Court Reporters Sue Court Reporting Agency

[Kelli Combs (admin)]

Mary Ann sent this to me, so I thought I'd share:

 

 

STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF MACOMB

SUSAN LOWRY, CAROLYN GRITTINI, JACQUELYN FLECK, BARBARA ESSIAN, PAULA RASKIN, CLEMENT FARBER, ROBERT GRITTINI, MARY JO POWER, AMY CALKINS, NANCY KLEIN, PAMELA GOLETZ, TAMMY NANNINI, CHRISTINE GONZALEZ, MAUREEEN COLLIER, SARA MANN, SHERRIE MANIER, MARY SECOT, DEBORAH CULVER, MELISSA RIELI, VINCENT QUAGLIA, CAROLYN FUERST, MARLANA WILLICK, KATHLEEN REISING, DIANNE SARKISSIAN, AMY LENGA, and DORA DOLETZKY Plaintiffs, v. LAUREN BIENENSTOCK & ASSOCIATES, INC., LAUREN BIENENSTOCK, and SAMUEL BIENESTOCK, Defendants.	Case No. 13- -CZ Hon.
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THE MILLER LAW FIRM, P.C. Kevin F. O’Shea (P40586) David B. Viar (P43479) Devon P. Allard (P71712) 950 West University Dr., Ste. 300 Rochester, MI 48307 248-841-2200 Attorneys for Plaintiffs SAFFORD & BAKER, PLLC Ralph R. Safford (P24633) 40900 Woodward, Ste. 275 Bloomfield Hills, MI 48304 248-646-9100 Co-Counsel for Plaintiffs

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COMPLAINT AND JURY DEMAND

Preliminary Statement

This case is about greed, deception, and betrayal. Twenty-six licensed court reporters are suing Michigan’s largest and best-known court reporting firm to recover over one million dollars they believe has been stolen from them by Lauren and Samuel Bienenstock and their court reporting firm. Many more potential plaintiffs are waiting in the wings, so terrorized by the Bienenstocks’ promises of retribution that they fear public identification. All of these court reporters, many of whom have provided services to the largest law firms and most prominent lawyers practicing in Michigan and throughout the United States, have one thing in common: the Bienenstocks have misled them, lied to them, and stolen huge sums of money from them for almost twenty years, all while pretending to act on their behalf and in their best interests.

The Bienenstocks’ scheme was simple: use every possible tactic to convert payments from attorneys and law firms for Plaintiffs’ court reporting services to their own use, despite their agreement with Plaintiffs that at least seventy percent of those payments belonged to them. The Bienenstocks sold Plaintiffs’ deposition transcripts without telling them, secretly charged higher rates for Plaintiffs’ services, and charged for myriad additional services, all the while keeping every penny of the additional income for themselves.

Like most such schemes, this one also involved a cover up: the Bienenstocks employed elaborate internal processes and office protocols to conceal their unethical and unlawful business practices. The Bienenstocks bullied their employees with temper tantrums and threats of termination should they reveal the truth to Plaintiffs, and they consistently denied their dishonest practices when questions arose. The Bienenstocks used Plaintiffs’ money to fund an outlandish lifestyle replete with luxury homes, exotic cars, and extravagant vacations for themselves and generous gifts for the attorneys and law firms who unwittingly facilitated the Bienenstocks’ corrupt business.

Although startling enough on its face, the Bienenstocks’ outrageous behavior is particularly execrable in light of the integral role licensed court reporters and court reporting firms play in our legal system. They provide the certified transcripts of sworn deposition testimony relied upon in nearly every case and nearly every court here and across the country, their activities are strictly regulated by Michigan statute and the Michigan Court Rules, and they are regulated by the State Court Administrative Office, the administrative agency of the Michigan Supreme Court. The Bienenstocks’ longstanding scheme to pocket Plaintiffs’ income thus undermines the integrity of the vital process by which certified deposition transcripts are produced for the use of this and other courts.
                JURISDICTION AND VENUE

1. Plaintiffs Susan Lowry, Carolyn Grittini, Barbara Essian, Pamela Goletz, Deborah Culver, Robert Grittini, Vincent Quaglia, Marlana Willick, Kathleen Reising Sulloli, Tammy Nannini and Maureen Collier reside in Macomb County, Michigan and conduct business throughout southeast Michigan.

