Confidential
Settlement – $20,000Mediator
Court
L.A. Superior Central
Attorneys
Plaintiff
Kenneth S. Gaines
(Gaines & Gaines APLC)
Defendant
Facts
The plaintiffs in this case hired defendant, a bankruptcy attorney, to represent them in bankruptcy when they were about to lose their home to foreclosure. The bankruptcy judge granted the lender relief from the automatic stay, the home was foreclosed upon and plaintiffs' equity was lost. The plaintiff brought this action against defendant based on a legal malpractice theory of recovery.
Settlement Discussions
The plaintiffs initially demanded $45,000, while defendant initially offered $5,000.
Damages
The plaintiffs sought $45,000, which was the amount of net equity in the home. The defendant countered that the equity would have been reduced by a $13,000 to $20,000 prepayment penalty, for maximum net damages of $25,000 to $32,000.
Other Information
MEDIATION: A mediation was held on Dec. 12, 1997, before Deborah Rothman of the American Arbitration Association resulting in the reported settlement.
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