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RECENT TRIAL VERDICT OBTAINED BY DON YEARIN
Firm: Yearin Law Group
Phone: 480-502-0708
Fax: 480-502-5188
On January 28, 2013, a decision was rendered in Kenneth Kunes v. Judy A. Cremeans and Todd Cremeans, husband and wife, Charles Peabody and Dolores Peabody, husband and wife, Alpha Insurance Services, L.L.P., a limited liability partnership, Maricopa County Superior Court Cause # CV2011-000807 before the Honorable Michael Herrod. Donald G. Yearin represented the plaintiff, Ken Kunes and Paul McGoldrick of, Shorall McGoldrick Brinkmann represented the defendants, Alpha Insurance Agency, LLC, Judy and Todd Cremeans and Charles and Dolores Peabody.
SUMMARY OF CASE
The parties were independent insurance agents and agreed to merge their three agencies or books of business to form a new agency, Alpha Insurance Agency LLP. The parties signed a one page document in May of 2003 which included the following terms (among other terms); Each partner would retain complete ownership over their respective books of business; Each partner would contribute 50% of the annual commissions from their respective books of business to pay for Alpha’s expenses; In the event any partner became disabled or wanted to retire, Alpha would purchase that partners book of business for 1.5 the annual commissions for the preceding year; Any partner could terminate the partnership by providing the other partners 90 notice give on the last day of any month.
The parties operated Alpha until September of 2010 when Mr. Kunes was provided with a letter signed by Mr. Cremeans and Mr. Peabody stating that he had been terminated from Alpha, effective immediately. Mr. Kunes requested that he be provided 90 days’ notice or at minimum, 30 days’ notice in order to transfer his insurance accounts to another agency. Defendants refused to provide Mr. Kunes with any prior notice and refused to transfer his accounts to a new agency. Defendants claimed that the one page document the partners signed was an unenforceable letter of intent. Defendants further claimed that Mr. Kunes had failed to contribute or pay his fair share of Alpha’s operating expenses and that he was a disruptive force in the office. Last, Defendants claimed that all insurance accounts were the property of Alpha and that Mr. Kunes was not the owner of his insurance accounts.
Mr. Kunes claimed that defendants wrongfully terminated him without notice and subsequently wrongfully converted his insurance accounts. After refusing to transfer Mr. Kunes’ insurance accounts to his new agency, Ms. Cremeans mailed a letter to all of Mr. Kunes prior clients representing that Mr. Kunes sought to seek “other endeavors” and requesting that said clients retain their insurance accounts with Alpha. Mr. Kunes further claimed that he had always paid his fair share of the Alpha’s expenses and that he was not a disruptive force in the office. Mr. Kunes was able to locate some of his past clients and transfer their insurance accounts to his new agency, however, Alpha and Mrs. Cremeans were able to convert many of Mr. Kunes prior clients over to Alpha.
PLAINTIFF’S INJURIES AND DAMAGES
Plaintiff claimed damages for wrongfully converted commissions in the amount of $64,229.60; tort damages in the amount of $25,000.00 for the inconvenience, emotional distress, damage to reputation and for the extra work and costs suffered due to defendants breach of fiduciary duty resulting from their failure to transfer his insurance accounts to his new agency. Plaintiff also claimed an unspecified amount in punitive damages and for his attorney fees and costs incurred due to defendants’ breach of contract.
Defendants requested that all of plaintiff’s claims be rejected and that the Court enter a favorable decision on their counter-claims.
PRE-TRIAL SETTLEMENT NEGOTIATIONS
Plaintiff filed an offer of judgment for $75,000.00. Defendants responded with an offer of $6,000.00 in payments of $500.00 per month. Plaintiff reduced his offer to $70,000.00 and defendants refused to make any other settlement offer.
THE COURT’S VERDICT
The Court awarded plaintiff $33,007.94 in lost commissions against all defendants; $25,000.00 in compensation for defendant’s breach of fiduciary duty(s) against defendants Judy Cremeans and Alpha Insurance Agency; and awarded plaintiff his attorney fees and costs. Plaintiff submitted a petition for attorney fees in the amount of $45,100.00 and cost in the amount of $1,913.80 which, if awarded, would have brought the total judgment to $105,021.74. Defendants claimed that not all of plaintiff’s attorney fees should be awarded. The parties settled for a one-time payment of $90,000.00 before the Court entered a final judgment.
The Court found against defendants on their counter-claims.
