If you don’t recognize Roy L. Pearson’s name, you should. He’s the latest poster boy for frivolous lawsuits, and for good reason. And now, he’s back in court.
In 2005, Pearson filed a US$67 million lawsuit against Jin Nam and Soo Chung. The Chungs operate a dry cleaning service, and Chung claims they lost his favorite pair of pants.
Now, if you’re wondering how a missing pair of pants from an US$1,100 suit came to be worth US$67 million, you’re not alone. Among other claims, Pearson (a lawyer and former administrative law judge) sued for 10 years of weekend car rentals so he could transport his dry cleaning to another store. Later, Pearson reduced his claim to US$54 million after deciding to focus on alleged fraud by the Chungs. The source of the “fraud?” A “satisfaction guaranteed” sign in the store.
In any event, after the Chungs spent more than US$100,000 defending themselves from this legal onslaught, the presiding judge threw out Pearson’s lawsuit. But Pearson has appealed the dismissal to the District of Columbia Court of Appeals. He claims that "satisfaction guaranteed" means that unsatisfied customers are entitled to whatever damages they believe are appropriate. Just fill in the blank, and they should write you a check.
According to Pearson, "Never before in recorded history have a group of defendants engaged in such misleading and unfair business practices." Well, I’m not a former judge, but I just don’t see how a “satisfaction guaranteed” sign is worth US$54 million.
Readers outside the United States might be shocked to hear that U.S. courts entertain lawsuits as loony as this one. Unfortunately, they do, and the costs can be catastrophic. The Chungs have already closed the shop involved in the dispute. With their legal fees mounting daily, the Chung’s plight is a textbook case for asset protection planning. At one point, they even considered moving back to South Korea, where Mr. Chung once worked in a charcoal factory.
If someone like the former Judge Pearson ever sues you, you'll wish you had a "financial fortress" in place that can't be touched, even if you lose. And there are plenty of options open to you—read more about them here.
Copyright © 2008 by Mark Nestmann
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