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The POWER 30: William Skolnick

Minnesota Lawyer//October 28, 2021

The POWER 30: William Skolnick

Minnesota Lawyer//October 28, 2021

There are some things people getting a divorce should not do: lie about their income, even when they’ve been lying about it throughout the marriage; lie about the value of a company they own; and, after lying about the company, sell it and have a newspaper report the price that is about five times the amount they represented to their spouses.

That scenario led to notorious litigation against a lying spouse and his lawyers. It also established a niche for business litigator William Skolnick of Minneapolis, who got the wronged wife her fair share in Sax v. Taunton. He demonstrated that the husband had committed a fraud upon the court and brought an independent action for damages after the divorce, including the husband’s law firm.

A prenuptial agreement valued the husband’s business at $6 million and he originally settled with his spouse for $350,000 for her share of the business. The wife reached a confidential settlement. The husband’s law firm then reached a settlement with the wife.

The husband then sued his former law firm for malpractice because he had to pay a larger settlement and attorney fees. The court dismissed that case because the husband was a fraudster and was barred from suit by the doctrine of pari delicto.

Sax created Skolnick’s niche. It was followed by Rucker v. Rucker and later Rucker v. Schmidt. That case involved the business The Tile Shop, valued by husband. A year later the wife got a letter from an employee telling her she had been cheated. The court found that the husband engaged in an intentional course of material misrepresentation and nondisclosure concerning the value of his business interest in The Tile Shop.

The wife successfully sued her ex-husband for fraud and later settled with him, days before trial, reserving the right to sue the ex-husband’s lawyer and law firm, which she did. The Supreme Court ruled in Rucker v. Schmidt that the attorney-client relationship between the ex-husband and the lawyer did not create privity such that the husband and firm could not be sued. That case settled.

Similarly, a man told his wife his family business was worth $1 million, although he had an offer on his desk for $10 million. That man had a brother who was also married. Skolnick let the woman in the brother’s divorce know that he could help her. “Eventually she called me,” he said.

Skolnick practices business location, not dissolutions of marriage. “I just do litigation. I don’t want to draft contracts,” he said. That means that business or corporate lawyers whose clients run into divorce difficulties can refer their clients to Skolnick, knowing he will return them.

Discovery is the way to win cases, Skolnick said. He advocates deep and wide discovery, and is less concerned about proportionality. “Who knows what you’re going to find out?” he said.

He’s also an advocate of direct communication with witnesses. Skolnick often does the interviews himself, but always has someone else with him.

“It’s amazing how many people on both sides don’t contact witnesses,” he said. “How do you not have that conversation? One of the most effective tools you have is to talk to them.”

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