John Swain v. Kelley & Swain Inc., Scott Kelley
Published: Apr. 4, 2009 | Result Date: Oct. 15, 2008 | Filing Date: Jan. 1, 1900 |Case number: 07-AS-04166 Bench Decision – $370,000
Court
Sacramento Superior
Attorneys
Plaintiff
John S. Knowlton
(Burton Law Firm)
Defendant
Peg Carew Toledo
(Arnold & Porter Kaye Scholer LLP)
Facts
Plaintiff John Swain and Scott Kelley established their insurance company, Kelley & Swain Inc., in 1998. They later founded Swain & Kelley LLC, which owned the building that housed Kelley & Swain Inc. Swain then left Kelley & Swain Inc. and sued for breach of contract. The parties mediated and settled.
A part of the settlement pertained to Swain and Scott Kelley, whereby Kelley agreed to purchase Swain's interest in Swain & Kelley LLC for $370,000 in payments over 10 years at eight percent interest. Kelley made the first month's payment but refused to continuing paying. Swain sought to enforce the settlement.
Contentions
PLAINTIFF'S CONTENTIONS:
The plaintiff contended that Kelley's refusal to pay violated settlement terms.
DEFENDANTS' CONTENTIONS:
Defendant Kelley contended he ceased payments because plaintiff failed to disclose various liabilities pertaining to the building. Swain breached his fiduciary duty by designating Swain & Kelley LLC as a guarantor of loans taken. Swain also owed money and had agreed that defendant could pay of his lenders rather than pay directly to Swain. Defendant argued that the court lacked jurisdiction to enforce the settlement.
Damages
The plaintiff asked for enforcement of the settlement plus fees.
Result
The court found for Swain and entered judgment in accordance to settlement terms.
Other Information
The plaintiff sought attorney fees. The defendant filed an appeal and plaintiff filed a notice of cross-appeal.
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