Facts

Edward Cardoza and Cathleen Cardoza filed a lawsuit against David Reed, Sheryl Reed, Reflex LLC, Kevin Gonsalves, Leading Edge Properties Inc., and Pisenti & Brinker LLP.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that in 2005, they entered into an agreement to purchase commercial property from David Reed and Sheryl Reed for $4.7 million. Plaintiffs further alleged that when they made their offer to purchase the property, it was bringing in about $30,000 per month in rent, with the main tenant being RPM Optoelectronics, which was owned by the Reeds. Plaintiffs contended that RPM suddenly moved out of the building and, in 2007, RPM went into bankruptcy, leaving only one tenant at the property that was paying $8,000 per month in rent. Plaintiffs further contended that in May 2008, David Reed sold another company, Reflex LLC for $5 million. Plaintiffs alleged that David Reed and Gonsalves acted in concert to inflate the value of the property by increasing rents before plaintiffs purchased it.

DEFENDANT'S CONTENTIONS:
Gonsalves and Leading Edge argued that they were not aware that RPM would move from the property. David Reed denied the allegations of plaintiff's claims

Settlement Discussions

Plaintiffs made a pretrial demand of $750,000 on Gonsalves and Leading Edge. David Reed offered to settle for $300,000 and Gonsalves and Leading Edge offered to settle for $200,000.

Damages

Plaintiffs sought $5,000,000 in compensatory damages and also sought punitive damages.

Result

After a jury trial, the jury found Reflex was not found liable for fraud. Reflex was found liable for interference with contract for a total of $5 million and punitive damages of $6.1 million. David Reed was found liable for intentional torts amounting to $5 million and punitive damages of $6.1 million. Also, Sheryl Reed was found liable for negligent preparation of statutory form for $5 million with 100 percent indemnity from David Reed. However, in post trial proceedings, the court reduced the $5 million award to $2,905,515. Also, the court determined that the claims against Reflex were time barred, and eliminated the $6.1 million of the punitive damages awarded. The court, however, found that Reflex was the alter ego of David Reed and, therefore was liable for the judgment against David Reed.

Other Information

Reed has filed an appeal.

Deliberation

2.5 days

Poll

12-0 against Reed and Reflex LLC

Length

four months