Confidential
Settlement – $120,000Judge
Court
Confidential
Attorneys
Plaintiff
Defendant
Robert B. Ericson
(Albert & Will LLP)
Experts
Plaintiff
Douglas Schulz
(technical)
Defendant
Robert L. Martin
(technical)
Facts
In or around 1985 and 1987, the claimant, a 55-year-old credit analyst for an oil company, invested $76,500 in oil and gas limited partnerships through the respondent. The partnerships were not profitable. The claimant alleged that the investment represented 35% of his net worth. The claimant also alleged that the series of 26 limited partnerships were marketed as being as safe as certificates of deposit. The respondent allegedly referred to high returns of earlier investors in marketing the partnerships to the claimant. The claimant alleged that the returns included a return of the investor's own capital and were, therefore, inflated. The claimant's account agreement provided for arbitration and the claimant brought this action against the respondent based on fraud and breach of fiduciary duty theories of recovery.
Settlement Discussions
Per the claimant, the claimant made a settlement demand for $75,000 prior to the first arbitration and the respondent made a settlement offer of $14,000. Per the respondent, the settlement negotiations were confidential.
Damages
Per the claimant, the claimant claimed $80,000 in damages for out-of-pocket losses and loss of use of the invested funds. Per the respondent, the claimant claimed $100,000 in damages for out-of-pocket losses and loss of use of the invested funds, $30,000 (for emotional distress and costs associated with the arbitration and expert witnesses) and between $240,000 and $300,000 (for punitive damages).
Other Information
The award was reached approximately three years after the case was filed. The arbitration began on May 5, 1995, before a panel of three arbitrators of the American Arbitration Associations. During the first day of the hearing, the respondent moved to disqualify one of the arbitrators after the arbitrator disclosed that he previously retained or consulted with the claimant's attorney's law firm. Per the respondent, the arbitrator made statements that indicated he had pre-judged certain issues, and the respondent then moved to disqualify the arbitrator in question and the rest of the panel. The arbitrator in question disqualified himself. Subsequently, a second arbitrator was disqualified when his law firm became adverse to the respondent's law firm in another matter. The arbitration resumed in February of 1996. The arbitration panel consisted of Joel Mark, Stephen Haberfeld and Bert Levy. The arbitration resulted in the reported award with arbitrator Haberfeld concurring and dissenting in the award stating that the amount of the award was inadequate to make the claimant whole.
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390