Firm Wins Jury Verdict in Complex Business Breakup Case Between Father and Son
On October 12, 2012, the firm won a jury verdict in a complex business breakup case between father and son. The firm defended the son against claims by his father’s company that the son had breached his duties of loyalty and care as manager of the parties’ LLC. In closing argument, the father requested $5.4 million plus punitive damages for alleged improprieties. After a four week trial, the jury returned a verdict of zero damages in favor of the son (Innovative Financial Planning, Inc. v. Larry Bryan, et al., 17th Judicial Circuit, Case No. 07-10303).
During 2005 and 2006, Stanley Schweiger and his son, Larry Bryan, worked together in an insurance agency that sold premium-financed life insurance policies. The business, Simba Life Plans, LLC, focused on selling policies with large death benefits to high net worth senior citizens. The applicants typically did not pay the expensive insurance premiums themselves. Rather, third party “funders” paid the premiums on their behalf. The funders later received an assignment of the policy’s death benefit in a secondary market transaction.
By 2006, this business had become so successful that the LLC was grossing millions in annual sales. By the middle of 2006, the father and son began having difficulties over business issues.
In May 2007, the father, through his holding company, sued the son and various companies related to the business. The father alleged that he was entitled to 40% of the business’ profits through 2010, when the business ended. Because the business had failed by 2010, however, the father’s key theory was to impose personal liability against the son for breaching his duties as manager of the LLC. The father alleged various improprieties against the son.
The son defended the claims against him for personal liability by asserting the defenses of the business judgment rule and in pari delicto. The business judgment rule protects a manager of an LLC for properly exercising his business judgment in a manner that does not lead to an improper personal benefit. The defense of in pari delicto is a Latin term that means “in equal fault” and prevents a plaintiff from recovery if the plaintiff knowingly participated in the same wrongful conduct about which he complains.
In closing argument, the father asked for $5.4 million against the son personally, plus punitive damages. After a 4 week trial, the jury returned a verdict of zero damages in favor of the son.
The case was tried in Broward County before Circuit Judge Jack Tuter. Trial counsel for the defendants was Adam Rabin.