LENDER LIABILITY

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, 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. This verdict was the 12th largest verdict in California in 2014.

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 successfully defends a couple personally sued for $2,400,000 by a commercial lender. The lender sued the couple, seeking $2,400,000 on a personal guarantee agreement they signed. If successful, the suit would have economically devastated the couple. The couple had signed an agreement with the lender in which they guaranteed the debt of a family member’s business. When that business went under, the lender personally sued the couple to recover the entire debt, totaling $2,400,000. After a three-week jury trial, FBBC obtained a complete exoneration for the couple. FBBC proved that the lender had concealed information from the couple into signing the guarantee by, among other things, withholding key information from them. As a result, the jury found in favor of the couple on all claims, awarding the lender nothing. The couple is now pursuing recovery of all their legal fees and expenses from the lender.

Action against General Electric Credit Company (“GECC”) alleging that GECC interfered with the operations of the borrower, AAI, and tried to “squeeze” the borrowers out of a new company that had successfully passed “First Flight Status” in the design of a corporate jet called the FANSTAR. After a trial lasting several months, the jury returned a $65,000,000 verdict plus $5,000,000 in punitive damages against GECC.

For more representative Lender Liability cases, look here.