California Superior Court Rejects $26 Million Breach of Fiduciary Duty Claim
On May 16, 2017, the California Superior Court entered judgment in favor of defendants Michael Griffith and FCI Lender Services Inc., rejecting a $26 million breach of fiduciary duty claim asserted by Sarsenstone, Inc.
The judgment followed a two-month trial before the Hon. Gail A. Andler in which Pepper Hamilton LLP partner Andrew K. Fletcher served as lead defense counsel. The Pepper team also included Los Angeles partner, Pamela S. Palmer, as well as Richard M. Weibley and G. Richard Murphy. Tim Ryan, of The Ryan Law Firm, also represented the defendants.
In her statement of decision, Judge Andler found that “Sarsenstone did not present sufficient credible evidence to establish that Griffith or FCI assumed or were in any way responsible for Old Canal's alleged fiduciary duties as the trustee for the Old Canal Loan Pools.” Sarsenstone's case relied heavily on the testimony of Old Canal founder Gregory Fernandez, whom the court found “presented as spiteful and vindictive toward Mr. Griffith. His recall of events appeared to differ depending on whether he was asked questions on direct examination or cross examination.” Judge Andler, who sat on the bench in the Orange County Superior Court for more than 23 years, continued: “Rarely has this Court seen a witness so lacking in credibility.”
“This was a grueling trial for Mike Griffith,” Fletcher said. The trial evidence included 260 exhibits and testimony from 10 witnesses, including three experts. “It was not easy for Mike Griffith to sit in a courtroom for seven weeks and have his good name and reputation attacked day after day,” Fletcher continued, “but he was patient, and he trusted the legal system and his trial team. We are delighted for Mike and FCI.”