Tuesday, May 20, 2014

A Whistleblower’s Tainted Defeat: CA Appellate Reversal Paves Way for Continued Bank Retaliation

Yves here. A key element that this post’s author, whistleblower Michael Winston, does not mention is that he played an important role in the PBS documentary The Untouchables, which is probably best known for the scene in which Lanny Breuer said he stayed awake at night worrying that he might be hurting banks.  

By Michael G. Winston, who served in executive positions for five Fortune 100 companies across three industries (high technology, aerospace and financial services) and has been included in several “Top Business Thought-Leaders” lists. He took a strong and visible stand against the malfeasance he witnessed at Countrywide

I have been called the whistleblower who “conquered Countrywide” by Pulitzer-Prize winning journalist Gretchen Morgenson of The New York Times. I have also been referred to as “Wall-Street’s Greatest Enemy: The Man Who Knows Too Much,” by the PBS show Moyers & Company and a revelatory article by David Dayen in Salon.

However, I do not feel like a conqueror at all. I feel like a victim who has been repeatedly re-victimized by a system that allows legal loopholes, misrepresentations, and fraud on a trial and appellate court. On May 8, 2014, I was informed that Bank of America, a $100,000,000,000 company with over $2.2 trillion in assets, has placed a lien on my Thousand Oaks home for $96,523.29. Ironic that this is the home I purchased to which I relocated my family when accepting a position for which Countrywide aggressively recruited me. This continues the retaliation that I have experienced by Countrywide and successor BAC for over 7 years. My offense? When they defrauded and abused employees, homeowners, shareholders and taxpayers, I stepped up and challenged them vigorously and took them to court. I won a convincing legal victory. Somehow they found a way to have my strong jury verdict and judicial ruling reversed in my absence (there was no new evidence) and now I must pay this behemoth’s court costs including nearly $65,000 for a bond that was ordered by the court, not requested by me.

The Court is leaning on me. Interestingly, no such efforts were made by the Court to collect my substantial financial award or court costs from BAC/CFC during the 26 months after my successful verdicts and judgments and before appellate reversal deemed to be unconstitutional and unlawful by a growing number of prominent attorneys. The damages were NEVER given to me. Not a penny! It is almost like they had planned to reverse judgment and verdict from the outset.

During litigation, BAC/CFC lost motions for summary judgment, disqualification for lack of court standing, lost jury verdict, judicial ruling, motion for judgment notwithstanding verdict and had very strong evidence against them. BAC/CFC, waited over two years thereafter, then was able to convince a court to support their appeal (consisting largely of lies under oath) and found a court willing to reverse these (in violation of law, constitution and despite evidence in my favor cited as “overwhelming” by trial judge). They claimed I had no evidence and therefore have to pay court costs to the “prevailing party.” They did this by manipulating some crucial evidence and eliminating or ignoring other crucial evidence. I am in possession of original evidence and court record. If an unbiased panel reviewed the actual evidence, they would affirm original verdicts and judgments against BAC/CFC. I believe I actually possess enough evidence for an unbiased Court to pursue criminal charges. These courts should have. I would like to call for just this action.

In the meantime, whistleblowers like me see once-impressive corporate careers collapse and strong financial positions implode. Why? Because we uncovered fraud, insider trading, and illegal business and safety practices, spoke against these unlawful practices and tried to protect the masses from them. In short, we are punished for doing the right thing and telling the truth about it while the guilty are rewarded for doing the wrong thing and lying to cover it up.

I recently returned from the American Whistleblower Tour at Syracuse University, during which I presented my saga to a number of audiences. Several of my colleagues suggested I share the new elements of this story, once-forgotten and now-recalled, that change the calculus and make it even more in the public interest.

