The Wall v. Altium litigation’s latest development is another win for the Walls, the re-assignee investors who did not receive the settlement payments that they thought they had purchased because the order approving the sale was later deemed to be void.
In a May 10, 2017, opinion, the federal court for the Western District of Pennsylvania awarded the Walls attorneys’ fees and costs in their lawsuit against the financial advisors who connected them with factoring company Corona Capital.
As set forth in an earlier Secondary Insurance Market Blog post (here), the order approving the transfer was based on a forgery which, when discovered, led the court to vacate its order:
The plaintiffs in the case, Robert and Linda Wall, hired defendant Altium Group, LLC, as financial advisors, and were then connected with Corona. Corona filed a petition in a Florida court, seeking court approval of a transfer of structured settlement payment rights, from an individual named Kenneth Stevens, to Corona. The transfer involved 60 monthly payments of $3,000,00, increasing 3% each year, due to be paid from June 1, 2014, to May 1, 2019.
Corona – which filed papers that included, among other things, a transfer agreement with the signature of Stevens – was successful in obtaining court approval, and the 2012 order approving the transfer directed that the transferred payments were to go to Corona’s re-assignees, Mr. and Mrs. Wall.
In 2014, the same Florida court issued another order, this time vacating its 2012 order approving the transfer. The reason? Stevens had filed papers seeking to overturn the order and, “after extensive discovery”, the court concluded that Stevens “did not sign any of the documents submitted to this Court in support of the” Corona petition. In other words, his signature had been forged.
[T]he Walls filed suit against Altium and Corona, alleging that the court had vacated the order because “Stevens’s wife had forged his name regarding the transfer”, and that they had paid more than $150,000 for the future payments that were subject of the now-aborted transfer – but never received any of the structured settlement payments.
The Walls brought breach of contract, unjust enrichment, negligence, and other claims.
In earlier opinions (described here, here and here), the federal court dismissed Corona due to a lack of personal jurisdiction over the company, the denied Altium’s motion to dismiss, and, in a March 2017 opinion, held that Altium breached its contract with the Walls.
In its latest opinion, Wall v. Altium Group, LLC, Civil Action No. 16-1044, 2017 U.S. Dist. LEXIS 71115 (W.D. Pa. May 10, 2017), the court granted the Walls’ motion for attorneys’ fees, court costs, and pre-judgment interest. In doing so, the court’s introduction to the opinion provided a concise summary of the issues that it reaches:
Contracts signed by investors allowing a financial company to invest their money often allow an investor winning a breach of contract dispute to seek reimbursement for court costs and reasonable attorney’s fees incurred in enforcing the contract. When they want to bring a breach of contract claim, the same investors may then sign a contract hiring a lawyer to bring the breach of contract claim against the money management firm and agreeing to pay a contingency fee upon recovery. As a matter of contract law, we strictly enforce the investors’ agreements with their money management company and then their lawyers.
Today, we address these two agreements signed by the investors: first with their money management company and then a retainer agreement with their lawyers. On March 28, 2017, we granted summary judgment to the investors on their breach of contract claim against their money managers on a restitution basis. They now move for prejudgment interest on this restitution award. They also seek an award of reasonable attorney’s fees and costs under their retainer agreement which provides only one payment obligation: upon winning a recovery, the attorneys’ recovery is limited to one third of the recovery. We affirm the right to attorney’s fees and prejudgment interest under the two agreements.
The full opinion regarding the award of fees, costs, and interest is available here.