Basic HTML Version
PASTOR GENERAL'S REPORT, January 25, 1980
Page 7
fight!
(But first, for those of you who may have been confused on this
point, Mr. Jack Kessler is the son of Dr. William Kessler of Ministerial
Services.)
The offices of Rader, Cornwall, Kessler and Palazzo, Certified Public
Accountants, were first visited by Hillel Chodos on the morning of January
3 before he joined the Receiver, ex-Judge Weisman, in Pasadena. In a
typical show of ignorance of the facts in this case, Chodos asked for and
expected to find either Mr. Rader or Mr. Cornwall, even though they had
left the firm years before. Instead, he found Mr. Kessler who is the
firm's managing partner.
Both Mr. Kessler and Mr. Palazzo (the two partners of the firm) realized
the enormous damage that could accrue to their accounting practice if they
were not quickly vindicated. Unfortunately, the Attorney General would not
listen to any offers of proof of sound accounting. So,aware that victory
at trial would be years down the road, Messrs. Kessler and Palazzo decided
to try and beat them at their own game in the county court.
Both are
attorneys as well as CPAs, and they are the founding partners of the law
firm of Palazzo & Kessler.
On January 19, 1979, Palazzo & Kessler filed their first ''demurrer" to the
State's complaint. A demurrer is a legal pleading that states, in effect,
that even if everything in your complaint were true, it contains such
defects that either it does not state a legally suitable "cause of action"
(i.e., your case does not belong in a court of law), there is a "misjoinder
of parties" (you have named the wrong people as defendants), or the com
plaint is so completely unintelligible that it is impossible to answer.
Many lawyers advise against ever filing a demurrer, because in the course
of arguing the motion you point out to the other side eac� and every defect
in their complaint and give them a free "lesson" in how better to plead
their case.
This is considered a tactical decision of some consequence.
On January 29, 1979, after an oral hearing, Chodos lost his first motion in
the case and received a free lesson from Palazzo & Kessler on how not to
sue an accounting firm. The court agreed that the complaint did not state
a cause of action, was unintelligible and vague, and misjoined tbe
accounting firm as defendant parties. However, the State was given 30 days
"leave to amend" (an opportunity to restate their case by filing a new
complaint)
Although during this period there was no complaint on file, until an order
of dismissal is entered by a judge, a defendant is still a defendant, and
the accounting firm could not get out of the case. Even though the firm
objected strenuously, the State was favored by repeated extensions of time
to amend. The First Amended Complaint was not filed until many weeks later
(April 12, 1979).
Upon examining the new complaint, however, it was evident that, among
other things, the Attorney General's deputies were slow learners: Their
attempt at an amended complaint was unresponsive to the earlier criticisms.
Because of Judge Thomas T. Johnson's vacation schedule, the earliest date
that a hearing on the second demurrer filed by the accounting firm could
be set was for May 30. By then five months would have passed and still no
relief from this unjustified attack on the integrity of a competent account
ing firm!