The case of Winston vs. Bank of America/Countrywide has been reported upon for many reasons. The strong and decisive jury verdict in my favor with over $3.8 M in damages prompted the case to be newsworthy for over two years. So, too, did the unwillingness of any in the legal system to take action against CFC/BAC witnesses for an unending litany of lies as well as document alterations and fabrication while under oath. (See embedded document at the end of this post) There were no repercussions. A seemingly pretextual appellate reversal over two years after the favorable jury verdict has kept it in the news. Whistleblowers and others are concerned that an Appellate Court can deny due process and remove rights guaranteed by the constitution. They are also questioning the legality of this action. I am hoping to have this judgment amended.

A prominent California attorney, Cliff Palefsky, recently went on the record regarding actions taken by the Appellate Court which deprived me of my constitutional rights reversing the favorable jury verdict (said to be “overwhelming” by the Trial Judge on the record). This sets a dangerous precedent.

Mr. Palefsky stated on the record, “This never happens…It isn’t legal.” He then said “The appeals court is not supposed to go back and cherry-pick through the evidence the way this court did. And if there is any doubt about a case, they are legally bound to uphold the jury’s verdict.”

Mr. Palefsky has been included as one of the Best Lawyers in America every year since that survey’s inception in 1986 and was named Best Lawyer of the Year in the San Francisco Labor and Employment Law category in 2011. In 2013, Best Lawyers named him Best Lawyer of the Year in the San Francisco Employment Law – Individuals category. He received his J.D. from Georgetown University in 1977.

Mr. Palefsky has been called one of the “Most Feared Lawyers” by Human Resources Magazine and the San Francisco Business Journal. In 2010 he received the California Lawyer Magazine Attorney of the Year Award for his work as part of a litigation team that obtained a $78.5 million settlement – the largest settlement in the history of the U.S. Department of Education. Chambers USA described him as “the leading plaintiff side employment lawyer in California” and named McGuinn, Hillsman & Palefsky as the leading plaintiff employment firm in the state.

If it is true that “they are legally bound to uphold the jury’s verdict,” I need a lawyer to enforce this for me. The Appellate reversal felt totally contrived, a product of an unholy alliance between the legal system and a too-big-to-fail bank.

The appellate process as it was applied to my case was deeply-flawed. It involved people who were not there and do not know what happened. They may not have even read the briefs, delegating this task instead to law clerks. Even then, the overworked clerks may only scan portions of the material. Appellate documents were pushed back and forth between the two parties. Three times each. With each successive receipt, more and more of the evidence that the jury relied upon in deciding my case was deleted. Vanished into thin air.

Thus, this Appellate court decision was based upon sound-bites, half-truths, untruths, edited or radically-depleted records. I have been informed by leading attorneys that the process described above is highly unusual. Purposeful or not, the Appellate Court is depriving people of their civil rights and depriving society of the truth. How many others once victimized and seeking justice will be re-victimized by the legal process? How pervasive is this practice which denies us of constitutional rights?

Lawyer Clay Robbins told me the Appellate Court made a “draconian move. They did it deliberately. You got shafted. You had sufficient evidence to prevail with the Appellate Court. They should have affirmed the jury verdict. They deliberately circumvented your options. Their decision was not judicious.”

Why would a court be suppressing rather than enforcing my rights?

When I accepted an invitation to go work for this rapidly growing mortgage company in 2005, I was eager for a new opportunity and envisioned years of impact, performance and the satisfaction that comes from knowing we made a difference. I was excited to help them build a broadly diversified financial services firm. They told me they wanted me to help them build a “Goldman Sachs on the Pacific.” I served as Managing Director and Enterprise Chief Leadership Officer.

I had no idea I would wind up in a battle that would consume years of my life. I never dreamt the nation’s economy would soon lie in tatters, forcing millions from their jobs and, in record numbers, from their homes as well. I never suspected that my new employer would in a few years come to be known as one of the prime players in a global economic crisis of historical proportions—an institution that Senator Charles Schumer referred to as “ground zero of the financial crisis.” The Great American Dream had become the Great American Nightmare.

