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Some time ago, I was served a frivolous, extortionary lawsuit. The complaint included a number of false claims. I went to a lawyer, who told me that while I could fight this and probably win, my best option was just to pay them some money and move on with my life. I was furious, naturally, and insisted in multiple conversations with my lawyer that these guys were fraudsters, but my lawyer (who didn't seem to believe me) kept telling me "Nah, this is in good faith, just pay up and settle and move on." So I did. Some time later, I hear that these people who sued me are in trouble for, you guessed it, filing a bunch of baseless and frivolous lawsuits in order to extort things from people. So now this is out in the open. Meanwhile, I'm still out over $20,000, following my attorneys advice.

I would like to know if it is, in general, possible to throw out a settlement agreement in the situation that the plaintiff has since demonstrated a consistent pattern of abusing the court system. There's a non-disparagement part that I would like lifted, and then there's all the money I lost that I would like back.

More specifically, if I were to pursue this, what sort of lawyer should I talk to? I apparently picked the wrong lawyer last time, and I'm not interested in contacting the attorney who negotiated this horrible deal for me, ignoring a number of red flags.

  • Is this in the U.S.? Also, what sort of "trouble" are the people with whom you settled in? E.g., were they sanctioned by a court? Charged with a crime? – feetwet Oct 7 '15 at 19:38
  • This is in the US. They are being sued by other victims, after their case was dismissed. I have reason to believe (based on some observations which I don't want to be to specific about) that they are also under investigation from some state regulatory agencies. – B Wen Oct 7 '15 at 20:13
  • What was the case? If there are other victims, unit and hang in there. Testify the shit out against that asshole. Publish his stories. – user4951 Oct 6 '16 at 5:52
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As for which lawyer to hire, when these schemes fall apart, it is usually because a couple of defendants hung in there. Find out who was representing those people and call the lawyers.

As for the status of your settlement, the bad behavior after-the-fact might be enough to bolster your cause, but you are going to need to identify bad behavior before the fact and prove that some of it landed on you.

If they knowingly defrauded you, and you justifiably relied on fraudulent statements, you could get a judgment as well as punitive damages. However, it doesn't look like that happened here. (What I mean is that it sounds like your claim is based on what these guys did to other people.)

Unjust enrichment is also a potential tool that you could use but that is usually going to require an absence of consideration. This generally means that you would not have gotten anything in return for your payment. But you did get something, you got the case against you dropped. That was your consideration.

It seems to me that while "the complaint included a number of false claims," it also included enough true claims that scared you enough to pay. So, if you do invalidate the settlement, are you prepared to defend yourself against the original charges?

EDIT: by the time these things blow up, the money is usually gone. As in, your money is gone.

  • I didn't rely on fraudulent statements - because the statements in the complaint were about me and I knew them to be false. There is no question (to me) that the bad behavior was there before I settled. I was talked into settling by my attorney. I am quite certain that these guys (who run a successful legitimate business on the side) would not pursue the original charges against me, because last time they did that they were called out for it publicly, and they did a 180 and called the whole thing a "misunderstanding." – B Wen Oct 7 '15 at 21:12
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I am not a lawyer, so this is a layman's observation.

You don't seem to have a good case against the plaintiff. You were advised by a lawyer, and all the legal forms were observed. The subsequent "frivolous pattern" was not there at the time that you settled, and the law (normally) doesn't allow you to act retroactively.

You might want to consult a malpractice or ethics lawyer to see if you have a case against the lawyer. The lawyer "caved in" and got less for you (including the absence of a nondisparagement clause) than a reasonable settlement. The potential "litigation value" of such a case is everything you lost by settling, including attorney's fees. If your case is strong enough, some lawyers might be willing to take it on contingency.

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