APPELLATE COURT AFFIRMS $94 MILLION BREACH OF TRUST JUDGMENT AGAINST FORMER QUALCOMM DIRECTOR NEIL KADISHA
--Krane & Smith Represent Widow Bilked of Millions--
LOS ANGELES, September 24, 2010 -The Encino-based law firm of Krane & Smith has won a $94 million final judgment for compensatory and punitive damages on behalf of a young widow and her children whose trusts were grossly mismanaged by former Qualcomm director and shareholder Neil Kadisha, a family friend whom she had asked to oversee her deceased husband's estate. In an opinion certified for publication, the California Second Appellate District Court's decision affirmed a substantial portion of the trial court’s damage award, reversed an initial award of reduced attorney's fees and added pre-judgment interest of approximately $20 million.
"The Appellate Court realized that the initial judgment did not fully recoup our client’s substantial losses and reversed and awarded prejudgment interest of approximately $20 million to ensure adequate financial restitution," said Samuel Krane, a partner in the business litigation firm of Krane & Smith. "The Court of Appeal made certain that Kadisha’s misconduct was not condoned and set forth a strong warning to trustees to place the financial interest of the beneficiaries ahead of their own, and to do otherwise is a violation of trust, unethical and unlawful."
Following her husband's fatal heart attack in 1986, Dafna Uzyel and her children, Izzet and Joelle, asked family friend and trusted advisor Neil Kadisha to serve as trustee for her husband's estate.
The trial court found that Kadisha, while acting in the capacity of trustee, misappropriated millions of dollars of trust funds, invested trust assets in a real estate venture in which he had a financial interest, sold trust assets in order to embezzle the funds, and failed to properly manage trust assets resulting in the loss of millions of dollars. Kadisha’s breaches of his fiduciary duties as trustee might not have been discovered but for Uzyel's request for a portion of the funds for home repairs. After being denied access to the monies, Uzyel hired the law firm of Krane & Smith to pursue her rights.
During oral arguments, Justice Joan Dempsey Klein compared Kadisha's conduct to Bernard Madoff. During the course of investigating Kadisha’s actions and 12 years of financial records, his misconduct was uncovered. The Court of Appeals stated: "Throughout Kadisha's trusteeship, he acted in bad faith and in total derogation of his fiduciary duties. There can be no doubt that Kadisha knew that what he did was wrong—he did exactly what [he was] advised [..] not to do and then tried to cover up his misconduct."
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