Right before my eyes, Bank of America/Countrywide Financial seemed to repeatedly break the law. I saw it and tried to correct it. I was retaliated against mightily for doing so. It is against the law to retaliate against an employee for engaging in a protected activity. I sacrificed my career, personal life and financial stability to do the right thing. I was completely vindicated by the jury. The Chief Justice admitted this saying in the L.A. Times “the California Court of Appeal ruling… did not dispute Winston’s account of how Countrywide executives, including then-Chairman Angelo Mozilo had turned against him.”

This case involved my refusal to misrepresent material facts to a securities rating agency (Moody’s Investors Services, Inc.) and other business integrity issues and my whistleblowing activities (reporting serious health concerns to Cal-OSHA). These acts are protected by the law as a matter of public policy. I tried to stop the malfeasance I observed at Countrywide. I had witnessed what I believed to be blatant Countrywide insider trading, securities fraud and market manipulation. So, too, did the authorities. I had hoped the Board would step in but it was not to be. It was later revealed by Moody’s that there was a reason the outside directors did not act. Moody’s cited as concerns “Limited large public-company senior executive experience among directors” and “Director pay out of line with peers.”

(Note- Outside directors were paid twice as much as their peer group, according to Moody’s.)

My warnings were dismissed or ignored by management as well as the SEC. Instead of being rewarded for doing the right thing, I was punished, isolated, tormented, financially harmed and ultimately dismissed.

I may be the only plaintiff who has been able to convince a court of the direct involvement of the top officers of Countrywide Financial – including cofounder, CEO and chairman of the board Angelo Mozilo – in wrongdoing and thus compel their testimony.

My case was a retaliation case, not a wrongful termination case. It is true I was terminated a month after BAC took over, however my case was about the ongoing, relentless, egregious retaliation that took place at least once monthly (usually multiple times) from August, 2006 until termination in end of July, 2008. The jury heard about and saw proof of over eighty adverse employment actions taken against me by Countrywide over a two-year period, starting immediately after my alert to Cal-OSHA about dangerous conditions of a “sick building.” The jury heard and saw proof that dozens of people complained of difficulty breathing, headache and stomach ache, a metallic taste in their mouths and dizziness. Many sought medical attention for these sudden conditions. The jury also saw proof that I had sought mitigation from every level internally at Countrywide before contacting OSHA. It was only when I saw proof of their intent to cover-up, not mitigate, the environmental hazards that I took action. Many witnesses testified that my team and I were retaliated against. The jury heard this. Such retaliation was blatant, relentless and done in plain sight.

The retaliation actually increased when I refused to lie when asked, to Moody’s Investors Service, a ratings agency. I was asked to misstate the truth about the company’s succession plan and other governance issues by Countrywide’s President and COO as well as the Chief Human Resources Officer. My report acknowledged the succession gap clearly noticed by employees and ALL ratings agencies and attributed this to rapid growth, intense market demand and paucity of skills in this area (which is, in part, why my team and I were hired). This was the truthful and appropriate response. I was not going to outright lie and claim there was no gap in leadership. There was. In fact, I urged CFC to file an 8 K form to notify investors of the departure of the President and Chief Operating Officer, considered a material event that is important to shareholders and the United States Securities and Exchange Commission. As early as 2005, well before the mortgage crisis brought the economy to a halt, I had also informed the President of Countrywide Home Loans that their policy of a loan for everyone was neither responsible nor sustainable. I offered to help them change their business model.

When the retaliation, fraud and market manipulation picked up speed, I decided to sue as a means to hold them accountable. Wrongful termination was only the last of over eighty adverse employment actions. The case-in-chief we filed and pled was “Retaliation in violation of public policy.” The wrongful termination claim is much narrower and is not what we argued. The term was never even used during trial until the jurors were asked, after rendering their verdict, to initial a “special verdict form.”

