The Globe - RRLH Law Suit

Updated 05/25/07

Some background.

In March of 1964 Ross Cortese was building and developing Leisure World. The residents at that time paid $122,844 for the purchase of a sculpture called the "World Globe" and it was put into our Trust Agreement along with Clubhouses and Golf Courses.

The Globe was specifically mentioned as a part of the original Trust Agreement dated March 6, 1964, reference; Exhibit B, Schedule 3, Book 6953, Page 541, Item K: World Globe Main Entrance Way, Lakes, Landscaping, Sprinklers, Etc. $122,844.00.

Since it was a part of the Trust, GRF has no more right to eliminate the Globe as it would to eliminate a Clubhouse or the Golf Course without the consent of a majority of the owners. (see item 1 below).

The court action (as we interpret it) in lay terms.

The plaintiff (RRLH, Inc) originally fileda complaint on July 19, 2005, against GRF Inc., et al. The et al allowed the plaintiff to add any defendants during the discovery process.

Apparently their discovery resulted in the amended filing of May 16, 2006, which added Professioanl Community Management, Inc. (PCM) as well as Professional Community Management of California, Inc., (PCMOCI), and PCM Realty and Marketing (PCM Realty) as defendents.

The source of the complaint was the use of the RRLH Trademarks when advertising for profit and wanting a percent of the revenue that the defendents incurred while using the Trademarks. GRF used the trademark as a part of their TV/Broadband advertising from which they made a profit. PCM, PCMOCI and PCM Realty used the Trademark in advertising in numerous publications including the LW News.

An analogy to this action would be the right of a performer to receive royalties when a record company sells one of his/her records. RRLH had every right to the action that they took and Heidi Cortese allowed us to use the Globe for many years without any monetary compensation, until, we formed the Broadband Corporation and began generating advertising revenues.

The result of combining all the defendents together created a convoluted combination of Plaintiff and Defendents. It would have seemed to be in our best interest if our Corporate Attorney, Hart, King & Coldren (HK&C) would have isolated us, GRF, from PCMOCI and PCM Realty in a separate action. As seems to be the history of PCM, convoluting such actions prevents one from identifying the individual costs and prevents the Boards from understanding the specific consequences. Especially when the Trademark infringements were so grossly different between GRF and PCM Realty. How can the GRF Board differentiate the charges that were finally paid by the defendents.

Some further observations:

The court did not make a ruling!

The final outcome was a negotiated agreement between the Plaintiff and Defendents!

The court did not find fault and accepted the agreement that was reached, a stipulated judgement!

Also, the COURT DID NOT require that attorney fees be paid by the defendant, the court found that each will bear its own cost of court and attorney fees. Only if there is any proceeding relating to the terms of the enforcement of the Stipulated Judgment will the prevailing party be awarded reasonable attorney fees.

The $250,000 that George Portlock, President of GRF, admits to, does NOT include attorney fees. It would be interesting to see how these attorney fees were allocated between PCM and GRF. I'm sure that our GRF Finance Committee will separate those for us.

The action of HK&C appears questionable when comparing the infractions by GRF as opposed to PCM Realty. Might we have been better served if we had been on our own. We will always have the question in the back of our mind, "Would an attorney who had fewer ties to PCM have negotiated differently on behalf of GRF?" Also, "Would another attorney have alerted GRF to the possibility of retaining the Globe by obtaining written permission from RRLH as stipulated in the agreement" (see page 3 line 20 in item 3 below). This "oversight" by our corporate attorney does make one wonder "Why our Globe is GONE?"

Finally, shouldn't our corporate attorney (HK&C) have informed us that the placement of the "World Globe" in the Original Trust Agreement of March 6, 1964, made it illegal for GRF to dispose of this item without the majority consent of the owners?

Reference Data:

  1. The Globe in the Trust Agreement (Letter dated 5/24/7)
  2. Trust Agreements
    1. Original Trust Agreement March 6, 1964
    2. Amendment to Trust Agreement April 6, 1964
    3. Amendment to Trust Agreement January 9, 1969
    4. Amendment to Trust Agreement October 13, 1971
  3. The Proposed Stipulated Judgment of RRLH vs GRF, PCM, PCMOCI, and PCM Realty

 

|Home Page|Instructions|Site Map|Agendas|Issues|Documents|Blog|