Susan Souveroff, et al. v. Robert A. Wall, Hildegard Merrill, 2815-9 W. Olive Ave., Ltd.
Published: Feb. 8, 1997 | Result Date: Dec. 17, 1996 | Filing Date: Jan. 1, 1900 |Case number: BC105315 – $1,389,340
Facts
The "Souveroff plaintiffs" are seven individauls who purchased six limited partnership interests in 2815-19 West Olive Avenue, Ltd., a limited partnership formed in 1984 by defendants Robert A. Wall and Hildegard Merrill to acquire, manage and resell for profit certain realty located on West Olive Avenue in Burbank ("the partnership property"). Merrill sold the limited partnership units to the Souveroff plaintiffs, purchased three limited partnership units herself, and was to co-manage the partnership as a co-general partner with Wall, who initially found the property. On May 20, 1991, Wall sold the partnership property without the knowledge, consent or approval of the Souveroff plaintiffs. A total of $1.5 million was paid by the purchasers for the property: $400,000 was paid to satisfy the first trust deed and Wall authorized and paid himself an $80,000 brokerage commission. The plaintiffs claimed Wall took the remaining $670,000 of the sales proceeds from the partnership property by writing checks to himself from the partnership bank account(s). The defendants claimed the amount was $470,000. Neither Wall nor Merrill notified the Souveroff plaintiffs when the partnership property was sold, nor sought their approval as required under the partnership agreement. After the sale closed, Wall concealed the sale from the plaintiffs for almost two years. Wall falsified partnership accounting records to indicate an ongoing operation and rental of the property. Wall misrepresented to the plaintiffs that the property was still owned by the partnership and prepared and signed fraudulent tax returns for 1991 and 1992. The Souveroff plaintiffs did not discover the sale until the Fall of 1993, when they had a title search done after neither Merrill nor Wall would provide information on the partnership operations. On June 5, 1995, Wall pleaded "no contest" to three felony charges arising from the fraudulent sale and conversion of the property and tax fraud. On Dec. 19, 1996, following the civil trial and verdicts, Wall was sentenced by Judge James Basque to two years in state prison and remanded into custody. The plaintiffs brought this action against defendant Merrill on breach of fiduciary duty and negligence theories of recovery. The plaintiffs brought this action against defendant Wall based on breach of fiduciary duty, fraud and conversion theories of recovery.
Settlement Discussions
The plaintiffs made a settlement demand for $475,000 "new money." Per the defendants, the plaintiffs made a settlement demand of $1 million. Defendant Wall made an offer of $300,000 with $100,000 in cash and the remainder to be paid over two terms. He had already paid $207,000 to all parties before trial.
Injuries
The plaintiffs claimed $5 million in damages.
Other Information
The verdict was reached approximately two years and six months after the case was filed. Per the plaintiffs, during trial, before either defendants Wall or Merrill testified, and unbeknownst to the Souveroff plaintiffs, Merrill (who also owned three limited partnership interests) settled with Wall for $50,000 ($30,000 cash and $20,000 due in one year). POST TRIAL MOTIONS: Defendant Wall made a motion for new trial based on excessive damages and excessive punitive damages on the assertion that he had no net worth. The equity issues were bifurcated from the legal claims and tried to the court, which determined the partnership accounting issues, and the amount of compensatory damages. The jury determined the legal liability issues and punitive damages.
Deliberation
1+ days
Poll
12-0 (against defendant Wall for breach of fiduciary duty, fraud, conversion and money had and received), 11-1 (for defendant Merrill on no causation resulting from Merrill's breach of fiduciary duty, and on negligent conduct), 12-0 (punitive damages against Wall)
Length
8 days
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