta in defending itself from suit and in finding suitable counsel. (Id. ¶ 10 (“I spent innumerable hours interviewing firms qualified to handle the large number of cases filed for and against Mr. Terzakis and Vesta.”)) In the Tesoro Coast case, Mr. Murphy submitted an attorney fault declaration, in which he accepted full responsibility for Vesta’s failure to file a responsive pleading. (ECF 22 Exh. 12) In fact, Mr. Murphy states in that declaration that “[m]y firm was retained to represent Mr. Terzakis’and Vesta’s interests in the actions in which Mr. Terzakis and/or Vesta were parties, and to assist with finding local counsel in California for this and numerous other matters.” (Id. ¶ 4 (emphasis added)) Mr. Murphy goes on to say in this declaration that “I did not, however, file or cause to be filed a response to the Complaint in this matter.” (Id. ¶ 7).

In addition to these declarations, Defendant also participated forcefully in settlement negotiations, on behalf of Vesta, with a number of California residents who claimed they lost significant amounts of money when Vesta was looted by Terzakis and Estupinian. Defendant sent strongly worded, almost threatening, settlement letters to California residents seeking monetary settlement of their claims against Vesta, and indicated that such settlements would be rescinded if the claimants filed civil suits or contacted law enforcement authorities regarding their losses. (See Dillon Decl., ECF 22 Exh. 13 (“This letter summarizes and sets forth our client’s proposal to resolve your claim relating to Vesta Strategies, L.L.C.”); Exh. 14 (“This letter is an update to our previous communications regarding our clients’ proposal to resolve your claim relating to Vesta Strategies, L.L.C. and John Terzakis.”) (emphasis added); Exh. 15 (“In an effort to resolve all matters between yourself and Vesta Strategies and all other related matters, we hereby propose the following.”) (emphasis added)).

Edward X. Clinton, Jr.