James, et al. v. Commonwealth Energy Corporation
Published: Apr. 15, 2003 | Result Date: Dec. 10, 2002 | Filing Date: Jan. 1, 1900 |Case number: 01CC02611 Verdict – $2,737,800
Judge
Court
Orange Superior
Attorneys
Plaintiff
Eric V. Traut
(Traut Firm)
James R. Traut
(Traut Firm)
Defendant
Randall B. Aiman-Smith
(Aiman-Smith & Marcy PC)
Facts
The subject suit was instituted by 15 sales people who sued their former employer, Commonwealth Energy, for discounted qualified stock options they claimed to have earned while raising the seed money to start the company during the period 1997-1999. They admitted to receiving all of their commissions totaling over $4 million. Both parties agreed that the sales people were not registered or licensed with the California Department of Corporations and should not have been selling the private offering of stock.
Settlement Discussions
According to the plaintiffs: The plaintiffs demanded $4.1 million at the start of trial, reduced to $2.8 million when the plaintiffs were forced to seek quantum meruit. The defendant offered approximately $500,000 plus some non-qualified options. According to the defendant: The plaintiffs demanded $6 million at the start of trial, reduced to $2.8 million when the plaintiff rested. The defendant offered approximately $1 million.
Other Information
According to the plaintiffs: They had retained an expert to testify as to the value of the Commonwealth stock. The court precluded the plaintiffs' expert from testifying when he issued the ruling that the case could only proceed on a quantum meruit theory of recovery. The jury had to decide the value of services for each plaintiff and whether such exceeded $4 million plus in commissions. The court allowed special jury instructions submitted by the defendant which precluded the jury from using the value or number of the stock options in determining the reasonable value of services of each plaintiff. On March 13, 2003, the defendant's judgment notwithstanding the verdict and motion for new trial were denied. The defendant has filed notice of appeal. Although plaintiffs' counsel were retained on a contingency basis, the plaintiffs filed a motion for $720,000 in recoverable attorney fees ($360,000 x2 per Loadstar calculation) and costs of $27,000. The defendant has filed its own motion for attorney's fees contending it was the prevailing party on all contract claims and as against plaintiffs against whom summary judgment was entered. Those motions will be heard in May 2003. According to the defendant: The defendant filed a motion for judgment notwithstanding the verdict and a motion for new trial, and submitted juror affidavits from three jurors who voted in favor of the verdict which declared that the jurors had improperly discussed and considered options, and had based the verdict entirely on the number and value of stock options argued by plaintiffs' counsel in closing argument. The plaintiffs did not rebut this contention.
Deliberation
six days
Poll
9-3
Length
five weeks
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