Cirrus’ lawsuit against Jim Campbell and one of his LLCs garnered a lot of interest on POA; over 1,000 postings in the ~21 months from case filing to settlement. One of the fun aspects was the near-real-time reporting of case filings and discussions of the meanings of them.
However, it’s tough for a newcomer to wade through. Those who happen to find the “Negative ANN article about Cirrus” thread on POA are probably looking for the answer to a simple question: “What the heck happened?”
This posting is an attempt to provide that information in a single location. You can reference someone directly to it via:
http://tinyurl.com/mrjvsgh
Before we start, let me introduce myself. My name is Ron Wanttaja, and I’m one of the 15 people Campbell unsuccessfully sued for “Conspiracy to Defame” back in the ‘90s. Obviously, I can’t claim to be an unbiased observer. However, I will be referring to actual court documents throughout this posting, and if I make a supposition, I’ll try to make that clear.
Keep in mind, also, that I’m not a lawyer.
Let’s begin with a brief summary:
- The company sued Jim Campbell and one of his LLCs, Kindred Spirit Aviation, for non-payment on the loan on the purchase of a Cirrus SR22. Cirrus’ main exhibit was signed loan documents that commit Campbell to pay $5,500 a month on the aircraft. Campbell claimed his signature was forged.
- Campbell claimed that Cirrus had an agreement with ANN in which advertising services were to provide payment on the loan. On ANN on 10 October 2011, Campbell claimed that Cirrus owed advertising bills totaling over $700,000.
- The judge rejected the connection between the purchase of the aircraft and Campbell’s claim regarding an exchange for advertising, and refused to add ANN as a participant in the case. None of the loan paperwork filed by Cirrus references ANN.
- However, while it was not stated, Campbell was free to have ANN sue Cirrus separately and prepared to do so.
- 5. As part of a negotiated settlement in April/May 2013 (20 months after the lawsuit was filed):
- Campbell gave the airplane back to Cirrus.
- Campbell and ANN had to release Cirrus from any alleged obligations (e.g., the supposed $700,000 in unpaid advertising).
- Both sides had to pay their own legal fees (probably $100,000 or more)
The actual path to the settlement was a long and complex one. The following is an attempt to explain it. Again, I am not a lawyer.
Cirrus filed suit on 2 September 2011. They sued Jim Campbell as an individual, and Kindred Spirit Aviation, an LLC Campbell had set up to own the aircraft (we’ll call it “KSA”). In the suit, Cirrus claims that Campbell and KSA purchased Cirrus N377R in December 2008 for $359,000. Their main exhibit was a promissory note which required Campbell and KSA to pay $5,500 a month for the next 60 months. It included the usual clauses on what would happen if the payments were not made (e.g., repossession of the aircraft). It is signed with what Cirrus claims is Jim Campbell’s signature. Other exhibits included an aircraft security agreement (also signed), a title search showing Cirrus as the lienholder for the aircraft, and a Guaranty on the aircraft loan.
(Cirrus’ filing is attached as Ref 1.)
The case record shows Cirrus had difficulty serving Campbell with the lawsuit, but by the end of October 2011, the case was ready to move ahead. Edward M. Booth Jr. and Sara Jane Carter of Quintairos, Prieto, Wood and Boyer announced themselves as Campbell and KSA’s lawyers.
They filed a motion to dismiss the case on 25 October. The motion claimed that Aero News Network (ANN, Campbell’s online magazine) was an “indispensable party” and should have been included in the suit. Campbell claimed that Cirrus and ANN had an agreement by which the aircraft loan would be offset by advertising carried on ANN, and that these credits had not been properly assigned to the loan. It asked that the court dismiss the case without prejudice, and that Cirrus re-file with ANN as a co-defendant.
The filing included one exhibit, a document claiming to represent the alleged agreement between ANN and Cirrus. It is not signed. Nor, for that matter, is it written like a contract… in my opinion, it is written as a marketing proposal. The filing, including the marketing proposal, is attached as Ref 2.
(An interesting note: The purchase agreement filed by Cirrus is three pages long. The supposed written version of ANN’s verbal contract is twice that length.)
Early in December 2011, Campbell filed his answers to the Request for Admissions filed by Cirrus. It describes the signatures on the Purchase Agreement as fraudulent; the first indication of the direction his defense was taking.
