Legal analysis

Adult film star Stormy Daniels has filed a civil action against Donald Trump, asking a California court to declare that the nondisclosure agreement between them is not valid because Trump never actually signed it.

The complaint alleges Daniels had an intimate relationship with Trump between 2006 and 2007. Years later, during Trump’s presidential campaign, he and his attorney Michael Cohen “aggressively sought to silence” Daniels, allegedly to ensure Trump was elected president. Daniels says she was pressured into signing a nondisclosure agreement — which she calls the “Hush Agreement” — and that she was paid $130,000 for her silence.

This is not a lawsuit seeking money or other damages.

Rather, it asks the court for “declaratory relief” — finding that the “Hush Agreement” was either never formed or that it is unenforceable. The purpose of such a declaratory judgment is to resolve doubts that might otherwise eventually result in litigation, and to guide the parties’ future conduct to preserve their legal rights.

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Stormy Daniels’ attorney: Trump knew about payment to her at the time 5:01

Daniels’ objective is to have the court clear up whether this contract really forces her to remain quiet. That could be important if Daniels seeks to profit by telling her story about her alleged relationship with Trump.

Because the nondisclosure agreement between Daniels and Trump contains an arbitration agreement, the court’s decision on the validity of the contract will likely also determine whether Daniels’ case even belongs in court.

Cohen has denied that Trump had a relationship with Daniels. White House Press Secretary Sarah Huckabee Sanders, responding to a question, said on Wednesday that Trump didn’t approve the $130,000 payment that Cohen made to Daniels. “The president has addressed these directly and made very well clear that none of these allegations are true,” she said.

The Trump team has apparently already sought to place this case in arbitration — a maneuver that would surely benefit the president. The agreements attached to the complaint contain mandatory arbitration provisions with penalties for noncompliance.

Arbitration clauses are increasingly criticized as an unfair means of resolving disputes for individuals like Daniels. The high costs, secrecy, limited discovery and denial of court access are just a few of the many complaints about the proliferation of these clauses, which inherently favor corporations over the “little guy.”

If the court determines the contract between Daniels and Trump to be valid, then it will likely conclude the case belongs in arbitration, not in court, and Daniels’ claim will disappear from the public eye.

On the other hand, if the original contract and arbitration clause either never existed or is now unenforceable against Daniels, then Trump can’t force her into arbitration — and he can’t force her to keep quiet.

Daniels’ primary argument is that Cohen was the one who signed the agreements, and not “David Dennison” — Trump’s alias in the contracts attached to the complaints.

Cohen appears not to have signed for “Dennison”; he signed a separate signature line, on behalf of the entity “Essential Consultants.” The signature lines for Trump/Dennison in the documents are blank.

According to the allegations in Daniels’ complaint, this was not an oversight. It was allegedly a deliberate choice by Trump so that he could deny knowledge of the agreements if they surfaced publicly. If true, this was a tactical gambit by the Trump team that could now prove fatal to the contract.

Attorneys routinely sign documents on behalf of their clients, with the permission of the clients. An attorney is authorized by virtue of his employment to bind the client in procedural or tactical matters that are incidental to litigation.

On the other hand, an attorney’s signature on documents may not bind or impair the client’s substantial rights, as in the case of settlement and compromise of claims.

Even if Cohen or another attorney for Trump had signed for Trump/Dennison, a court could conclude that the attorney’s signature was ineffective. In this case, nobody signed for Trump. The Trump team will surely argue that because Essential Consultants and Trump/Dennison were aligned, the signature of one is effective for both, and that Trump’s actual signature was never required.

The Trump team might also argue that because Trump performed his part of the bargain, Daniels accepted the contract payments, and she cannot now deny the agreement’s existence or fail to perform her obligations under it.

Danny Cevallos is an MSNBC legal analyst. Follow @CevallosLaw on Twitter.

 

Courtesy: NBC NEWS

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