Confidential
Settlement – $878,000Judge
Court
Orange Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Chang Zern Hong
(medical)
Stuart T. Waldrip
(technical)
Irwin Rosenfeld
(medical)
David K. Ringwood
(technical)
Defendant
J. Richard Tucker
(technical)
John K. Trotter
(technical)
Facts
Plaintiff in the instant case was a customer of a security brokerage house, which sued her and others in federal court in 1984 for fraudulently manipulating the price of a stock, which she had recently bought (and sold for approximately $20,000) through the brokerage. Immediately upon discovering the manipulation scheme, the brokerage house froze all of Plaintiff's stock portfolio and served her with the complaint. Shortly thereafter, an official of the brokerage telephoned Plaintiff and offered to drop her from the suit and to unfreeze her account if she would give up her claim to the proceeds of the sale of the stock in question. The broker admitted on the phone that he knew Plaintiff was innocent, but said she would incur large legal expenses if she resisted; the telephone conversation was secretly taped by the broker. Newspaper articles followed, which named Plaintiff and the other Defendants as being charged with fraudulently manipulating the stock market. Later, while her motion for summary judgment was pending, the brokerage house dismissed Plaintiff from the federal court action, acknowledging that her right to sue for malicious prosecution was preserved. The brokerage still held on to portions of Plaintiff's portfolio for some additional months. Plaintiff then filed an action for malicious prosecution against the brokerage, who continued to keep the proceeds from the sale of certain of her stock. The case against the brokerage house went to trial in 1990, with Plaintiff represented by the Defendant attorney (instant case). Plaintiff's attorney asked the jury to award damages for emotional distress, physical pain, and economic loss, as well as $12,000,000 in punitive damages. At the conclusion of the 1990 malicious prosecution trial, the Court found there was no probable cause for the suit against the Plaintiff in the 1984 malicious prosecution case and so instructed the jury. "Favorable termination" of the 1984 suit was not disputed. Nevertheless, the jury returned a general verdict for the Defendant brokerage. Plaintiff brought this malpractice action against her attorneys for her loss of a jury verdict in the 1990 malicious prosecution trial. Defendant trial attorney died during the pendency of the malpractice case; and his estate was substituted in as Defendant in the instant case.
Settlement Discussions
Plaintiff contends the following: At the outset of the case, Plaintiff made a 998 demand for the policy limits, which was not accepted; on the eve of trial, a settlement conference was ordered before The Honorable Eli I. Chernow; and at that time, a demand was made for the remaining limits, which was accepted.
Specials in Evidence
$50,000
Injuries
Plaintiff claimed ongoing emotional distress from the 1984 lawsuit, the 1990 trial, and its aftermath, which further caused Plaintiff permanent physical injury in the form of myofascial pain and cortisol imbalance. Plaintiff also sought to recover $40,000 in legal fees expended in the prior actions and the loss of punitive-damages award she should have received in the 1990 trial.
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