Spillane Trial Group Wins and Collects Seven Figure Judgment

In addition to appearing for clients at the outset of a case, we appear at the eleventh hour, when summary judgment is denied, the settlement conference blows up, and the case hurtles toward trial.

This was the case for American Computers & Engineers (“ACE”), a company that rents high end custom computer equipment for vendors of major multi-media productions.  ACE rented numerous computer units to Martin Brinkerhoff Associates, Inc. (“MBA”), which produces multi-media extravaganzas for the likes of Disney and Hyundai.

MBA’s former IT Manager stole, and sold, numerous units rented by ACE.  MBA ceased making rental payments, eventually concluded their IT Manager had indeed stolen the equipment, informed ACE of the loss and applied for insurance coverage. 

The insurance company, however, denied coverage, citing an exclusion for employee theft.

MBA, disappointed it could not pay for the stolen equipment with Someone Else’s Money, “lawyered up,” and filed a declaratory relief action, citing Commercial Code Section 10219, an obscure provision providing that (in absence of an agreement otherwise), “risk of loss [of equipment rental] is retained by the lessor.”  MBA urged this meant that ACE suffered the risk of “loss” of the equipment due to employee theft.  ACE-cross-claimed for the unpaid lease payments.

Spillane Trial Group was called upon to substitute into the case less than two months prior to trial, just as motions in limine were coming due. 

We filed three motions in limine, winning all three, including a key ruling that the actions of the IT Manager, a management level employee, were not a “superseding cause” relieving MBA of liability.  We also convinced the judge, based upon a fifty-state search for relevant decisions, resulting in citation to a Texas case, that Section 10219 covers only “casualty loss,” such as accidental destruction in transit, not employee theft.

At trial, we played key admissions from the videotaped deposition of the principal of MBA.  Their CFO, not deposed but clearly not prepared to spout the company’s litigation position, gave key admissions on the stand on cross-examination.

On July 7, 2012, the judge entered Judgment awarding ACE every penny requested, plus pre-judgment interest and attorneys’ fees, totaling over $1 million.

While MBA was threatening appeal and bargaining for a steep discount, STG recorded a Judgment Lien in favor of ACE with the Secretary of State (“JL1”).  A search for MBA’s recorded UCC-1’s yielded the contacts for each of its lenders.  We then wrote to ACE’s lenders, and corporate clients, attaching the JL1, and explaining that “this JL1 establishes priority over any further advances by secured lenders, Cal. Civ. Proc. Code § 697.590(f), and accounts receivable. Cal. Civ. Proc. Code § 697.530(a).”

Within days, MBA delivered a cashier’s check paying the Judgment in full.

The case played to all our strengths: 1) incisive legal research and writing; 2) exhaustive mastery of the facts; 3) an ability to quickly master a case shortly before trial; 4) adroit and impactful examination at trial; and 5) targeted post-Judgment collection.