2. Plaintiffs Jacquelyn Fleck and Amy Lenga reside in Wayne County, Michigan and conduct business throughout southeast Michigan.

3. Plaintiffs Paula Raskin, Amy Calkins, Nancy Klien, Sara Mann, Sherrie Manier, Mary Jo Power, and Carolyn Fuerst reside in Oakland County, Michigan and conduct business throughout southeast Michigan.

4. Plaintiff Dora Doletzky resides in Washtenaw County, Michigan and conducts business throughout southeast Michigan.

5. Plaintiff Clement Farber resides in the State of Arizona.

6. Plaintiff Christine Gonzalez resides in the State of Maryland.

7. Plaintiff Mary Secot resides in the State of Pennsylvania.

8. Plaintiffs Melissa Rieli and Dianne Sarkissian reside in the State of Florida.

9. Defendant Lauren Bienenstock & Associates, Inc. (“Bienenstock & Associates”), is a Michigan corporation with offices in Macomb County and throughout the State of Michigan.

10. Defendant, Lauren Bienenstock, is a Michigan resident whose principal residence is 3735 Loch Bend Drive, Commerce Township, Oakland County, Michigan 48382.

11. Defendant, Samuel Bienenstock, is a Michigan resident whose principal residence is 3735 Loch Bend Drive, Commerce Township, Oakland County, Michigan 48382.

12. This Court has jurisdiction over the parties and this action pursuant to MCL § 600.701 and because the amount in controversy exceeds $25,000.00.

13. Venue is proper in this Court under MCL § 600.1621.

GENERAL ALLEGATIONS

14. Lauren Bienenstock is the founder and owner of Bienenstock & Associates.

15. Samuel Bienenstock is married to Lauren Bienenstock. He serves as the Chief Executive Officer or CEO of Bienenstock & Associates. Together, Lauren and Samuel Bienenstock manage the day-to-day business operations of Bienenstock & Associates.

16. Bienenstock & Associates contracts with licensed court reporters to provide court reporting services to attorneys, law firms, and insurance companies in Michigan and across the United States.

17. Plaintiffs are licensed court reporters who provided their services through Bienenstock & Associates as independent contractors pursuant to oral and written agreements entered into with Bienenstock & Associates from 1995 through early 2013. A partially executed agreement naming Bienenstock & Associates and one of the Plaintiffs is attached as Exhibit A.

18. Each and every Plaintiff entered into the same or similar agreement with Bienenstock & Associates. The essential terms of the parties’ agreements, which are reflected in both signed and unsigned contracts, oral promises, a course of dealing between the parties, and supported by well-established standards in the court reporting industry and judicial rules of practice, were as follows:

1. Bienenstock & Associates agreed that it would find and present opportunities to Plaintiffs to perform court reporting services for attorneys, law firms, and insurance companies (“the Customers”) in exchange for the payment of an agreed-upon, fixed percentage of the total amount paid by the Customers for those services, primarily the preparation of deposition transcripts. This agreed-upon, fixed percentage was, under the terms of the parties’ agreement, to be paid on all services without regard to when the services were performed and/or when deposition transcripts were ordered by the Customers;

2. It was the exclusive responsibility of Bienenstock & Associates to solicit customers, set customer billing rates, take customer calls, schedule Plaintiffs’ appointments with the Customers, and bill the Customers for court reporting services provided by Plaintiffs. Plaintiffs prepared and sent invoices for their services not to the Customers, but to Bienenstock & Associates with the agreement and understanding that such invoices would be processed and sent on to the Customers for payment. Plaintiffs were, under the terms of their agreement, prohibited from contacting and/or sending invoices directly to the Customers. In fact, the Plaintiffs were required to avoid all discussions of charges and rates with the Customers and to direct any and all of the Customers’ “billing questions” to Defendants;

