HLG Wins Defense Verdict From Jury
# 1 March 07
On February 14, 2007, a Los Angeles jury rendered a defense verdict in favor of HLG’s client, First Wilshire Finance.
First Wilshire made several loans to plaintiff to purchase and rehabilitate real property. Due to a mistake by First Wilshire, it did not receive repayment of one of its loans to plaintiff upon the sale of one of the properties. Plaintiff claimed he was unaware of the mistake and did not receive any excess proceeds because he had transferred the property to someone else before the sale. When plaintiff refused to repay the loan, First Wilshire demanded and received monies from the sale of his other properties pursuant to a provision in the loan agreements, which tied all of plaintiff’s loans together. Plaintiff thereafter sued First Wilshire for breach of contract, breach of the implied covenant of good faith and fair dealing and conversion. The jury found that plaintiff’s failure to pay the loan was not excused by First Wilshire’s mistake and that First Wilshire was entitled to receive the monies from the sale of plaintiff’s other properties to repay plaintiff’s debt.
Jeffrey Huron, who tried the case to the jury, is extremely pleased with the result because “it is always difficult to defend lenders in jury trials.” Before the trial, HLG subpoenaed banks located near plaintiff’s office to try to find evidence tracing the monies that should have gone to First Wilshire but for its mistake. HLG’s hunch that plaintiff used banks near his office paid off and it discovered evidence tracing the monies to plaintiff. HLG was also able to locate an escrow officer who testified that she informed plaintiff of First Wilshire’s mistake. According to Mr. Huron, “our defense centered upon the language in the contracts but it also helped us immensely to show the jury that plaintiff knew of the lender’s mistake and attempted to pocket the money for himself.”
The jury verdict represented HLG’s second trial victory in a month. Mr. Huron has won his last six trials, including a jury verdict for $7.2 million and a court judgment for $10.5 million.