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Mitchell Pollack & Associates PLLC Successfully Defends Credit Union in 3 Week Jury Trial
Verdict: $ 3,750,000.00 on credit union’s counterclaim and dismissal of complaint
Prime Time Holdings, L.L.C., Plaintiffs
-Against-
US Alliance Federal Credit Union F/K/A I.A.G. Federal Credit Union Richard Murray, Richard Katz, Judith A. Brandt, Peter H. Staley, George L. Barto, James R. Collins, Robert J. Dichiara, Thomas F. Mccormick, Manuel Medina And Ferdinand S. Spucci, Defendants
US Alliance Federal Credit Union, Counterclaimant,
-Against-
Larry Sobel, Michael Inzitari And Mark Betz, Additional Parties To Counterclaims.
Facts & Allegations
In 1996, plaintiff Prime Time Holdings L.L.C., a Greenwich, Conn.-based auto-leasing company, entered into a leasing contract with Rye, N.Y.-based USAlliance Federal Credit Union. According to the contract’s terms, USAlliance’s members were eligible to obtain auto leases originated by Prime Time. The program was funded largely by a voluntary-purchase option, which allowed USAlliance to purchase a share of the leases.
In 1997, the contract was redrafted to establish a collateral account, in which some percentage of USAlliance’s investments would be held in security.
In May 1998, after USAlliance discovered that the collateral account was not being funded with the agreed-upon percentage of its investments, the parties established an amended agreement, which specified that all appropriate funds were to be placed in the collateral account within 120 days. The transfers were not executed by Oct. 1, 1998, so USAlliance ceased use of its voluntary-purchase option.
Prime Time subsequently ceased operations and stopped managing the lease portfolio. It sued USAlliance; USAlliance’s former chief executive officer, Richard Murray; its former attorney, Richard Katz; and the remaining members of its board of directors: George Barton, Judith Brandt, James Collins, Robert DiChiara, Thomas McCormick, Manuel Medina, Ferdinand Spucci and Peter Staley.
Prime Time claimed that USAlliance breached the contract between the two parties, and that it engaged in conversion and abuse of process. Prime Time also presented several other business-tort claims, but all were dismissed prior to trial, as were the conversion and abuse-of-process claims.
USAlliance and several of Prime Time’s creditors had simultaneously commenced an involuntary-bankruptcy proceeding against Prime Time. The bankruptcy court ultimately dismissed the proceeding. In response, Prime Time then amended its state court action to include a malicious-prosecution claim.
USAlliance filed counterclaims against Prime Time. USAlliance alleged that Prime Time breached the contract between the two parties, that it breached its fiduciary duty, and that it engaged in fraud and conversion. Specifically, it claimed that Prime Time failed to repurchase delinquent leases, as it promised to in the contract, and that it generally ceased to manage the lease portfolio. Prior to the trial, USAlliance was granted partial summary judgment on its breach-of-contract claim.
The matter proceeded to trial before the Hon. Kenneth Rudolph, Commercial Part Westchester County. After more than three weeks of trial, the matter was submitted to the jury.
Injuries/Damages
USAlliance sought damages sustained as a result of Prime Time’s breach of the contract between the two parties. In less than two hours, the jury returned a verdict in favor of the credit union.
Result
The jury rendered a defense verdict. It found that USAlliance and its board of directors did not maliciously file the bankruptcy proceeding, and therefore dismissed Prime Time’s complaint in it's entirety.
The jury rendered a verdict in USAlliance’s favor for the counterclaim. It awarded USAlliance $3.75 million.
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