The first court hearing, on 3 January 2012, addressed the issue regarding the alleged verbal agreement: Campbell’s attempt to add ANN to the case was denied. This meant that the case would turn solely on the loan agreement filed by Cirrus… which makes no mention of an exchange for advertising. Any alleged ANN agreement was no longer a factor in this suit.
While it was not stated in the judge’s decision, Campbell, of course, would be free to file a separate suit on behalf of ANN.
The judge gave Campbell and his lawyers twenty days to respond. The response, on 13 January 2012, took most folks by surprise: The lawyers requested permission to withdraw from the case, due to “irreconcilable differences between the counsel for the Defendants and the Defendants.”
(Actually, this shouldn’t have been that big of a surprise. Over the last twenty years, Campbell has been in about 30 lawsuits. In more than a quarter of them, his lawyers have requested to withdraw. In some of the cases, he went through three sets of lawyers.)
The judge granted permission to withdraw, and Campbell was given 30 days to find a new lawyer. Twenty-nine days later, Campbell filed a hand-written motion pleading for more time: “Just obtained a copy of withdrawal motion on 3/19/12”.
Cirrus’ response was scathing. “It is incredulous that Defendants just obtained a copy of the withdrawal motion (filed on January 12, 2013) or the Order (entered on February 21, 2019) on March 19, 2012.” Cirrus filed for a default judgment against KSA only (Campbell could represent himself, but the corporation was required to have an attorney).
The hearing on the default judgment was scheduled for the 21st of May, but on 18 May 2012, J. Michael Liddell and Roger K. Gannam of Liddell and Farson filed notice that they were now representing Campbell and KSA. Campbell had been given 30 days, but had taken nearly 90.
Campbell’s new attorneys filed notice that they were calling Alan Klapmeier, Cirrus’ CEO at the time of the aircraft sale, for a deposition in July 2012.
Curiously, at this point the case record goes silent for four months. Other than some routine material (notice that Klapmeier’s deposition would be videotaped, notification of email addresses), nothing of significance gets added to the case record until the end October…four months later. The Klapmeier deposition apparently did occur, but the nothing about it was added to the case list.
Later filings claimed there had been failed negotiations for an out-of-court settlement in 2012. It’s possible it was in this period; that would explain the apparent lack of progress. In any case, action resumed on 29 October 2012. One of the filings on that date was the notice that Jim Campbell would deposed in January.
But barely six weeks later (and a month before the scheduled deposition), Campbell’s SECOND set of attorneys filed for withdrawal: “Defendants have failed to substantially fulfill their obligations to the Law Firm…Furthermore, the Law Firm’s representation has recently been rendered unreasonably difficult by the Defendants.”
“Obligations,” in this case, probably refer to financial obligations. Campbell was apparently not paying his legal bills.
There were two other interesting quotes in the motion to withdraw: “Meanwhile, Law Firm has continued to meet Defendants’ interests by … drafting a proposed counterclaim (awaiting clients’ approval to file).”
Most likely, this was a suit by ANN over the alleged unpaid advertising bills.
The second told the court that Campbell had apparently known for months that he was losing his attorneys: “As early as 8 October 2012, the Law Firm notified Defendants of their need to identify successor counsel…”
This might a cautionary action based on Campbell’s hand-written request for more time when his last attorneys left. That request implied that his previous attorneys hadn’t notified their client of the need to obtain new counsel. Liddell and Gannam might have just been establishing that Campbell couldn’t blame them if he were unable to meet the new deadline.
The deposition on the 4th of January 2013 was cancelled. A later filing by one of Cirrus’ attorneys indicated this was done as a courtesy to the departing lawyers. With Campbell’s attorneys claiming that “representation has recently been rendered unreasonably difficult by the Defendants,” one can see they might not have had their whole hearts into representing Campbell at a deposition.
The hearing on the motion to withdraw was held on 15 January 2013. The judge granted the motion to withdraw, and gave Campbell just ten days to come up with new representation.
However, Cirrus’ attorneys were probably expecting the same sorts of delays as the previous time. Two days after the start of the ten-day clock, they re-scheduled Campbell’s deposition for the 6th of February…barely three weeks later.
