In the latest round of the litigation between MMRGlobal, Inc. (OTCBB: MMRF) company MyMedicalRecords.com (“MMR”) and Beverly Hills Housewife Taylor Armstrong, Los Angeles Superior Court Judge Frederick Shaller dealt a blow to Taylor Armstrong in denying her motion for a summary judgment to have the MyMedicalRecords.com lawsuit against her dismissed.
We first broke the story in a July 2011 article when MMR, a provider of secure personal health records and electronic safe deposit box storage solutions, originally filed a breach of contract lawsuit against Taylor Ford Armstrong – aka Taylor Ford, Taylor Armstrong and Shana Hughes – and her now-deceased husband, Russell Lynn Armstrong and Armstrong’s Venture Capital firm, Nuway Digital Systems, Inc. The original court documents can be viewed here.
The litigation stemmed from damages backdropped by a series of doings by the Armstrongs involving misappropriation of funds and lack of fiduciary responsibility in their Bernie Madoff-type investor scheme that was originally settled in 2007 when Russell paid a $250,000 penalty for his activities, returned all of his shares of then-private MyMedicalRecords.com and was completely disconnected from any association with the company. Additionally, the Armstrongs were to provide all the names of shareholders whom the two had fleeced so that the now public MMR could rectify the situation with each person.
Taylor was included in the settlement for her active role in the shady dealings and at least one situation where a check from an investor to MMR appeared to be converted to her personal bank account. The signed settlement agreement required Russell and Taylor to disclose all of their dealings regarding MMR stock and included a liquidated damages provision in the event that Taylor or Russell failed to disclose the names and details of their victims at $1 million for the first failure and $250,000 for each additional failure. At the time of the original filing on July 29, 2011, three complaints had been reported; totaling a request for liquidated damages by MMR from the Armstrongs of $1.5 million.
Taylor filed a motion to the case seeking dismissal of the litigation claiming that minimal harm was done to MMR. Taylor’s lawyer, Michael Gless, argued that MMR already was aware of one of the shareholders named in the $1.5 million liquidated damages lawsuit and that there was no proof that the Armstrongs had to reveal any other names.
Judge Shaller apparently didn’t agree; denying the motion by Armstrong. The Court noted that MMR is not required to prove actual damages in order to trigger a claim for $1.5 million in liquidated damages. “There is no evidence of the circumstances existing at the time the contract was made to enable the court to find that the liquidated damage clause is unreasonable,” the Superior Court Judge said in his ruling.
According to Richard L. Charnley, a partner in the law firm Ropers Majeski Kohn Bentley PC representing MMRGlobal, the case remains set for trial on July 11, 2012 at which point MMR may present evidence of additional undisclosed victims of the Armstrongs that could increase MMR’s claims for liquidated damages to more than $3 million.
“I said in the past that we would vehemently pursue the litigation for the benefit of our MMRF shareholders and I still stand 100-percent behind that decision,” said MMRGlobal CEO Bob Lorsch in a phone conversation with us. “I am extremely pleased by the court’s ruling to reject claims that only ‘minimal harm’ was done to our company or any private company investors and loyal shareholders who dealt with the Armstrong’s.”
Interested parties looking for more information on the lawsuit can read our article in which we spoke with Award Winning designer John Wiltgen and real estate entrepreneur Philip Elghanian about their direct dealings with Taylor Armstrong.
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