Pacific Coast Packaging Corporation v. Arthur Andersen & Company
Published: Jul. 30, 1994 | Result Date: Jul. 11, 1994 | Filing Date: Jan. 1, 1900 |Case number: VC012081 – $2,305,850
Judge
Court
L.A. Superior Norwalk
Attorneys
Plaintiff
Defendant
Michael L. Cypers
(Glaser Weil LLP)
Experts
Plaintiff
Patricia L. Gleitsmann
(technical)
Defendant
James K. Loebbecke
(technical)
Facts
From 1986 to 1990, Plaintiff Pacific Coast Packaging Corporation sustained monetary losses of over $2,500,000 due to embezzlement by their former controller. During the same period, Defendant Arthur Andersen & Company performed annual financial statement audits for each year in question.
Settlement Discussions
Plaintiff contends it demanded $2,000,000 at the MSC and Defendant made a 998 offer of $400,000 prior to trial reduced to a waiver of costs after the third day of trial. Defendant contends that Plaintiff's only demand was $4,500,000.
Damages
Plaintiff originally sought to recover approximately $12,000,000, representing the alleged following damages: $2,500,000 embezzlement losses; $8,762,000 lost profits; $271,650 lost interest; and $300,000 fees and expenses.
Result
The jury returned a verdict in favor of the Plaintiff on its professional negligence cause of action for each audit year form 1986 through 1990. The poll on the professional negligence question was 12-0. The poll on statute of limitations was in Plaintiff's favor was 12-0. The comparative negligence allocation was decided by a 9-3 vote of the jury. In addition, the jury found Plaintiff negligent by a 12-0 vote.
Other Information
The gross award of $2,305,853 was based primarily on the total amount of the embezzlement loss which could be verified by photocopied checks written by the embezzler, those which could be located from the bank. The embezzler destroyed the original embezzled checks. The bank was unable to locate the remaining portion of checks in their micro-fiche files.
Deliberation
2.5 days
Poll
varied
Length
22 days
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