Knitting Factory Exec Wins 3-Year Legal Battle For Joshua Tree Outpost Pappy + Harriet’s

Knitting Factory Entertainment CEO Morgan Margolis and his partners prevailed Dec. 18 in a long-running battle for control of  Pappy + Harriet’s Pioneertown Palace near Joshua Tree, California, from ex-partners Moresco and Elin Group over the property. The Knitting Factory group assumed interim management of the beloved desert outpost on Dec. 23.

The ruling in Los Angeles Superior Court granting a temporary injunction pending entry of a final judgement also provides for damages for breaches of contract and taking of intellectual property, likely amounting to millions of dollars, as well as court and legal costs.

The decision brings to an end the three-year-long battle between Margolis, and partners Stephen Hendel and John Chapman, and the venue’s co-partners, Joseph Moresco and Lisa Elin, over operation of Pappy + Harriet’s, including booking and management of the rustic music venue as well as its bar and restaurant. 

Over the years, Pappy’s + Harriet’s has hosted international superstars like Paul McCartney, Robert Plant and Lana Del Rey to more homegrown favorites such as Jesika Von Rabbit and Victoria Williams. 

The dispute began in 2021 when Joseph Moresco and Lisa Elin, operating in a partnership as Moresco and Elin Group,  changed the locks on the venue and prevented the Margolis group from accessing the venue and its operations. The Margolis Group sued the couple, charging breach of contract and of fiduciary duty as well as other allegations and asked that they be removed as general partners.

A jury unanimously found, after a multi-week trial, that the Margolis group “had the authority to remove Moresco Holdings as the general partner of the partnership. Despite that removal, Defendants proceeded to utilize partnership assets,” according to court documents. 

“The decision confirmed that the Margolis Group was always supposed to control the partnership, the venue operations, and the talent booking and was wrongfully ousted without basis,” Knitting Factory Entertainment said in a statement.

Los Angeles Superior Court Judge Steve Cochran later ruled on the remaining claims in the case, finding the Mresco and Elin Group defendants engaged in breaches of fiduciary duty, wrongful conduct and had breached the partnership agreement with Margolis and his partners “in multiple ways.” 

 The Court restored all operational and financial control, as well as booking, over Pappy + Harriet’s to the Margolis Group.  

The two entities announced their partnership back in April 2021 to acquire the venue from beloved longtime owners Robyn Celia and Linda Krantz, who purchased Pappy + Harriet’s in 2003 from Harriet Allen and her husband, Claude “Pappy” Allen, who founded it in 1982. The venue started life as a Western movie set and cantina in the 1940’s. Within weeks, the defendants, Moresco and Elin, allegedly shut them out.

Margolis responded by filing suit against Moreso and Elin on June 23, 2021. After more than three years of wrangling and delays, the jury trial finally began on Oct. 22, 2024, and lasted eight days. 

Speaking for the plaintiffs, Margolis said, “we pride ourselves on decades of successful and meaningful partnerships and industry relationships built on trust and integrity.  We are pleased that the judge and jury confirmed what we have always known to be true: we were victimized by people who tried to take more than they bargained for.  This has been a long-fought dispute, and the jury and judge got it right and justice prevailed.  

“We are excited to move forward with what we set out to do three years ago when we bought this iconic venue that is so special to so many people. We look forward to engaging with the community at large as we fully embed ourselves within the high desert community to honor Pappy + Harriet’s rich history starting with Pappy and Harriett and continuing at full speed through Robyn and Linda.  We hope to carry their legacy forward.”

Brandon Fernald, an attorney for Moresco and Elin, said in a statement to the Los Angeles Times that “JB [Moresco] and Lisa [Elin] have spent nearly four years working to improve and grow Pappy & Harriet’s into one of the most respected and successful restaurants and music venue in the high desert, and globally during a time when there has been significant closures of outlets in the hospitality space.

“While we have the greatest respect for the Court and the jury,” Fernald continued, “we strongly believe both got it wrong. While this began as a mismanagement case, it ended with Mr. Hendel’s attorneys successfully keeping out any evidence of JB and Lisa’s extremely successful management of Pappy & Harriet’s during their tenure. We strongly believe that these and other decisions made by the Court were in error, and that the verdict will be overturned.” 

The attorney indicated that the two plan to appeal.