“This case is a sad reminder that friendship and business do not always mix.” So begins a lengthy ruling by Quebec Superior Court Justice Geneviéve Marcotte recounting the sombre saga of a successful Montreal businessman, a former corporate lawyer and his wife.
It is a story about a friendship that turned so sour that Justice Marcotte ordered Earl Takefman, formerly chief executive officer of a number of public companies, to pay Montreal lawyer Elliot Bier and his wife $20,000 each in moral damages, $25,000 each in punitive damages and nearly $42,000 in extra-judicial fees incurred by the couple in the proceedings, together with legal interest.
What’s more, Takefman has been ordered to cease and desist from communicating to the Biers or to third parties directly or indirectly in writing, including electronic communications such as emails and text messages, any details on the private life, the assets and property of Elliot and Dawna Bier and their financial situation, save and except to his legal counsel and staff.
The story begins well enough, with a friendship that was struck in 2000 between Takefman and the Biers. Their friendship was solid, so it seemed. The Biers asked Takefman to lend them $50,000 to pay for their daughter’s “sumptuous” wedding to be held in a private club in the Bahamas in April 2008. Takefman did not hesitate. A meticulous, detail-oriented, focused and determined person who is “extremely loyal and generous” to his friends and family is how Takefman described himself before the court. He trusted Elliot Bier, “especially since” Bier was expecting a $150,000 termination settlement from Grand Toys Inc. where he was a senior executive.
But when Elliot Bier, the managing partner of the Montreal law firm Adessky Poulin for more than 20 years, failed to repay the sum as quickly as promised, Takefman became upset as he was counting on the money to pay his income taxes. “When others fail to live up to their obligations, he does not hesitate to use intemperate language to express his frustration, disappointment and betrayal with them,” notes the judge. The debt was repaid two weeks later, in time to settle his taxes. Settled but not forgotten.
In some ways, though, the seeds of the fracas were sown six months before in the fall of 2007. Elliot Bier had begun trying to convince Takefman to invest in Global Clean Energy Inc. (GCE), a Colorado-based company that specializes in converting waste to energy and bio-fuels. Bier, who was a consultant for GCE, claimed that he was going to be its chief executive officer. Bier also claimed to have invested $100,000 of his own money to purchase 1.2 million GCE shares even though the shares had not yet been issued as it was pending approval from a U.S. securities regulatory body called the Financial Regulatory Authority (FINRA).
In mid-April 2008, shortly before the wedding of the Biers’ daughter in the Bahamas, Takefman invested $125,000 in GCE through his holding company Status-One Investments Inc. even though FINRA approval had not been obtained. He purchased 125,000 shares at a dollar per share. The monies was wired for deposit into the trust account of Kenneth Adessky. Takefman did not know that Adessky was a director and chief financial officer of GCE, and its largest shareholder.
Takefman claimed he invested in GCE because of Elliot Bier’s significant investment in the company and the fact that he was going to be its CEO. “Earl (Takefman) felt such confidence from Elliot’s representations that he did not find it necessary to perform a detailed due diligence or to consult the information that was publicly available on the Internet regarding the company and the identity of its officers and shareholders,” said Justice Marcotte.
When FINRA approval had still not been obtained by August 2008, Takefman asked to be reimbursed. He learned however that his $125,000 had been withdrawn from Adessky’s trust account and used by the company who could no longer reimburse it. This led to verbal and written accusations of fund misappropriation against both Elliot Bier and Adessky. Settlement discussions were eventually held with GCE. In mid-August 2008, Takefman signed a settlement agreement whereby he accepted to be compensated with an additional 156,250 GCE shares at no additional cost, bringing his total holdings to 281,250 shares which were to be issued within 48 hours of the FINRA approval.
