Confidential
Settlement – $450,000Judge
Court
Confidential
Attorneys
Plaintiff
William R. Hart
(Hart King APC)
William R. Hart
(Hart King APC)
Defendant
Samuel A. Keesal Jr.
(Keesal, Young & Logan)
Samuel A. Keesal Jr.
(Keesal, Young & Logan)
Experts
Plaintiff
Richard J. Teweles
(technical)
Richard J. Teweles
(technical)
Defendant
John D. Maine
(technical)
John D. Maine
(technical)
Facts
The claimant, a homemaker and mother of eight, inherited a "blue chip" stock portfolio from her great aunt in 1976. The money generated from the portfolio in recent years, $35,000 to 40,000 per year, was her family's main source of income. The portfolio was maintained essentially untouched until the original share certificates were hand-delivered to the respondent brokerage firm in April 1994. At the time of transfer to the respondent, the stocks had a value in excess of $960,000. Soon after the delivery of the certificates, the claimant learned from receipt of confirmation slips that the entire "blue chip" stock portfolio had been sold. The "blue chip" portfolio was then invested into investments which the claimant argued were more speculative and high risk, and which declined in value over the next year. The respondent claimed the portfolio was invested into investments designed to generate more income, as requested by the claimant. The respondent also claimed the portfolio's decline in value was due to the unprecedented decline of the Mexican peso. In February 1995, the plaintiff consulted with her tax acountant and learned for the first time that she had incurred a capital gain tax liability in excess of $300,000. After the tax was paid and the balance of the account sold, the portfolio had a market value of approximately $500,000. The claimant brought this action against the respondents, the investment firm, the branch office manager and the broker, based on breach of fiduciary duty, fraud and negligent supervision theories of recovery.
Settlement Discussions
The claimant made a settlement demand for $1 million. The respondentsmade a settlement offer of $65,000.
Damages
The claimants sought $481,783 for diminution of portfolio value; $64,876 for commissions and interest paid and attorney's fees and costs. Per the respondents, the claimant sought $1 million in compensatory damages, $500,000 in attorney's fees and punitive damages of $2.3 million to $12.2 million.
Other Information
The award was rendered approximately one year after the case was filed.
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