Campbell appears to be deposition-shy. On his last major lawsuit, his second suit against Sun-N-Fun, he had been scheduled to depose twice, canceling both times. The fact was cited by the judge when granting the motion for Campbell’s attorney in THAT case to withdraw.
We don’t know if Cirrus’ attorneys scheduled a fast-turnaround deposition to “encourage” Campbell to find an attorney within the judge’s deadline, so he could fight against the deposition. But if they did, the encouragement apparently worked. Matt Mercer, of Mercer Law filed notice on 25 January that he was now representing Campbell.
Mr. Mercer immediately filed for a Protective Order to delay the deposition, complaining that the date was unilaterally set (e.g., Campbell was not asked if the date was suitable) and that he, himself, wouldn’t have enough time to prepare.
In response, Cirrus’ filing said, “It is the undersigned’s recollection and understanding that this Court advised the undersigned that Plaintiff could unilaterally schedule the deposition…” So Campbell’s request for a Protective Order was against an action permitted the judge.
Campbell’s request for a Protective Order also included copies of emails and faxes that had been exchanged with one of Cirrus’ attorneys, Jason Johnson.
These exchanges were just lead-ins for a considerable amount of antagonism between Mr. Mercer and Mr. Johnson (one of Cirrus’ two attorneys), antagonism that would build over the coming months. Later filings allege instances of misbehavior on behalf of Mr. Johnson’s actions, usually followed by rebuttals that provided more background on each supposed case. This eventually peaked in a request that the judge sanction (punish) Mr. Johnson (more later).
In any case, the deposition didn’t happen.
Cirrus filed a motion that requested that Campbell submit to a deposition within ten days. Both sides filed availability notices for the next several months. Campbell’s attorney scheduled several Cirrus employees for depositions in April.
A hearing on Campbell’s request for a Protective Order and Cirrus’ motion was held on 26 February 2013. It was apparently not granted; neither was Cirrus’ motion to force Campbell to submit to deposition within ten days. A later filing by Cirrus said the judge told counsel to schedule the deposition within the next thirty days, but there was no court order issued.
I don’t have a transcript of that hearing, but according Campbell’s lawyer (in a later filing) the judge said that Mr. Campbell “needs to stop monkeying around.” It also stated a claim that Mr. Campbell had left “crazy messages” on the judicial assistant's voice mail. Also, in the exchanges included in Campbell’s request for the Protective Order, Campbell’s attorney write, “I am further concerned about your implying, albeit loosely, that the Court may hold my Client in disfavor or be irritated at my client for one reason or the other…”
It sounds like the judge might have been getting tired of delaying tactics. If Campbell *had* left “crazy messages” on his assistant’s voice mail, this probably hadn’t helped.
There was one other interesting outcome in the 26 Feb hearing: Campbell’s attorney had requested that a trial date be set, and the judge did so: A non-jury trial was set for 18 June 2013, less than four months away.
It required that the attorneys file notice of any Expert Witnesses at least 90 days prior. Thus, a week later, Cirrus filed a Disclosure of Expert Witness. Richard Orsini, a forensics specialist, would be testifying regarding handwriting analysis of the Campbell signature on the loan documents. Cirrus filed a Request for Production to have Campbell supply samples of his signature, both currently, and from around the time period the loan documents were supposed to have been signed.
Campbell’s deposition was scheduled for 13 March. It started bad (the first 15 pages of the transcript consisted of Cirrus’ attorney trying to get Campbell to state his address for the record) and it ended worse…or actually DIDN’T end. Campbell refused to answer a particular line of questioning, and the deposition was suspended.
Campbell’s refusal to answer wasn’t gentle. According to the transcript, he told Cirrus’ attorney to “Go to hell” and threatened “I’m calling the FBI and I’m going to have you charged with extortion…”
Which line of questioning? Dealing with the NTSB hearing, of course. Campbell lost his medical due to mental health issues back in 1980, and appealed the suspension to an Administrative Law Judge (Case SE-4661).
Why did Cirrus want to discuss this old case? Probably because the main symptom that led to the diagnosis was *Campbell’s inability to tell the truth*. He lied, so much, back then, that FAA psychiatrists considered it indicative of mental illness that affected his ability to fly.
