UPDATE: $27.4 Million Merced County Jury Award
Date: 10/20/2008
Contact: Kathryn Marko

UPDATED: A Merced County jury has returned a verdict in favor of L&R clients in the amount of $27.4 million.

L&R attorneys Martin Reilley and Candace Shirley represented 11 Central Valley dairymen and their dairies at trial for claims for fraud, breach of contract and professional malpractice brought against their clients' former milk co-operative, its CEO and his wife.

The case began as a simple breach of contract claim for nonpayment of milk delivered to the co-op for marketing. During discovery, L&R developed evidence that for many years the CEO and his wife had been using a side business to sell the co-op's milk and keep for themselves the amounts paid for the milk by the ultimate purchasers in excess of the State mandated minimum price.

L&R also discovered that the co-op's accountants failed to properly report these transactions to the co-op's board of directors, thereby aiding and abetting the fraud. Following this verdict, reported to be the largest in Merced County history, the co-op's accountants settled with L&R's clients for $1.25 million which was the total amount remaining on the accountant's professional liability insurance policy.