The Taylor Armstrong lawsuit most people mean was a $1.5 million breach-of-contract case brought in July 2011 by MMRGlobal, Inc., the parent company of MyMedicalRecords.com, against the Real Housewives of Beverly Hills cast member and her then-husband, Russell Armstrong. MMRGlobal said the Armstrongs had violated a 2007 settlement over diverted investor money. Taylor settled in June 2012 by turning over a 10-carat yellow diamond engagement ring valued at around $250,000 and two Hermès Birkin bags that the company later discovered were counterfeit.1Reality Tea. Taylor Armstrong Settles MMRGlobal Lawsuit With an Engagement Ring, a Bank Note, and Two Fake Birkins
What MMRGlobal Accused the Armstrongs of Doing
MMRGlobal, run by CEO Robert H. Lorsch, provided online personal health records and document tools for healthcare providers. Russell Armstrong was its largest shareholder and separately ran a venture capital firm, NuWay Digital Systems, Inc. (NDS), which held an interest in MMRGlobal.2TMZ. Taylor Armstrong and Estranged Husband Russell Named Defendants in Breach of Contract Lawsuit
According to the company, Russell raised more than $1 million by selling NDS shares to investors who thought they were buying into MMRGlobal itself.2TMZ. Taylor Armstrong and Estranged Husband Russell Named Defendants in Breach of Contract Lawsuit MMRGlobal alleged the couple then spent that money on themselves, including redecorating their Beverly Hills mansion and investing in a restaurant with Eva Longoria.3FindLaw. Real Housewives Taylor Armstrong Sued With Husband for $1.5M
That earlier dispute settled in 2007. Under the deal, Russell and Taylor gave up 100% of their shares in the then-private company and paid $250,000 in cash. They were also required to identify every investor who had indirectly bought shares from them so MMRGlobal could issue those investors the equity they were owed.4GlobeNewsWire. MMRGlobal Recovers Biotech Assets and Files Liquidated Damages Claim Against Reality Television Stars Taylor and Russell Armstrong
MMRGlobal later said the Armstrongs concealed at least three such investors. On July 29, 2011, it filed a new complaint in Los Angeles Superior Court against Taylor, Russell, and NDS for breaching the settlement. A liquidated damages clause in the 2007 agreement fixed the amount: $1 million for the first undisclosed investor and $250,000 for each additional one, producing the $1.5 million claim.4GlobeNewsWire. MMRGlobal Recovers Biotech Assets and Files Liquidated Damages Claim Against Reality Television Stars Taylor and Russell Armstrong
Why the Case Continued Against Taylor After Russell’s Death
Russell Armstrong was found dead by suicide on August 15, 2011, at a friend’s Los Angeles home. He was 47, and the Los Angeles Police Department reported no signs of foul play. His attorney, Ronald Richards, said Russell was more than $1.5 million in debt and “living month to month.”5ABC News. Husband of Real Housewives Star $1.5 Million in Debt Before Suicide Taylor had filed for divorce weeks earlier and publicly described years of physical and verbal abuse during the marriage.6Reuters. Housewives Star Taylor Armstrong Details Abuse
His death did not end the case. Because the conduct at issue occurred during the marriage in California, a community property state, Taylor remained potentially liable for the debt.3FindLaw. Real Housewives Taylor Armstrong Sued With Husband for $1.5M Lorsch said publicly that MMRGlobal would investigate her assets, including her salary from The Real Housewives of Beverly Hills, consulting income, and sponsor gifts.7HuffPost. Lawsuit Against Taylor Armstrong
Taylor moved for summary judgment. Judge Frederick Shaller denied the motion, holding that MMRGlobal did not need to prove actual damages to enforce the liquidated damages clause and finding “no evidence of the circumstances existing at the time the contract was made to enable the court to find that the liquidated damage clause is unreasonable.” The company signaled it might introduce evidence of additional undisclosed investors at trial, potentially pushing damages above $3 million. A trial date was set for July 11, 2012.8AccessNewsWire. Judge Denies Taylor Armstrong’s Request to Dismiss Case With MyMedicalRecords.com
The Settlement: A Ring, Two Fake Birkins, and a Bank Note
Taylor and MMRGlobal settled in June 2012, before trial. On paper the terms required her to pay more than $1 million. To satisfy that obligation, she handed over the 10-carat yellow diamond engagement ring, valued at roughly $250,000, and two Hermès Birkin bags. The bags came without paperwork and turned out to be counterfeit. “There was no paperwork on the bags,” Lorsch told reporters.9HuffPost. Taylor Armstrong Settlement
To account for the questionable bags and doubts about Taylor’s ability to pay, the settlement also included a bank note for a nominal amount. If she came into money soon after claiming she couldn’t pay, MMRGlobal would have a way to reach it. Lorsch said collecting a $1.5 million judgment from her was “questionable” and that spending more than $100,000 on a trial did not make sense. “At the end of the day, I think we will do OK with the ring,” he said. “For us the chapter is closed.”1Reality Tea. Taylor Armstrong Settles MMRGlobal Lawsuit With an Engagement Ring, a Bank Note, and Two Fake Birkins
Other Cases That Aren’t the Same Lawsuit
A few other legal matters tend to get grouped with the MMRGlobal case but were separate. After Russell’s death, American General Life Insurance Co. filed an interpleader in Superior Court because both his ex-wife Barbara Fredrickson, as trustee for their son, and Russell’s estate claimed the $1 million policy proceeds; the insurer deposited the face value with the court for a judge to divide.10Courthouse News Service. What to Do With Suicide’s $1 Million Policy Years later, Taylor’s second husband, John Bluher, was sued by Capital One in Orange County Superior Court over a $21,456.13 credit card balance; that case was dismissed with prejudice on August 10, 2023. Bluher also carried federal tax liens, including an outstanding IRS bill of $468,848.18 for the 2014 tax year.11Radar Online. Taylor Armstrong’s Real Housewives of Orange County Husband John Credit Card Lawsuit Dismissed None of those matters was part of the MMRGlobal case Taylor settled in 2012.