Confidential
Settlement – $500,000Facts
The plaintiff is an 80-year-old widow and was provided with care givers by the defendant caregiver agency. The defendant owner of the defendant agency began handling the plaintiff's finances in 1998. At the time, the plaintiff was receiving $3,300 monthly on a deed of trust and $300 in social security. The deed of trust was paid off and the plaintiff received approximately $400,000 in October 1999, three months after receiving a $72,000 distribution from her deceased husband's estate. The defendant agency owner referred the plaintiff to the co-defendant financial planner with whom the defendant agency owner had invested in excess of $300,000 of his own money in offshore companies and banks. The co-defendant financial planner had the plaintiff sign a partnership agreement in November 1999 wherein he would invest $455,000 of her money in international mutual funds and pre-IPO companies. After one year, the plaintiff, if she requested, could get all of her money back. The plaintiff demanded the return of her money at the end of the first year but was told by the defendant financial planner that he did not have the money. Ultimately, the plaintiff's agent, under a durable power of attorney, was able to recover $127,000 paid overtime by the defendant financial planner. In April 2002, the plaintiff injured her hip and underwent treatment at a care facility. On discharge, it was determined that the plaintiff could no longer afford the expense of caregivers which were required for her to continue living in her own home. Consequently, the plaintiff was placed into a residential care facility with five other seniors and went from living in her own home to a 10x10 foot bedroom sharing all other areas of the home. Prior to investing $455,000, which the plaintiff needed to provide for her economic and medical needs for the rest of her life, the plaintiff had never invested in the stock market or real estate leaving all financial decision making responsibility and issues, including the check book, to her husband who passed away in December 1997. By the time the suit was filed, it was projected that the plaintiff would run out of money, the $127,000 that was returned from the original $455,000 investment, by March 2004, leaving her with the $300 monthly from social security.
Settlement Discussions
The plaintiff demanded $1 million. There was no offer prior to mediation. The case settled at mediation for $500,000 before Scott Slater Marcus.
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