Read the entire story by the Associated Press, Grandma who lost savings wins $15M in case against insurers and Los Angeles Times, Simi Valley woman awarded $15.4 million after investing in Ponzi scheme pushed by insurance salesman or watch the video about it on Fox News
FBBC wins at Court of Appeals, arbitration agreement declared unenforceable
In a hotly contested malpractice case, where FBBC’s clients suffered $20,000,000 in damages from the transactional representation provided by their former law firm, FBBC had its arguments tested—and validated–by the California Court of Appeals. FBBC’s clients were a family who had been represented for decades by a prominent and prestigious large law firm. During the real estate boom, the law firm advised the clients to structure a proposed sale of large multi-family residential property in a manner that was supposed to protect the clients’ interest whether the boom continued, or whether a bust occurred. When the clients attempted to enforce the deal, the proposed purchasers sued the clients in a class action.
When the clients were forced to settle the class action (after losing on the liability phase of the trial), they had to give up not only their property, but also became liable for millions of dollars in damages to the purchasers. In response to FBBC filing suit against the former law firm, the former law firm contended that an arbitration provision of a new fee agreement applied retroactively to all prior representation, including the transactional representation from over five years prior. On an expedited briefing scheduled, FBBC convinced the trial court that the former law firm was wrong. The former law firm appealed. In a unanimous opinion by Justice Gilbert, the Court of Appeals agreed with FBBC’s arguments, finding that the defendant law firm could not enforce the arbitration agreement retroactively. (Click here to read the Court of Appeals decision.)
F&F, LLC v. East West Bank
BC462714, Superior Court of California, County of Los Angeles
FBBC obtains $38,914,610 jury verdict for family owned business against East West Bank
In what can be considered a David and Goliath lender liability battle, Foley Bezek Behle & Curtis, LLP (“FBBC”) on behalf of developer, F&F, obtained a $38,914,610 jury verdict against East West Bank (“EWB”). FBBC charted a strategy that was designed to organize and simplify the complicated facts so that the “heart” of the case was immediately apparent in trial. However, to get to the trial, FBBC navigated through a myriad of obstacles designed by EWB to avoid that trial.
EWB counter sued F&F alleging its own damages in the approximate amount of $12 million dollars. FBBC successfully eliminated the Bank’s counterclaim and after a three week trial, it prevailed on behalf of F&F, obtaining a convincing jury award.
Before trial, EWB refused to settle for any amount greater than $1.2 million. The principal owners of F&F are Cambodian refugees who successfully escaped the Khmer Rouge with virtually no money or assets and through hard work in the United States, began to build a family nest egg. They developed a small retail shopping center, only to have it all taken away as a result of the actions of EWB.
Specifically, on June 14, 2007, F&F, obtained a $34,850,000.00 construction loan from East West Bank to help finance construction of the Victoria Promenade Project, a retail center located in Rancho Cucamonga. Thereafter, F&F contended, among other things, that East West Bank failed to honor its obligations and commitments to them by wrongfully siding with the contractor, making false representations, and committing other wrongful acts. F&F claimed that East West Bank’s wrongful conduct caused it to lose its property and years of hard work. F&F prevailed at trial, obtaining a jury verdict in the amount of $38,914,610. This verdict was comprised of $16,914,610 in compensatory damages plus $22,000,000 in punitive damages. Thereafter, FBBC assisted F&F in obtaining an additional award from EWB of over $2 million in attorneys’ fees and other litigation expenses.
FBBC, along with its co-counsel, has settled a class action against Verizon Wireless, one of the largest wireless carriers in the country for over $64,000,000 on behalf of over 2,000,000 consumers nationwide.
In a hotly contested oil and gas rights case, in which FBBC was engaged after the litigation began, FBBC filed a Second Amended Complaint alleging among nine causes of action that Defendants, including the original sellers of the property, had wrongfully recorded oil and gas leases on property owned by FBBC’s client. Defendants filed a Cross-complaint against Plaintiffs, alleging that Plaintiffs’ claimed interest in the property was legally improper based on the language of a deed from the original seller of the property. FBBC then implemented its carefully designed strategic litigation strategy which included a reasoned discovery plan. As a result of that plan FBBC was able to terminate the litigation early and in its clients favor by filing and winning a Motion for Summary Judgment. Defendants, faced with the loss of the Summary Judgment and facing trial on the issue of damages claimed by FBBC’s client, the case was settled on terms favorable to FBBC’s client which included, the deeding of all mineral rights in the property to FBBC’s client. Experts in the case valued this victory to be in excess of $1.0 Billion.
Jeffrey Schulein, et al. v. Petroleum Development Corporation et al.
