Smith et al. adv. Westport Financial Services, Ltd.
30-2009-00121324, Superior Court of California, County of Orange
FBBC Successfully Defends Couple Personally Sued for $2,400,000 by Commercial Lender
A commercial lender sued FBBC’s clients seeking $2,400,000 on a personal guarantee agreement they signed. The couple signed the agreement with the lender guaranteeing the debt of a family member’s business. When that business went under, the lender personally sued the couple for recovery of the entire debt, totaling $2,400,000. If successful, the suit would have economically devastated the couple. After a three-week jury trial, FBBC obtained a complete defense verdict in favor of the couple. FBBC proved that the lender had concealed information from the couple, lulling them into signing the guarantee by, among other things, withholding key information from them. In addition, FBBC proved that the lender had actually paid itself from funds that were supposed to have gone to family member’s business, which ultimately caused the collapse of the business. As a result, the jury found in favor of FBBC’s client on all claims, awarding the lender nothing. FBBC then successfully obtained an order from the Court compelling the lender to pay all of the couple’s attorney’s fees and expenses incurred in the case. Despite the vociferous objection by the lender, the couple was awarded approximately $300,000 in attorney’s fees and expenses from the lender. At the same time, the lender filed a motion for a new trial and a motion for judgment notwithstanding the verdict. Both of the lender’s motions were denied by the Court.