The Appellate Opinion written by the Court was eerily similar to the initial Appellate Brief written by Bank of America’s lawyers. It seemed as if both were written by the same people or one was simply lifted from the other. I found this very worrisome. The Appellate Court seemed to be attempting to rewrite history. They edited evidence, re-sequenced evidence, misinterpreted evidence and completely deleted evidence. They re-weighed the evidence though this is not allowed. They failed to credit the overwhelming jury verdict to me though they are supposed to. My trial lawyer told me after the hearing that the Chief Justice gave BAC the benefit of the doubt in virtually every instance. Yet, the law requires that such benefit go to me, the person who won the jury verdict. Why would Justices show such bias?

Further, instead of fully crediting the jury verdict, the court fashioned some form of additional de facto direct-evidence requirement of what was said behind closed doors. In doing the above they have denied me of rights granted all citizens under the U.S. Constitution.

When a jury verdict is overturned, it always raises the concept of a denial of the right to a jury trial if based on a reevaluation of the facts instead of the law. This would be a violation of one’s civil rights. Further, the Appellate Court re-weighed the evidence on a cold case. There was no new evidence. The case had been over for more than two years when they looked at it. The Appellate Justices were not there and thus, could not hear the intonation, inflection and other manifestations of verbal (and non-verbal) communication that persuaded the jury to grant him a favorable verdict and note BAC/CFC guilt. All they could do was read a cold, dry record.

According to an amicus brief filed by Government Accountability Project (GAP) to the California Supreme Court and signed by Senior Counsel Richard Condit,
The Court of Appeal carved out an exception to the longstanding rule of law leaving matters of credibility, the drawing of inferences, and making judgments concerning the weight of evidence to the jury. Instead, the Court of Appeal nullified the jury’s determinations and substituted its assessment of the record for those of the jury and trial judge. Such a departure from well-established principles of law creates a conflict among the Courts of Appeals and conflicts with the prior rulings of this Court.
Mr. Condit then stated that “respect for the jury’s determinations is the rule in California and likewise the rule in the federal system.

The Justices are supposed to credit the jury’s interpretation. They did not. GAP’s Senior Counsel continued, stating “this result is contrary to and in conflict with California precedent and prevailing federal precedent in whistle blower cases.”

Further, attorney Palefsky notes that the Appellate Court not only re-weighed the evidence, but pretended not to. He noted the Court gave full credit to BAC/CFC testimony (which was proven to be fraught with countless lies on issues material to my case.) This is unlawful. Further, he opined that the Court gave NO credit to me for getting the jury verdict. This is also unlawful.

Still further, according to the Trial Judge Bert Glennon Jr., when denying BAC’s claim for a Judgment Notwithstanding Verdict and supporting my victory, “there was a great deal of evidence that was provided to the jury in making their decision, and they went about it very carefully and took their time. As this Court has noted, trial judges have the unique opportunity to consider the evidence in the living courtroom context, while appellate judges see only the cold paper record.” This, too, is on the record.

Given the above, how is reversal even possible? How is reversal even legal? I am told it is not. I believe the Appellate Court violated my constitutional rights. The precedent this sets is too dangerous to go unchallenged.

The facts speak for themselves. So did the jury, which voted overwhelmingly in my favor and gave me the verdict. The weight of the evidence supported the jury verdict. Thus, while the Appellate Court states they have “scoured the record” and found no support for the claim, the record actually shows abundant evidence. In fact, our evidence was so overwhelming that the trial judge informed us twice that we had met the sufficiency criterion and instructed us to submit no further evidence as the Judge and jury had heard and seen more than enough. It is on the record.

It appears the Appellate Court overlooked or ignored the evidence. It is the purported absence of evidence where such evidence is abundant that the alarm bells should go off.

The real story is that the appeal court can manipulate facts, law and legal issues to justify the conclusions they want to reach. I have learned firsthand that the case one reads about in the published opinion can bear little resemblance to the case actually presented to the lower court. To make matters worse, judges have absolute immunity to any suit seeking remedy for grossly erroneous decisions no matter how negligently, recklessly or maliciously the judge acted in depriving a deserving party of a just judgment. This is almost farcical. Who judges the judges?

