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Leonard Schrage, embroiled in a legal battle against his brothers Michael and Joseph over their father’s car dealership empire, has filed a lawsuit against U.S. law firm Manatt Phelps & Phillips. Schrage alleges that the firm’s mishandling of his case led to the forfeiture of a $30.9 million court victory.
Wrong Legal Theory and Consequences
In the 11-page lawsuit filed in Los Angeles County Superior Court, Schrage accuses Manatt of employing the wrong legal theory when initially pursuing the lawsuit against his brothers in 2015. This alleged misstep ultimately led to significant financial losses and damage to Schrage’s reputation. The lawsuit contends that Manatt’s actions hindered Schrage’s ability to secure employment within the car dealership industry.
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Critical Errors and Lack of Strategy
Schrage asserts that Manatt pursued individual claims against his brothers instead of derivative claims, which he believes was erroneous and detrimental to his case. Moreover, the lawsuit claims that Manatt withdrew a related derivative case, further exacerbating the situation. Schrage criticizes the firm’s strategy, describing it as “arrogant” and shortsighted, and accuses Manatt of disregarding established California law on the distinction between individual and derivative claims.
Costly Reversal and Abandonment
Despite initially securing a $30.9 million verdict in March 2019 following a lengthy trial, the 2nd District California Court of Appeal overturned the decision in September 2021. The appellate court ruled that Schrage lacked standing due to failing to assert a derivative claim. Following this reversal, Schrage alleges that Manatt abruptly terminated their representation without his consent or court approval. This left Schrage without legal counsel to navigate the aftermath of the verdict reversal and defend against his brothers’ financial demands.
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Seeking Redress and Legal Response
In his lawsuit, Schrage seeks unspecified damages from Manatt Phelps & Phillips for the alleged mishandling of his case. However, neither Manatt nor their spokesperson has responded to requests for comment at the time of writing. Similarly, Schrage’s legal representatives have not provided any statements regarding the lawsuit.
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