Michael Cohen has lost his lawsuit against Donald Trump. Cohen was suing Trump for his litigation costs but his case depended on his own legal judgment as former counsel to the former president. A convicted felon, Cohen was always more of a legal thug than a competent lawyer. His case collapsed when the court refused to take his word for an oral contract and noted that he signed a contract directly refuting such oral contract claims. This week proved a double boost for Trump who also saw the withdrawal of the much covered lawsuit of Summer Zervos, a former contestant on “The Apprentice.” After thousands of articles in the media, Zervos quietly dropped her lawsuit.
The former counsel for Trump relied on an alleged oral promise by Trump to cover the costs. However, Cohen had written agreements that contradicted that claim. Cohen was seeking payment of bills that were largely linked to Trump himself, Trump’s 2016 presidential campaign or the now-defunct Trump Foundation. However, he was suing the Trump Organization and his contract expressly bars this type of claim.
As Samuel Goldwyn stated “a verbal contract isn’t worth the paper it’s written on.” Under New York law, “where a contract contains a ‘no oral modification’ clause, that clause will be enforceable.” Israel v. Chabra, 12 NY3d 158, 163 (2009). The contract, called the Operating Agreement, contains a “no oral modification” clause.
Cohen also presented no evidence of an oral contract beyond his own word. That is a highly precarious basis of reliance for any court. For full disclosure, I have been a critic of Cohen long before he broke with the President. His conduct as an attorney was a disgrace to the bar for years. Cohen has been gaming the system his entire career. He claimed urgent medical needs for release from prison. Of course, he previously claimed health problems in failing to appear to testify only to be spotted out on the town for a fancy dinner. Cohen previously (and implausibly) reinvented himself as a redemptive sinner and received financial support from Trump critics. he continued that pattern after his conviction.
The court notes:
“Plaintiff’s amorphous role as former President Trump’s personal “fixer” compounds the issue. As alleged in the Amended Complaint, Plaintiff not only worked for the Trump Organization, he “often help[ed] Mr. Trump . . . and other affiliated businesses” … Plaintiff fails to tender evidence showing that his involvement in the Mueller Investigation relates directly to his capacity as a Trump Organization employee, rather than his role more generally in the Trump orbit. It is not enough to argue that but for his employment at the Trump Organization, Plaintiff would not have known some of the information that made him a target – and, later, a cooperator – in the investigation. That reasoning sweeps too broadly, permitting corporate indemnification even where it is not tied to actions on behalf of the corporation. The Operating Agreement only compels Defendant to indemnify Plaintiff with regard to the business of the Trump Organization. And Plaintiff has not tendered evidence to show this connection.”
The court reduced the case succinctly with this line: “In a nutshell, Mr. Cohen’s legal fees arise out of his (sometimes unlawful) service to Mr. Trump personally, to Mr. Trump’s campaign, and to the Trump Foundation, but not out of his service to the business of the Trump Organization, which is the only defendant in this case.”
Here is the opinion: Cohen v. Trump Organization