Gordon Rees Scully Mansukhani Dallas Partners Bob Bragalone and Soña Garcia secured a unanimous defense verdict for the firm’s client, the president/founder of a wellness beverage company, in a complex fiduciary duty case pending since 2021.
The plaintiff, a lender, sought more than $1 million in damages, alleging that the client had breached fiduciary duties by authorizing the dismissal of a lawsuit against an equity investor. GRSM was retained only two days before trial, entering the case without access to the case file. Despite these constraints, the team quickly moved to stabilize the litigation, filing a motion for continuance. Both the trial court and the Court of Appeals denied the request, requiring the case to proceed to trial as scheduled.
The parties then reached a settlement, but opposing counsel challenged its validity on the eve of trial. The court allowed GRSM to amend its pleadings to assert a counterclaim for breach of the settlement agreement but required the fiduciary duty claims to be tried first, immediately, and before any litigation of the settlement dispute.
The trial spanned eight days, during which the defense called no witnesses and produced no documents or exhibits for the jury. The plaintiff’s case centered on the theory that the client’s lawsuit against other parties was a valuable asset of the beverage company and the dismissal of which amounted to a breach of fiduciary duty owed to the lender.
On cross-examination of the plaintiff’s main witness, GRSM established that the balance sheet had been reviewed and accepted as complete and accurate, with no indication that the dismissed claims were ever treated as company assets. In closing, the GRSM team argued that the claims were not listed as assets, were never treated as such, and that any valuation of the dismissed claims was speculative. The jury agreed, concluding that the claims were not an asset, and therefore, no fiduciary duty was owed. The jury did not reach the question of breach or of damages.
This case reflects the firm’s commitment to agile, results-driven advocacy under the most challenging of circumstances. The team achieved this result with the invaluable strategic support of Chicago Partner Bradley Faber and Dallas Senior Counsel Ryan Fellman.