Confidential
Settlement – $400,000Judge
Court
Kern Superior
Attorneys
Plaintiff
Defendant
Andrew J. Waxler
(Kaufman, Dolowich & Voluck LLP)
Experts
Plaintiff
Steven M. Blumberg
(technical)
Bruce Beaudoin
(technical)
Mark Luttrell
(technical)
Defendant
Larry Peake
(technical)
James Ducker
(technical)
James Kryminski
(technical)
Edward Curtis
(technical)
Steven Lantz
(technical)
Facts
The defendant, an attorney, formed a partnership with his long time clients, the plaintiffs, regarding the purchase and develoment of 118 acres of farmland in Bakersfield, California. In March of 1990, the defendant attorney purchased 118 acres of farmland for $12,000 per acre. In May of 1990, the defendant offered a one-half (+) interest in the property to the plaintiffs, his clients, at a price of $15,000 per acre. The defendant prepared a letter agreement regarding the partnership which was signed by the plaintiff husband but not by the plaintiff wife. The letter agreement did not contain all the terms of the alleged agreement. The defendant attorney failed to make his fifty percent (50%) of the payments on the property as debts came due. A portion of the property was sold to the local high school district and there was a distribution of the sale proceeds. The defendant attorney did not reveal to the plaintiffs that he represented a construction company which performed the off-site work. The plaintiffs could not finance one hundred percent (100%) of the remaining debt on the property which was lost in foreclosure in November of 1993. The defendant performed some of the work as an individual and as the defendant law partnership that he had created in 1993. A declaratory relief action was filed by the defendant's malpractice insurance carrier denying coverage. That declaratory relief case was dismissed as part of the settlement of the underlying case. The plaintiffs brought this action against the defendants based on negligence, legal malpractice, breach of fiduciary duty, constructive trust and accounting theories of recovery.
Settlement Discussions
The plaintiffs made a settlement demand for $850,000 (policy limits remaining on the malpractice insurance policy) which was reduced to $600,000 at a settlement conference. The defendants made a C.C.P. º 998 offer of compromise for $100,001, which was increased to $200,000, $275,000 and ultimately $400,000.
Damages
The plaintiffs claimed that there was an imbalance of capital account of approximately $222,000 due to the defendant attorney's withdrawal of capital contribution of the partnership and failure to pay expenses, resulting in the loss of the property through foreclosure valued at of approximately $480,000. The plaintiffs also claimed that the defendant realized profits of approximately $148,000.
Other Information
The settlement was reached approximately two years and three months after the case was filed. Extensive settlement conferences were held on December 4, 1995 and February 14, 1996, before the Hon. Gerald K. Davis, retired, resulting in the reported settlement of $400,000 and the dismissal of the declaratory relief action by the malpractice insurance carrier.
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