The only one claiming that Campbell’s signatures on the loan documents were forgeries was Campbell itself…and whether or not to believe him might hinge on whether one thinks he’s still got the personality disorders of thirty years prior.
Campbell’s attorney filed another motion for Protective Order, asking the judge to, among other things make questions regarding the NTSB case off-limits, claiming they dealt with medical issues.
Cirrus’ response? They pointed out that the NTSB transcript had been taken in open court (in fact, the hearing was at Campbell’s own request), and the transcript was accessible to the public. Thus, could not be considered private medical information. They also pointed out that the NTSB case had ALREADY been admitted into evidence in at least one Federal Court (Campbell’s first Sun-N-Fun lawsuit), and Campbell had not objected to it, there.
The weird thing is: When the NTSB case came up in the Sun-N-Fun lawsuit, Campbell handled it quite well. He didn’t refuse over medical grounds, he didn’t curse at the attorney. He had quit logical answers to the question… handled himself well, in fact. Quite different from this case.
A summary (by yours truly) and the full transcript can be found by Googling “NTSB SE-4661”.
Another Cirrus filing about the same time contained a bombshell: ”Plaintiff is ready, willing, and able to produce a witness who was present at the time Campbell executed the sued-upon loan documents and who personally saw Campbell execute the same.” So, with Campbell’s word directly contravened by another, the issue of both parties’ truthfulness comes to the fore.
And remember, Campbell was sued for perjury back in the 90s (he settled it out of court for $25,000). We don’t know if Cirrus had been planning to bring it up after discussing the NTSB case. But it would have probably made sense.
Cirrus also claimed that Campbell had refused to provide the handwriting samples their forensic specialist needed to determine if the signature on the loan paperwork was indeed Campbell’s. What’s more, the 90-day deadline for notifying the court of Expert Witnesses had also passed, without Campbell’s side identifying a countering forensic specialist who would testify that the signature was a forgery.
Right about the end of a very busy March, Cirrus filed for its own Protective Order against Campbell. Campbell had filed for depositions from a number of Cirrus employees, to occur on the 4th and 5th of April. Cirrus didn’t object to most of the depositions, but said that one of the individuals named was “…sought solely in furtherance of Defendant’s desire to bring an unrelated action against Cirrus…” Probably, again, over the alleged unpaid advertising. The request for protective order also referenced Campbell not providing sufficient notification of some of the documents the deponents were expected to bring.
So, as of the morning of 4 April 2013, here’s the status of the case:
- Campbell had a lawsuit against Cirrus ready to go. Cirrus claimed that some of the actions taken in this suit were actually intended for use in this other suit.
- Cirrus had filed for monetary compensation for the premature ending of Campbell’s deposition.
- Campbell had filed for a second protective order, to stop Cirrus from asking questions about the NTSB case.
- Cirrus had filed a motion for the judge to compel Campbell to provide the signature samples to their forensic expert.
- Depositions for four Cirrus employees (including the current CE0) were expected to start.
And then…things started getting REALLY weird.
It started with an announced out-of-court settlement. Which quickly fell through.
After two Cirrus employees had been deposed on the 4th of April, all the parties (including Campbell and current Cirrus CEO Dale Klapmeier) got to talking, and decided on a settlement. Campbell would give the airplane back to Cirrus and waive any claims on behalf of himself, KSA, and ANN, and both sides would pay their own legal fees.
Since they had the court reporter there anyway, they discussed the issues and came to agreement on the record. Cirrus collected the keys to the airplane and its hangar the next night (Friday, the 5th).
Why would Cirrus settle for just the airplane? Cirrus had spent a lot of money on legal fees. Nominally, of course, they would be awarded those fees upon winning their case. But collecting them would be another issue. The $25,000 out-of-court settlement in his fraud and perjury case never
was fully paid; he struggled for five years, eventually paying about $19,000 until the court excused him the rest in 2005. The aircraft probably *was* Campbell’s major asset and they were already going to get that. The case had been going a long time, and there were still over two months until the court date. Settling now would stop the legal expenses.
There was a court date scheduled on the 9th of April (the following Tuesday) to discuss the various motions that had been previously filed. Since the motions were all moot, they agreed to cancel the hearing and reschedule it for April 25th. A notice of cancellation was posted to the case’s online file listing on the 8th of April.