3. Although Bienenstock & Associates negotiated the per-page and hourly/appearance rates charged to the Customers, it was the agreement and understanding of the parties that Defendants would charge the Customers the same rate upon which Bienenstock & Associates paid Plaintiffs for their court reporting services. This agreed-upon rate was reflected in Plaintiffs’ invoices to Bienenstock & Associates and the records of Bienenstock & Associates. The agreed-upon charges for services rendered to the Customers were “pass through” rates with no additions, discounts, or markups to the page rates and/or the hourly/appearance rates charged by Plaintiffs;

19. Lauren Bienenstock and Samuel Bienenstock repeatedly and consistently told Plaintiffs that they were (per the parties’ agreement) being paid their agreed-upon, fixed percentage of the total amount charged to, and received from, the Customers.

20. Lauren Bienenstock and Samuel Bienenstock expressly prohibited Plaintiffs from revealing to the customers the per-page rate and appearance fee upon which Bienenstock & Associates paid Plaintiffs for their court reporting services provided to the Customers.

Backordered Deposition Transcripts

21. The Customers generally ordered transcripts directly from the court reporters on the same day as the depositions. When this occurred, Plaintiffs were aware that a transcript had been ordered and they expected to receive and, on information and belief, usually did receive what they believed was their agreed-upon share of the payment received by Bienenstock & Associates.

22. Many customers ordered deposition transcripts a few days, weeks, or months after the day of the depositions. In these instances, the Customers were instructed by Defendants to order the transcript directly from Bienenstock & Associates, rather than by contacting the court reporter who took the deposition. This process was designed and intended by Defendants to prevent Plaintiffs from learning about customer orders that took place after the date of the completed deposition.

23. Transcripts ordered after the day of the deposition are referred to in the court reporting industry and at Bienenstock & Associates as “backordered transcripts” or “backorders.”

24. Bienenstock & Associates provided backordered transcripts, and billed for and collected substantial fees for them, without disclosing to Plaintiffs that the backorders had been received or payments received for them.

25. Defendants took calculated steps to conceal the existence of backorders and payments received for backorders from Plaintiffs so that they could keep all of the Customers’ payments for themselves, including Plaintiffs’ share of those payments.

26. Defendants set up internal policies and office-wide protocols to conceal the existence of backorders and payments received for backorders from Plaintiffs so that they could keep all of the customer payments for themselves, including Plaintiffs’ share of those payments.

27. Defendants instructed their billing and administrative staff not to disclose the existence of backorders to Plaintiffs.

28. In the rare instances when Plaintiffs learned of backorders from direct communications with the Customers or otherwise, on information and belief Bienenstock & Associates paid them for the backorders in an attempt to conceal its general practice.

COD or Hold Orders for Deposition Transcripts

29. Bienenstock & Associates frequently supplied transcripts to the Customers but permitted them to delay payment. These delayed payments were referred to at Bienenstock & Associates as “CODs” or “holds.”

30. Bienenstock & Associates did not pay Plaintiffs their agreed-upon share of delayed payments (CODs or holds) collected from the Customers for deposition transcripts.

31. Defendants took calculated steps to conceal the existence of and payments for CODs or holds from Plaintiffs so that they could keep all of the Customers’ payments for themselves, including Plaintiffs’ shares of those payments.

32. Defendants set up internal policies and office-wide protocols to conceal the existence of and payments for CODs or holds from Plaintiffs so that they could keep all of the customer payments for themselves, including Plaintiffs’ shares of those payments.

33. Defendants instructed their employees not to disclose the existence of CODs or holds to court reporters.

Dual Page Rates for Deposition Transcripts

34. Defendants negotiated separate per-page rates for deposition transcripts with some of the Customers that were higher than the agreed-upon rates disclosed to Plaintiffs and upon which Plaintiffs were paid.

35. Defendants kept the payments from the Customers representing the difference between the per-page rates agreed upon with Plaintiffs and the separate, higher rates for themselves and their own benefit, including Plaintiffs’ shares of those payments.