8:11-cv-01891-AG-AN, United States District Court, Central District of California
FBBC secures preliminary approval of a $37.5 million settlement for nationwide class of investors in lawsuit against large domestic oil company
FBBC and its co-counsel represented a nationwide class of limited partners that invested millions of dollars in limited drilling partnerships managed by PDC Energy (formerly Petroleum Development Corporation), a large, publicly traded domestic oil company. When PDC began acquiring the partnerships in 2010, purchasing the limited partners’ interests for a fraction of their true value, FBBC took action to protect the limited partners’ rights. On behalf of its clients, FBBC and its co-counsel filed a class action lawsuit in federal district court for the Central District of California for violations of federal securities laws and for breach of fiduciary duty.
From the beginning of the lawsuit, PDC fought to have the investors’ lawsuit dismissed, engaged in procedural battles involving discovery, opposed the certification of the investors’ class, and attempted to obtain a summary judgment prior to trial. Over the course of the lawsuit — which lasted more than three years — FBBC and its co-counsel devised and implemented a comprehensive strategy for overcoming PDC’s defense tactics. Because of this strategy-driven approach, FBBC and its co-counsel obtained an order compelling PDC to produce millions of pages of documents relevant to its client’s claims, prevailed in certifying the investors’ class, and defeated PDC’s attempt to obtain a judgment in its favor before trial. Ultimately, FBBC and its co-counsel obtained a $37.5 million settlement from PDC on behalf of its clients.
Diversified Lending Group Litigation
FBBC successfully recovers over $7 million dollars lost by thousands of investors in a California based Ponzi scheme
FBBC has recovered millions of dollars that individuals lost in an alleged Ponzi scheme involving Diversified Lending Group, Inc. (“DLG”). From 2004 to 2008, DLG raised more than $200 million from over 200 investors. The Securities and Exchange Commission (“SEC”) shut down DLG in March of 2009, and had a Receiver appointed to liquidate DLG’s assets. The remaining assets were insufficient to pay legitimate claims from investors. The court appointed Receiver liquidated DLG’s assets, and the individual investors received less than ten cents on the dollar in recovery from the Receiver.
Most Ponzi schemes need the help of third parties to operate, and the assistance of those third parties makes it appear that the Ponzi scheme is a legitimate business. To recover for defrauded investors, FBBC focused on solvent third parties who aided and abetted the operator of the Ponzi scheme, including accountants, attorneys, title and insurance companies.
Specifically, FBBC led a nationwide class action in 2010 for investors in DLG against Jackson National Insurance Company, in an action alleging that Jackson National had knowingly aided and abetted the sale of DLG investments in order to sell its insurance products. And, in 2012, FBBC led a lawsuit against American National Insurance Company, asserting that it, too, had aided and abetted the sale of DLG securities for its own benefit. In Galper v. Jackson National Life Ins. Co. (Los Angeles Superior Court Case No. BC454632), FBBC and its co-counsel recovered more than $6.3 million dollars for its clients. And, in Kramer v. American National Ins. Co. (Los Angeles Superior Court Case No. BC480029), FBBC and its co-counsel recovered $1.5 million in settlements for its clients.
B&B Hardware, Inc. v. Hargis Industries, Inc. et al.
FBBC Victory at Trademark Trial and Appeal Board is Focal Point of First Trademark Case in 10 years to be Decided by U.S. Supreme Court
On December 2, 2014, the United States Supreme Court (“SCOTUS”) heard oral arguments in B&B Hardware, Inc. v. Hargis Industries, Inc., et al. The case is the first trademark case in 10 years to be decided by the U.S. Supreme Court.
FBBC was hired by B&B Hardware, Inc. (“B&B”) after a jury found against B&B on its trademark infringement claims against Hargis Industries, Inc. (“Hargis”), another fastener manufacturer. Specifically, the jury found that B&B’s trademark “Sealtight” was merely descriptive and had no secondary meaning. Thereafter, Hargis sought to parlay its victory at trial and aggressively extend its rights, including an application to register its own trademark “Sealtite.” If successful, this registration would have been devastating to B&B’s business. On the eve of the close of the opposition proceeding period at the Trademark Trial and Appeal Board, B&B retained FBBC to challenge Hargis’ attempted registration. After a hotly contested trial before the Trademark Trial and Appeal Board, FBBC successfully proved that Hargis’ “Sealtite” mark was likely to be confused with B&B’s “Sealtight” mark. This resulted in the Trademark Trial and Appeal Board’s refusal to register Hargis’ claimed mark. FBBC thereafter secured “incontestable” status for B&B’s mark. Having already proved that Hargis’ claimed mark was likely to cause confusion, FBBC then filed a new trademark infringement action against Hargis in Federal District Court. The Federal District Court initially dismissed the action, claiming that B&B already had its day in court years earlier. However, based on FBBC’s earlier proof of liability (likelihood of confusion), the 8th Circuit Court of Appeal reversed the dismissal. This reversal was based both on FBBC’s successful proof of likelihood of confusion at the Trademark Trial and Appeal Board, and also its securing of incontestable status for B&B mark, which meant that the mark could no longer be challenged for mere descriptiveness. FBBC’s theory was that B&B should not be required to prove likelihood of confusion twice. Having established likelihood of confusion during the trial before the Trademark Trial and Appeals Board, B&B only needed to prove its damages in the subsequently filed infringement action before the Federal District Court.
