There are two different ways that an attorney can unjustly obtain a quarter-million dollars with very little work. This case exemplifies -- at least writ large -- both of them.
I'll first talk about the legal way one can get your hands on the cool quarter mill. Since that's both what the actual case is about as well as the better way.
Default judgments. Gotta love 'em. Here, Alan Cruz is a 16-year old kid whose parents bought a pressure cooker at the San Diego Fair, and a couple months later, he burned himself when he tried to take the lid off. Fagor America is the American distributor of the pressure cooker, so Cruz (and later Cruz's attorney) writes to try to get Fagor America to pay up. Fagor's insurer says they'll reimburse Cruz for his $5,000 in medical bills but nothing more. So Cruz sues.
At which point it gets interesting. Since Fagor America is an out-of-state corporation, Cruz's attorney does the easy thing and serves 'em via certified mail, return receipt requested, in an envelope addressed to the president (who's an officer, of course) of Fagor. Right. Fagor's a 13-person company, and, not surprisingly, someone other than the president signs for the process. Makes sense.
Then, inexplicably, Fagor does nothing. Doesn't answer. Doesn't respond to the first attempt by Cruz to enter a default. Doesn't respond to the second attempt either. So eventually Cruz succeeds, and obtains a default judgment of $259,000+. At which point another six months passes, during which Fagor again gets notices but continues to do nothing.
Eventually, Fagor America requests relief from the default judgment on a variety of grounds, and Judge Hayes (down here in San Diego) gives it to 'em, holding (among other things) that service of process was improper because the officer didn't personally sign for the mail (and there was no evidence that she ever personally received it) and that relief was also available for extrinsic mistake.
But Justice Aaron reverses. Service was proper, she said, and there was no basis for relief from the default judgment since Fagor America didn't (and apparently couldn't) explain why it sat on its butt until after the plaintiff filed notice of a lien. So back comes the $259,000+ judgment. Plus statutory interest and costs, of course.
So that's one way to make your money. Either as the plaintiff or as the attorney on a contingency fee for the plaintiff. Plus, it's legal!
Now let me tell you the other way. Which I mention only because I looked up the attorneys on the case and noticed that both of them -- Harold D. Thompson for the plaintiff and Kathleen McCormick for the defendant -- were graduates of the fine University of San Diego School of Law. Which led me to do a tiny bit of additional digging.
So the alternative way is: Forgery. Back in 1996, Mr. Thompson -- attorney for the plaintiff, you'll recall -- did a little digging of his own and noticed some unencumbered property in San Diego owned by a person named Jay Johnson. Which perhaps reminded Harold of the famous beer commercial jingle: "You can call me Ray, or you can call me Jay, but you doesn't have to call me Johnson." Except that Thompson said: "Hey, why not have everyone call me both Jay and Johnson?!" At which point he obtains false identification in the same of Jay Johnson, presents the identification to take out mortgages on the property, and cashes the loan checks to the tune of $200,000-plus.
Neat, huh? And would have worked, too, except for a suspicious teller at one of the banks at which Thompson (a/k/a Jay Johnson) deposits the checks, who sniffs the whole thing out, contacts police, and eventually leads to Thompson being convicted in both Riverside and San Francisco of forgery.
I'm a little more sympathetic towards Thompson than most people not only because I'm an institutional guy (he's a USD grad, after all), but also because he apparently suffered from severe depression at the time of the incident as well as made immediate restitution and cooperated with the Bar during the resulting disciplinary process. Plus, he served his sentence and also served his three-year suspension from the Bar, so you've got to give the guy a second chance, right?
I nonetheless found it somewhat ironic that a guy twice convicted of forgery is now making a fair piece of contingency fee money as the result of a default judgment from a particular signature on a return receipt. But, hey, that's the way the cookie crumbles. And at least it's an honest way to make a living. Or, at minimum, more honest than the apparent alternative.