FINRA approval was granted on September 3, 2008 – and “from this moment on, Earl (Takefman) would bombard Elliot with letters and emails from sunrise to midnight,” wrote the judge. He criticized Elliot Bier repeatedly, and began writing to his wife Dawna, a partner in a large employment agency in Montreal that does business throughout Canada and the United States. “The tone of Earl’s emails to Dawna became increasingly aggressive,” and “all the while, he continued to write to Elliot separately, reporting on the unfavourable comments made by their common friends,” said Judge Marcotte.
The emails began to have an effect. Between September 25, 2008 and October 2, 2008, Dawna Bier became increasingly distraught and nervous. She had difficulties sleeping and lost weight. She stopped going out, and hid at home. She also became increasingly aggressive with Elliot, as she blamed him for having gotten into business with Earl.
Mediation to settle their differences with Takefman was not a viable alternative, said the Biers before the court. Nor was launching a lawsuit or filing a private complaint, given the need for an immediate result and their financial difficulties. Elliot Bier’s right to practice was suspended for two years by the Barreau du Québec after he failed to account for 118 missing wills of former clients of Adessky, Poulin. Yet, notwithstanding this setback, Elliot Bier maintained the image of a wealthy and successful person. In 2008, he drove a Porsche, lived in Westmount, owned a condo in Bal Harbour, Florida. He ate at the finest restaurants and played golf with Takefman at an exclusive private golf club. He was also the Chairman of the Board of Governors of Mount Sinai Hospital, a position he held since 1991.
“In their view, their only option was to go to the police with their evidence and let the police decide whether to press charges against Earl (Takefman),” remarked the judge.
On October 11, 2008, an accusation of criminal harassment was authorized by the Directeur des poursuites criminelles et pénales and filed into Municipal Court. Four days later, Elliot Bier tried to kill himself. His wife rushed home after receiving an email from him “referring to the impact of Earl’s behaviour on his life.” She found him in the garage, asleep in his car, intoxicated with alcohol and pills.
Two months later, the Crown prosecutor dropped the charges. Before the Municipal Court, the Crown prosecutor said:
“I’ve reviewed the applicable case law. I’ve reviewed carefully the evidence on the file. I’ve met with both complainants in my office and I’ve discussed with them and the investigator. Following my unfavourable assessment of their credibility, the Crown comes to the conclusion that there is no likelihood of a conviction in the above mentioned… in today’s file. Given the context and the history of events, the Crown concludes that the acts of Mr. Takefman do not constitute criminal harassment, and for these reasons the Crown adduces no evidence in the file.”
Takefman, who spent some $34,000 in legal fees to defend himself, wrote to the Biers a day later in what he qualified to be an honest attempt to settle the situation with them. That same day, Earl also wrote to approximately 90 people, either members of his family, friends and acquaintances, outlining his acquittal and denunciating Elliot Bier’s attempts to falsely accuse him by “working the legal system.”
The Biers replied through a letter drafted by their attorney, informing Takefman of their intention to institute legal proceedings against him for his defamatory remarks. “Earl interpreted this as a declaration of war,” wrote the judge. Takefman filed separate proceedings against Elliot and Dawna claiming from each of them identical damages, as a consequence of their false and abusive complaint to the police.
He also continued to write more emails to the Biers and to third parties. In late November Takefman wrote to Adessky, with a copy to Elliot Bier, updating him on the progress of his various lawsuits and complaints:
“….Last week I filed a Fraud and False Pretence criminal complaint against you and Elliot. The fraud department tells me they are 3 to 6 months behind but I will follow up with the same aggressiveness that Elliot followed up with the prosecutor when he filed his unfounded complaint against me.
Last week I also filed a complaint with SEC against you and your ‘consultants’ I have already received their standard form letter telling me that they have received the compliant. Once again I will follow up aggressively.
Lastly, I also filed a complaint with the Barreau du Quebec against you and Elliott. I am sure Elliot can help you out in this regard given his experience in this area….
I also sued Elliot and Dawna last week for malicious prosecution and defamation. I cannot wait for the examinations on discovery.
