BREACH OF CONTRACT I BUSINESS LAW – Fraud Damages in Breach of Contract – Company Fails to Pay Former President’s Shares, President Secures Verdict for $553,000

BREACH OF CONTRACT I BUSINESS LAW – Fraud Damages in Breach of Contract – Company Fails to Pay Former President’s Shares, President Secures Verdict for $553,000

September 24, 2019

Former President sues company for fraud and breach of contract. After an eight-day jury trial and two-days of jury deliberations, the jury returns an award 12-0 for the plaintiff awarding: $20,000 in Punitive Exemplary Damages, $435,000 in Compensatory Breach of Contract Damages and $98,000 in Fraud Damages.

Case Study – Verdict Search:“On Aug. 15, 2008, plaintiff Tim Munro entered into an agreement with Environmental Management Technologies Inc. and Michael Kelly in order for them to purchase his 50-percent interest in the company, in exchange for his resignation as president of the corporation. Munro claimed that Kelly and Environmental Management Technologies ultimately breached the agreement and refused to pay him for his share of the business. He claimed that, instead, they terminated him for cause.”

Per the Court’s finding the parties entered into a contract, in which the Plaintiff would resign as president and in exchange the Defendant would purchase the Plaintiff’s 50% interest in the Company.  In lieu of preforming per the terms of the contract, the Plaintiff alleged that the Defendant fraudulent terminated him for cause to avoid their obligations under the agreement. After an eight-day jury trial, the jury found for the Plaintiff awarding him $553,000, which included damages for fraud, punitive damages and compensatory damages for breach of contract.

This is a link to our previous blog discussing “what is a breach of contract”:; along with our blog discussing the difference between Punitive Damages and Compensatory Damages:


Contract Remedies and Damages are outlined in the Contract Chart below:

Contract Damages /Remedies:   Available if:
Compensatory Damages Damages that compensate the plaintiff for the unique loss they suffered as a result of the breach of contract, which includes costs and expenses incurred as a result of the breach of contract.


If there is an actual loss suffered by the non-breaching party.
Punitive Damages Punitive damages are only awarded to an injured plaintiff when the defendant’s conduct was despicable or reprehensible.  Punitive damages are designed to punish a wrongdoer for the wrongful conduct and discourage similar conduct in the future. There is a showing of fraud, bad faith, breach of fiduciary, oppression, deceit or malice
Liquidated Damages A liquidated damages clause in a contract that specifies an amount of damages, payable to a non-breaching party in the event of a specific type of breach or failure to preform.  In order for a liquidated damages clause to be found enforceable amount it must be a reasonable “estimate” of actual damages which will be sustained by a non-breaching party in the event of a breach. (1)    A liquidated damages clause is included in the agreement; and

(2)    The specific amount of payable damages is a reasonable estimate of actual damages.

Specific Performance In situations in which monetary damages will not make a plaintiff whole, a court may order specific performance. This requires the breaching party to perform their obligations under the contract. Specific performance is a common remedy in real estate disputes, since each piece of real property is considered unique.


What is bargained for in the terms of the agreement must be unique so that no award for monetary damages would suffice.

If you have a pending contract dispute or have questions regarding a breach of contract, we encourage you to contact our offices at 619-432-5145 for a free consultation with one of our San Diego contract attorneys and California breach lawyers.

Diana Legal