36. Defendants took calculated steps to conceal the existence of the dual page rates from Plaintiffs so that they could keep all of the payments received in excess of the amount split with Plaintiffs for themselves and their own benefit, including Plaintiffs’ shares of those payments.

37. Defendants set up internal policies and office-wide protocols to conceal the existence of and payments for the dual page rates from Plaintiffs so that they could keep all of the customer payments for themselves, including Plaintiffs’ shares of those payments.

38. Defendants instructed their administrative staff and billing people not to disclose the existence of the dual page rates to court reporters.

Dual Appearance Rates

39. Defendants charged customers either flat rate or hourly “appearance fees” for court reporters’ time but paid Plaintiffs based on a lower rate.

40. Defendants took calculated steps to conceal the existence of the dual appearance rates from Plaintiffs so that they could keep all of the payments received in excess of the amount split with Plaintiffs for themselves and their own benefit, including Plaintiffs’ shares of those payments.

41. Defendants set up internal policies and office-wide protocols to conceal the existence of and payments for dual appearance rates from Plaintiffs so that they could keep all of the customer payments for themselves, including Plaintiffs’ shares of those payments.

42. Defendants instructed their employees not to disclose the existence of dual appearance rates to court reporters.

Charges to the Customers for Additional Court Reporting Services

43. Defendants charged clients of Bienenstock & Associates for additional services and products related to the court reporting services provided by Plaintiffs, including but not limited to electronic transcripts, condensed format transcripts, and copying of deposition exhibits.

44. Defendants did not pay Plaintiffs their agreed-upon share of payments received from the Customers for such additional services and products related to the court reporting services provided by Plaintiffs.

45. Defendants did not pay Plaintiffs their agreed-upon percentage share of payments received from the Customers for non-deposition transcription services.

Printing Charges to Court Reporters

46. Bienenstock & Associates charged Plaintiffs a per-page fee for the printing of deposition transcripts even when no transcripts were printed and despite the parties’ agreement that such expenses would be covered by Bienenstock & Associates’ percentage share of payments from the Customers for court reporting services.

Additional Claimants

47. There are dozens of other licensed court reporters who are not Plaintiffs and who currently serve or formerly served as independent contractors for Bienenstock & Associates and have legitimate claims for unpaid compensation against Defendants similar in all material respects to Plaintiffs’ claims.

48. Defendants have repeatedly refused to pay full compensation owed to court reporters following their departure from Bienenstock & Associates, in part to threaten and frighten court reporters from asserting legitimate claims for unpaid compensation from Defendants.

49. Defendants have declared that they will terminate their business relationship with any court reporters they identify as having joined in this action, in part to threaten and frighten court reporters from asserting legitimate claims for unpaid compensation from Defendants.

50. The other licensed court reporters who are not Plaintiffs and who have claims against Bienenstock & Associates that are materially similar to Plaintiffs’ claims are not part of this action because they are unaware of their claims, fear that becoming Plaintiffs will lead Defendants to terminate their contractual relationship and/or withhold additional compensation due them, and/or hope to benefit from this litigation without bearing their fair share of the costs entailed.

51. While Michigan follows the American Rule on attorneys’ fees and other costs, Michigan courts recognize an exception for situations in which the actions of an individual litigant or litigants create or preserve a common fund which can be used to benefit other similarly situated individuals.

52. This action is likely to create a common fund or common benefit out of which the other licensed court reporters who are not Plaintiffs and who have claims against Bienenstock & Associates that are materially similar to Plaintiffs’ claims can be compensated for the damages caused by Defendants.

53. It would be inequitable for such court reporters to partake in any recovery they may receive as a result of this action without bearing their fair share of the costs required to secure such recovery.

COUNT I

[Amanda Leigh]

I hope that applicable agencies who networked with Bienenstock also join in this lawsuit.  It's not just the individual reporters at a financial loss; depending upon the arrangement, it's also networking agencies.