I am advised this occurrence – a high profile case in which a seven figure verdict was reversed on appeal with no option for remand or retrial – is extremely rare. Then the California Supreme Court declined my petition for certification. Case closed. This is rarer still.

I can refute with evidence virtually every conclusion reached by the Appellate Court. In most instances, the opposite was true as reflected in a document which uses actual trial testimony to refute most assertions by Appellate Court. Documentary evidence refutes the remainder. This must not stand. If it does, it will happen set precedent and happen indiscriminately to others. Is this yet another way the too-big-to-fail banks are protected?

Why is the Appellate Court breaking its own precedent? Why is the Appellate Court breaking federal precedent?

Because of this, so many wonder what is the true nature of the relationship between the Courts and Bank of America? These kinds of wrongful actions are contributing to a trust deficit in our legal system, according to Harvard’s Kennedy school).

We won the Motion for Summary Judgment.
We defeated their motion claiming lack of standing.
We successfully defeated their Motions in Limine. As a result, testimony was compelled from the Top 5 Countrywide officers.
We won a jury verdict after a nearly month-long trial. The victory was referred to as “overwhelming” by the Trial Judge.
We defeated their Motion for Judgment Notwithstanding Verdict (JNOV).
Over two years later, the Appellate Court re-evaluated the evidence. It is like they are erasing evidence already on record. The Appellate Court fully credited BAC/CFC testimony, which was rightly deemed to be perjured by the jury. The Appellate Court did NOT credit my favorable jury verdict. I am told this is against the law and unconstitutional.
We petitioned for Rehearing by the Appellate Court. They refused.
We petitioned for Hearing by the California Supreme Court. They refused.
On July 14, 2013, President Obama urged Americans on a totally different issue to respect the jury’s verdict saying “But we are a nation of laws, and a jury has spoken.”

Well, the jury has spoken in the matter of Winston vs. Bank of America/Countrywide. We must respect the jury verdict.

The jury system was created to prevent judicial bias and influence peddling by the rich, connected and powerful. The idea was to achieve balance by introducing the perspectives of a jury of twelve of one’s peers. Instructions to the jury in my case in January and February 2011 advised them that they were “the sole and exclusive judges of the believability of the witnesses and the weight to be given the testimony of each witness.” The instructions added: “A witness, who is willfully false in one material part of his or her testimony, is to be distrusted in others.” The role of juror was stated to jurors by the trial judge as “trier of fact and determiner of fact.”

The jury in my case deliberated long and carefully for 2½ days. After a process spanning nearly a month, the jury rendered their verdict in my favor. They concluded I did the right things and told the truth about them. Further, they concluded, BAC/CFC did the wrong things and lied to cover them up. Why convene a jury only to totally ignore its verdict? The American system is based upon respecting, not usurping, the jury verdict. 

In fact, the Los Angeles County Appellate Court’s own website affirms that it must accept the jury’s findings as fact. And that the Appellate Court cannot retry or renegotiate facts: “On an appeal from a judgment after a trial, the appellate court will reverse the judgment only if it finds the trial court committed legal errors that were prejudicial during the trial.”

However, legal errors were not committed. Clearly, the evidence was reevaluated by the Appellate Court. However, this reweighing of the evidence is specifically NOT the charter of the Appellate Court. Reviewing the evidence is the charter of the Trial Court only.

California law mandates that the Court “view the evidence in the light most favorable to the jury’s verdict.” By failing to do so, the Appellate Court is breaking the law they are sworn to defend. Further, the law states, “Trial courts resolve both legal and factual disputes, but appellate courts consider only legal questions. They do not reweigh the evidence, and they do not reassess witness credibility.”

I am filled with worry, not only for my case but for our country. Why are the rules being violated by Justices who are expected to follow them? How can we ensure a Court free of bias? Will this decision thwart the seating of future juries when they learn their time, talent and opinion can so easily be “tossed?” And now in the face of fraud, abuse and wrongdoing, will anyone stand up and speak truth to power when a jury verdict broadly vindicating their actions is so easily ‘tossed out’? This is bound to have a chilling effect on whistleblowers everywhere.

