This is the property of the Daily Journal Corporation and fully protected by copyright. It is made available only to Daily Journal subscribers for personal or collaborative purposes and may not be distributed, reproduced, modified, stored or transferred without written permission. Please click "Reprint" to order presentation-ready copies to distribute to clients or use in commercial marketing materials or for permission to post on a website. and copyright (showing year of publication) at the bottom.

Real Property
Breach of Fiduciary Duty
Conversion

Barbara Dailey v. William Wells, et al.

Published: Jun. 15, 2002 | Result Date: Mar. 7, 2002 | Filing Date: Jan. 1, 1900 |

Case number: NC022381 Verdict –  $2,678,000

Judge

Cesar C. Sarmiento

Court

L.A. Superior Santa Monica


Attorneys

Plaintiff

Reilly Atkinson


Defendant

Adam D.H. Grant

Lawrence Jackson


Experts

Plaintiff

Dennis A. Webb
(technical)

Richard M. Rosenthal
(technical)

Joanne Robbins
(technical)

Defendant

Daniel B. Sparr
(technical)

Boyd S. Lemon
(technical)

Facts

The plaintiff, Barbara Dailey was the legal secretary for the defendant, William Wells, Esq. from 1963 until
1997. In 1972, one of WellsÆ corporations, Garden Gate Inc. loaned the plaintiff $19,000 for a down payment
for a home in Pacific Palisades. She agreed to pay back that amount if and when Garden Gate demanded
repayment. It never did.
For the next 27 years, the plaintiff paid the mortgage and lived in the house. Wells transferred title to her by
grant deed in 1997 (that expressly extinguished all debts) that she recorded. Dailey also purchased commercial
property in Corona in 1976. Wells acted as her lawyer and as property manager for the next 20 years. During
this period, the Corona property generated over $1 million in rental income.
As the owner, Dailey sued tenants Security Pacific and Texaco for maintenance and environmental cleanup
issues due to the propertyÆs use as a gas station. In these cases, Wells filed numerous declarations stating
under oath that Dailey owned the property. Wells also testified under oath in trial in 1984 that Dailey owned
the property. Dailey recovered $110,000 in that trial and payment was made to Wells who claimed that the
money was held in trust for Dailey.
Dailey and Wells agreed that he would be paid a reasonable percentage of the rental income generated from the
property. Wells controlled all the Corona property rental income and deposited it in his corporate bank
accounts. Financial records concerning rental income and his compensation were maintained in his law office.
After being fired by his primary client, Wells fired the plaintiff in 1997. However, he continued to represent her
in pending Corona property litigation. He filed another declaration in February 1998 stating under oath that
Dailey owned the property. After Wells allowed a default judgment to record against Dailey, she hired new
counsel in March 1998 and asked Wells for all files and financial records relating to the Corona property and
the $110,000 judgment. However, Wells claimed for the first time that he owned the property and refused to
turn over any records or account for any monies received.
Dailey thereafter sued Wells for conversion, breach of fiduciary duty, money had and received and for
declaratory relief that she owned the Corona property. Wells and his corporate entities cross-complained
against Dailey alleging that he owned the Corona property and for quantum meruit and conversion.
In addition, Garden Gate Inc. sued Dailey claiming it owned the Palisades property.

Settlement Discussions

The defendant offered $100,000 during a November 2001 mediation. The defendant subsequently withdrew the offer and made a demand of $400,000.

Damages

The plaintiff alleged that the defendant received $1.1 million in rental income and should have held the $110,000 judgment in a client trust account. The defendant claimed $2 million for quantum meruit and $68,000 for misappropriation.

Other Information

$2,678,000 gross verdict for the plaintiff ($178,000 for breach of fiduciary duty; title to the Corona property appraised at $2.5 million). $141,000 for William Wells on his cross complaint. The defendant, who acted as associate counsel during trial, moved unsuccessfully for a mistrial 10 times claiming that the courtroom did not comply with the Americans with Disabilities Act and that he was disabled due to an alleged hearing impediment.

Deliberation

1.5 days

Poll

12-0

Length

four weeks


#97619

For reprint rights or to order a copy of your photo:

Email jeremy@reprintpros.com for prices.
Direct dial: 949-702-5390