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Original Talk Radio Network, Inc. v. Alioto

United States District Court, D. Oregon, Medford Division

May 27, 2014

THE ORIGINAL TALK RADIO NETWORK, INC., an Oregon corporation; TALK RADIO NETWORK ENTERPRISES, LLC, an Oregon limited liability Company; TALK RADIO NETWORK ENTERTAINMENT, INC., an Oregon corporation; TALK RADIO NETWORK-FM, INC., a Delaware corporation; AMERICA'S RADIO NEWS NETWORK, a Nevada Corporation, Plaintiffs and Counterclaim Defendants,
JOSEPH M. ALIOTO, individually and doing business as the ALIOTO LAW FIRM, Defendant and Counterclaim Plaintiff,
MARK MASTERS, an individual Counterclaim Defendant.


OWEN M. PANNER, District Judge.

This matter comes before the Court on Plaintiffs' Motion for Partial Summary Judgment (#105) and Defendant's Amended Motion for Summary Judgment (#118). Plaintiffs' Motion is GRANTED. Defendant's Motion is GRANTED in part and DENIED in part.


Plaintiffs and counterclaim defendants in this matter are The Original Talk Radio Network, Inc., Talk Radio Network Enterprises, LLC, Talk Radio Network Entertainment, Inc., Talk Radio Network-FM, Inc., and America's Radio News Network (collectively "Plaintiffs"), all of whom are companies which produce syndicated news and talk radio programs. Defendant and counterclaim plaintiff is Joseph Alioto, an attorney specializing in antitrust litigation. Defendant has also named Mark Masters ("Masters"), CEO of Plaintiffs, as an individual counterclaim defendant.

In 2011, Plaintiffs became concerned about the practices of Dial Global ("Dial"). Plaintiffs believed Dial was violating antitrust laws and that Dial's conduct would shortly drive Plaintiffs out of business. Plaintiffs, through Masters, sought to retain Defendant to represent them in an antitrust action against Dial.

After reviewing their case, Defendant agreed to represent Plaintiffs. Plaintiffs contend Defendant promised to prosecute their case against Dial vigorously and promptly file a complaint. On February 10, 2012, Defendant drew up a Fee Agreement, which he sent to Plaintiffs. The relevant terms of the Fee Agreement were:

1) The scope of the representation was for Plaintiffs against Dial.
2) Plaintiffs would pay Defendant a "$500, 000 non-deductible non-refundable true retainer" to be paid in installments. The first installment of $150, 000 was due immediately, with $100, 000 installments due on March 26, 2012, May 7, 2012, and June 18, 2012. A final $50, 000 installment was due on July 30, 2012.
3) Defendant would be paid on a contingency basis. He would receive 25% of anything recovered before filing the complaint, 33.33% of anything recovered after filing the complaint, and 40% of anything recovered after the commencement of trial.
4) Plaintiffs would pay $25, 000 into a separate fund for Defendant's costs.
5) If Plaintiffs withheld their consent to settle the case for an amount Defendant believed to be reasonable, Defendant would be permitted to withdraw.

Masters signed the agreement and returned it to Defendant, along with the initial payment of $150, 000 and the $25, 000 cost fund. Plaintiffs subsequently made the March 26 payment of $100, 000.

Defendant and Plaintiffs engaged in settlement negotiations with Dial. Dial offered Plaintiffs concessions, the value of which is disputed by the parties. Plaintiffs repeatedly demanded that Defendant file the complaint, which Defendant refused to do. In May 2012, Plaintiffs claimed that Defendant had breached the contract by failing to file the complaint. Plaintiffs withheld payment of the May 7 and June 18 installments of the retainer and advised Defendant that they would immediately transfer the funds if Defendant filed the complaint against Dial. Defendant again declined to file the complaint.

On June 8, 2012, Defendant sent Plaintiffs a letter stating that Defendant had elected to withdraw from his representation, citing differences of opinion on strategy and tactics and Plaintiffs' refusal to pay the May 7 retainer installment. Plaintiffs did not accept the withdrawal and advised Defendant that the withdrawal would be prejudicial to them. Despite Plaintiffs' protests, Defendant withdrew.

Plaintiffs then filed their complaint against Dial in district court in California. Plaintiffs retained different counsel to represent them in that action. The case against Dial was transferred to New York and, has since settled.

Plaintiffs demanded the return of the money they had paid to Defendant. Defendant refused, although he did ultimately return the balance of the cost fund ...

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