My worry intensifies. Why are the justices not focused on the real issues in this case? We documented hundreds of lies by witnesses for the defense (Countrywide and their successor Bank of America)… deliberate, egregious, blatant, and no one has been held to account. Likewise, we fully documented witness tampering and obstruction of justice. Countrywide was proven to have falsified documents and fabricated others. These offenses are against the law. Are Bank of America and Countrywide above the law? Is the reversal of the jury verdict and court ruling just another example of unwillingness to punish too-big-to-fail firms? The Untouchables, indeed.

Over two years after our legal victory called “overwhelming” by the trial judge, the jury verdict was “tossed out.” On what grounds? There was no new evidence. My winning jury verdict was reversed on the same day and time as I was presenting at a Government Accountability Project conference on whistleblowing in Florida. Coincidence? I think not. More likely, a warning to whistleblowers everywhere.

Seven years ago, we began this process seeking justice. Justice was denied. The bad guys get away “scot-free.” The good guys get punished. How does one get justice in California?

In early 2011, twelve jurors listened and watched for nearly one month, and then deliberated for two and a half days, returning a verdict finding serious violations of the law. A learned and highly experienced trial judge, after hearing and seeing the same evidence, concluded there was, indeed, legally sufficient evidence to support the jury’s verdict.

Over two years later, on a demonstrably “cold case,” three justices on the Appellate Court claimed they found no evidence and that judgment should accordingly be rendered against the verdict. This is just factually untrue. They then said that Bank of America was not responsible for Countrywide’s misdeeds. This is also factually untrue.

There is something very wrong here. The Appellate Court has not been granted the power to ignore or undermine the law. They cannot decide which laws they will comply with and which they won’t. Indeed, the Judges have an obligation to the American people to faithfully execute and uphold the law. Like you, I am worried about the possibility of an eroding rule of law in my own country. I believe the Appellate deck was stacked. This is unconstitutional. The Court is expected to enforce the law, not ignore it, distort it or subvert it. Justice was not only denied; it was undone.

I am seeking a strong legal advocate to help me get justice.

[sidebarFIRST, the real party in interest wasn't sued.  Thus, you've got the problem which most Americans also have:  CRIMINAL FRAUD, is how the U.S.A. runs the operation "Democracy".


Please, the RICO is quite obvious by now.

SECOND, SEEKING A STRONG LEGAL ADVOCATE TO HELP GET JUSTICE is OUR OWN SELF AS SPECIAL ATTORNEY GENERAL.  We have to do what the U.S. Constitution is as the spirit, letter, rule due process law.

Dear Yves, Et Al, there is no more time to act as victims.  We've now had enough time to be educated enough to know how to do our own self-representation.  Should this not be true, then we are in serious harm to be continued, obviously.

U.S. Constitution doesn't say WE HAVE TO BE REPRESENTED VIA AN 'ATTORNEY'.  Matter of fact, U.S. Constitution states very matter of fact, to ATTORN our RIGHTS' is to say we are an imbecile and can't represent our self/selves.

ATTORNEYS ARE THE APARTHEID.  That is, in the United States of America, the Attorneys licensed at the British Accredited Registry, B.A.R., commit treason.  INTEREST ON THE ATTORNEYS' TRUST ACCOUNT, IOLTA, now what Bank and which ATTORNEYS are responsible for watching this gigantic UNJUST ENRICHMENT!

Supreme Court of the United States of America:  SCOTUS.  We have a serious problem in how the RACKET works to trickle all that aren't "Attorneys" up up up to all that are the so called "Attorneys".

... to be continued ....]

1 comment:

  1. NAKED CRIMINAL FRAUD called "Capitalism" and then what ISM isn't an ISM that yokes human beings into the Criminal Fraud of SLAVERY! U.S. Constitution stipulates SELF REPRESENTATION. To say the U.S. Constitution is to be good law, is to self-represent THE, the, the FIRST STEP in our RECOVERY!