Stephanie Clifford a.k.a. Stormy Daniels has proposed giving back $130,000 in hush money that she was paid to keep quiet about her alleged affair with Donald Trump. The $130,000 was paid by Essential Consultants, LLC. based on a tripartite Settlement Agreement (“SA”) signed by Clifford (referred to as “PP”) and Michael D. Cohen for Essential Consultants, LLC (referred to as “EC, LLC”), but not by Trump (referred to as “DD”). Based on the SA, Clifford should keep the money.
The SA (Sec. 4.3.2) provides that Clifford was to make certain representations, “without which DD would not agree to pay any monies whatsoever”. However, there is no provision in the SA under which DD was obligated to make any payment. The only obligation to make any kind of payment is in Section 18.104.22.168 wherein EC commits to pay $130,000 to Clifford’s attorneys trust account. There is no provision in the SA that this payment is made on behalf of DD. Section 22.214.171.124.2, provides “No portion of the Gross Settlement shall be disbursed by the Attorney for PP unless and until PP executes all required Settlement Documents.” Accordingly, the only requirement for Clifford to receive the money was to sign the Settlement Documents, which she did.
EC’s only obligations under the SA were to pay the $130,000, and serve as DD’s agent for receiving notices. Section 5.1.3 entitles DD to seek injunctive relief, not EC. Section 5.2 provides for arbitration of claims arising “between DD on the one hand, and PP on the other hand”, and not claims involving EC. In short, EC as a signatory to the SA fully discharged its obligations when it paid the $130,000.
Similarly, with regard to EC, Clifford fully discharged her obligations to EC when she signed the SA and the Side Letter. Since both parties did everything they were required to do under the SA vis-à-vis the other, Clifford should keep the money.
Bruce C. Cohen is an attorney and the author of Missouri Defendant’s Procedural Warfare Manual. He also writes fiction as Charlie Kenmore and Ken Charles.