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GAIMS, WElL, WEST & EPSTEIN, LLP ALAN JAY WElL (SBN 63153) ANDREW M. VOGEL (SBN 187312) JEREMY BORDEN (SBN 252141) 1875 Century Park East, 12th Floor Los Angeles, California 90067 Telephone: (310) 407-4500 Facsimile: (310) 277-2133
Attomeljs for Defendant Helen Yu

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SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES, CENTRAL DISTRICT

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SEAN MICHAEL LARKIN, an individual, Plaintiff, vs. HELEN YU, an individual; and DOES 1 through 10, inclusive, Defendants.

Case No. BC 426988

[Assigned to Hon. John Shepard Wiley, Jr., Dept. 50] Complaint Filed: November 30, 2009
ANSWER TO UNVERIFIED COMPLAINT

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Defendant Helen Yu ("Defendant") answers the unverified Complaint by Plaintiff Sean Michael Larkin ("Plaintiff") as follows:
GENERAL DENIAL

Pursuant to California Code of Ovil Procedure § 431.30, Defendant denies, generally and specifically, each and every allegation and each and every purported cause

ANSWER TO UNVERIFIED COMPLAINT

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of action of the Complaint and further denies that Plaintiff was damaged in the amounts alleged, or in any amount, or at all.
SEPARATE DEFENSES

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Defendant pleads the following separate defenses to the Complaint. Defendant reserves the right to supplement or amend her Answer to include additional defenses as additional information becomes available. The pleading of a defense as a separate defense is not an admission or acknowledgement that Defendant bears the burden of proof on such defense, nor is it a waiver of any argument that Plaintiff bears such burden.
ALLEGATIONS APPLICABLE TO ALL DEFENSES

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Larkin, a business manager responsible for handling the financial affairs of a world famous music group, has failed to meet his most basic obligations as a business manager. Yu is a licensed attorney who represents one or more members of the music group and its affiliates who has sought to protect the legal and financial rights of her clients. Yu is informed and believes upon reasonable investigation that Larkin, despite

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17 being paid substantial fees for business management services from the music group, has 18 19 20 21 22 23 24 25 26 27 28
Larkin's complaint falsely distorts the facts, contains erroneous information and seeks to blame Yu for Larkin's own actions and misconduct as a business manager. Larkin's actions have placed his clients at considerable risk. The full extent of that risk is still unknown because Larkin has delayed and obstructed efforts to audit the performance of his duties as a business manager for the music group. Yu is not a competitor of Larkin, nor is Yu a business manager. Yu's intentions at all times has been to protect the financial and legal interests of her clients from the
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ANSWER TO UNVERIFIED COMPLAINT

failed to file Federal and State income tax returns for years, and to keep clear and accurate financial records on his clients' behalf.

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wrongful actions of Larkin. At all times Yu sought to vigorously protect the rights and financial affairs of her clients. Larkin's allegation that the auditors and other investigations have found no "improprieties" by him is false. A third-party audit currently on-going on the music group's behalf has revealed extensive problems resulting from Larkin's misconduct. Larkin's allegation that recent letters sent by Yu triggered a record company

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8 investigation which revealed no "discrepancies or improprieties" by Larking is also false. 9 10
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The third-party audit started months earlier after the music group discovered some of Larkin's misconduct and after IRS inquiries regarding Larkin's failure to file tax returns. Larkin claims his failure to file Federal and State Tax income returns on behalf of his clients was "inadvertent." However, Larkin has failed to file numerous tax returns for years. Despite the music group earning tens of millions of dollars over several years, Larkin is only now creating necessary accounting ledgers of the music group, which books and records should have been created and maintained on an on-going basis.
FIRST DEFENSE (Failure to State a Cause of Action)

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The Complaint, and each purported cause of action contained therein, fails

to allege facts sufficient to state a cause of action against Defendant.
SECOND DEFENSE (Truth)

2.

