SETTLEMENT:

$20,000.

CASE/NUMBER:

Case I.D. Confidential.

COURT/DATE:

Los Angeles Superior Central / December 12, 1997.

MEDIATOR:

Deborah Rothman / American Arbitration Association.

ATTORNEYS:

Plaintiffs - Kenneth S. Gaines (Encino).
Defendant - Bruce I. Bolkin (Kinsella, Boesch, Fujikawa & Towle, Los Angeles).

FACTS:

The plaintiffs in this case hired defendant, a bankruptcy attorney, to represent them in a bankruptcy when they were about to lose their home in foreclosure. The bankruptcy judge granted the lender relief from the automatic stay, the home was foreclosed upon and plaintiffs' equity was lost. The plaintiff brought this action against defendant based on a legal malpractice theory of recovery.

CONTENTIONS:

The plaintiff contended that defendant's actions fell below the standard of care in that he should have opposed the lender's request for relief from the automatic stay based on the equity in the home, and should have appeared at the hearing and notified the court that an escrow for the sale of the house had been opened the previous day.

The defendant contended that the bankruptcy judge presiding over plaintiffs' Chapter 7 bankruptcy would have granted relief from the stay even if he had filed opposition papers and made an appearance because plaintiffs could not make adequate protection payments on the home.

DAMAGES:

The plaintiffs sought $45,000, which was the amount of the net equity in the home. The defendant countered that the equity would have been reduced by a $13,000 to $20,000 prepayment penalty, for maximum net damages of $25,000 to $32,000.

SETTLEMENT DISCUSSIONS:

The plaintiffs initially demand $45,000, while defendant initially offered $5,000.

MEDIATION:

A mediation was held on December 12, 1997, before Deborah Rothman of the American Arbitration Association resulting in the reported Settlement.

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