But the next morning, all parties were in court. Campbell’s attorney had sent a notice that the judge *would* be hearing motions in the case.
It was news to the judge. “I was caught off guard,” he said. “When I looked at this yesterday, the last thing I saw was that it had been rescheduled for April the 25th…. What I prefer you do is come back on the 25th when I thought you were going to have your next hearing date so that I can have the opportunity to read what’s been filed up to date.”
The basic issue: Campbell’s attorney felt that the verbal discussion constituted the whole agreement, while Cirrus looked upon it as a framework for writing the agreements that would close out the case.
The primary thing Cirrus was looking for…for what should be obvious reasons, by now…was a complete, written release by ANN. Without that, of course, the current lawsuit could be settled, but Cirrus might find itself right back in court again. They had over $100,000 in legal bills already, and a settlement WITHOUT getting buy-off on behalf of ANN would mean the money drain might continue. Cirrus wanted this release in writing
The relationship between the two attorneys, not good from the start, had seriously crashed by now. In a filing with the court, Campbell’s attorney (Matt Mercer) quoted Cirrus co-counsel Johnson as saying “F@CK YOU, MERCER” and giving him the middle finger. In a response, Johnson claimed Mercer called him an “*******” and a “disgrace to the legal profession” in front of his staff.
Oh, yeah. These guys didn’t like each other.
The antagonism came to a head on the 24th of April (the day before the scheduled hearing), when Campbell’s attorney filed a motion for sanctions (punishment) against Cirrus co-counsel Johnson. It was one of the things addressed in the next day’s hearing.
Which did not go Campbell’s way.
The motions for sanctions against Cirrus’ attorney was stricken…not just denied, but stricken from the record.
The judge agreed that ANN would have to supply a WRITTEN release, and the oral discussion on the 4th could not cover ANN. Basically because ANN was not a party to the lawsuit. “There’s a third entity here that is not in the jurisdiction of the court,” said the judge. “So how can I enforce a settlement against ANN when they’re not even a party before my court?”
Was it a problem with the wording on the release? Why not have Campbell’s attorney write the release, then? The judge suggested that. He asked Campbell’s attorney, “Is there any reason you could not prepare a mutual release that your client would be willing to sign?”
The answer was, basically, “no”: “There was no bargain for a written release. That was not what was agreed to in the stipulation.”
A little later, the judge addressed Campbell directly, about his refusal to sign any written release. “…the fact that you don’t want to do it leads me to believe that there’s some ulterior motive here or additional litigation you plan to bring as soon as this case is dismissed.”
Another court appearance was scheduled for four weeks later, presumably to settle any outstanding motions prior to the trial. The judge said the trial date would be kept…18 June 2013, less than two months later.
Going to trial wouldn’t be a good move for Campbell. The claim that the signatures on the loan documents were forged would be weakened by Campbell’s refusal to supply handwriting samples. Campbell didn’t even have his own forensic specialist to counter the testimony of Cirrus’. Cirrus claimed to have a witness to Campbell signing Cirrus’ loan paperwork. This would have directly justified questions regarding Campbell’s truthfulness, which would have justified questions about the NTSB case.
In short, he probably would have lost. He’d already given up the airplane, but the judge would probably award Cirrus its legal fees…well over $100,000. If Campbell *could* pay, it would probably be very damaging. If he couldn't pay, it would probably mean bankruptcy.
Campbell’s attorney had one last effort: A motion to disqualify the judge. It would mean re-starting the case with, a second chance to fight the admissibility of the NTSB data, garner his own forensic specialists regarding the signatures, etc. However, best guess is that he was probably just positioning Campbell for an appeal, if the case went to trial and didn’t go his way. The judge denied the motion.
But an appeal would just start the money hemorrhaging again, with no assurance of victory in the end. If the judge allowed questions about the NTSB case, Campbell would also undergo a series of very public, very probing questions about an event he’d rather everyone forgot.
Instead, Cirrus and Campbell signed a joint stipulation for settlement was filed on 21 May 2013. Did Campbell sign the ANN release? We don’t know for sure, but Cirrus had no reason to accept the settlement, as written, without it.
In any event, the case was over.
We think.
Ron Wanttaja
June 2013