To the extent Defendant made statements regarding Plaintiff, the

statements were truthful and/ or were made in good faith based upon a reasonable investigation, including but not limited to the following: A. Defendant is informed and believes that Larkin knowingly and/ or

recklessly breached his fiduciary duties as a business manager and has never filed a
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ANSWER TO UNVERIFIED COMPLAINT

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valid Federal income tax return for the music group's touring corporation, despite the touring corporation having earned tens of millions dollars of income.
B.

Defendant is informed and believes that Larkin knowingly and/ or

recklessly breached his fiduciary duties as a business manager by also failing to timely reconcile, e.g. failing to report tens of millions of dollars of touring income to one or more members of the music group and the taxing authorities.
C.

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Defendant is informed and believes that Larkin knowingly and/ or

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recklessly breached his fiduciary duties as a business manager by engaging in a pattern of failing to file Federal and/ or State income tax returns for individual members of the group, and their corporations stemming back as far 8 years. D. Defendant is informed and believes that Larkin knowingly and/ or

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recklessly breached his fiduciary duties as a business manager by failing to file State income tax returns for the music group's touring corporation as required on an annual basis in states where the music group performed. As a direct result of Larkin's misconduct, corporate entities owned by the music group and its members have been "suspended" by the Franchise Tax Board for nonpayment of taxes. Defendant is informed and believes that Larkin's misconduct has also put his clients at considerable risk, the full extent of which is still unknown because Larkin has delayed and obstructed efforts to audit the performance of his duties as a business manager for the music group.
E.

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Defendant is informed and believes that Larkin knowingly and/ or

or recklessly breached his fiduciary duties as a business manager by failing to timely prepare and maintain basic accounting records in conformity with generally accepted accounting standards. F. Defendant is informed and believes that Larkin knowingly and/ or
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ANSWER TO UNVERIFIED COMPLAINT

recklessly breached his fiduciary duties as a business manager by hiding more than $1.4

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million dollars in United States Treasury checks made payable to one or more members of the music group. G. Defendant is informed and believes that Larkin knowingly and/ or

recklessly breached his fiduciary duties as a business manager by failing to timely make elections to tax various entities affiliated with the music group as Subchapter S corporations, resulting in losses of no less than $1.1 million to the members of the music group. H. Defendant is informed and believes that Larkin knowingly or

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recklessly breached his fiduciary duties as a business manager by delaying and obstructing efforts to audit his performance of his duties as a business manager for the music group, its members and affiliated entities despite numerous and on-going requests of the auditors to provide pertinent financial information.
I.

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Defendant is informed and believes that Larkin knowingly or

recklessly breached his fiduciary duties as a business manager by concealing his wrongful conduct from the music group and its members.
THIRD DEFENSE (Unclean Hands)

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3.

The Complaint, and each purported cause of action contained therein, is

barred by Plaintiff's unclean hands.
FOURTH DEFENSE (Good Faith)

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The Complaint, and each purported cause of action contained therein, is

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barred, in whole or in part, because Defendant acted at all times relevant hereto not maliciously but in good faith, with reasonable care, in an honest belief in the propriety and lawfulness of her conduct, and had good cause for her actions.
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ANSWER TO UNVERIFIED COMPLAINT

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FIFTH DEFENSE (Failure to Mitigate)

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The Complaint, and each purported cause of action contained therein, is

barred by Plaintiff's failure to mitigate his alleged damages, if any.
SIXTH DEFENSE (No Grounds for Penalties or Punitive Damages)

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The Complaint, and each purported cause of action contained therein, does

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not state facts sufficient to enable Plaintiff to recover punitive damages.
SEVENTH DEFENSE (Punitive Damages Unconstitutional)

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7.

An award punitive damages as sought by Plaintiff in the Complaint is a

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violation of Defendant's rights to due process and equal protection under the law pursuant to the Fifth and Fourteenth Amendments to the United States Constitution and Articles I and IV of the California Constitution and the United States Supreme Court's decision in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.s. 408 (2003).
EIGHTH DEFENSE (Privilege)

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8.