On March 24, 2015, the U.S. Supreme Court issued its opinion on B&B Hardware, Inc. v. Hargis Industries, Inc., and held that decisions of the Trademark Trial and Appeals Board (TTAB) can have preclusive effect in subsequent litigation, if certain requirements are met. In short, the Court adopted FBBC’s view that certain proceedings before the TTAB, where the usages it adjudicates are “materially the same” as those before the district court, warrant application of issue preclusion in subsequent trademark infringement litigation (provided the ordinary elements of issue preclusion are met). For instance, proving likelihood of confusion in a TTAB opposition proceeding may obviate the need to re-prove that same issue in later litigation. Notably, however, the Court made clear that not all TTAB proceedings will qualify for issue preclusion under this standard. One size does not fit all. Indeed, district courts will have discretion to evaluate issue preclusion on a case-by-case basis. But, significantly, this decision will (or should) change the way practitioners handle TTAB proceedings. No longer can they be viewed as insignificant administrative matters, affecting only issues of registration. Rather, TTAB proceedings now have the potential of significantly affecting subsequent trademark litigation, including the all-important likelihood of confusion element. As for B&B Hardware, the decision places the company in a much better position. As a result of FBBC’s successful proof of liability against Hargis at the TTAB, B&B Hardware is now poised to return to the trial court having only to prove its damages.
The Supreme Court’s Slip Opinion can be read here
Dana Bostick v. Herbalife International of America Inc., et al.
CV 13-02488-BRO (RZx), United States District Court, Central District of California
Herbalife distributors successfully prosecute their nationwide claims to a $17.5 million settlement; FBBC secures the preliminary approval of a $17.5 million settlement for nationwide class of former Herbalife distributors
In a nationwide class action against multi-level marketing company Herbalife, Inc., FBBC led a class action on behalf of hundreds of thousands of the company’s current and former distributors, seeking compensation for what the distributors alleged were the company’s unlawful business practices. FBBC’s clients alleged that Herbalife was operating a pyramid scheme, whereby it profited from the recruitment of additional distributors and not from the sale of its products. Herbalife was defended by Jonathan Schiller of the nationally recognized firm Boies, Schiller & Flexner LLP. FBBC, along with co-counsel, designed a successful litigation strategy to weather an anticipated aggressive defense implemented by one of the nation’s largest law firms. FBBC successfully prosecuted its case on behalf of the nationwide class. FBBC secured the preliminary approval of a $17.5 million settlement on behalf of the class members, which allocated $15 million to a cash settlement and established a $2.5 million fund for the repurchase of unused Herbalife products. Herbalife also agreed to implement substantial corporate reforms as a result of the lawsuit.
Emmett McDonough et al v. James Knell et al.
1415007, Superior Court of California, County of Santa Barbara, Anacapa Division
In litigation that lasted more than two years against Foley Bezek Behle & Curtis, LLP’s (“FBBC”) long-time clients, (a real estate investment company, its founder and thirteen limited partnerships), a disgruntled investor that claimed to have lost money sought millions of dollars from FBBC’s clients. The plaintiffs alleged 38 causes of action and sought compensatory and punitive damages. As FBBC implemented its defense strategy to protect its clients, the plaintiffs progressively replaced one law firm with another, eventually using the services of a well-respected and successful Los Angeles law firm to prosecute the Santa Barbara based action. FBBC obtained a complete defense verdict, thus protecting its clients from each of the investor’s claims which were prosecuted in a three-week jury trial.
$2,000,000 + UPDATE:
After obtaining the verdict for its clients, FBBC thereafter, sought, on behalf of the clients, to recover from the Plaintiffs all of the attorneys’ fees and costs incurred in its vigorous and successful defense of the hotly contested action. Plaintiffs presented an aggressive opposition, not only challenging the amount of fees, but the reasonableness of the fees, as well as a core assault on whether Defendants had any entitlement to fees in the first instance. FBBC overcame every challenge to the fee request, and obtained for its client all attorneys’ fees expended in the litigation, as well as all statutorily available costs. Thus, at the ultimate conclusion of the case, FBBC not only obtained a complete victory for its Defendant-clients, but it also obtained an order that Plaintiffs pay FBBC’s clients over $2,000,000 in attorneys fees and costs.