Facts

Plaintiff Mark Hoppus is a musician and a former member of the band Blink-182. The other plaintiff is his wife, Skye Hoppus.

For several years, defendant Louis Tommasino, CPA, provided accounting and business management services to plaintiffs (and to some of their various business entities). The defendant also provided accounting and business management services to Missicom, LLC, a new business venture started by plaintiffs' friends, Jeff Mitchell and Ed Mitchell. The plaintiffs invested $600,000 in Missicom, LLC, in the form of a loan to the company. The loan has not been repaid. The plaintiffs claimed that Missicom is a "scam" and that their investment in the company is worthless.

The plaintiffs sued Tommasino, alleging that he failed to conduct the necessary due diligence; that he failed to properly disclose conflicts of interests relating to his role with Missicom; and that he wrongfully advised plaintiffs to invest in the start-up company.

Shortly before the case went to trial, the plaintiffs also filed a separate derivative complaint against Ed and Jeff Mitchell alleging fraud and breach of fiduciary duty regarding the Mitchells' operation of Missicom, their receipt of investor funds, and the statements they made in connection with plaintiffs' investment in the company.

PLAINTIFF'S CONTENTIONS:
The plaintiffs contended that defendant wrongfully advised them to invest $600,000 in Missicom and did so because he was being compensated for bringing investors to the company. They contended that defendant failed to conduct the necessary due diligence regarding the company and its promoters; that he failed to properly disclose conflicts of interests relating to his role with Missicom; and that he concealed from them material facts regarding the company.

DEFENDANT'S CONTENTIONS:
The defendant contended that he was not asked, and never agreed, to conduct a due diligence investigation regarding the company or its promoters. He did share with plaintiffs the information he had regarding the company and also shared his honest, personal opinions regarding the company, but he never provided plaintiffs with a professional opinion that they should invest in the company. The defendant was not plaintiffs' investment advisor and was not asked (or paid) to give investment advice.

The defendant also contended that he never agreed to solicit investors for Missicom and has received no money from the company. He provided two years of professional services to the company in exchange for a small number of shares; however, he will not receive any return on his Missicom shares unless and until plaintiffs' loan is repaid in full. He contended that all of the material facts (including the fact that he was going to be working for the company) were disclosed to plaintiffs before they decided to invest, but plaintiffs chose to ignore the disclosures.

Settlement Discussions

The plaintiffs served a C.C.P. section 998 demand for $675,000.

Damages

The plaintiffs sought a return of their $600,000 investment in Missicom, plus prejudgment interest and punitive damages.

Result

Defense verdict. Summary adjudication was previously granted as to plaintiffs' claims for breach of contract and negligence. The case went to trial on the remaining claims of breach of fiduciary duty and fraud, both of which were decided in defendant's favor. Judgment was entered in favor of defendant on all counts.

Other Information

The defendant has a pending cross-complaint against Missicom, LLC, Ed Mitchell, and Jeff Mitchell, seeking express and implied indemnity for the expenses incurred in defending against plaintiffs' claims and for other relief. FILING DATE: Dec. 6, 2006.

Deliberation

one day

Poll

11-1 (defense)

Length

seven days