Facebook CEO Mark Zuckerberg faces fraud charges

05:47 PM | 3 Oct, 2015
Facebook CEO Mark Zuckerberg faces fraud charges
SILICON VALLEY (Web Desk) - Mark Zuckerberg moved closer to a trial over a developer's lawsuit alleging the billionaire committed fraud by reneging on a promise to introduce him to Silicon Valley's elite as part of a land deal.

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A state judge in San Jose, California, denied Zuckerberg's request to throw out claims that he didn't keep his word in a $1.7 million deal that ended plans for a mansion with a view into the 31-year-old Facebook founder's bedroom, the Bloomberg reports.

Superior Court judge Patricia Lucas said at a hearing on Thursday “she'll consider Zuckerberg's arguments before making a final decision on a breach-of-contract claim”.

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Zuckerberg's backyard privacy showdown took another dramatic turn when the lawyer for the developer confirmed during the hearing that he's seeking to withdraw from the case. Attorney David Draper, who represents developer Mircea Voskerician, didn't disclose why he wants off the case after winning a number of pretrial battles and just weeks before it's set for trial. He declined to comment on it outside of court.

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Patrick Gunn, a lawyer for Zuckerberg, said Draper has a conflict with his client and made the request to withdraw in court filings that cite professional rules of conduct for attorneys but don't describe what the conflict is. It's "not clear" why Draper wants to withdraw, Gunn said in an interview, noting that the judge has scheduled a hearing on the matter next Thursday.

Voskerician told the judge he's looking for a new lawyer and expects to have one at the next hearing. The substitution may push the November 9 trial date back, though it's unlikely to imperil Voskerician's case, said Miriam Cherry, a professor at Saint Louis University law school.

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The case grew out of a 2012 deal in which Zuckerberg paid for the rights to buy the house behind his home in Palo Alto, California, from Voskerician. The developer claims he gave Zuckerberg a 40% discount on the property rights, while agreeing to drop plans to build a 9,600-square-foot home, because he was promised introductions and referrals to boost his business that never materialized.

Lucas on Thursday rejected most of Zuckerberg's requests to have individual claims decided in his favour without need of a trial. She also ruled that Divesh Makan, a financial adviser to Zuckerberg, must face a claim that he was part of a conspiracy to defraud Voskerician.

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Oral contract Gunn challenged what he called a core claim in the case, Voskerician's allegation that Zuckerberg is bound through an oral contract to his promise of referrals. The verbal agreement was so opaque that it's unenforceable, Gunn told the judge.

"Was Mr Zuckerberg supposed to help the plaintiff build his project elsewhere?" Gunn asked. If so, "does that mean Mr Zuckerberg was supposed to help him find other sites? Was Mr Zuckerberg supposed to put in a good word for the plaintiff?"

Draper said there's evidence in e-mail messages that Zuckerberg agreed to give Voskerician referrals. "The fact of the matter is Mr Zuckerberg didn't do anything," Draper argued, saying that amounts to a breach of the contract. "They just wanted to get rid of Mr Voskerician."

In her tentative ruling issued before the hearing, Lucas refused to dismiss the contract claim, saying the evidence shows the alleged agreement "is not so uncertain or indefinite so as to be rendered unenforceable." She said she'll issue a final decision later.

Sara Petersen Graves, a lawyer for Makan, and Gunn declined to comment on Thursday's ruling. The case is Voskerician v Zuckerberg, 114CV264667, Superior Court of California, County of Santa Clara (San Jose.)