Bernhard Law Firm has won a final judgment for $647,763.21 in damages against a Miami financial adviser who claimed to oversee client accounts for “ultra high net worth individuals.” See Miami-Dade Circuit Civil case no. 19-6848 CA. (Florida Bar disclaimer: results may not be typical. You may not have as beneficial a result, or same or similar results). Bernhard Law Firm expressed its contentment to see happy clients. For details, keep reading below. If you have questions as to lawsuits on private equity, broker-dealers, financial advisers, and investments, please contact Bernhard Law Firm at 786-871-3349, abernhard@bernhardlawfirm.com, or www.bernhardlawfirm.com.

As garnered from the filings, the Defendant was a financial adviser who oversaw client accounts for “ultra high net worth individuals.” Bernhard Law Firm brought suit for Defendant’s breach of a separation agreement (the “Separation Agreement”) with a financial holding company, with whom Defendant previously did investment business. Under the Separation Agreement, Defendant was to pay the financial holding company certain amounts. Bernhard Law Firm’s investigation and discovery unveiled that Defendant signed the Separation Agreement and its attachments, failed to pay, defaulted, received default notice, and still never paid any amounts under the Separation Agreement.

In his Answer, Defendant denied the allegations and raised defenses of lack of consideration and duress. However, Bernhard Law Firm proved that in consideration for the Separation Agreement, Defendant received full releases from all claims by the financial holdings company and was able to unilaterally withdraw himself and his company from numerous investments, partnerships, and corporate memberships and affiliations without any liability or consequence, and without otherwise required consents, and was able to do so without any tax consequences. Bernhard Law Firm further proved that the amounts at issue were determined in pre-signing negotiations, supported by spreadsheets analyzed by Defendant before signing, reflecting sources of funding in investments, percentages that Defendant’s company held, and the financial impact of Defendant’s untimely withdrawal and separation from a financial management company, and its affiliates and investments. Therefore, Bernhard Law Firm proved that the Separation Agreement was valid and supported by consideration under Florida law.

In his Answer, Defendant also alleged duress, but Bernhard Law Firm proved that this defense lacked any merit. To establish duress, Defendant had to prove two elements: (1) that his act of signing the Separation Agreement was totally involuntarily and was not an exercise of any free choice or will whatsoever, and (2) that this condition of mind was caused by conduct by the other side that Florida law recognizes as legally improper and coercive. As Bernhard Law Firm argued in Court, to sustain a duress defense there must be a total loss of free will far beyond strong bargaining to make a contract—“an ordinary offer to make a contract commonly involves an implied threat by one party, the offeror, not to make the contract unless his terms are accepted by the other party, the offeree. Such threats are an accepted part of the bargaining process.” Bernhard Law Firm successfully argued that rudeness, lack of consideration, and threats to enforce existing rights and put defendant out of business are not sufficient to sustain a duress defense. Bernhard Law Firm showed that even threatening to have a defendant institutionalized if he does not sign a contract is insufficient to sustain a duress defense under Florida law.

Bernhard Law Firm showed how the Defendant’s duress allegation had to be taken in the context of Defendant as a financial adviser who oversees client accounts for “ultra high net worth individuals.” Defendant regularly dealt in high pressure and high stakes financial matters. Bernhard Law Firm’s examination of Defendant showed that he did not completely lose his free will and choice in signing the Separation Agreement; far from it. Bernhard Law Firm proved that Defendant was given several options in his request to separate from the financial holding company and various other ongoing investments and companies that were midstream, and that he could separate with full release and withdrawal in exchange for a promise to pay the cost his separation caused. Bernhard Law Firm proved that Defendant thus plainly did not suffer a complete loss of free choice and will, and could not sustain a duress defense.

The Court agreed with Bernhard Law Firm and entered final judgment for $647,763.21 in damages against the Defendant, a Miami financial adviser. Bernhard Law Firm was encouraged by the positive result and the success for its client. If you have questions as to lawsuits on private equity, broker-dealers, financial advisers, and investments, please contact Bernhard Law Firm at 786-871-3349, abernhard@bernhardlawfirm.com, or www.bernhardlawfirm.com.