Facts

Claimants Lance and Judith Fisher Freed, the Freed Living Trust and the Judith Fisher Freed Living trust filed suit against Clearing Services of America. Their claims involved various securities, including Vivendi stock and unspecified Class B mutual funds.

CONTENTIONS:
Claimants alleged breach of contract, breach of fiduciary duty, negligence and failure to supervise. Respondents denied the allegations and asserted various affirmative defenses.

Damages

Claimants sought $3,150,000 in compensatory damages, interest, damages computed on a well managed account theory, return of fees and commissions, and costs.

Injuries

Claimants claimed emotional distress.

Result

Respondent was found liable and ordered to pay Lance and Judith Fisher Freed, and the Freed Living Trust $1,225,000 in compensatory damages. Respondent was ordered to pay the Judith Fisher Freed Living Trust $165,000 in compensatory damages, and the Lance R. Freed IRA $170,000 in compensatory damages.

Other Information

Claimants had previously filed a NASD arbitration claim against respondent. The prior arbitration was stayed pursuant to Bankruptcy Code Section 362 in accordance with a district court order issued in a liquidation proceeding against respondent by the Securities Investor Protection Corporation. The stay was later lifted, so that claimants were allowed to proceed against respondent to the extent of its available insurance. At an evidentiary hearing, the parties stipulated that any award to claimants should be reduced by the amount claimants received in settlement from another party in a related proceeding.