The Complaint, and each purported cause of action contained therein, is

barred, in whole or in part, because Defendant's alleged conduct was privileged.
NINTH DEFENSE (Intervening and Superseding Causes)

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Plaintiff's damages, if any, were legally caused and contributed to by his

and/ or his agents' acts, omissions, misrepresentations, wrongdoing, negligence, and/ or conduct of persons and/ or entities other than Defendant, and such negligence, acts, omissions, misrepresentations, wrongdoing and/ or conduct were intervening and superseding causes of Plaintiff's damages,. if any.
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ANSWER TO UNVERIFIED COMPLAINT

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TENTH DEFENSE (Unjust Enrichment)

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10.

The Complaint, and each purported cause of action contained therein, is

barred by the doctrine of unjust enrichment.
ELEVENTH DEFENSE (Statement of Opinion)

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The statements alleged to be defamatory in Plaintiff's Complaint were non-

actionable statements of opinion.
TWELFTH DEFENSE (Estoppel)

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The Complaint, and each purported cause of action contained therein, is

barred by the doctrine of estoppel.
THIRTEENTH DEFENSE (Waiver)

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The Complaint, and each purported cause of action contained therein, is

barred by the doctrine of waiver and acquiescence.
FOURTEENTH DEFENSE (Comparative Fault)

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Defendant is informed and believes and thereupon alleges that at all times

relevant to Plaintiff's Complaint, Plaintiff did not exercise ordinary care, caution and prudence in connection with the events that are alleged in the Complaint. Plaintiff is therefore barred from recovery from Defendant, or, alternatively, Plaintiff's recovery, if any, should be proportionately reduced.

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ANSWER TO UNVERIFIED COMPLAINT

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FIFTEENTH DEFENSE ( Justification)

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Any and all actions taken by Defendant with respect to any and all of the

matters alleged in the Complaint were justified. WHEREFORE, Defendant Helen Yu prays for judgment as follows: A. That Plaintiff's Complaint and each cause of action thereof be dismissed

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with prejudice;

B.

That judgment be entered in favor of Defendant and against Plaintiff; That Plaintiff take nothing by his Complaint; That Defendant be awarded her costs of suit incurred herein; and For such other and further relief as the Court may deem just and proper.

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c.
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Dated: December 14, 2009

GAIMS, WElL, WEST & EPSTEIN, LLP ALAN JAY WElL ANDREW M. VOGEL JEREMY BORD

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ANSWER TO UNVERIFIED COMPLAINT

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PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am employed in the county of Los Angeles, State of California. I am over the age of 18 years and not a party to the within action; my business address is 1875 Century Park East, 12th Floor, Los Angeles, California 90067.
On December 14, 2009, I served the foregoing document described as:
ANSWER TO UNVERIFIED COMPLAINT

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on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope addressed as follows: Louis R. Miller Miller Barondess LLP 1999 Avenue of the Stars, Suite 1000 Los Angeles, California 90067 Attorneys for Plaintiff

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(BY U.S. MAIL Code Civ. Proc., §§ 1013, 2015.5)

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I am readily familiar with my employer's practices for collection and processing of correspondence for mailing with the United States Postal Service. Following ordinary business practices and placing for collection and mailing at 1875 Century Park East, Los Angeles, California 90067-2513, a true copy of the abovereferenced document(s), enclosed in a sealed envelope; in the ordinary course of business, the above document(s) would have been deposited for first-class delivery with the United States Postal Service the same day they were placed for deposit, with postage thereon fully prepaid .
[] (BY EMAIL TRANSMISSION)

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By transmitting via email on the date from the server at Gaims, Weil, West & Epstein, LLP the document(s) listed above to the email address(es) set forth below.
[] (BY OVERNIGHT COURIER)

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I placed the document(s) in an envelope, properly labeled, and caused it to be deposited into a Federal Express/UPS pick-up receptacle as per the regular practice of this office. Executed on December 14,2009, at Los Angeles, California. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

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