[The Court’s underlining]
In February 2009, the Biers initiated their own set of proceedings — a Motion for provisional, interlocutory and permanent injunction. They later added a claim in damages.
Three months later, on April 27, 2009, Earl filed a complaint against Elliot and Dawna for public mischief under article 140 (1) a) of the Criminal Code. On July 9, 2009, Earl’s criminal complaint was refused, given that the Crown “could not be morally convinced that an infraction had been committed.” The Crown was also not reasonably convinced of its ability to convince a Court of the liability of the accused individuals.
In the meantime, Takefman lodged complaints against Elliot Bier and Adessky to the Syndic or investigating officer of Quebec’s legal society. Adessky was charged with the misappropriation of funds invested by Earl into GCE (Adessky is scheduled to appear before the Barreau du Québec’s disciplinary committee on August 31, 2012.)
No charges, however, were laid against Elliot Bier. The syndic concluded that Elliot Bier had not been acting in his capacity as a lawyer when he convinced Earl to invest into GCE and that there was insufficient evidence of Elliot’s conspiracy with Adessky in the transaction. He also concluded that Elliot Bier had not filed a false or unreasonable complaint to the police nor abused the Court system to his own benefit.
Justice Marcotte had to decide who was at fault in this sordid case. Did the Biers falsely and maliciously file a complaint to the police against Takefman, and if so, what damages should he be entitled to claim? Or are the Biers entitled to damages as a result of Takefman’s conduct and if so, what is the nature of the damages to which they are entitled?
While Takefman blames the Biers for having abused the legal system by filing false and abusive complaints to the police, Justice Marcotte held that he had only himself to blame.
“By sending repetitive and harassing emails, Earl (Takefman) provoked the Biers into going to the police and filing complaints against him,” Justice Marcotte wrote in her 50-page ruling. “When they did, he wrote emails to inform friends and acquaintances of the circumstances of his arrest and publicly attacked the Biers, knowing that these emails would become viral. He reminded these friends and acquaintances a year later and pursued his disparaging campaign.
“In light of Earl’s behaviour, it comes as no surprise for the Court that, in the process and through his vicious attacks, he may have lost some friends and may also have damaged his reputation. He is the author of his own misfortune and cannot blame the Biers for these consequences. He should have been wary of the old Chinese proverb: “Those who seek revenge must remember to dig two graves”..
Takefman’s arguments that his “vicious, slanderous, cruel and vengeful comments” should qualify as gossip, and therefore something that the court should not interfere with, did not hold water. “This is no gossip,” said Justice Marcotte in no uncertain terms. “Earl (Takefman’s) comments are uncivil and vicious, even in the most liberal context of freedom of expression. They are a clear illustration of an abuse of right and the exercise in bad faith of a guaranteed freedom.”
After weighing Takefman’s right to freedom of expression and his declared intention to offend the Biers as well as the Biers’ right to privacy, Justice Marcotte concluded that the “exceptional circumstances” of the case justify the issuance of a permanent order that will enjoin Earl not to communicate directly or indirectly in writing with the Biers or to third parties regarding the Biers’ private life, their assets and property or their financial situation.
“This is one of these rare cases, where such an extensive prohibition is warranted and can be reasonably justified,” said Justice Marcotte.
Though Takefman did not deny that some of his emails may have been defamatory, he contended that his actions had no impact on the Biers’ reputation, “which was already poor.” He also claimed that much of the damages claimed by the Biers were the result of their own doing, having been caused by their financial difficulties, Elliot Bier’s fights with his former partners and employers, or his suspension from the Barreau du Québec and his subsequent bankruptcy.
“The Court finds that none of these elements serve to negate the damages that the Biers may have suffered,” said Justice Marcotte. She held that Takefman’s disparagement of the Biers did have an impact. Their physical and mental well-being suffered as did their reputation and dignity.