In recent weeks, I’ve written posts about two new legal startups, LawTova and Text to Ticket, and described ties they appeared to have to another legal startup, QuickLegal, that shut down amid fraud allegations concerning its founder Derek Bluford.
(All of my posts pertaining to Bluford and QuickLegal can be found through the tag QuickLegal.)
One of the ties that I pointed out between LawTova and QuickLegal is that LawTova’s CEO is Cyrus Zal, an attorney in Folsom, Calif., who also represents both QuickLegal and Bluford and who is Bluford’s father-in-law. Another post associated Zal with Text to Ticket, noting that the press release announcing its launch included a quote from Zal.
Since those posts, I have spoken with and exchanged several emails with Zal. He indicated that he wanted to clarify certain aspects of my reporting. He provided me with written statements and we also discussed these issues by phone.
The first issue he raised was with respect to the stipulated judgment against Bluford. As I first reported on May 26, 2016, in a lawsuit filed against him by two former clients, Bluford stipulated to a judgment against him in the amount of $559,330 to settle a lawsuit charging him with impersonating a lawyer, forging legal documents and swindling two clients. About that judgment, Zal wrote:
It is true that Derek Bluford stipulated to a judgment of $599,330, but in that Stipulated Judgment, Mr. Bluford specifically denied any wrongdoing or liability in the matter. Some of the judgment has already been paid, and Mr. Bluford intends to pay the balance of the judgment. Quicklegal was only tangentially involved in that lawsuit, and your article correctly notes that those events allegedly occurred while Mr. Bluford was at another company (California Legal Pro’s), and not at Quicklegal.
For the record, my original post did note that Bluford, in stipulating to the judgment, did not admit to the allegations of the complaint. A day after my original post, I spoke with Bluford and published a follow-up post, reporting again that he denied the allegations of the complaint.
In a post here on March 28, 2017, I wrote about a startup called Text to Ticket and described it as coming from “some of the former QuickLegal crew.” As noted above, one of the associations I made between QuickLegal and Text to Ticket was Zal. But Zal denies that he was part of the QuickLegal “crew” and he denies that he has any involvement with Text to Ticket. With regard to QuickLegal, he wrote this:
Although I was nominally involved in Quicklegal, I was not actively participating in any of Quicklegal’s day-to-day running of its business, as all of my time was spent in my full time law practice. In view of the foregoing, I do not know if it is accurate to describe me as being on the Quicklegal “team” or being part of its “crew”. Being on a “team” or “crew” implies active involvement in the business, and I certainly did not have any involvement at all in running the day-to-day business of Quicklegal.
With regard to Text to Ticket, Zal wrote:
I have no involvement whatsoever with Text to Ticket in any way, shape or form. I was merely asked to give my legal opinion by the author of the piece. So it is not accurate to say in your article that: “Now, Zal and Nguyen are involved in another new startup, Text to Ticket.” I am not involved in any way with Text to Ticket. Your statement is not accurate as to me, and I do not know Mr. Nguyen, and I do not know anything about his business affairs.
On March 13, 2017, I wrote a post about the startup LawTova, with the headline, Legal Startup Appears to Shut Down After I Question Its Management. I wrote that LawTova had appeared to shut down after I began questioning its ties to QuickLegal, but I then updated that post two days later to note that the site was back online. I also noted that Zal had told me he had just become LawTova’s CEO in February 2017, even though a California state filing on Sept. 29, 2016, listed him as CEO. About this post, Zal wrote:
I wish you had called me to get my side before publishing the story. … As I mentioned at the beginning of this email, the LawTova website had technical issues that were being addressed and so it was “down”. The website is now operating. Although I was listed as CEO of LawTova in the Statement of Information filed with the Secretary of State on September 29, 2016, I was merely a “placeholder”, as there was no active CEO yet and the Statement of Information had to be filed in order to avoid penalties for late filing. Later, Brett Bunnell eventually became the actual CEO of LawTova, but when he passed the Bar and became licensed as an attorney, he obtained a position with a law firm and resigned as CEO, and that is when I actively became the CEO of LawTova last month in February.
Your article gives the impression that Quicklegal was somehow “tainted” by the unproven allegations of fraud against Mr. Bluford, when in fact the company was not involved at all in those matters. Quicklegal was recently dismissed by the plaintiffs in that lawsuit because Quicklegal had not done anything wrong.
Once again for the record, before publishing that post, I did attempt to follow-up with Zal by email — which was how he and I first communicated — but he did not respond.
As Zal notes, the plaintiffs in the fraud lawsuit against Bluford — which continues against other defendants even though Bluford settled — filed a request on Feb. 21, 2017, to dismiss QuickLegal as a defendant. The document gives no reason for the request, but a separate court filing by QuickLegal states that it agreed to a settlement payment to plaintiffs of $55,000.
More generally, Zal took issue with my suggestions that there were connections among the three startups. He wrote:
Although I appreciate that your role as a journalist is to write interesting articles that “tie together” things that seem to be related, I thought the overall impression given by your article was unfair to Quicklegal, to LawTova and to Text to Ticket, and perhaps a bit inflammatory as well. The primary “connections” in the article between Quicklegal and LawTova were me as the attorney for Quicklegal and CEO of LawTova (and Mr. Bluford’s father-in-law), and Steve Nyugen as an investor in both companies. Those are totally innocent connections, but the article’s overall innuendo was that somehow the unproven allegations of fraud against Mr. Bluford should be “applied” to me and to Mr. Nyugen, and to LawTova and to Text to Ticket — and in my view, that is unfair to all of us, and misleading. The same unfairness applies to connecting Mr. Nyugen and me to Text to Ticket — again, the article’s innuendo is that the unproven allegations of fraud against Mr. Bluford should be “applied” to me and to Mr. Nyugen, and to Text to Ticket.
Once more for the record, my post drew other connections than the two Zal mentions, but you can read it for yourself and draw your own conclusions.
One of the defendants in the original fraud lawsuit against Bluford and QuickLegal was Bank of America, where QuickLegal’s funds were on deposit. On March 15, 2017, QuickLegal — still represented by Zal — filed a cross-complaint against Bank of America alleging that it wrongfully froze QuickLegal’s bank accounts after the lawsuit was filed in April 2015. At that point, over $1 million had been invested in QuickLegal, the cross-complaint alleges, but Bank of America’s freezing of its bank accounts prevented it from operating and forced it to go out of business.
The court docket does not show that Bank of America has filed an answer to the cross-complaint.