On March 6, 2018 Stormy Daniels, by and through her attorney, Michael Avenatti, filed a complaint against Donald Trump and Essential Consultants, LLC (“EC”) in the Los Angeles Superior Court. Since then, things have moved rather swiftly. The defendants transferred the case to the federal court in Los Angeles, and the plaintiffs added a complaint for defamation against Michael Cohen, Trump’s attorney. On March 28, the plaintiffs moved the federal court for an order authorizing a deposition of President, pointing out that the Supreme Court had authorized a similar deposition of William Clinton when he was President. The next day, the federal judge rejected the motion without a hearing, saying that it was premature. But Avenatti has indicated that he will renew his motion in the future.
What is the main thrust of the action against Trump? Stormy Daniels has alleged that she was involved in a consensual sexual relationship with Trump back in 2006. In July 2016, Trump secured the nomination by the Republican Party for President. On October 6, 2016, the Washington Post disclosed a video showing Mr. Trump making lewd comments about women. Within days, several women came forward to say that Trump had sexual encounters with them.
Stormy Daniels then indicated that she wanted to tell her story. She now alleges that Trump and his attorney Cohen colluded to hush her up. EC was founded on October 17, 2018. On October 28, 2018, Stormy Daniels and EC signed an agreement under which all of her rights to her story involving Trump were transferred to him and she would be barred from talking or writing about it. In return, EC paid her $130,000.
Stormy Daniels was paid $130,000 and accepted it. That in itself might be sufficient reason to make the contract binding on her.
In her complaint, Stormy Daniels alleges that the agreement is void, despite the fact that she received $130,000, because Trump did not sign the agreement.
Personally, I would hope that she would succeed and be able to depose Trump, but I can see some significant problems with her arguments.
- First of all, there are any number of cases decided in the past where a contract has been enforced without all parties signing it.
- Second, Stormy Daniels was paid $130,000 and accepted it. That in itself might be sufficient reason to make the contract binding on her.
- Third, she initialed every page of the contract, and so did EC, the latter signing on the line meant for Trump.
In addition, all notices involving the agreement are to be sent to Trump in care of EC. And, finally, the contract states that it is by and between EC and/or Trump, on the one hand, and Daniels, on the other. The “and/or” language means that Trump is not an essential signing party.
If the agreement had been between EC and Daniels alone, without Trump as a specific party, it would be perfectly valid. Two parties can enter into a contract, intending for a third party to be a named beneficiary even though not a signatory. In this sort of situation, the signing parties are bound, but the third party has rights, too. Even if Trump knew absolutely nothing about the agreement, the contract can still bind EC and Stormy Daniels.
Which is really too bad. Because Trump caused the entire situation. It was he who initiated the sexual encounter with Stormy Daniels, at a time when he was married to Melania and they had just had their first child. He’s the one who should suffer. Instead, it’s Stormy Daniels and the rest of us who are going to suffer “the slings and arrows of outrageous fortune.”
Michael T. Hertz