Excluded Partner Can Fight for 6-Figure Share | Courthouse News Service
Thursday, November 30, 2023
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Thursday, November 30, 2023 | Back issues
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Excluded Partner Can Fight for 6-Figure Share

(CN) - A jury slipped in awarding $1 for a breach-of-contract claim worth nearly $192,000, a federal judge ruled, ordering a new trial on damages.

Jeffery Norman had sued his former business partner, David Elkin, and others for fraud, breach of contract and conversion.

Norman and Elkin had been the sole shareholders of US Mobilcomm, with Norman holding 25 percent of company shares and Elkin holding the remainder. They formed the company with a $1 million investment in 1994 to participate in the wireless communications industry.

But Norman said he never received any profits from the sale of the company, which amounted to $767,274.

A Delaware federal jury ultimately upheld all three claims, finding that Elkin had breached an agreement by failing to give Norman his 25 percent share of proceeds.

Though the jury awarded just $1 for breach of contract, it awarded $153,756 for fraud and $38,062 for conversion. The total award, $191,819, amounted to $1 more than the 25 percent share of distributions to which Norman was entitled.

On July 30, 2010, however, U.S. District Judge Joseph Farman vacated the findings of fraud and conversion. This left Norman with just the $1 for breach of contract. Farman retired the next day, and Norman moved to alter the jury verdict or convene a new trial.

The new jurist assigned to the case, U.S. District Leonard Stark said Monday that it would constitute a "miscarriage of justice" to not alter the jury's determination of damages for the breach-of-contract claim.

"Had the jury only had before it the breach of contract claim, it could not have justifiably awarded a mere $1 in damages," Stark wrote.

The 12-page decision also rejected a bid for attorneys' fees from Elkin and the co-defendants.

Norman's attorney, Sean Bellew with Ballard Spahr, told Courthouse News that his client deserves $191,818 for breach of contract

"We look forward to establishing this at the new trial on damages," he said.

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