Part II of Trump University $25 MIllion Settlement - The Fraud Complaint
Case No. 2 -- The Fraud Claims - Sonny Low, individually and on behalf of all others similarly situated v. Trump University, LLC, et al.
In August 2008, Tarla Makaeff, a shoe and handbag designer, purchased a three-day Trump University "Fast Track to Foreclosure Training" workshop for approximately $1,495. Two people were permitted to attend per each ticket, so Ms. Makaeff attended with a friend and split the cost. During the three-day workshop, Ms. Makaeff was advised to raise her credit card limits four times so she could enter into real estate transactions. However, at the end of the session, Trump University encouraged attendees to use that credit increase to purchase an additional Trump seminar. On or about Aug. 10, 2008, Ms. Makaeff enrolled in Trump University's Gold Program for $34,995, and she ultimately spent nearly $60,000 on Trump University seminars over the course of one year. Donald J. Trump and Trump University had promised "mentorships," urging consumers that it was the "next best thing" to being Donald Trump's next "Apprentice." Ms. Makaeff contended that her assigned mentors did not pay enough attention to her and that when they did, the advice they gave her led her toward real estate deals with conflicts of interests and illegal facets.
On April 30, 2010, Ms. Makaeff, individually and on behalf of all others similarly situated, filed a complaint against Mr. Trump in the United States District Court for the Southern District of California, alleging violations of Cal. Bus. & Prof. Code § 17200; the Consumer Legal Remedies Act, California Civil Code § 1750 et seq.; untrue and misleading advertising in violation of Cal. Bus. & Prof. Code § 17500 et seq.; breach of contract, and breach of the implied covenant of good faith and fair dealing, money had and received, negligent misrepresentation, fraud, and false promise. Ms. Makaeff proposed a class of all persons who purchased seminars from Trump University beginning on April 30, 2006. Judge Gonzalo P. Curiel was assigned to the case.
On May 26, 2010, Trump University filed a counterclaim, alleging defamation. A second amended complaint was filed on Dec. 16, 2010, and Donald J. Trump was named as an additional defendant. In November 2015, a motion to consolidate the case with another was denied. In March 2016, Ms. Makaeff withdrew as lead plaintiff, and Sonny Low, another plaintiff in the action, assumed the role of lead plaintiff.
A Nov. 18, 2016, minute order noted that the parties had entered into a settlement agreement and that the cases was dismissed. That day, a Law360 article by Brandon Lowrey and Steven Trader noted that the by-then President-elect Trump agreed to pay $25 million just days before the case would have proceeded to trial. The proposed deal included $21 million for approximately 7,000 former students, with some receiving up to $35,000, and $4 million to settle a separate case brought by New York Attorney General Eric Schneiderman. The New York portion of the settlement included $1 million in penalties to the state for violating state education laws. The article also indicated that the class had been decertified with respect to damages, so the scheduled trial would have only resolved matters for three of the students and then might have instigated a series of individual damages trials.
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