[Mary Ann Payonk]

No doubt a lot of the "dirty little secrets" of court reporting will be revealed IF this case goes to trial.

M.A.

[Dean Morris]

Excellent reminder, Amanda!

[Rita Carpenter]

Kelli - do you know when this suit was filed?

[Janet]

Hi, Rita.  Kelli is away on vacation.  I didn't find when the case was filed, but I found this recent article about the owner's secrets of success.  What timing, considering the pending lawsuit.

 

http://mydigimag.rrd.com/display_article.php?id=1370822

[Kelley Nader]

Lots of stories in between those lines.  Sad, but I'm sure NCRA knew and knows the turmoil and misdeeds that have been caused to all of Michigan Court Reporting agencies.  Why even our own NCRA support this, the contract Queen.  Our rates are still only $3.20 p/p and some lower, and when I started reporting over 30 years ago, they were about $2.15/2.20.  You didn't get that wealthy on the competitive rates that firm charges.

 

 

 

[Beth Douglas]

I know a few of these reporters as I have worked with them.  Very interesting to me.  I no longer live in Michigan so I have been out of their "loop" for quite a few years.

[Lisa Migliore Black]

My experience is that article submissions have to be in at least a month or two before submission in an upcoming JCR.  The timing of Ms. Bienenstock's article days or weeks after the news of lawsuit became widespread public knowledge was horrible, but I would hazard that the editor of the JCR knew nothing of it at the time the article was being written, the layout was planned, and the content was sent to press.

"Do you want to nominate someone for the “Secrets of Success” series? Send your pick in to the JCR’s Writer/Editor."

Somebody nominated Ms. Bienenstock for this series????

If the allegations made by the number of plaintiffs in this case are true (caveated only because of the fact that there isn't a court ruling yet), every single word in this article is absolutely meaningless to me, and I would count NCRA as another victim caught in the fallout of someone whose integrity is questionable.  

Does anybody here have any ideas on how reporters can protect themselves going forward from the type of dishonesty alleged in this case? With so many firms mandating that the reporter have NO direct contact with attorneys beyond the taking of the deposition, how are we to ensure against this type of thievery?  Ideas?

 

[Kelley Nader]

As usual, Lisa, very professional and moving forward response from you.  Thank you.  And good questions above.

 

[Lisa Migliore Black]

Thanks, Kelley.

It never ceases to amaze me how cheaply some value their own integrity.  I can see how an occasional error could be made by not crediting the proper reporter for a transcript (less so with today's sophisticated billing and scheduling systems available with ReporterBase and RepAgency), but a volume of these types of acts is unforgivable.  A reaction other than a concerted effort to rectify the matter financially and a good look at internal procedures to ensure that it doesn't happen again is unfathomable to me.  (Being honest takes so much less energy than lying!)

But beyond that, I still have a larger unanswered question:  Who owns the transcript in a reporter/agency relationship?  I can think of many situations that could make the answer to this question unclear.  

There are bad agencies and there are bad reporters.  

Bad agencies would cheat reporters out of copy sales.  Dishonest agencies may reformat transcripts to short reporters and gouge clients. Dishonest agencies may quote two rates:  one to reporters, another to clients.  Perhaps these issues of concern can be addressed in an IC/employee agreement.

But, for instance, does an agency have the right to correct glaring errors in production if a reporter does a poor job and refuses to correct them?  What happens if there's a dispute on what constitutes an error?

I don't know the answer.  

[Dean Morris]

Changing a reporter's punctuation is wrong to do, in my opinion.  What may look appropriate after-the-fact on paper is most likely not the way the words were spoken at the time.

[Kelli Combs (admin)]

Well, Lisa, there is a group here called "Have You Ever Heard Of...." where if you have a question about an agency, you ask your question on the discussion board and leave your email address.  If anyone knows any information about the firm, they will post the positive reviews in the group.  However, anything negative about the agency is sent to your personal email address.  That is how we're keeping abreast of agencies we're unsure of. 

Here is the link:  http://csrnation.ning.com/group/have-you-ever-heard-of