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'Doe' Family Feud : Courts: Civil suit listing anonymous litigants is believed filed by Clothestime against rival retailer Styles for Less, both founded by members of O.C.'s DeAngelo clan.

June 08, 1995|GREG JOHNSON | TIMES STAFF WRITER

SANTA ANA — A long-simmering feud involving one of Orange County's most successful retailing families has apparently erupted into a highly unusual court battle, with one women's fashion chain accusing a competitor of stealing trade secrets and fashion tips.

A civil suit filed June 5 in Superior Court in Santa Ana lists Doe Corp. No. 1 as the plaintiff and Doe Corp. No. 2 as the defendant. The court document does not identify either of the firms, but details in the document seem to paint a portrait of Clothestime Inc. and Styles for Less, two Anaheim-based junior women's fashion retail chains founded by members of the DeAngelo family.

Courthouse observers describe the civil suit, which seeks unspecified damages, as puzzling because neither the plaintiff nor the defendant is identified.

"I've written a five-volume textbook on civil procedures . . . and I've read my competitors' books, but I've never heard of this kind of filing," said Michael P. Thomas, a Huntington Beach-based lawyer and Western State University College of Law adjunct professor.

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The suit alleges that the defendant company illegally interviewed employees of the plaintiff under the guise of job interviews. The document alleges that the defendant illegally tried to extract trade secrets and up-and-coming fashion trends during those interviews, using potential job offers to draw out information.

The suit also alleges that the defendant illicitly used the plaintiff's proprietary information to help locate its own stores near the plaintiff's highest-volume stores.

Industry sources have known that Clothestime, under Chairman and Chief Executive John Ortega II, is feuding with Styles for Less, which Michael DeAngelo and Michael Leff, two former Clothestime executives, founded in 1992.

Members of the DeAngelo family, the two competing retail chains and their attorneys either refused to comment on the suit or were unavailable for comment.

"I can't confirm or deny that the suit involves Clothestime and Styles for Less," said Clothestime spokesman Jeff Dake. But after being read portions of the suit, Dake acknowledged that, "from what you're telling me, I don't know who else it could be."

Richard J. Grabowski, whose Irvine-based law firm serves as Clothestime's external counsel, acknowledged that he signed the complaint. But Grabowski declined to comment on the filing, adding that "you shouldn't infer from my silence that this case has anything to do with Clothestime or Styles for Less."

Leff, chief operating officer at Styles for Less, said he knew of "no suit filed against us or by us. . . . I don't know what to say because I don't know what's going on."

Retail industry analysts said Wednesday that Clothestime co-founder Ortega, who has been with the firm since its inception in 1978, was known to be upset by Michael DeAngelo's decision to emerge from retirement in 1992 and compete against Clothestime.

"Mike opened a store that looks a lot like Clothestime," said an industry analyst who asked to remain anonymous. The analyst explained that the move caused some problems between the two retailers. "I don't know, though, if that [situation] got worse."

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Clothestime officials in the past have declined to comment on the competitive or personal relationship between Ortega and DeAngelo. And Dake on Wednesday declined to discuss DeAngelo's business.

But the suit includes language that seems to describe Clothestime and Styles for Less.

The suit states that Doe Corp. No. 1, for example, is an Orange County-based specialty retailer that sells off-price and discount women's junior wear to customers ages 18 to 35 from carefully selected strip shopping centers. That is nearly word-for-word how Clothestime describes itself in its most recent annual report.

The suit describes the defendant as a newer chain founded by an unidentified Doe No. 3 who previously had served as the plaintiff's general merchandise manager and now serves as the defendant's chief operating officer. At Styles for Less, Leff is chief operating officer. He formerly was Clothestime's general merchandise manager.

Finally, the suit alleges that the newer competitor has located many of its stores in shopping centers where the plaintiff operates many of its highest-volume stores. Styles for Less has opened stores in strip shopping centers where Clothestime operates.

In fact, on Wednesday, a sales clerk described the Styles for Less store in Santa Ana as being "next door to Clothestime."

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While Clothestime has been hurt by an ongoing slump in the specialty retail sector, the rag business has been good to the DeAngelos.

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