, the law firm Winget Spadafora & Schwartzberg LLP (WSS) obtained a unanimous jury verdict in Los Angeles County Superior Court before Judge Elizabeth White in a case that began as a conventional breach of contract action seeking damages of approximately $380,000, and resulted in a $3.8 million award that included approximately $1.5 million in lost profits and business reputation damages, and $2 million in punitive damages. The jury deliberated for approximately 30 minutes and reached a unanimous verdict.
In February 2012, HCF Insurance Agency (Woodland Hills, CA) filed a lawsuit against defendant Pasadena Healthcare Management Inc. (Cerritos, CA), which operated numerous convalescent homes and skilled nursing facilities in Southern California. HCF’s sterling reputation with insurance carriers, underwriters and finance companies enabled it to obtain worker’s compensation, general and professional liability, and property insurance quotes for the defendant facilities. HCF also loaned the facilities the down payment for the worker’s compensation policy. HCF sued Pasadena Healthcare because it refused to pay the premiums on the policies, refused to pay the broker fees and commissions to HCF and refused to repay the loan. (HCF Insurance Agency v. Pasadena Healthcare Management, Inc. et al., Case No. BC479659.)
Brandon S. Reif, lead trial counsel and Managing Partner of the Los Angeles office of WSS, prosecuted the seven day jury trial. Reif showed through the creative use of trial graphics that HCF acted in good faith to broker insurance for Pasadena Healthcare, but that Pasadena Healthcare defrauded HCF and breached agreements, which Reif described as “broken promises.”
Anticipating that Pasadena Healthcare’s owner, Felicidad Ferrer, would try to tailor her testimony based on the accounts of other trial witnesses, Reif called Pasadena Healthcare’s owner first as a hostile witness. “I was determined to call Ferrer as my first witness to cast her in a bad light and leave the jury with an unfavorable first impression of her.” Eliciting Ferrer’s testimony early on in the case was a calculated risk that worked because, during the rest of the trial, Reif impeached and discredited Ferrer through documentary evidence and other trial witnesses, including witnesses called by the defense. “It is a rare event to prove by clear and convincing evidence that breach of contract can give rise to fraud by false promise,” said Reif.
Reif also presented the jury with a compelling case of lost business reputation and future economic losses. “When Pasadena Healthcare breached the insurance contracts, HCF’s reputation with insurance carriers, underwriters and a financing company was substantially harmed,” argued Reif. Reif proved to the jury that consequential damages were caused by Pasadena Healthcare’s misconduct and argued, “How do you put a value on a business like this? You can’t get these relationships back after they’re destroyed.”
HCF President Jason M. Adelman commented after the verdict that WSS’s lead trial attorney Brandon S. Reif and the trial team’s Marc Ehrlich, partner, and Jibraun Riaz, associate, delivered a “big time win by highly skilled trial attorneys.” Adelman added, “I feel vindicated, and will use this victory to help rebuild HCF’s reputation now that it was proven that I was the victim of fraud.” Winget Spadafora & Schwartzberg LLP is a nationwide law firm with offices in California, New York, New Jersey, Connecticut, Florida and Texas with an expertise in trial law and litigation for business and corporate disputes, securities, insurance, financial services, employment and real estate law. (www.wssllp.com)
HCF Insurance Agency is a full service national insurance agency providing insurance for nursing homes, assisted living facilities, hospitals, and other healthcare facilities, as well as individuals in the healthcare industry. HCF provides workers compensation, liability, health benefits, and fire coverage. (www.hcfinsurance.com) Winget Spadafora & Schwartzberg LLPMr. Brandon S. Reif, Esquire
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