Page 1
Court of Appeal:
Erika Jayne Not Liable for Misdeeds of Husband Tom Girardi
Opinion Says Summary Judgment Properly Granted in Favor of Reality TV Star in Action Alleging She Aided in Spouse’s Breach of Fiduciary Duty in Misappropriating Settlement Funds; No Proof She Knew of Scheme
By Kimber Cooley, associate editor
|
|
|
Pictured above is reality-television star Erika Jayne, estranged wife of disbarred lawyer Thomas V. Girardi. The Court of Appeal for this district has affirmed a judgment in Jayne’s favor in an action alleging that, on an aiding and abetting theory, she shares liability for torts committed by her husband. |
Div. Five of this district’s Court of Appeal has affirmed the dismissal of a claim filed against Erika Jayne by a personal injury attorney asserting that she aided and abetted her estranged husband, disbarred lawyer Tom Girardi, in breaching fiduciary duties owed to the plaintiff by misappropriating settlement funds.
In an unpublished opinion filed Tuesday, Acting Presiding Justice Lamar Baker said the claim fails as a matter of law because the undisputed facts show that the defendant, a singer and cast member on the hit reality television show “Real Housewives of Beverly Hills,” had no actual knowledge of any asserted breach, rejecting the plaintiff’s contention that the star’s lavish lifestyle put her on notice of the financial impropriety.
Justices Carl H. Moor and Dorothy C. Kim joined in the opinion.
Appealing the judgment in favor of Jayne (the surname used professionally by Erika Girardi), was Long Beach solo practitioner Robert P. Finn, who filed a complaint against her, her former husband, and his now-shuttered law firm, Girardi & Keese (“G&K”), on Dec. 9, 2020.
According to the operative complaint, Finn entered into retainer agreements with clients he later referred to G&K for joint representation in exchange for an agreement to share fees following the resolution of the claims.
The clients allege that they were sickened by emissions of a toxic chemical produced by TXI Industries’ Riverside-area cement plant. According to Finn, the claims were ultimately resolved with a cash settlement of $31 million.
After Finn did not receive his $3.94 million share of the settlement from G&K, he filed suit.
Allegations in Complaint
Finn sets forth a single cause of action against Jayne, asserting that she aided and abetted a breach of fiduciary duty owed to the plaintiff by her estranged spouse.
The operative complaint alleges:
“When the cases settled and the attorneys’ fees were paid out to Girardi to handle on behalf of and distribute to the joint venturers, Girardi had a fiduciary duty to act with the utmost good faith in performing those tasks, but Girardi breached his fiduciary duty by misappropriating the funds and not disbursing them to Plaintiffs. Defendants knew that Girardi was breaching his fiduciary duties, but rather than put a stop to it, they aided and abetted Girardi because it benefitted them financially.”
According to the pleading:
“Girardi’s wife, Defendant Erika Jayne, knew about the scheme and that victims like Plaintiffs were funding her notoriously lavish lifestyle chronicled on The Real Housewives of Beverly Hills, and aided and abetted Girardi’s breach of fiduciary duty and has direct liability for participating in and facilitating the conduct….Defendants knew that Girardi was operating a Ponzi scheme that depended on Girardi breaching his fiduciary duty to Plaintiffs and other joint venturers and took no action to stop the breaches.”
Summary Judgment Motion
Jayne moved for summary judgment, arguing that Finn could not meet his burden of proof on two elements of the cause of action against her—that she had actual knowledge of the alleged breach of fiduciary duty and that she provided any substantial assistance to the firm or the former attorney.
She filed a declaration averring that she was “never” a lawyer, “never” worked at G&K, and had “no knowledge” of the TXI litigation or the dealings between Finn and the firm.
In his opposition to the motion, Finn did not dispute any of the defendant’s evidence that she was unaware of the TXI litigation but argued that Jayne’s knowledge of the breach could be inferred from circumstantial evidence indicating that she benefitted from the alleged misconduct, saying:
“Erika Girardi is the single largest beneficiary of the single largest fraud by a law firm in the history of California. With her help, Ms. Girardi’s husband, Tom Girardi…stole more than $100 million from clients and attorneys like…Robert Finn who referred the clients, and Ms. Girardi spent much of that money financing her lavish lifestyle and her expensive and unprofitable dream to become a pop star, as chronicled on The Real Housewives of Beverly Hills. Ms. Girardi admits that she signed all the tax returns for her company EJ Global, LLC, which received at least $25 million from Girardi Keese….She admits she signed subordination agreements for lenders to keep money flowing to her when she already knew that the Franchise Tax Board was auditing her company, which operated at a loss for over a decade but continually spent law firm money on what the FTB alleged was a music ‘hobby’ and not a ‘career’….Meanwhile, Ms. Girardi consistently made public statements and continues to make inconsistent and nonsensical public statements designed to keep creditors at bay and obfuscate the truth.”
In reply, the defendant argued that she was entitled to judgment as a matter of law because Finn conceded that she had no actual knowledge of the scheme.
Los Angeles Superior Court Judge Richard L. Fruin Jr. granted Jayne’s motion in August 2022, pointing to case law holding there is no fiduciary relationship between co-counsel and that it was “undisputed” that Jayne had no actual knowledge of a breach of fiduciary duty.
Aiding, Abetting Breach
Baker noted that “[t]he elements of this sort of an aiding and abetting claim are: ‘(1) a third party’s breach of fiduciary duties owed to plaintiff; (2) defendant’s actual knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement by defendant…; and (4) defendant’s conduct was a substantial factor in causing harm to plaintiff.’ ”
Saying that “[t]he second of these elements, actual knowledge, is ‘crucial’ because even ordinary business transactions can constitute substantial assistance,” he wrote:
“Defendant put forward evidence she had no actual knowledge and that evidence was never disputed by Finn such that a trial would be necessary. Indeed, Finn continues to concede the point on appeal. The only counterargument made by Finn is that there is circumstantial evidence that would allow a factfinder to draw an inference that defendant should have been aware of some financial impropriety going on with her husband or his law firm generally.”
He continued:
“Even if that were true—a point on which we express no opinion—it is not enough. Finn’s complaint alleged defendant aided and abetted a particular breach of a fiduciary duty, and the undisputed summary judgment record establishes defendant had no awareness of even the existence of a relationship between Finn, Girardi, and G&K concerning the TXI Cases, much less of a breach of an asserted fiduciary duty involving those matters.”
Under those circumstances, he declared that “defendant was entitled to judgment as a matter of law.”
The case is Finn v. Girardi, B324878.
Jayne was represented by Evan Christophe Borges and Heejin Hwang of the Costa Mesa and Los Angeles offices of Greenberg Gross LLP. Acting for Finn was James Winston Spertus and Michael Anthony Brown of Spertus, Landes & Umhofer LLP, and Ronald N. Richards of the Beverly Hills-based Law Offices of Ronald Richards & Associates A.P.C.
Tom Girardi was disbarred in 2022 after the state disciplinary body acknowledged receiving more than 200 complaints of misconduct against him throughout his 40-year career. In August of last year, he was found guilty of four counts of wire fraud for embezzling millions of dollars from his law firm’s clients and using the money to underwrite an extravagant lifestyle enjoyed by him and his now-estranged wife.
His sentencing has been delayed due to assertions by his defense attorney that he suffers from dementia.
Jayne filed for divorce in 2020 but the couple remains legally married.
Copyright 2025, Metropolitan News Company