June 01, 2020

Greenberg Gross Client Awarded Sanctions on “Frivolous Appeal” as $100 Million Lawsuit Against Fletcher Jones Proceeds in Trial Court

In a resounding victory for Greenberg Gross client Garth Blumenthal in his $100 million lawsuit against the Fletcher Jones organization, the California Court of Appeal for the Fourth District, Division Three affirmed a trial court decision denying Jones’s motion to compel arbitration of the dispute and imposed $40,000 in sanctions on Jones and his counsel. The case arose from Blumenthal’s role as the General Manager of Fletcher Jones Motorcars, which Blumenthal built into the largest Mercedes-Benz dealership in the United States. When Jones and his company terminated Blumenthal without warning in 2017, in breach of various promises and agreements they had made over the years, the firm filed suit for Blumenthal in Orange County Superior Court. After trying unsuccessfully for nine months to have the case dismissed, and with trial only months away, Jones moved to transfer the case from court to arbitration. When the firm defeated that motion, Jones appealed. The appellate court not only affirmed the decision, finding that Jones and his counsel had acted in bad faith in filing a delayed motion for arbitration, but found that the appeal was frivolous and itself in bad faith, and ordered Jones and his appellate counsel to pay sanctions to Blumenthal. The case will now proceed in the trial court.
In a separate but related arbitration that ended in 2019, the firm obtained a complete victory for Blumenthal against Jones in a dispute relating to a different Mercedes dealership. In that case, the arbitrator rejected Jones’s claims against Blumenthal and his attempt to expel Blumenthal from the business, gave Blumenthal the right to take over the business entirely, and ordered Jones to pay over $500,000 in Blumenthal’s attorney fees and costs.
Blumenthal was represented by Alan Greenberg.
Read Daily Journal Article [PDF]

Alan A. Greenberg