Dennis Dubrow v. Matthew B. Mack
Published: Jul. 1, 2003 | Result Date: Apr. 4, 2003 | Filing Date: Jan. 1, 1900 |Case number: CIV182944 Verdict – $0
Judge
Court
Ventura Superior
Attorneys
Plaintiff
Defendant
Jonathan B. Cole
(Nemecek & Cole)
Experts
Plaintiff
William Gamble
(technical)
Alan Cutrow
(technical)
Defendant
Warren Nagler
(technical)
Peter D. Wrobel CPA
(technical)
Facts
The defendant, Matthew B. Mack served as trustee for the $500,000 Lorraine Konblett Charitable Remainder Unitrust (CRUT) from 1990 through September 1997. The trust instrument provided that the trust should be administered and investments handled in a manner consistent with the goals of the trustor, Lorraine Konblett, who was also the first income beneficiary. The trust instrument designated the American Cancer Society and the American Heart Association as the charitable remaindermen, but their designation was revocable in the sense that they could be replaced with other charitable beneficiaries by the first income beneficiary, Konblett, and the second income beneficiary, Sheila Schlichter, at any time and for any reason. In accordance with the goals and the directions of Konblett, the initial investments were in conservative tax free bonds. As the trustor/income beneficiary's needs and interests changed, including the depletion of other assets in her estate by members of her family, Mack undertook efforts to increase the income and growth of the trust by investing more aggressively in secured and unsecured loans, real estate general partnerships and stocks, including some speculative tech stocks. The results were mixed, and the overall rate of return was approximately 6.7 percent up to the time Mack was replaced as trustee in October 1997. The above-mentioned real estate general partnerships, consisting of three separate investments, each involved an investment in a partnership in which Mack himself was the managing partner, and to the extent the partnerships were profitable, Mack received management fees in the form of a 25 percent share in the profits.
Settlement Discussions
In November 1999, the defendant submitted a C.C.P. Section 998 offer of $250,000 (policy limits). This was rejected without a counter-offer. No other offers or demands were made.
Damages
The plaintiff sought compensatory damages in excess of $1 million, plus substantial punitive damages. At trial, the plaintiff argued for compensatory damages in the amount of $400,000 based upon the negligent handling of investments, as well as the return of management fees and disgorgement of profits approaching another $100,000, plus substantial punitive damages.
Other Information
A memorandum of costs has been filed by the defendant which is in excess of $85,000.
Deliberation
2.5 hours
Poll
12-0 (as to each cause of action)
Length
17 days
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