Well, lawyers are gonna lawyer. Ex-fixer Michael Cohen sued the Trump Organization in New York State civil court looking for reimbursement for legal fees Cohen incurred defending himself from criminal charges. Apparently, Cohen expects his former employer to overlook his recent disloyalty and continue paying out all his employment benefits. No one ever accused Michael Cohen of being too timid to claim what’s his.
According to Cohen’s complaint, he’s been seriously victimized by Trump’s people, claiming, “As a result of the Trump Organization’s unfounded refusal to meet its indemnification obligations under the indemnification agreement, Mr. Cohen has incurred millions of dollars in unreimbursed attorneys fees and costs.” The Trump Organization’s refusal to make good on its obligations, according to Cohen, constitutes…wait for it… a breach of “the covenant of good faith and fair dealing.” I know. Someone call Kafka, because this is some great material.
The complaint tells the story of a loyal and aggrieved Cohen who innocently relied on his employer’s 2017 promise to mount a joint defense against the myriad legal woes stemming from Robert Mueller’s investigation. Cohen is now looking for reimbursement for his legal fees, nearly two million dollars in damages, and interest.
The anger emanating from the responsive court documents filed by the Trump Organization is practicably palpable. In their memo supporting their motion to dismiss, they characterize Cohen as a “nine-time felon” who hopes to secure “a payday as he enters federal prison.” As for any indemnification contract, the Trump Org calls that nothing more than a “phantom agreement.” Cohen’s convictions weren’t for the illegal actions of a criminal soldier, but were “personal crimes of greed.”
The Trump Organization was clearly having a bit of fun with its response, and even threw in a little law school final exam response. Unsurprisingly, however, they delivered a C-level answer.
The Trump Organization argued that an indemnification agreement like the one Cohen alleged would have been subject to the Statute of Frauds, and was therefore unenforceable if not memorialized into a written contract. The Statute of Frauds (SOF) is a nifty little contract law concept (codified into statute in most states) that requires certain kinds of agreements to be in writing in order to be enforceable. One such category is contracts that require more than one year to perform.
The Trump Organization said any Cohen indemnification agreement would have been “a contract of indefinite duration,” and concluded that the lack of specific time frame results in the contract’s falling within the SOF’s writing requirement. But as any contracts professor will tell you, most contracts of indefinite duration are theoretically capable of being completed within the one-year time frame; therefore, they’re perfectly enforceable even if only agreed to orally.
Trump’s lawyers should have paid closer attention in bar review, because the correct answer would actually have been suretyship – a promise to pay the debt of another. Indemnification agreements do fall within the Statute of Frauds and do need to be in writing. There’s something just so Trump to make an incorrect losing argument when a perfectly good winning argument remains unarticulated.
Watching Cohen’s and Trump’s lawyers joust over who is more fully epitomizing ideals of good faith and fair dealing is pushing the limits of suspended disbelief. Something tells me Cohen’s claim is in line for a quick dismissal.
[Image via Spencer Platt/Getty Images]
This is an opinion piece. The views expressed in this article are those of just the author.
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